TIDMRUA
RNS Number : 9215R
RUA Life Sciences PLC
11 July 2022
11 July 2022
RUA Life Sciences plc
("RUA Life Sciences", the "Company" or the "Group")
Final results for the year ended 31 March 2022
RUA Life Sciences, the holding company of a group of medical
device businesses focused on the exploitation of the world's
leading long-term implantable biostable polymer (Elast-Eon(TM) ),
announces its audited final results for the year ended 31 March
2022.
Highlights :
-- Revenue growth to GBP1,625,000 (2021: GBP1,528,000)
-- Operating loss was GBP2,352,000 (2021: GBP1,551,000)
-- Year-end cash balances of GBP2,963,000 (2021: GBP6,294,000)
-- Return to growth in Contract Manufacturing revenues of 11%
-- Board strengthened with two new executive directors appointed
-- Biomaterials business volume growing year on year
-- Major improvements in business processes
Bill Brown, Chairman of RUA Life Sciences, commented: "A great
deal of work has been undertaken within the business to continue
the process of building RUA into a full-scale medical device
manufacturer. Key appointments have been made in the Regulatory,
Finance, Quality and R&D Engineering teams with all departments
making good headway. After the FDA indicated that they would like
to see additional data and in particular a relatively small
clinical study, constructive discussions continue on the precise
requirements of the 510(k) process. The Group is currently
accelerating the changes required to fully transition to a medical
device manufacturer and have a robust manufacturing process in
place to meet anticipated demand for product" .
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the UK version of the EU Market Abuse Regulation (2014/596) which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended and supplemented from time to time.
For further information contact:
RUA Life Sciences
Bill Brown, Chairman Tel: +44 (0)1294 317073
Caroline Stretton, Group Managing Director Tel: +44 (0)1294
317073
Cenkos Securities plc (Nominated Advisor and Stockbroker) Tel: +44 (0)20 7397 8900
Max Gould (Corporate Finance)
Giles Balleny (Corporate Finance)
Michael Johnson (Sales)
About RUA Life Sciences
RUA Life Sciences plc is the ultimate parent company of the
Group, whose principal activities comprise exploiting the value of
its IP & know-how, medical device contract manufacturing and
development of cardiovascular devices.
Our vision is to improve the lives of millions of patients by
enabling medical devices with Elast-Eon (TM) , the world's leading
long-term implantable polyurethane.
Whether it is licensing Elast-Eon (TM) , manufacturing a device
or component, or developing next generation medical devices, a RUA
Life Sciences business unit is pursuing our vision.
Elast-Eon(TM)'s biostability is comparable to silicone while
exhibiting excellent mechanical, blood contacting and flex-fatigue
properties. These polymers can be processed using conventional
thermoplastic extrusion and moulding techniques. With over 8
million implants and 15 years of successful clinical use, RUA's
polymers are proven in long-term life enabling applications.
The Group's four business units are:
RUA Medical End-to-end contract developer and manufacturer
: of medical devices and implantable fabric specialist.
RUA Biomaterials Licensor of Elast-Eon (TM) polymers to the medical
: device industry.
RUA Vascular: Development of large bore polymer sealed grafts
and soft tissue patches.
RUA Structural Development of tri leaflet polymeric heart valves.
Heart :
A copy of this announcement will be available shortly at
www.rualifesciences.com/investor-relations/regulatory-news-alerts
.
CHAIRMAN'S STATEMENT
On behalf of the Board, I am pleased to present the Company's
audited final results for the year ended 31 March 2022.
Trading for Year
Total revenue for the year amounted to GBP1,625,000 (2021:
GBP1,528,000) representing growth of 6% over the previous period.
The contract manufacturing business within RUA Medical saw a strong
recovery from COVID related business interruption and delivery of
polymer measured by volume to our licensees saw strong growth,
although revenues in the biomaterials business were down slightly
due to a larger one-off timing benefit in Royalties last year.
Gross margins remained strong at over 84%, demonstrating both the
attraction of the polymer licensing model as well as the embedded
value within medical device contract manufacture.
