10 July 2014 Collagen Solutions Plc (the "Company" or the Group )

Transcription

1 10 July 2014 Collagen Solutions Plc (the "Company" or the Group ) Audited Preliminary Results for the period 15 March 2013 to 31 March 2014 Collagen Solutions plc (AIM: COS), the developer and manufacturer of medical grade collagen components for use in regenerative medicine, medical devices and invitro diagnostics, announces its preliminary results for its first period of trading ended 31 March Financial Highlights Net funds of 3.63 million raised in an equity placing April 2013 Simultaneous acquisition of Collbio Limited and the business and assets of Collagen Solutions LLC, and admission of enlarged share capital to trading on AIM in January 2014 Adjusted LBITDA (388,269) Pretax loss (479,998) Basic loss per share (1.1p) Net cash balances of 1.49 million at 31 March 2014; 1.14 million at 30 June 2014 Operational Highlights Smooth integration of Collbio and Collagen Solutions management team Maintained GMP process + production of FDA approved collagenbased wound care gel Excellagen tm Management team strengthened by appointment of Chief Financial Officer Significant advances in development work with our strategic partner, Jellagen, in the processing of vectorfree jellyfish collagen Post Period End Retained ISO / ISO certification for manufacturing facility Professor Robert Brown, UCL, appointed as exclusive consultant and member of Scientific Advisory Board Licence Agreement with UCL for exclusive rights to commercialise patented collagen formulation process Key staff taken on in R&D, San Jose and in Manufacturing, Glasgow Annual General Meeting The Company s AGM will be held at 3 Robroyston Oval, Nova Business Park, Glasgow G33 1AP on 27 August 2014 at 11 am Dr Stewart White, Chief Executive Officer of Collagen Solutions, commented: The relatively short three month trading period since the acquisition of Collbio and the assets of Collagen Solutions LLC, in the USA, has seen all parts of the business become well integrated to develop a solid platform for providing collagen products, development services and embedded value added products to our customers on a global basis. Having invested in both our ISO Quality Systems for manufacturing and our Research and Development programme during this period, we are well placed, especially in view of the recent appointment of Prof Robert Brown, UCL, as a Scientific Adviser and the IP licence for polymeric collagen acquired from UCL, to become the go to organisation for novel and leading edge collagen formulations and collagen based devices. Enquiries: Collagen Solutions Plc David Evans, Chairman Tel: Stewart White, CEO / Gill Black, CFO Tel: Zeus Capital (Nominated Adviser and Broker) Ross Andrews / John Depasquale (Corporate Finance) Tel: Dominic Wilson (Institutional Sales) Tel: Walbrook PR Ltd Tel: or collagen@walbrookpr.com Mike Wort Mob: Anna Dunphy Mob:

2 STATEMENT BY THE CHAIRMAN, DAVID E EVANS I am pleased to present Collagen Solutions maiden annual report and accounts as a publicly listed company. Since being admitted to the AIM market of the London Stock Exchange as Healthcare Investment Opportunities plc in April 2013, we made our first strategic acquisition in the healthcare sector following a review and assessment of thirty different proposals in the fields of invitro diagnostics, biopharma, biomaterials, medical devices and software. The criteria used to evaluate the proposals included whether the target was or had: revenue or near revenue generating; capable of generating embedded or protected IP; UK based; capable of significant growth potential; or a capable management team The acquisition of Collbio Limited and Collagen Solutions LLC in the Board s view met the key criteria above. The acquisition was approved by shareholders on 27 December 2013 and the ordinary shares exchanged in relation to this transaction were admitted to AIM on 2 January It involved combining businesses in the UK and USA, and provides the Company with a management team with extensive contacts, that has previously worked together servicing the medical devices industry, and which has the ability to generate long term revenues and opportunities through investment and strategic input from the Board. The objective is to build a significant global biomaterials business by assisting customers in expediting the transition of their products from development through to manufacture by the provision of cost effective, functional collagen materials and devices across a range of clinical indications, for the ultimate benefit of providing effective and affordable treatment to patients. Overview The enlarged Group has only been trading for a relatively short period. However we are pleased to report that some of the key foundation stones have been laid in terms of creating longterm shareholder value. In particular I would draw your attention to the following: The management teams in Glasgow and San Jose have been integrated and are working effectively as a cohesive unit The appointment of Gill Black as Chief Financial Officer The technology transfer of the first product from San Jose to GMP contract manufacturing in Glasgow is well underway We have made significant advances in our work with one of our partners, Jellagen, on the processing of jellyfish into vectorfree collagen The licence agreement with UCL, signed in June 2014, for polymeric collagen accesses a breakthrough platform technology for the production of stronger, more durable, living collagenbased tissues. We have set ourselves a target by 2020 to create a biomaterials business with a value of 100 million, through a combination of organic growth and exploitation of licensed IP as well as through appropriate acquisitions, and we look forward to that journey, having already made some significant progress. Results The Group s results for the period ended 31 March 2014 are set out in the Consolidated Statement of Comprehensive Income. Revenue for the first three months trading was a nominal 24,023. Administrative expenses (before separately identifiable items) were 303,647, reflecting the costs of operating a public company and the related regulatory costs. Selling and marketing costs were 71,914. LBITDA (before separately identifiable costs) were ( 388,269) and the loss per share was (1.1p). Net cash used in operations during the period was 524,839, net cash used in investing activities was 1,357,278 and net cash flow from financing activities was 3,373,777. The Group s cash balances at 31 March 2014 were 1,491,660. As highlighted in my opening paragraphs the acquisition of Collbio Limited and Collagen Solution LLC was approved by shareholders on 27 December 2013 and the ordinary shares exchanged in relation to the transaction were admitted to AIM on 2 January The passage of six days has given rise to an additional amount of goodwill of 466,250 shown in the accounts reflecting the increase in the share price from 27 December (12.5p) to 2 January (14.5p), the date on which control technically passed.

