Creo Medical Group plc

("Creo" or the "Company")

Half-year Report

Growth in clinical network and education of early adopters, strengthened commercial infrastructure and continued R&D

Creo Medical Group plc (AIM: CREO), a medical device company focused on the emerging field of surgical endoscopy, announces its unaudited results for the six-month period ended 30 June 2021.

Recent and post-period highlights:

·    Commercial orders for Speedboat Inject remain in line with expectations on pricing and volume with first volume sales occurring in both the USA and Europe during the period

·    Creo's Clinical Education Programme has continued to provide training and mentoring, both in person and via remote technology, yielding an increase in KOL conversion, patient treatments and opening of new training centres

·    Speedboat Inject usage has increased in both upper GI (including "POEM" or Peroral Endoscopic Myotomy) and lower GI ("SSD" or Speedboat Submucosal Dissection) procedures.  The utilisation of Speedboat technology in upper GI procedures, with increasing clinical validation, opens additional markets for Creo's technology

·    The first patient to undergo a procedure using MicroBlate Fine has shown an excellent result, further validating the clinical use of that deice

·    Further health economics data published validating Speedboat Inject, leading to potential savings of over £10,000 per procedure versus traditional surgical outcomes

·    Opening of United States headquarters featuring a learning centre and fully equipped training laboratory to support Creo's commercial roll-out in the key US market

·    Completion of the purchase of the freehold of Creo House, Chepstow, and the adjacent building for £4.25m to support the Company's planned and sustained growth

·    Significant initial discussions with third parties in respect of licensing opportunities for Creo's Kamaptive technology

·    Completion of a successful Placing and Open Offer in September 2021, raising an additional £36.3m (before expenses) of funding to further strengthen Creo's balance sheet and to provide resources to enable the exploration of a number of strategic opportunities

Continued product and regulatory progress through:

·    FDA 510(k) clearance for MicroBlate Flex

·    Strengthened IP portfolio, with 326 granted patents and 810 pending applications as at 31 August 2021

Financial highlights:

·    Total sales in the period of £12.9m (H1 2020: £0.0m)

·    Cash and cash equivalents (before post-period equity raise) of £30.6m at 30 June 2021 (H1 2020: £70.6m)

·    Operating loss of £11.4m for H1 2021 (H1 2020: £10.6m) including £0.6m share based payments (H1 2020: £0.5m), in line with management expectations

·    Net assets of £52.2m at 30 June 2021 (H1 2020: £74.2m)

Craig Gulliford, Chief Executive Officer, commented:

"I am pleased with the strategic and operational progress over the six month period, and continue to be proud of the efforts made by the entire team despite the continuing challenges posed by the pandemic. Our focus on clinical education, both remotely and in-person, has led to more KOLs being trained on the safe use of our products and more patients being successfully treated with our technology; Speedboat Inject has continued to be used successfully in both POEM and SSD procedures during the period.  We expect this positive trend to remain in H2 and into 2022 as the pandemic eases, with increasing clinician education, training sites, adoption and patient procedures using our technology.

"We have made significant strides in building out the Company's infrastructure with the opening of our US headquarters and the purchase of the freehold of Creo House in Chepstow.  This provides increased capacity to support our commercial and operational footprint across Europe and the US and provides additional manufacturing capacity for our full suite of devices.

"Our team has continued to grow during the period, not just in the US and Europe, but also by enhancing our direct presence in the APAC region. Furthermore, we have continued to leverage the acquisitions made during 2020, particularly benefitting from the resulting enlarged sales network within Europe.

"The publication of further health economics data has underlined the potential of our Speedboat Inject technology to save costs for healthcare systems to a greater extent than first envisaged. The first patient to undergo a procedure using MicroBlate Fine has shown an excellent result, further validating the clinical use of that device.

"With the business ready to service the rising demand we expect for all our products and our strengthened balance sheet following the completion of the Placing and Open Offer in September 2021 will allow us to deliver and develop our strategic objectives.  We are very optimistic for the continued progress of the business throughout 2021 and into 2022."

About Creo Medical

Creo Medical is a medical device company focused on the development and commercialisation of minimally invasive electrosurgical devices, bringing advanced energy to endoscopy. 

