Final Results

RNS Number : 7290S

RUA Life Sciences PLC

13 July 2020

 

13 July 2020

RUA Life Sciences plc

("RUA Life Sciences", the "Company" or the "Group")

Final results for the year ended 31 March 2020

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 2020 .

  Highlights :

· Transformation continues: driven by recent strategic acquisition of RUA Medical Devices Limited

· Polymer IP business unit performed strongly:  licence fee and royalty income grew to £489k (2019: £463k)

· Year end cash balance: despite continued R&D spend, cash remained strong at £1,976k (2019: £2,412k). As at 7 July 2020, cash balance of £1,507k after incurring costs and initial cash consideration for the acquisition of RUA Medical Devices Limited

· Medical device development business progressing well:  key milestones met in both Vascular and Structural Heart business units including pilot animal study on vascular grafts

· Overheads remain tightly controlled : all R&D costs charged to the Group's income statement

· Key milestones : expect to reach design freeze on Vascular products within the next two months and Structural Heart projects during the financial year allowing full regulatory testing to commence on both product areas

· Post-year end, completed strategic acquisition of RUA Medical Devices Limited and name changed to RUA Life Sciences plc creating a fully formed medical devices business with IP, people, production and products

Bill Brown, Chairman of RUA Life Sciences, commented:   "A huge amount has been accomplished by the Company and its partners over the last two years in building the foundations for a range of transformational cardiovascular devices. With the recent acquisition of RUA Medical, the Group now has all of the elements in house to continue the progress made and anticipate meeting a number of key milestones over the next year."

For further information contact:

RUA Life Sciences

Bill Brown, Chairman                                   Tel: [phone]                                   

David Richmond, CEO    Tel: [phone]   

Shore Capital 

Tom Griffiths/David Coaten                        Tel: [phone]

About RUA Life Sciences

The RUA Life Sciences group was created in April 2020 when RUA Life Sciences Plc (formerly known as AorTech International Plc) acquired RUA Medical Devices Limited to create a fully formed medical device business. RUA Life Sciences is the holding company of the Group's four trading businesses, each exploiting the Group's patented polymer technology.

Our vision is to improve the lives of millions of patients by improving and 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 is pursuing our vision.

Elast-Eon™'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 7 million implants and over 14 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-EonTM polymers to the medical device industry.
RUA Vascular:	Development of large bore polymer sealed grafts and soft tissue patches.
RUA Structural Heart :	Development of tri leaflet polymeric heart valves.

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 2020.

I introduced my statement last year by saying that the year had been transformational for the Group. I am delighted that this transformation has continued and the Group which was renamed from AorTech International plc to RUA Life Sciences plc on 16 June 2020 is almost unrecognisable from where it was only two years ago. The change of name followed the strategically important post-year end acquisition of RUA Medical Devices Limited ("RUA Medical") and has now created a fully formed medical device business with the facilities, people and regulatory approvals to develop and manufacture medical devices enabled by the world leading properties of the Elast-Eon™ family of polymers. The exceptional team at RUA Medical is already making great progress on the Group's projects and I welcome them all to the wider RUA Life Sciences business.

Trading for Year

The period under review represents the trading of the Group just prior to the completion of the acquisition of RUA Medical. During that period revenues grew by 5.6% over the year from £463,000 to £489,000. As the business focussed on developing its range of medical devices, there was an anticipated increase in costs, and as a result, the loss for the year was £816,000 compared to £609,000 for the previous year. All Research and Development ("R&D") costs were expensed to the profit and loss account and the Company benefited from R&D Tax Credit receipts of £81,000 on the Research and Development activities undertaken during the year ended 31 March 2019 and the claim for the current year is expected to be higher.

Despite the increase in R&D expenditure, cash was well managed during the year and the cash burn was limited to £436,000 to include certain costs relating to the RUA Medical acquisition. Net assets as at 31 March 2020 were reduced from £3m to £2.28m due to the loss for the year and movement in other reserves in respect of the share-based payments for share options.

Group Structure

Following completion of the acquisition of RUA Medical in April 2020, RUA Life Sciences plc is the holding company of four distinct business units all of which are focussed on growth through the exploitation of our world class biopolymer, Elast-Eon™. The operations of each are described in more detail in the Group Chief Executive Officer's Report but in summary operate as follows:

RUA Biomaterials is the licensor of RUA's polymer technology, providing exclusive rights to other group companies as well as third party medical device manufacturers.

RUA Medical (acquired post year-end) is a fully certified and regulated full service end to end medical device designer, developer and manufacturer of products for third party customers.

RUA Vascular and RUA Structural Heart are two business units within the Group which are also customers of RUA Medical. RUA Vascular is developing medical devices based on the Group's expertise in implantable textiles combined with the properties of Elast-Eon™. The initial products being developed are large bore vascular grafts and soft tissue patches. RUA Structural Heart is developing a novel polymeric heart valve designed to revolutionise the global heart valve market by increasing durability without the need for drug treatment, whilst being machine made will have a significant cost advantage.