3 Dividend Due to the loss incurred for the period since incorporation no dividends are payable. Board and management On the acquisition of Collbio Limited, Dr Stewart White was appointed Chief Executive Officer of the Group. Stewart has significant experience of the biomaterials space and has a clear strategic vision to build the Company into a major player in the industry. In early March, Gill Black was appointed Chief Financial Officer and Company Secretary. Gill has considerable experience of working with early stage companies and also those within a manufacturing environment. On the acquisition of Collagen Solutions LLC, the founders Jacci Burgin and Diane Mitchell became key members of the management team, as Chief Scientific Officer and Chief Commercial Officer respectively. They both have extensive knowledge and contacts within the industry and are also significant shareholders in the Company. I am very pleased to see the team gel and work together as a cohesive unit under Stewart s leadership. The challenge will be as we grow to retain that sense of purpose and camaraderie. Outlook The year 2014/15 will see a continued investment in people and facilities as we continue to expand our sales pipeline. We are looking to develop strong collaborative partnerships with key players in the regenerative medicine space, and we have seen since the year end the first product being transferred from our core R&D facility in San Jose to our manufacturing unit in Glasgow. We are recognised within the industry for the quality of the materials that we produce and our ability to do that within a GMP environment. That gives me confidence that our longterm revenue generation is secure as those revenues are effectively embedded into our customers products. What is more difficult to judge, is the exact timing of such revenues as our customers take their products through to launch and beyond. We have yet to reach a critical mass of manufactured products and we see this happening by the end of 2015, unless we see valueadding opportunities to shorten this timescale. We are looking to continue to leverage opportunities to develop and exploit IP, and I will update you later on in the year as we formalise such arrangements. This investment will come from our existing resources. Your Group is one of the most innovative and exciting that I have ever been involved in and I see the ability to secure significant value accretion in a relatively lowrisk manner by adopting a portfolio approach with regard to development for our customers and ensuring our revenues are secured longterm by taking that from R&D through to manufacturing. Thank you for your support. David Evans NonExecutive Chairman 9 July 2014