As anticipated, the total loss for the year has increased from
GBP1,451,000 to GBP2,067,000 principally as a result of increased
expenditure on the key research and development activities
undertaken on our grafts and heart valves, along with further
investment in growing the manufacturing infrastructure to deliver
upon our ambitions.
We continued to invest further in property and equipment with
total additions to tangible fixed assets being GBP907,000 in the
period. Despite the investments of both a capital and revenue
nature, cash was well managed with total cash resources at the
period end of GBP2,963,000.
Our Businesses
RUA has two mature, revenue generating, high margin and
attractively profitable business units in RUA Biomaterials and the
Contract Manufacturing unit of RUA Medical. It is naturally the
developing businesses of Vascular Grafts and Heart Valves that
attract the most investor attention however it is appropriate to
recognise the value of the mature businesses. The Biomaterials
business, as well as providing the platform technology for the
Group, achieved revenues of GBP487,000 during the period with
minimal costs, the revenues are based on royalties and licence fees
and has many characteristics of an annuity. Contract Manufacturing,
although part of the wider RUA Medical business that is the hub for
Group activities, generated revenue of GBP1,138,000 during the year
and generated a net margin of around 48% and thus contributed
around GBP550,000 to the wider Group. The activities of the other
parts of the Group are described in a little more detail below.
Vascular Grafts
RUA Vascular, our business developing a range of surgical
vascular grafts designed to eliminate the need for animal tissue as
a sealant has make good progress over the period following the
request by the FDA for additional data in order to progress the
510(k) application. A comprehensive suite of testing had been
undertaken on the grafts to demonstrate their mechanical integrity
and improved sealant properties together with the in vivo healing
process particularly at the important blood contacting surface. The
package of test data was sent to the FDA in November 2021 as part
of a 510(k) submission which sought to demonstrate the substantial
equivalence of the RUA grafts to current technology. The in vivo
testing did however demonstrate a difference to current technology
whereby, the Elast-Eon sealant in the RUA grafts prevented the
surrounding tissue from sticking or adhering to the outside of the
grafts as demonstrated with the control devices. Additionally,
there was some evidence that the RUA grafts were also less
susceptible to an inflammatory process. As the "healing" process
was different, the FDA determined that in order to approve the
grafts under the 510(k) regime that they would like to see
additional data and in particular a relatively small clinical study
to allow a better understanding of the healing process. Our
regulatory team (now established in house) has been actively
engaged with the FDA in seeking consensus on the appropriate
additional testing and this process is anticipated to conclude
during August, at which point we should have agreement on the full
scope of the anticipated additional testing required.
The delay has been disappointing however it has allowed time for
engineering improvements to the graft manufacturing process, which
should improve the gross margin potential .
More detailed marketing data and segmental analysis has been
undertaken, confirming that the global market for the RUA Vascular
range of products (including patches) specifically designed to be
used by cardio-thoracic (or "heart") surgeons is around $1 billion.
Taking into account the limitations of current technology, the
improvements that the RUA range would introduce to the market and
external feedback, we are building the infrastructure of the
business with the objective of meeting demand for at least a 10%
market share although industry insiders have suggested a multiple
of that is possible.
Heart Valves
A patient faced with surgery for a diseased heart valve is also
faced with a major decision regarding which type of valve to have.
A mechanical valve will be very durable but has the disadvantages
of noise (clicking) and the risks of thrombosis or bleeding if
warfarin levels are not controlled. A biological valve is silent,
avoids drug treatment but has a limited lifespan and as such risks
the need for a further operation when older and the procedural
risks increase.
RUA's vision with its heart valve development programme is to
create a valve that utilises the proven benefits of Elast-Eon's
durability, non-thrombogenic and anti-calcification properties to
reduce or eliminate the compromises a patient has to make. Over the
year and in the current period, the project has succeeded in
meeting some important milestones. The design has seen further
refinement to reduce stress on the valve, the hydro dynamic
performance has been very promising and we have succeeded in
developing a hybrid material that could be a replacement for the
pericardium material that is used to manufacture biological valves
without the durability drawbacks. This new composite material is
very thin, flexible, yet demonstrates tear resistance many times
greater than a simple polymeric sheet whilst retaining the blood
contacting properties of Elast-Eon. We believe this material
coupled with our valve design has the potential to eliminate the
patient compromise whilst avoiding the potential for sudden failure
of a leaflet. The intention during the current year is to further
advance the testing of this technology and, if it demonstrates the
benefits as anticipated, advance to animal studies.