The Company's vision is to improve patient outcomes through the development and commercialisation of a suite of electrosurgical medical devices, each enabled by CROMA, powered by Kamaptive.  The Group has developed the CROMA powered by Kamaptive full-spectrum adaptive technology to optimise surgical capability and patient outcomes. Kamaptive is a seamless, intuitive integration of multi-modal energy sources, optimised to dynamically adapt to patient tissue during procedures such as resection, dissection, coagulation and ablation of tissue. Kamaptive technology provides clinicians with increased flexibility, precision and controlled surgical solutions.  CROMA currently delivers bipolar radiofrequency ("RF") energy for precise localised cutting and focused high frequency microwave ("MW") energy for controlled coagulation and ablation via a single accessory port. This technology, combined with the Group's range of patented electrosurgical devices, is designed to provide clinicians with flexible, accurate and controlled clinical solutions. The Group's three initial areas of focus are (1) in the GI, (2) soft tissue ablation (including but not limited to, the liver, pancreas, kidney) and (3) lung interventions for the resection and/or ablation of pre-cancerous and cancerous lesions. The Directors believe the Company's technology can impact the landscape of surgery and endoscopy by providing a safer, less-invasive and more cost-efficient option for procedures.

For more information about Creo Medical please see our website, www.creomedical.com

Interim results for six months ended 30 June 2021

Chief Executive Review

Overview

Creo Medical Group plc is a medical device company focused on the emerging field of surgical endoscopy, enabling clinical procedures to be performed minimally and non-invasively. Our vision is to improve patient outcomes by bringing advanced energy to the emerging field of surgical endoscopy. To achieve our vision, we have developed a suite of novel, minimally invasive, electrosurgical medical devices that are enabled by our ground-breaking CROMA Advanced Energy Platform, powered by our full spectrum adaptive Kamaptive Technology.

CROMA currently delivers bipolar radiofrequency ("RF") energy for precise localised cutting and focussed high frequency microwave ("MW") energy for controlled coagulation and ablation via a single accessory port. This technology, combined with the Group's range of patented electrosurgical devices, is designed to provide clinicians with flexible, accurate and controlled clinical solutions. The Group's three initial areas of clinical focus are:

1.    In the Gastrointestinal (GI) tract;

2.    Soft tissue ablation (including but not limited to the liver, pancreas, kidney); and

3.    Lung interventions for the resection and/or ablation of pre-cancerous and cancerous lesions. 

The Group has four technology families - Speedboat, MicroBlate, SlypSeal and SpydrBlade. We believe that our technology can impact the landscape of surgery and endoscopy by providing a safer, less-invasive and more cost-efficient option for procedures.

The Group's products are distributed via direct and indirect sales channels. Creo has a direct presence in eight countries across Europe, the USA and APAC with access to multiple other jurisdictions through the support of distribution partners (predominantly in the EMEA and APAC regions).

The Directors believe that they have the opportunity to develop the business through a three-tiered strategy:

1.  To organically Build the team across global markets to commercialise and develop its existing and continually developing technology;

2.   To Buy companies with existing and mature sales, distribution and/or manufacturing operations to complement and add infrastructure and capability in our direct sales markets; and

3.   To Partner with third parties or industrial partners, which may include the license to them of Kamaptive, the Group's advanced energy technology. 

During 2020 the Group made two acquisitions: Albyn Medical and Boucart Medical. These acquisitions provided the Group with direct access to key European markets to facilitate the roll-out of the Group's own products as well as bringing immediate revenues derived from the sale of own label and third-party GI and urology products. The sales teams at both companies have integrated well and, during the period, the performance of these businesses not only further validates the decision to pursue these acquisitions but supports Creo's Build, Buy, Partner strategy.

As of 31 August 2021, the Group has 114 patent families, which currently comprise in total 326 granted patents and 810 pending applications. The Group's patent estate is growing at a steady rate covering existing products, future enhancements to CROMA and future product ideas.

Operational Review

Like many businesses worldwide, we continue to be affected by the ongoing uncertainty arising from the COVID-19 pandemic, not only within our immediate day-to-day operations but from ongoing restrictions on travel across the world, the postponement of elective procedures and the need to prioritise care for patients with COVID-19. Procedures will need to increase to mitigate any impact on the healthcare system arising from the later diagnosis and more advanced conditions not being detected and treated at an earlier stage. As such, we remain confident that we will see significant growth in commercial orders for Speedboat Inject in the second half of 2021 and into 2022.