4 STATEMENT BY THE CEO, DR STEWART WHITE I am pleased to report that all parts of the Group have integrated well in the relatively short period since the acquisition. The reported pretax loss of 479,998 is after charging separately identifiable items relating to acquisition costs of 74,769. The Group s cash position remains strong at 1.49 million, which is sufficient for ongoing funding requirements of the Group and its planned investment in manufacturing and research and development. Operational trading Revenue has come from both development work and direct sales of existing collagen products. We believe the continued interest from new customers is due to an appreciation for the historic, and now combined, capabilities, but also reflects that the market recognises the value offering of the newly formed Collagen Solutions plc Group. A number of customers are well advanced through the regulatory approval process for their own products, which contain our embedded collagen formulations or components. The Group has considerable experience of supporting customers through such regulatory processes with notified bodies or competent authorities and this is a bespoke service which we provide. When contributing to customers development requirements, it is always our intention to establish longterm partnerships with the aim of providing an increased scale of production or indeed contract manufacturing of the finished device. Our relationship with Taxus Cardium Pharmaceuticals, is an excellent example of this. In order to provide materials and components into a regulated industry we must continue to make investment in our manufacturing base. Such investments will ensure we not only have the correct capabilities and capacities our customers require, but also that we ensure we retain our ISO and ISO certifications. Notified body approval of our Quality Management System and thereby extension, our own suppliers, is critical to demonstrate the safety and traceability of materials we supply and the production processes we carry out. Maintaining such systems and processes takes significant resources and of course the commitment from our dedicated team. Our extensive Research and Development activities serve to demonstrate to customers that Collagen Solutions is committed to evolving by developing new collagen formulations which can be readily and quickly modified to meet customer requirements. As the Group responds to market forces, our development team will provide the knowhow and innovation which will meet our customers expectations. We have a number of products undergoing development and proceeding though our design control process. We have been reviewing the market potential of these formulations and exploring the benefits and necessities of further regulatory approvals to expedite their use in our own devices. The value placed on our offering can be seen in the margins we can achieve on materials which are competitively priced. In addition to such direct commercial activities listed above, the Group is also open to closer collaborations. An example of this is the work being done with our strategic partner Jellagen Pty Ltd, in which we have a 10.5% interest. In this case the Group is providing development expertise to assist Jellagen to develop and move towards commercialising a range of novel jellyfish collagenbased products. Collbio and Collagen Solutions acquisitions A key driver for acquiring Collbio Limited and Collagen Solutions LLC was the revenue synergies that could be achieved from combining the sales offerings of both development and manufacturing capabilities. These competencies, alongside our collegial approach will help ensure that Collagen Solutions becomes a globally recognised centre of excellence in the chemistry, supply, development and manufacture of medical grade collagen biomaterials. I am pleased to report that this strategic vision is being supported by the technology transfer from our US operation to full GMP volume manufacturing in the UK, of material which we supply to a major medical device customer for use in their approved product, which is already available in the USA. Markets served The Group is ideally positioned to have greater access to our main markets. We have a range of collagenbased products which typically have a common starting material, or platform technology. Therefore, we can assess the potential of specific formulations and how they might be applied as reagents in in vitro diagnostics, for use in medical devices and as carriers or scaffolds for therapies in regenerative medicine and cellular therapies. Not only does the Group have the capability to supply different market segments, we can supply materials to a range of companies within each segment. That is, although the majority of our volume of materials is supplied for use

5 in medical devices which require regulatory approval, we are active in multiple markets, with multiple customers using multiple collagen products, providing significant contingency in our business model. It should be noted for the initial three month revenue generating period, the directors consider in view of the total volume generated through the sale of collagen products, that this comprised one operational segment for the purposes of segmental reporting. Business development Following the acquisition, the Group now has prime locations in the largest markets for value added medical devices. Our facility in San Jose is ideally positioned to serve the North American markets, and our manufacturing site in Glasgow, Scotland, is well placed within the UK to serve the European market. We expect this global reach to provide significant benefits moving forward, allowing the Group to benefit from available public sector support where possible, and to capitalise on the benefit of these locations for costeffective conference and trade show attendance. In addition to typical business development activities, much of our business is won through direct contacts. The team at Collagen Solutions has an extensive network across the industry and continues to utilise this to identify new opportunities. Business development activities will continue to evolve, specifically, to investigate the potential to move into newer territories which will require the necessary skilled business development personnel to ensure we obtain rapid and meaningful traction. Strategic risks and mitigation The combined entity provides medical grade collagen formulations for medical, diagnostics and research applications using specialised sourcing knowledge, relationships and agreements with a variety of leading suppliers of raw biomaterials. Our intentionally diversified approach on markets, products and customers, is key to supporting a robust strategy which we believe provides the contingency of a maximised number of opportunities, with least risk, and the greatest potential for shareholder return. Postbalance sheet events Retaining ISO / ISO certification for our manufacturing facility in Glasgow following external audit during April Jellagen, our strategic partner, has secured the necessary external funding required to undertake further research, with the aim of taking their products to market. In May 2014, Professor Robert Brown, UCL, joined the Company as an exclusive consultant and an initial member of our Scientific Advisory Board. Professor Brown's expertise will be invaluable in driving new and exciting product development activities. In June 2014, a Licence Agreement was entered into with UCL, providing the Group with exclusive rights to commercialise a collagen formulation process which has been patented and already been granted in the USA. Outlook / current trading The next financial year will be a period of further consolidation as we continue to develop new revenue streams and work to exploit opportunities which will build value into the business. This will be in line with our strategic objectives to invest in the areas of Research and Development and Manufacturing in order to support our customers, win new business, and remain at the forefront of collagen biomaterials. Whilst we will strive to expand our direct sales, it is also likely we will look to work closely with an increased number of strategic partners who may have technology, facilities, knowhow, distribution or market access that we can mutually exploit. I share the Board s view that there is a strong opportunity for the Group to become a global leading player in the biomaterials field. Dr Stewart White Chief Executive Officer 9 July 2014