Outlook
It was clearly a great disappointment to have not achieved
510(k) approval at the first time of asking, but I am convinced
that it remains a question of when, and not if, the polymer sealed
grafts are approved for marketing. It is a slightly unusual
position that the reason for the delay is probably a clinical
benefit and the data we would expect to gather from the expanded
clinical requirement will be both invaluable from a marketing
perspective but also suggests that we could achieve a much greater
market share than first anticipated. We are still in the
consultation phase with the FDA and as such have a good idea of the
additional work that will be required, and anticipate final
confirmation of these requirements in August.
William Brown
Chairman
8 July 2022
GROUP MANAGING DIRECTOR'S REPORT
Sales performance has improved
Total revenue reported from contract manufacturing and polymer
licensing businesses of GBP1,625,000 (2021: GBP1,528,000)
represents an increase of 6% over the same period in the previous
year. Third party contract manufacturing revenue increased 11% to
GBP1,138,000 (2021: GBP1,021,000) reflecting a recovery from Covid
related disruption. Polymer licence and royalty fees represented
the balance of Group revenues of GBP487,000 (GBP2021: GBP507,000),
which did not reflect the underlying volume growth and was due to a
major licencee hitting its 2021 royalty cap in the last quarter of
2021 coupled with a weakened dollar.
Research and development ("R&D") activities, along with the
Group's polymer IP, are the key platforms for future growth.
Reflecting our ongoing commitment to this area, R&D expenditure
increased by almost two thirds over the period with investment in
this area rising from GBP541,000 to GBP903,000.
Overall, loss after tax for the period has increased to
GBP2,067,000 (2021: GBP1,451,000) which resulted from a combination
of increased R&D activities and further investment in the
infrastructure to support future growth.
The directors have prepared the financial statements on a going
concern basis. The assessment of going concern is included in note
2.
Pivoting to sustainable and profitable growth
Significant progress was made on product development activities
for RUA Vascular's large bore vascular grafts which enabled a
510(k) submission to the FDA in November 2021. It was disappointing
to receive feedback from the FDA that human clinical data would be
required to demonstrate substantial equivalence of the grafts to
existing products on the market on the basis that they introduced
novel technology compared to the predicate devices. Bringing full
time regulatory and clinical study expertise in house was already
being addressed prior to the 510(k) submission, and as a result
resource has been available to further engage with the FDA and
review the regulatory strategy. The need to generate clinical data
means final FDA approval is now expected in late 2024, and this has
enabled a critical review of business processes and afforded the
time to progress the following advances in 2022:
1- Transform business processes in order to transition from a
narrowly focused contract manufacturer to a fully-fledged medical
device manufacturer.
2- Develop a high-throughput manufacturing process to ensure
manufacturing at scale from day one of FDA approval. This will
allow RUA to maximise initial vascular graft revenue and secure
significant early market penetration.
3- Accelerate the development and launch of the extended
vascular graft product pipeline. This will include an open surgical
hybrid device to repair the aortic arch and descending aorta.
4- Accelerate the development of a second design of a flexible
leaflet heart valve system; this new design is effectively a
synthetic equivalent to current pericardium material used to
manufacture biological valves with the objective of avoiding valve
failure through polymer technology.
5- Increase the talent pool within the business with the
necessary experience, knowledge and skill sets to help deliver on
RUA's ambitious plans.
Significant Board/Management changes for the period
The Group has restructured its operations and the team expanded
with new recruits from the medical device industry. Product
development and all graft R&D activities are now being managed
by Simon Rosendale (Manufacturing Engineering Manager). Stuart
Elias (Medical Textiles Manager) continues to manage day to day
textile production and provide his invaluable textiles expertise to
Group businesses. Simon and Stuart have over 40 years medical
textiles expertise between them, including employment at Terumo
Aortic on the production and development of vascular grafts.