During the period, Creo announced that it had gained FDA 510(k) clearance for its MicroBlate Flex product, which is the fourth device within Creo's portfolio of flexible endoscopy devices for the gastrointestinal ('GI') market to receive FDA regulatory clearance. 

Throughout the pandemic we have utilised our resources appropriately to ensure that we are well positioned to respond to and maximise the opportunities that will inevitably arise once we fully emerge from the pandemic, building on our progress to date.

At the end of the period, we had cash reserves of £30.6m (plus an additional £36.3m (before fees) was raised post period end), which gives the business additional runway to meet its strategic objectives.

Clinical Education Programme progress

Creo's Clinical Education Programme ensures leading clinicians are educated in the use of our Speedboat technology and the CROMA Advanced Energy Platform with the aim of ensuring quality control and best patient outcomes.

Understandably, the Company's roll out of its Clinical Education Programme across UK, US and EMEA regions has been impacted by the ongoing restrictions on travel across the world, the postponement of elective procedures and the need to prioritise care for patients with COVID-19. To address the immediate challenges faced, the business has adjusted its approach to training, utilising remote technology where appropriate. In addition, with the support of in-country Creo employees in the US market, we have been able to demonstrate products and provide immersive, didactic ex-vivo and lab-based training sessions on the safe use of Speedboat Inject. 

These efforts are yielding some great clinical results which we expect to be replicated more widely once markets emerge from the pandemic.  During the period, Speedboat Inject has been used successfully in both upper GI (POEM) and lower GI (SSD) procedures.  The ability to utilise Creo's Speedboat technology in upper GI procedures, and with increasing clinical validation, opens up additional markets for our technology.

Commercial progress

Commercial orders for Speedboat Inject continue to be received, in line with expectations on pricing and volume at this early stage of commercialisation, whilst maintaining our focus on establishing clinical education centres in all key markets to continue the growth in excellent clinical outcomes and adoption.  Establishing our US and APAC offices will be a catalyst to increase growth in 2021 and 2022.

During the period we were also pleased to report that data from the paper titled: 'Cost-effectiveness analysis of Speedboat submucosal dissection in the management of large non-pedunculated colorectal polyps' demonstrated that the use of Speedboat Inject is highly likely to be a cost-effective strategy for treating both benign and malignant large non-pedunculated colorectal polyps (colonic lesions found inside the large intestine) and may lead to cost savings in NHS Hospitals of over £10,000 per procedure versus a traditional surgical outcome for patients.

Under the leadership of David Woods, the commercial team continues to strengthen across the Group with increasing collaboration between regions and offices. We have leveraged the benefits of the acquisitions of Albyn Medical and Boucart Medical to train our sales teams in these regions, generate sales and train clinicians in Europe. Post period end we formally opened our US headquarters in Danbury, Connecticut, to provide a base for the US operations and enable clinical and education programmes from the facility further enhancing our ability to penetrate the market.  In addition, we have replicated this model in the APAC market and will be opening our Singapore office in the second half of 2021.

Pipeline update

The CROMA Advanced Energy Platform has been designed with a single accessory port compatible with a suite of single-use devices that use the microwave and RF energy for cutting, coagulating and ablating in various procedures. The Company's development of a suite of endoscopic products for use with the CROMA Advanced Energy Platform remains on track, with management aiming to continue to enhance and introduce new products to support its existing product portfolio. In addition, the Company continues to investigate other applications for its technology beyond the initial suite of devices. One particular focus is to be able to 'see' diseased or abnormal tissue in any region of the body, with our ultimate goal being to then use this information to 'treat' it using miniature structures being developed by Creo.

In line with our Build, Buy, Partner strategy, we believe that there is a sizeable opportunity for the Group to licensing its advanced energy, Kamaptive, to third parties for use in:

·    Laparoscopic and endoscopic robotic applications - platform for delivery of advanced energy and device technology into a number of surgical applications

·    Handheld laparoscopic applications - a capsule advanced energy platform for delivery of advanced energy and device technology to support a number of surgical applications

·    Non-thermal plasma - platform for wound care and scope decontamination

·    Electroporation - platform for non-thermal tissue effects including irreversible tissue 'ablation' and cellular level sensitisation.