6 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the period ended 31 March 2014 Before Separately identifiable items Separately identifiable items (Note 5 ) Total 2014 Notes REVENUE 3 24,023 24,023 Cost of sales (12,084) (12,084) Gross profit 11,939 11,939 Sharebased compensation (24,647) (24,647) Administrative expenses (303,647) (74,769) (378,416) Selling and marketing costs (71,914) (71,914) LOSS BEFORE INTEREST TAX DEPRECIATION AND AMORTISATION (388,269) (74,769) (463,038) Amortisation and depreciation (16,960) (16,960) OPERATING LOSS BEFORE TAXATION (405,229) (74,769) (479,998) Taxation _ LOSS FOR THE PERIOD (405,229) (74,769) (479,998) Currency translation difference (44,666) (44,666) Other comprehensive loss (44,666) (44,666) TOTAL COMPREHENSIVE EXPENSE FOR THE PERIOD (449,895) (74,769) (524,664) Basic and diluted loss per share pence 4 (1.10p)

7 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 March Notes ASSETS Noncurrent assets Intangible assets 6,894,398 Property, plant and equipment 232,484 7,126,882 Current assets Inventories 39,265 Trade and other receivables 167,036 Cash and cash equivalents 1,491,660 1,697,961 Total assets 8,824,843 EQUITY AND LIABILITIES Equity attributable to equity holders of the parent company Share capital 7 683,260 Share premium 3,230,105 Sharebased compensation 24,647 Merger reserve 2,842,683 Translation reserve (44,666) Retained deficit (479,998) Total equity 6,256,031 Noncurrent liabilities Other financial liabilities 2,409,236 2,409,236 Current liabilities Trade and other payables 159, ,576 Total liabilities 2,568,812 Total liabilities and equity 8,824,843

8 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the period ended 31 March 2014 Share Capital Share Premium Account Share Based Payment Reserve Merger Reserve Translation Reserve Retained Deficit Issue of shares for cash 450,000 3,600,000 4,050,000 Issue of consideration shares on acquisition 233,260 3,149,011 3,382,271 Issue costs of shares (369,895) (306,328) (676,223) Total transactions with owners in their capacity as owners 683,260 3,230,105 2,842,683 6,756,048 Sharebased compensation 24,647 24,647 Loss for the period (479,998) (479,998) Currency translation difference (44,666) (44,666) Total comprehensive loss for the period (44,666) (479,998) (524,664) At 31 March ,260 3,230,105 24,647 2,842,683 (44,666) (479,998) 6,256,031 Total

9 CONSOLIDATED STATEMENT OF CASH FLOWS for the period ended 31 March 2014 Note 2014 CASH FLOW FROM OPERATING ACTIVITIES Loss before taxation (479,998) Share based compensation 24,647 Depreciation 12,647 Amortisation 4,313 Increase in inventories (13,337) Increase in trade and other receivables (65,511) Decrease in trade and other payables (6,876) Translation movement 43,942 Foreign exchange (44,666) NET CASH USED IN OPERATIONS (524,839) INVESTING ACTIVITIES Payments to acquire property, plant and equipment (426) Payments to acquire business and assets of Collagen Solutions LLC (1,398,985) Net cash acquired with acquisition of business and assets of Collagen Solutions LLC 6 26,662 Net cash acquired with subsidiary undertaking 6 15,471 NET CASH USED IN INVESTING ACTIVITIES (1,357,278) FINANCING ACTIVITIES Net proceeds on issue of ordinary shares 3,373,777 NET CASH GENERATED FROM FINANCING ACTIVITIES 3,373,777 Net increase in cash and cash equivalents 1,491,660 Cash and cash equivalents at the end of the financial period 1,491,660