The further key appointments to the Board of Lachlan Smith,
Chief Financial Officer, and Iain Anthony, Director of Clinical and
Regulatory Affairs, also ensure the right management expertise is
available to support growth of the Group. Iain in particular has
extensive cardiovascular medical device experience in clinical,
regulatory and R&D areas. I have also moved into a wider Group
role from the narrower focus I previously had within the RUA
Medical Devices subsidiary.
Capital Expenditure
The balance sheet of the Group retains a cash balance at the
period end of GBP2,963,000 (2021: GBP6,294,000) having invested a
further GBP907k (2021: GBP837k) in Property, Plant and Equipment.
This mainly comprised heart valve testing equipment, graft scale up
equipment and a new facility. This new facility was purchased in
November 2021 to accommodate additional office space for the
expanding business, and a high output cleanroom facility to support
scale up manufacturing of RUA Vascular's graft range and associated
support functions. The new facility is planned to be commissioned
during 2023.
RUA Biomaterials
RUA Biomaterial's manufacturing and licensing partner,
Biomerics, continues to actively promote the uptake of
Elast-Eon(TM) as a world leading material to the medical device
industry. Elast-Eon has now been in long term human implants for
well over 15 years, is the enabling technology behind over 8
million life-sustaining devices and is proven to have all of the
characteristics necessary for a long-term implantable biomaterial.
Although 2022 revenues decreased by 4%, this did not reflect the
underlying volume growth, and was due to a major licensee hitting
its 2021 royalty cap in our last quarter of 2021 coupled with a
weakened dollar. Future strategy is centered around increasing
royalty income by positioning Elast-Eon as an enabling technology
which de-risks the future of all current medical devices
incorporating animal derived material. Biomerics has expanded its
manufacturing capacity and we will look to enhance our Intellectual
Property portfolio to add more value to future licensing deals.
RUA Medical Devices
Third party contract manufacturing revenue increased 11% to
GBP1,138,000, reflecting a recovery from Covid related disruption,
particularly in the US. Our operations were not significantly
affected during the year and we managed to respond to COVID-19
supply chain disruption and ensure continued focus on quality and
delivery of customer products.
We have also entered into the final stages of negotiating a new
manufacturing and supply contract with a global medical technology
company which is intended to be finalised in the very near
term.
Future strategy is focused on growing OEM customer demand and
transforming the aspirations for the Group's product portfolio into
real results. RUA Medical Devices remains the engine room for Group
R&D and production, and, as the inventor of the novel Elast-Eon
coating process technology, will build upon its reputation as the
Centre of Excellence for Elast-Eon processing.
Vascular Grafts
We remain excited by the opportunities open to RUA Vascular
which is now much more than just another graft manufacturer with an
interesting sealing technology. The segments of the global vascular
graft market being addressed by the RUA product pipeline are
estimated to be worth, in total, around $1 billion and represent,
in the main, the products required and used by cardio-thoracic (or
heart) surgeons. Polyester vascular grafts have been available on
the market for over 50 years with little innovation. There are a
number of long-established competitors in the marketplace and many
use animal derived sealants for their polyester grafts. There is
now a growing acceptance in the surgical community of an inevitable
switch away from animal sourced products once a synthetic surgical
graft is available, RUA's current range of synthetic large bore
grafts under development will be the enabler for the development of
more complex products in the vascular graft portfolio. Detailed
financial planning by Group management has estimated that the
vascular graft product pipeline could achieve a market
penetration of 10% within the next ten years.
Significant progress was made on product development activities
for RUA Vascular's large bore vascular graft in 2021, and after
resolution of cellulose contamination on the graft, a 510(k)
submission to the FDA was made in November 2021. After
collaborative discussions with the FDA, the 510(k) submission for
the large bore vascular graft was converted to a pre-submission, or
Q-sub, allowing interactive discussions between the Company and the
FDA to determine the regulatory path to approval in the US. During
these discussions, many of the additional data requirements for a
future 510(k) submission were agreed and a future pre-submission
strategy identified. On a positive note, it was confirmed that RUA
can still follow the 510(k) route to the US market provided that
supplementary clinical data are generated to support the Vascular
Graft range. A clinical trial has now been designed to demonstrate
the safety and efficacy of Elast-Eon as a graft sealant. The trial
design has been submitted to the FDA in a further pre-submission to
ensure alignment with the FDA's expectations. These discussions are
expected to be completed by August of this year. While this adds
some delay to the front end of the process, the data generated in
the trial will be utilised to support marketing applications in
multiple geographic regions including Europe, and this is expected
to drive faster acceptance and uptake of the graft products than
previously planned.