We have received considerable interest in our Kamaptive Technology and are now building a pipeline of potential partnerships - robotic surgery being a particular sector of interest. We believe that with the right partners, robotic surgical platforms powered by Creo's Kamaptive Technology have the potential to accelerate this inevitable change in the way that patients are cared for and treated. We are in early-stage discussions with a number of potential partners with regards to, amongst other things, licensing Kamaptive.  Concluding agreements with these potential partners is a key focus for the Creo Team and the Board is confident that pursuing such relationships has the potential to create long term shareholder value and is aligned with the Company's mission, to improve patient outcomes.

Management and Employees

We continue to recruit talented and experienced individuals across all business functions. Creo now employs more than 245 people worldwide, working in a creative, innovative and driven environment, with a shared goal of improving clinical outcomes and improving lives.

Creo has always recognised its wider responsibilities and has prioritised the communities it serves, most obviously our patients and their families, the clinicians that treat and care for them, but also our staff and their families and the local communities in which we employ them. We continue to assess our responsibilities under the ESG framework which we introduced in our 2020 Annual Report. We will progress and formalise our strategy and policies as we continue to support communities, charities and advance our response to environmental waste and emission reduction.

Current Trading and Outlook

The team continues to execute against the Company's Build, Buy, Partner strategy and deliver against our operational milestones and, accordingly, we look to the Company's future with confidence.  In particular, the ability to work with third parties to license our Kamaptive technology has the potential to increase the number of markets able to benefit from Creo's technology whilst reinforcing our mission to improve patient outcomes. 

Although COVID-19continues to have an impact, with the acceleration of vaccine programmes around the globe, we are cautiously optimistic that our key markets will return to pre-pandemic levels in the near term. We expect second half revenues to continue at the current levels, with an increase in orders of Creo's core technology (CROMA Advanced Energy platform and Speedboat Inject), supported by additional cases utilising Creo's MicroBlate technology.

The Board thanks Creo's shareholders for their continued support and encouragement along with all members of the Creo team, our clinicians and their patients, our customers, suppliers and other partners for all their hard work, support and positive contributions during the period.

Craig Gulliford

Chief Executive Officer

29 September 2021

Financial Review

The Company's financial performance for the period under review was in line with management's expectations. Operating expenses reflect the increased clinical and development activities of the Company during the period, together with investment in headcount and business infrastructure to support the transition of the business to a fully integrated specialty medical device manufacturer with product origination, development and commercialisation capabilities. This continued investment in the business will, we believe, support its anticipated growth and development in the coming periods.

Total sales for the period were £12.9m (six months to 30 June 2020: £0.0m) of which £12.8m was generated through the former Albyn group with £0.1m generated through Creo Medical Limited.

Research and development expenditure for the period was £5.2m (six months to 30 June 2020: £4.5m). Expenditure on product development and clinical costs increased during the period as the business continued to invest in the expansion of its portfolio of products. Administrative expenses for the period were £12.0m (six months to 30 June 2020: £6.1m), reflecting costs within the former Albyn group, increased headcount and investment in Creo's global infrastructure.

Operating loss

The operating loss for the period of £11.1m (six months to 30 June 2020: £10.6m), reflected the increased operating expenses outlined above. The underlying operating loss for the period is £7.7m (six months to 30 June 2020: £8.3m).  This is a non-statutory measure which adjusts the operating loss as follows:

*Underlying operating loss is calculated by adjusting operating loss for share based payments, depreciation, amortisation and R&D tax credits.

Tax

The Company has not recognised any deferred tax assets in respect of trading losses arising in the current financial period. At present, the Company recognises tax assets in respect of claims under the UK research and development Small or Medium-sized Enterprise ("SME") scheme, accrued in line with costs with any adjustments being made on submission of a claim.

Earnings per share

Loss per share was 6 pence for the period (six months to 30 June 2020: 6 pence).

Cash flow and Balance Sheet

Net cash used in operating activities was £12.7m for the six months to 30 June 2021 (six months to 30 June 2020: £10.1m), driven by the increase in research and development as well as development of the US commercial operations during the period. Net cash generated from share issues was £0.1m (six months to 30 June 2020: £0.1m) reflecting the net proceeds from the issue of new ordinary shares relating to the exercise of share options.