10 NOTES TO THE AUDITED PRELIMINARY ANNOUNCEMENT 1. BASIS OF THE ANNOUNCEMENT The audited preliminary results for the period ended 31 March 2014 were approved by the Board of directors on 9 July The preliminary financial information in this preliminary announcement does not constitute full accounts within the meaning of section 434 (3) of the Companies Act 2006 but is derived from the accounts for the period ended 31 March The figures for the period are audited. The preliminary announcement is prepared on the same basis as set out in the statutory accounts for the period ended 31 March 2014.Those accounts upon which the auditors issued an unqualified opinion, also had no statement under section 498(2) or (3) of the Companies Act While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards, as adopted by the European Union (EU) (IFRS), this announcement does not in itself contain sufficient information to comply with IFRS. The Company is a limited liability company incorporated and domiciled in England & Wales and whose shares are quoted on AIM, a market operated by The London Stock Exchange. The consolidated financial information of Collagen Solutions plc is presented in pounds sterling ( ), which is also the functional currency of the Group. The statutory accounts for the financial period ended 31 March 2014 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. 2. GOING CONCERN As part of its going concern review the Board has followed the guidelines published by the Financial Reporting Council entitled Going Concern and Liquidity Risk Guidance for UK Companies In determining the appropriate basis of preparing the financial statements, the Directors are required to consider whether the Company can continue in operational existence for the foreseeable future, being a period of not less than twelve months from the date of the approval of the financial statements. As at 31 March 2014 the Group had cash and cash equivalents of 1.5 million and net current assets of 1.5 million. Management prepares detailed working capital forecasts which are reviewed by the Board on a regular basis. Cash flow forecasts and projections have been prepared through to 30 September 2015, and take into account sensitivities on revenues, and costs. Having made relevant and appropriate enquiries, including consideration of the Company s and Group s current cash resources and the working capital forecasts, the Directors have a reasonable expectation that the Company and Group will have adequate cash resources to continue to meet the requirements of the business for at least the next twelve months. Accordingly, the Board continues to adopt the going concern basis in preparing the financial statements 3. SEGMENTAL REPORTING The Group s Chief Operating Decision Maker, the Chief Executive Officer, is responsible for resource allocation and the assessment of performance. In the performance of this role, the Chief Executive Officer reviews the Group s activities, in the aggregate. The Group has therefore determined that it has only one reportable segment under IFRS 8, Operating Segments, which is biomaterials. 4. LOSS PER SHARE The calculation of basic loss per ordinary share of 1.1p is based on losses of 479,998 and on 43,668,474 ordinary shares being the weighted average number of shares in issue during the period. The loss for the period and the weighted average number of ordinary shares for calculating the diluted loss per share for the period ended 31 March 2014 are identical to those for the basic loss per share. This is because the outstanding share options would have the effect of reducing the loss per share and would therefore not be dilutive under the terms of International Accounting Standard ( IAS ) No 33.

11 5. SEPARATELY IDENTIFIABLE ITEMS Separately identifiable items of 74,769 relating to the acquisition costs of Collbio Limited and business and assets of Collagen Solutions LLC are included within administrative expenses. 6. ACQUISITIONS On 2 January 2014 the Company completed the acquisition of the entire issued share capital of Collbio Limited, now Collagen Solutions (UK) Ltd, for a maximum consideration of up to 4 million. Initial consideration of 2 million was satisfied by 2 million in new ordinary shares issued at 12.5p per share, although the actual share price on date of admission had increased to 14.5p. In addition, a performance consideration payable is contingent on the future sales revenues up to the period ended 28 February 2017 and successfully entering into three new supply agreements by the end of the same period. The contingent consideration is to be satisfied by up to 2 million through the issue of new ordinary shares and it is anticipated at this time that the consideration will be payable in full and has been provided for on that basis. The fair value of this contingent consideration included at the balance sheet date is 1,782,122.At the date of acquisition the relevant Collbio Limited assets comprised the following: ASSETS NON CURRENT ASSETS Book Value Fair Value Fair Value adjustment Intangible assets customer contracts 34,496 34,496 Property, plant and equipment 24, , ,490 24, , ,986 CURRENT ASSETS Inventories 2,500 2,500 Trade and other receivables 38,283 38,283 Cash and cash equivalents 15,471 15,471 56,254 56,254 TOTAL ASSETS 80, , ,240 CURRENT LIABILITIES Trade and other payables 166, ,452 TOTAL LIABILITIES 166, ,452 NET (LIABILITIES) / ASSETS (85,708) 234, ,788 Goodwill arising on acquisition 3,953,334 Settled by: 4,102,122 16,000,000 ordinary shares at 14.5p per share 2,320,000 Contingent consideration 1,782,122 4,102,122 Net cash acquired with subsidiary undertaking 15,471 The strike price at which the consideration shares were issued was 12.5p being the price per the Admission Document and that on 27 December 2013 when the transaction was approved by the shareholders in general meeting. It was 2 January 2014 until the shares were admitted to AIM. Acquisition costs relating to the acquisition of Collbio Limited and under IFRS 3 (revised) are written off to comprehensive income as incurred.