The recruitment of the first patient for the clinical trial is
anticipated within the current financial year, with regulatory
submissions planned to allow entry into US and European markets in
2025. Other markets will also be pursued where market access can be
achieved on the back of US/EU regulatory clearance. The business is
confident that this clinical trial will demonstrate the benefits of
an Elast-Eon sealed vascular graft for patients and surgeons and
drive the inevitable switch away from traditional animal-sourced
graft sealants such as gelatine and collagen. Therefore, we believe
that once we achieve regulatory approval for the grafts there will
be ready buyers for the devices. Interest continues to be strong
for OEM use of the RUA vascular graft and those opportunities are
being advanced in parallel with our plans for sales into hospitals
via distribution partners.
Significant work has been completed on manufacturing process
refinement and efficiencies of the existing small-scale production
line to support the build of clinical trial stock and the future
transfer of manufacturing to a new high output cleanroom facility.
Production capacity plans have therefore been reviewed and a
scale-up line is being developed that is capable of meeting the
increased volumes and margins required for a global launch of the
vascular graft pipeline.
We were successful in being awarded an Innovate UK grant to help
finance an early feasibility study for the use of an Elast-Eon
device to treat Critical Limb Ischaemia. Unfortunately, we had to
allow the grant to lapse due to COVID-19 restrictions, meaning the
team was unable to travel to meet key opinion leaders and potential
partners. The project, however, remains in the vascular
pipeline.
Heart Valves
RUA Structural Heart is positioning itself to disrupt the $8bn
surgical and TAVI heart valve market. We believe that the key to
success will be a leaflet system which combines long-term
durability together with the bio-stability of Elast-Eon material.
Two heart valve programmes are running in parallel - one with a
100% polymer leaflet and the other a textile polymer composite
leaflet. Milestones in 2022 relate to the development and
de-risking of both heart valve designs and prioritising the design
which ensures the most resilient and appropriate technology. The
design with the greatest potential will be ready for in vivo trials
during 2023, at which point options for clinical trial will also be
considered.
To further broaden our IP portfolio and to further understand
and evaluate the use of new synthetic materials as heart valve
components, RUA is working with the University of Strathclyde on a
Knowledge Transfer Partnership (KTP) to introduce new polymer
science and processing knowledge and skills into the heart valve
programme. As well as enabling access to academic networks and
specialist equipment, this allows postgraduate students to gain
experience within industry and the opportunity to apply their
skills in a practical environment.
Outlook
RUA's world class products are being designed and developed to
meet identified needs in the market. By augmenting our team and
focussing on laying the foundations of a medical device
manufacturing business, this will allow us to disrupt the
cardiovascular market with innovative products that ultimately
deliver on the goal of significantly growing shareholder value. The
Group looks forward to commencing the vascular graft clinical trial
required for FDA submission in the current financial year, while
continuing to maximise revenues from the RUA Medical and RUA
Biomaterials divisions, alongside further RUA Vascular and RUA
Structural Heart division product development.
Caroline Stretton
Group Managing Director
8 July 2022
STRATEGY
The vision of the Group is to disrupt the Cardiovascular market
with innovative products that utilise our IP and expertise with
Elast-Eon(TM) , the world's leading long term implantable
polyurethane. This is being undertaken through:
-- licensing Elast-Eon(TM) to third parties through RUA Biomaterials;
-- developing and launching a range of Elast-Eon(TM) sealed
vascular grafts through RUA Vascular;
-- developing a revolutionary and market-disrupting
Elast-Eon(TM) leaflet polymeric heart valve through RUA Structural
Heart; and
-- becoming a centre of excellence for designing, developing and
manufacturing Elast-Eon(TM) based medical devices through RUA
Medical Devices, whilst continuing to serve and expand its current
OEM customer base.