Total assets at 30 June 2021 increased to £80.6m (30 June 2020: £79.9m). Cash and cash equivalents at 30 June 2021 were £30.6m (30 June 2020: £70.6m) after the acquisitions of Albyn and Boucart in the second half of 2020. Net assets were £52.3m (30 June 2020: £74.2m). Post period an additional £36.3m of cash was raised through a placing and open offer.

At 30 June 2021, the debtor position in relation to R&D Tax Credits was £5.2m including the £3.3m debtor from 2020. Inventory as at 30 June 2021 increased to £6.9m (30 June 2020: £0.9m), representing the increase in stock holding to facilitate current and expected future orders of core Creo products as well as the Albyn inventories acquired.

Trade and other payables as at 30 June 2021 increased to £9.9m (30 June 2020: £4.8m). This increase is mainly a result of increased accruals and trade payables acquired as part of the Albyn acquisition as well as for ongoing research and development as well as regulatory work as we continue with our commercial roll out.  

Audit Tender

During July and August 2021, the company undertook a competitive review and tender process for the auditing of the 2021 Creo Medical Group plc Annual Report. Following the conclusion of that process, and in accordance with its terms of reference, the Audit Committee recommended to the Board that the Company appoint Pricewaterhouse Coopers LLP ("PwC") as auditors of the Group. PwC replace KPMG LLP ("KPMG") who had acted as Creo Medical Group plc's auditors since 2016.  KPMG have confirmed that there are no reasons or matters connected with their ceasing to hold office as auditors which they consider should be brought to the attention of the members of Creo. 

Consolidated statement of profit and loss and other comprehensive income

Consolidated statement of financial position

Consolidated statement of changes in equity

Consolidated statement of cash flows

Notes to the interim financial statements

1. Basis of preparation

This interim financial report, which is unaudited, does not constitute statutory accounts within the meaning of section 434(3) of the Companies Act 2006. These interim financial statements have been prepared in accordance with the AIM rules and the IAS 34.

The accounts of Creo Medical Group plc for the period ended 31 December 2020, which were prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 ("adopted IFRSs"), have been delivered to the Registrar of Companies. Those accounts were prepared and audited as required by the Companies Act 2006. The interim statements are presented in sterling and rounded to the nearest thousandth pound.

This interim financial report for the six-month period ended 30 June 2021 (including comparatives for the six months ended 30 June 2020) was approved by the Board of Directors on 29 September 2021.

Going Concern

The business is continually monitoring the development of COVID-19 and the current and future impacts it will have on our business. We are poised with a range of devices ready to re-launch into our key markets, this time is allowing us to strengthen our approach and adapt to what will inevitably be a different world and are confident Creo will re-emerge from the pandemic, stronger, with a more robust commercial platform and network of distributors and direct sales teams to drive our global clinical education programme and enable to adoption of our products into practice.

An additional £36.3m of cash was raised in September 2021 following a Share Placing and Open Offer helping to strengthen the balance sheet and cash position.

The Company has prepared detailed forecasts and projections for its planned activities up to and beyond December 2025. On the basis of these financial projections the Directors are satisfied that the Company will have adequate resources to continue in operational existence for the foreseeable future and for a period of not less than 12 months from the date of signing this interim financial report. Thus, they continue to adopt the going concern basis of accounting in preparing the interim financial report.

Accounting policies

The same accounting policies and basis of measurement are followed in this interim financial report as published by Creo Medical Group plc in its statutory accounts for the period ended 31 December 2020, as delivered to the registrar of companies.

Changes in accounting policy and disclosures

New standards, amendments and interpretations

The following new standards, amendments and interpretations have been adopted by the Group for the first time for the financial year beginning on 1 January 2021:

·    Amendments to IFRS 9, IAS 9, IFRS 7, IFRS 4 and IFRS 16 relating to Interest Rate Benchmark Reform - Phase 2.

Principal risks and uncertainties

The principal risks and uncertainties impacting the Group are described in our 2020 Annual Report and remain unchanged at 30 June 2021. We continue to monitor the uncertainty around the UK's exit from the European Union as well as the impacts and effects of Covid-19.

1. Basis of preparation (continued)

Critical accounting judgments and key sources of estimation uncertainty

The Group is required to make estimates and assumptions concerning the future. These estimates and judgements are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results. Accounting estimates and judgements have been required for the production of these Financial Statements.