12 On 2 January 2014, Collagen Solutions (UK) Limited acquired the net assets of Collagen Solutions LLC through its wholly owned subsidiary company, Collagen Solutions (US) Inc., for a maximum consideration of up to 3,092,133. Initial consideration was 1,398,985 in cash and 1,062,271 of new ordinary shares, at 14.5p per share in Collagen Solutions plc. In addition, a performance consideration payable in two tranches is contingent on the future sales revenues up to the period ended 28 February The contingent consideration is to be satisfied by two payments of up to 630,877 in total in cash when the target criteria are met. At the date of acquisition the relevant Collagen Solutions LLC assets acquired comprised the following: Book Value Fair Value Fair Value adjustment ASSETS NONCURRENT ASSETS Property, plant and equipment 20,215 20,215 CURRENT ASSETS Inventories 23,428 23,428 Trade and other receivables 63,242 63,242 Cash and cash equivalents 26,662 26, , ,332 TOTAL ASSETS 133, ,547 TOTAL LIABILITIES NET ASSETS 133, ,547 Goodwill arising on acquisition 2,958,586 Settled by: 3,092,133 Cash consideration 1,398,985 7,326,007 ordinary shares at 14.5p per share 1,062,271 Contingent consideration 630,877 3,092,133 Net cash outflow resulting from acquisition Cash consideration 1,398,985 Net cash acquired on acquisition (26,662) The strike price at which the consideration shares were issued was 12.5p being the price per the Admission Document and that on 27 December 2013 when the transaction was approved by the shareholders in general meeting. It was 2 January 2014 until the shares were admitted to AIM. Goodwill arising from both acquisitions consists mainly of the anticipated synergies and economies of scale from combining and integrating the UK and US businesses as one group. The knowhow, customer relationships and products under development in both businesses acquired were reviewed against the recognition and definition criteria in IAS38 and it was considered that as a result of that review none of the expenditure met the criteria or was separately identifiable.

13 7. SHARE CAPITAL 2014 Authorised: 93,826,007 ordinary 1p shares 938, ,000 deferred 9p shares 45,000 Issued and fully paid: No Issued ordinary shares of 1p Issued deferred shares of 9p 63,826, , ,260 45,000 Balance at 31 March ,326, ,260 Ordinary shares The total number of issued shares at 31 March 2014 was 63,826,007. On incorporation the issued share capital of the Company was 1 divided into one ordinary share of 1. On 26 March 2013, the ordinary share of 1 each was subdivided into ten ordinary shares of 10p each and these were issued for a cash consideration of 10p per share On 26 March 2013, the Company issued 499,990 ordinary share of 10p each at par. On 28 March 2013, each ordinary share of 10p was subdivided into one ordinary share of 1p and one deferred share of 9p in the capital of the Company, resulting in 500,000 ordinary Shares and 500,000 deferred shares of 9p each in issue. On 5 April 2013, 40,000,000 shares were issued pursuant to a placing for cash consideration at a price of 10p per share. On 2 January 2014 as part of the initial consideration for the acquisition of Collbio Limited 16,000,000 shares were issued pursuant to a placing at a price of 12.5p per share and at the same time a further 7,326,007 shares were issued at a price of 12.5p as part of the initial consideration for the acquisition of the net assets of Collagen Solutions LLC.The fair value of these shares at 2 January 2014 was 14.5p. Deferred shares The total number of deferred shares at 31 March 2014 was 500,000. The deferred shares do not confer any voting rights. Options At 31 March 2014 the Company had 4,050,000 unissued ordinary shares of 1p each under the Company s share option schemes, details of which are as follows: Grant date Number Option price pence Date from which exercisable Expiry date 29 March ,050, January March 2023