RUA Life Sciences will seek to maximise shareholder value by
growing each business to achieve attractive levels of profitability
or disposing of business areas if the valuations are
attractive.
Summarised consolidated income
statement
Year ended 31 Year ended 31
March 2022 March 2021
Notes GBGBP000 GBGBP000
Revenue 1,625 1,528
Cost of sales (267) (276)
---------------- ----------------
Gross Profit 1,358 1,252
Other income 66 279
Administrative expenses
Share-based payments (145) (128)
Bad debt expense (3) 8
Amortisation & depreciation (313) (272)
Other administrative expenses (3,315) (2,690)
---------------- ----------------
Total administrative expenses (3,776) (3,082)
---------------- ----------------
Operating loss (2,352) (1,551)
Finance expense (8) (43)
---------------- ----------------
Loss before taxation (2,360) (1,594)
Taxation 293 143
---------------- ----------------
Loss from continuing operations
attributable to owners of
the parent company (2,067) (1,451)
---------------- ----------------
Loss attributable to owners
of the parent company (2,067) (1,451)
---------------- ----------------
Loss per share
Basic & Diluted (GB Pence
per share) 4 (9.32) (8.20)
There was no other comprehensive income for 2022 (2021:
GBPNil)
Summarised consolidated statement of financial position
31 March 31 March
2022 2021
Notes GBGBP000 GBGBP000
Assets
Non current assets
Goodwill 301 301
Other intangible assets 521 574
Property, plant and equipment 2,597 1,952
Total non current assets 3,419 2,827
----------------- -------------------
Current assets
Inventories 124 85
Trade and other receivables 1,120 949
Cash and cash equivalents 2,963 6,294
Total current assets 4,207 7,328
----------------- -------------------
Total assets 7,626 10,155
----------------- -------------------
Equity & Liabilities
Equity
Issued capital 1,109 12,949
Share premium 11,729 11,729
Other reserve (1,552) (1,697)
Capital redemption reserve 11,840 -
Profit and loss account (16,542) (14,475)
----------------- -------------------
Total equity attributable to equity
holders of the parent 6,584 8,506
----------------- -------------------
Liabilities
Non-current liabilities
Borrowings 199 223
Lease liabilities 83 124
Deferred tax 75 163
Other liabilities 174 40
----------------- -------------------
Total non-current liabilities 531 550
----------------- -------------------
Current liabilities
Borrowings 23 23
Lease liabilities 39 40
Trade and other payables 410 1,016
Other liabilities 39 20
Total current liabilities 511 1,099
----------------- -------------------
Total liabilities 1,042 1,649
Total equity and liabilities 7,626 10,155
----------------- -------------------
Summarised consolidated cash flow statement
Year ended
Year ended 31 March
31 March 2022 2021
GBGBP000 GBGBP000
Cash flows from operating activities
Group loss after tax (2,067) (1,451)
Adjustments for:
Amortisation of intangible assets 53 68
Depreciation of property, plant and
equipment 259 204
Share-based payments 145 128
Interest expense/(income) 8 9
Tax credit in year (293) (143)
(Increase) / decrease in trade and
other receivables (53) (589)
(Increase) / decrease in inventories (39) 7
Taxation received 87 122
Increase / (decrease) in trade and
other payables (453) 231
------------------ -------------
Net cash flow from operating activities (2,353) (1,414)
Cash flows from investing activities
Purchase of property plant and equipment (904) (620)
Proceeds from disposal of property
plant and equipment - 18
Acquisition of subsidiary net of cash
acquired - (341)
Interest paid (8) (9)
Net cash flow from investing activities (912) (952)
------------------ -------------
Cash flows from financing activities
Proceeds of issue of share capital,
net of issue costs - 6,462
Proceeds from borrowing - 260
Repayment of borrowings and leasing
liabilities (66) (38)
------------------ -------------
Net cash flow from financing activities (66) 6,684
------------------ -------------
Net (decrease)/increase in cash and
cash equivalents (3,331) 4,318
Cash and cash equivalents at beginning
of year 6,294 1,976
Cash and cash equivalents at end
of year 2,963 6,294
================== =============
Summarised consolidated statement of changes in equity
Capital Profit
Issued Share Other redemption and loss Total
share capital premium reserve reserve account equity
GBGBP000 GBGBP000 GBGBP000 GBGBP000 GBGBP000 GBGBP000