Covid-19 and Related Uncertainties

In certain respects, there is little uncertainty about Covid-19. Until such time as either a vaccine is developed or herd immunity provides protection, most of us will eventually catch Covid-19 and sadly some of us will die from it. The task for governments and policy makers is to balance the conflicts of limiting the spread of the virus through lockdown measures whilst allowing the economy and society to at least partially function. It is how global policy makers handle these conflicts that creates the current uncertainty. RUA Life Sciences operates in the global medical device sector and its products are all used to treat patients undergoing operations in hospitals.

In order to avoid the hospital systems being overwhelmed with Covid-19 patients, in late March 2020, elective surgery (i.e. surgery planned by the surgeon in consultation with the patient, rather than emergency surgery) was substantially cancelled and sales representatives from medical device companies were unable to visit hospitals. As no surgeries were being undertaken, hospitals were not purchasing many medical devices. The main market for RUA Medical's and RUA Biomaterials' customers is the US and as such the major area of risk. The US healthcare system is on the whole "for profit" and if operations are not being carried out neither the hospital nor the surgeon is earning.

As a result, we witnessed an earlier return to elective surgery in the US than we did in the UK with the state funded NHS. At the time of writing, the main customer of RUA Medical has returned to placing orders but since the middle of March 2020 the accumulated shortfall in orders amounted to approximately £300,000. There will be a backlog of patients awaiting surgery, but we remain uncertain how long it will take to catch up, if at all.

Your Board started its contingency planning for Covid-19 around the time of the lock down and suspension of elective surgery. One of the most important steps was the renegotiation of the cash element of the consideration for the acquisition of RUA Medical. The implications being that any shortfall in the trading expectations of RUA Medical results in a further year's deferral of all or part of the remaining cash consideration. The RUA Medical business has taken steps to limit the impact of Covid-19 on its trading activities by furloughing certain members of staff and successfully applied for £150,000 in grant finance from the Scottish Pivotal Enterprise Resilience Fund, which was received on 19 May 2020.

Detailed financial modelling has been undertaken and various scenarios analysed. The desire of RUA Life Sciences is to continue the progress made to date on the R&D activities relating to RUA Vascular and RUA Structural Heart. Even if revenues at RUA Medical were to be around 50% of historic levels and RUA Biomaterials suffers a reduction in licence and royalty income of 20%, the planned R&D activities can still be undertaken in the current year within the Group's cash resources without having to consider seeking additional finance. The Group has plans to invest in capital equipment for both manufacturing and testing of its device portfolio. RUA Medical has the benefit of a Regional Selective Assistance grant having been approved providing the opportunity of debt financing the balance of the cost.

Board

Following the acquisition of RUA Medical, David Richmond who had been a Non-Executive Director of the Group has now become Group Chief Executive Officer, with the governance benefits of splitting the role of Chairman and CEO.

As part of our review of the functioning and skills of the Board, we have identified the need for an additional Non-Executive Director with the necessary background and experience to become Chairman of the Audit Committee, a role that I have temporarily assumed from David Richmond when he was appointed Group CEO. A search process is commencing to identify suitable candidates and we intend to make the appointment by the end of the calendar year.

Gordon Wright, one of the original founders of AorTech and the visionary behind the original plans to develop a durable polymeric heart valve, has been on the Board of the Company for a number of years and a Non-Executive Director since 2006. Gordon has remained on the Board for longer than the corporate governance recommendations but it was desirable to see the Company through the current period of transformation. With the acquisition of RUA Medical, the ongoing progress in our R&D activities and the return to having a manufacturing base in Scotland, Gordon has informed the Board of his intention to retire and has agreed to remain as a Non-Executive Director until the end of the calendar year to coincide with the appointment of a new Non-Executive Director.

I would like to thank Gordon on behalf of the Group and its shareholders for his contribution over the years and in order to maintain a formal relationship with Gordon in the future, the Board is delighted that Gordon has accepted the position of Honorary Life President.

Corporate Governance

In line with most AIM quoted companies, RUA Life Sciences has adopted the QCA Code. In this annual report and accounts, I have set out my statement on Corporate Governance which I hope provides shareholders with a better understanding of how RUA is run and how important decisions are made. As part of the journey of Corporate Governance, the major change since my last report has been the acquisition of RUA Medical, which, as a related party transaction, was approved by shareholders on 1 April 2020. This has allowed the combined role of Chairman and Group Chief Executive to be split between myself and David Richmond, thus normalising the position.

Outlook

Setting aside the uncertainties related to Covid-19 and the implications for business of policy decisions to contain its spread, your Board remains positive about the prospects for RUA Life Sciences. We are fortunate to be focussed on the medical device industry and are developing devices to improve patients' lives. Covid-19 appears to have originated as a disease that has crossed from one species to another. All of the products we are developing are designed to eliminate the use of animal sourced by-products. Your Board believes that there will be a growing demand for non-animal sourced products and the benefits of Elast-Eon™ places RUA Life Sciences in a strong position to exploit those opportunities.