Share-based payments

Equity-settled share options are granted to certain officers and employees. Each tranche in an award is considered a separate award with its own vesting period and grant date fair value. Fair value of each tranche is measured at the date of grant using the Black-Scholes option pricing model, the Monte Carlo method, or a hybrid model where appropriate. Compensation expense is recognised over the tranche's vesting period based on the number of awards expected to vest, through an increase to equity. The number of awards expected to vest is reviewed over the vesting period, with any forfeitures recognised immediately.

Research and development costs

Capitalisation of development costs requires analysis of the technical feasibility and commercial viability of the project concerned. Capitalisation of the costs will only be made where there is evidence that an economic benefit will flow to the Company.

Successful human trials and sufficient clinician training is seen as a key element of the product being able to generate future economic benefit. As at 30 June 2021 only a handful of human trial cases have been carried using the MicroBlate Fine device due, in part, to the reduction in elective procedures in response to the COVID-19 pandemic.  Accordingly, we do not yet have certainty that these devices can generate future economic benefits, and therefore no costs relating to these products have been capitalised during the period.

The Group has determined that although technical feasibility has been achieved, the commercial viability is still to be achieved and therefore all the recognition criteria of IAS 38 to capitalise an internally generated intangible asset has not been met as at the period end.

Segmental reporting

An entity is required to disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates. As the Group's global reach has expanded in the period, management have exercised significant judgement in determining whether presenting segment information on an alternative basis would better adhere to this core principle.

Whilst the operations in different geographical locations form a fundamental part of the Group's long-term strategy, they are in the early stages of development and the Group continues to focus on the development and commercialisation of its key range of unique endoscopic surgical devices and CROMA Advanced Energy Platform. In making their judgement, the directors considered the Group's activities and the internal reporting structures and information regularly reviewed by the entity's chief operating decision-maker to make decisions about resources to be allocated and assessing performance.

After the assessment, the directors concluded that financial information at a consolidated Group level appropriately reflects the business activities in which the Group is currently engaged, and the economic environment in which it operates. As explained in the 2020 Annual Report, as the Group continues to grow it is expected that the internal reporting structure will evolve in order to meet the changing activities, goals and objectives of the business and therefore additional operating segments may be identified as appropriate in future reporting periods.

2. Earnings per share

Earnings per share has been calculated in accordance with IAS 33 - Earnings Per Share using the loss for the period after tax, divided by the weighted average number of shares in issue.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue to assume conversion of all potential dilutive ordinary shares. The potential ordinary shares are considered to be antidilutive on the basis that they reduce the loss per share and are such are not included in the Company's EPS calculation, meaning that diluted EPS is the same as basic EPS.

3. Share capital

4. Cash from share issue

5. Post balance sheet events

Purchase of Chepstow Land and Buildings

On 5 July 2021 Creo Medical Group plc completed on the acquisition of the freehold interest in Creo House, the Company's main headquarters in Chepstow ('Unit 2') together with the adjacent site ('Units 6-9'), for a total consideration of £4.25 million in cash.

Creo House has current total capacity of approximately 18,000 sq ft and the adjacent site, subject to receiving planning permission, will provide an additional 16,000 sq. ft. of increased capacity. This additional capacity will support Creo's commercial, operational and logistic footprint across Europe (following the acquisition of Albyn Medical S.L. in July 2020 and Boucart Medical SRL in November 2020) and will also provide additional manufacturing capacity for the commercial roll-out of the full range of Creo's products.

Opening of US office

On 16 July 2021 the Group opened its United States headquarters at the Summit, Danbury, Connecticut, USA.

Capital Raise

Post period, the Group raised £36.3m through the issue of 19,899,184 shares at an issue price of 182.5 pence per share (£31.25 million was raised from a Placing of 17,123,288 shares and £5.07 million through an open offer to qualifying shareholders for 2,775,896 shares).  Following the deduction of associated fees and expenses, the net proceeds receivable by the Company from the Placing will be approximately £34.3 million.

6.    Responsibility statement of the directors in respect of the interim report

We confirm that to the best of our knowledge:

·    the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting

·    the interim management report includes a fair review of the information required by:

(a)  DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b)  DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

Richard Rees

Chief Finance Officer

29 September 2021