-------------- --------- --------- ------------ --------- ---------
Balance at 31 March 2020 12,574 4,550 (1,825) - (13,024) 2,275
-------------- --------- --------- ------------ --------- ---------
Share-based payments - - 128 - - 128
Issue of equity share capital
- acquisition (net of fees) 75 1,004 - - - 1,079
Issue of equity share capital
- exercise of warrants 8 42 - - - 50
Issue of equity share capital
- fundraise (net of issue
costs) 292 6,133 - - - 6,425
-------------- --------- --------- ------------ --------- ---------
Transactions with owners 375 7,179 128 - - 7,682
-------------- --------- --------- ------------ --------- ---------
Total comprehensive loss
for the year - - - - (1,451) (1,451)
Balance at 31 March 2021 12,949 11,729 (1,697) - (14,475) 8,506
-------------- --------- --------- ------------ --------- ---------
Share-based payments - - 145 - - 145
Buyback of deferred shares (11,840) - - 11,840 - -
-------------- --------- --------- ------------ --------- ---------
Transactions with owners (11,840) - 145 11,840 - 145
Total comprehensive loss
for the year - - - - (2,067) (2,146)
-------------- --------- --------- ------------ --------- ---------
Balance at 31 March 2022 1,109 11,729 (1,552) 11,840 (16,542) 6,584
-------------- --------- --------- ------------ --------- ---------
NOTES TO THE EXTRACTS FROM THE CONSOLIDATED FINANCIAL
STATEMENTS
1. Basis of preparation
The extracts from the Consolidated financial statements are for
the year ended 31 March 2022. The Consolidated financial statements
have been prepared in compliance with UK-adopted International
Accounting Standards.
The Consolidated financial statements have been prepared under
the historical cost convention, with the exception of fair value
adjustments made in connection with the prior year acquisition of
RUA Medical.
The accounting policies remain unchanged from the previous
year.
2. Going concern
After considering the year-end cash position, making appropriate
enquiries and reviewing budgets and profit and cash flow forecasts
to October 2023, which incorporate planned investment in new
product development and assumptions related to the return towards
regular business, particularly relating to the RUA Medical Devices
subsidiary, the Directors have formed a judgement at the time of
approving the financial statements that there is a reasonable
expectation that the Group will have sufficient resources to
continue in operational existence for the foreseeable future. For
this reason, the Directors consider that the adoption of the going
concern basis in preparing the consolidated financial statements is
appropriate.
As part of the going concern assessment, the Board and
management have prepared and considered:
-- Detailed financial forecasts, and cash flow requirements
showing that future financing will be required
-- The level and timing of the additional financing needed to
support the business plan and cash burn rate
-- Detailed business plan and management actions which may be
necessary depending on the Group's performance
-- Appropriate sensitivities were applied to the business plan
and forecasts to stress test the model
-- Appropriate assumptions surrounding order growth and profitability
-- The economic outlook over the following twelve months and beyond
-- Current and future regulatory requirements concerning product release milestones
-- Current and future capital requirements
-- New product launches
-- The Group's liquidity and its ability to manage stress scenarios
-- The Group's operational resiliency
The Board, however, recognises that the Group, Parent and
Subsidiary is loss-making and cash consumptive, and its revenue
streams have been impacted by the COVID-19 pandemic and the
resulting macro-economic uncertainty and the setback of a
regulatory delay for the Vascular Graft Range. These events and
conditions may result in lower than forecasted revenues and
increased costs associated with the regulatory delay with our
Vascular Graft Range. This increases the risk that the Group will
not be able to execute its business plan, which could adversely
impact its ability to generate profit or raise sufficient capital
to meet capital and liquidity requirements.
These obstacles, together with the requirement for financing,
represent a material uncertainty that may cast doubt on the Group's
and parent company's ability to continue as a going concern.
The Board remains confident in RUA Life Sciences' ability to
execute its business plan and raise further capital. To mitigate
the risk, the Board has taken into account:
-- The strength of the product pipeline and potential international demand for our products
-- Management's dedication and commitment to achieving our
business plan and, where necessary taking difficult management
actions
-- If economic stresses continue to impact our business, the
Group will reassess its plans for product development and
investment in capital to reduce costs and control our balance
sheet
-- Consultation with its financial advisers
-- The Group's access to additional equity through its listing
on the London Stock Exchange's AIM market. A previous equity
fundraise in December 2020 introduced new institutional investors
to the Group's share register and demonstrates there is investor
support for Group's business plan. The Board is confident that
raising additional capital will be achievable
If the board concludes financing is unlikely there are options
to extend the runway, including the licensing or sale of assets,
products and programmes and the delay and reduction of
expenditure.
Based on this assessment and the Board's belief that sufficient
financing can be raised, the Board have a reasonable expectation
that the Group will be able to continue in operation and will have
sufficient financial resources to meet its liabilities and
obligations as they fall due over the forecast period. Accordingly,
it is satisfied that the adoption of the going concern basis of
preparation is appropriate. The financial statements do not contain
adjustments resulting from the going concern basis of preparation
being inappropriate.
3. Preliminary announcement
The summary accounts set out above do not constitute statutory
accounts as defined by section 434 of the UK Companies Act 2006.
The summarised consolidated statement of financial position at 31
March 2022, the summarised consolidated income statement,
summarised consolidated statement of financial position, the
summarised consolidated cash flow statement and the summarised
consolidated statement of changes in equity for the year then ended
have been extracted from the Group's statutory financial statements
for the year ended 31 March 2022 upon which the auditor's opinion
includes reference to material uncertainty relating to going
concern but is unqualified and did not contain a statement under
either sections 498(2) or 498(3) of the Companies Act 2006. The
audit report for the year ended 31 March 2022 did not contain
statements under sections 498(2) or 498(3) of the Companies Act
2006. The statutory financial statements for the year ended 31
March 2021 have been delivered to the Registrar of Companies. The
31 March 2022 accounts were approved by the Directors on 8 July
2022, but have not yet been delivered to the Registrar of
Companies.
4. Earnings per share
The basic loss per ordinary share of 9.32 pence (2021: loss of
8.20 pence) is calculated on the loss of the Group of GBP2,067,000
(2021: loss of GBP1,415,000) and on 22,184,798 (2021: 17,697,120 )
ordinary shares, being the weighted average number of shares in
issue during the year. Diluted earnings per share have not been
calculated as the Group is loss making.
Posting and availability of accounts
The annual report and accounts for the year ended 31 March 2022
will be sent by post or electronically to all registered
shareholders on 15 July 2022. Additional copies will be available
for a month thereafter from the Company's office 2 Drummond
Crescent, Riverside Business Park, Irvine, Ayrshire KA11 5AN.
Alternatively, the document may be viewed on, or downloaded from,
the Company's website: www.rualifesciences.com .
Notice of Annual General Meeting
Notice of the twenty-fifth Annual General Meeting of RUA Life
Sciences plc will be posted with the Annual Report and Accounts and
will be held at Riverside Lodge Hotel 46 Annick Road, Irvine,
Ayrshire KA11 5LD on Tuesday, 16 August 2022 at 11:00am.
FORMAT OF THE AGM
At the time of publication of this notice and having considered
the ongoing coronavirus (COVID-19) pandemic and the latest Scottish
Government measures on physical public gatherings, the Board is
satisfied that the AGM can take place in person this year. However,
given potential uncertainty, the Board encourages all shareholders
to vote by proxy. Any changes to these arrangements will be
published on the Company's website as soon as possible before the
date of the meeting and will also be circulated via a Regulatory
Information Service.
Further details of the AGM will be included in the Annual Report
and will published on the Company's website at
www.rualifesciences.com .
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END
FR UWVBRUVUBRAR
(END) Dow Jones Newswires
July 11, 2022 02:00 ET (06:00 GMT)
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