The Group's product development activities have continued to make good progress since the year end. The graft project has reached a major milestone of achieving its first animal implant and the initial results will be available in the near future. The feed-back from the implant was positive with the exception of an alteration required to the selvedge line which has now been addressed by the R&D team. Overall, we are delighted that the graft appears to have an enhanced surgical experience on implant.

The team are hopeful that the further pilot study data will allow design freeze on the graft product allowing us to progress to the necessary ISO testing prior to regulatory applications.

Similarly, we are pleased how the heart valve project is progressing and expect to be undertaking the pilot hydro-dynamic testing to verify the computational modelling which will also allow us to progress to regulatory testing.

Much has been achieved since the restructuring of the old AorTech business two years ago and we look forward to reporting on further developments in the new product portfolio over the coming year.

William Brown

Chairman

10 July 2020

Group Chief Executive Officer's Report

I am pleased to present my first Report to shareholders of RUA Life Sciences plc. The audited results cover the year to 31 March 2020. I became Group Chief Executive on 1 April 2020 and on that day, RUA Life Sciences acquired RUA Medical Devices Limited from me. I was a Non-Executive Director of RUA Life Sciences prior to the acquisition so the wider business is not new to me and I will explain the Group strategy and how the new group structure fits together.

Firstly, by way of introduction, I thought shareholders might be interested to learn why I was so enthusiastic about the prospects for the business combination that has created the RUA Life Sciences group. It was all driven by strategy and the perfect fit between the two businesses. The AorTech business had been successfully turned around from its historic difficulties into the owner of all of the intellectual property surrounding the Elast-Eon™ family of world class biostable polymers. A strategy had been developed to seek to capture much more of the value chain in medical devices by developing its own products in the cardio-vascular field. A very talented board of directors had been assembled and, in order to speed up the development of new products, strategic partnerships were entered into to enable this process.

My own business, RUA Medical Devices Limited was one such partner and we started working with the AorTech team almost two years ago on developing the products that will now become RUA Vascular. RUA Medical is an experienced full service, end to end medical device contract developer, contract manufacturer and implantable fabric specialist. It provides sub-contract design, development, manufacture, assembly, packing, inventory management, logistics and consultancy services to the medical device and biotech industries. The business is unique as we provide an end to end service from taking a client's device idea through design and development to be able to provide a fully retail packaged product to the customer. In order to create a business that is credible to the major medical device industry players, we made substantial investment in premises, clean room capacity, people, regulatory accreditations and the systems and processes required to be a trusted manufacturer of medical devices. The investment into this infrastructure was probably more than the headline price paid for RUA Medical. The limitation for RUA Medical in terms of growth in value was that as a sub-contract supplier, the exit multiples were substantially lower than those of an IP rich medical device "owner". It was by the combination of the RUA Medical infrastructure with the AorTech IP and device portfolio that I saw as an opportunity to be part of the development of a much larger and more valuable business.

New Group Structure

Since the creation of RUA Life Sciences in April 2020, the Group is best described as RUA Life Sciences being the holding company of four distinct divisions or subsidiaries. Each division is described below, but the structure is deliberate for a number of reasons, including transparency in monitoring the performance of each business unit, regulatory and quality system requirements, together with creating corporate structures that could be advantageous from a tax planning and future corporate activity perspective. We treat all parts of the business as an investment portfolio, allocating capital to where it can achieve the greatest risk adjusted return for shareholders. Each of the divisions is described below and their trading relationships explained.

For the reporting period, the first three of the following listed divisions has operated through RUA Life Sciences plc. However, for the current financial year, some are likely to transfer into previously dormant companies held by the Group, which have recently been renamed in preparation.

RUA Biomaterials

RUA Biomaterials is an IP licensing business that owns the family of medical grade polymers known as Elast-Eon™. Elast-Eon™ has been in long term human implants for well over 15 years and is the enabling technology behind over 7 million life sustaining devices. Elast-Eon™ has an FDA Masterfile and testing data has demonstrated the material to have all of the characteristics necessary for a long term implantable biomaterial.

RUA Biomaterials has licensed manufacturing rights to Biomerics and the rights to use the material to a number of other medical device companies. During the year to 31 March 2020, royalty income and licence fees from this business activity grew 5.6% from £463,000 to £489,000.

Elast-Eon™ is also being exploited by other group companies as the enabling technology behind the grafts and patches being developed by RUA Vascular and the heart valve being developed by RUA Structural Heart. Each of these group businesses will be granted exclusive licences to utilise Elast-Eon™ in their  particular field of use. As each of these products is developed and commercialised, RUA Biomaterials will enjoy a share of that success through the licence model.

RUA Vascular

RUA Vascular is developing a range of medical devices based on engineered textile substrates coated or sealed with Elast-Eon™. The initial products in this portfolio are large bore vascular grafts together with soft tissue patches. RUA Vascular has been working closely with RUA Medical Devices in the development of these products. The Research and Development team has now successfully produced a graft sealed with the polymer yet retaining the handling characteristics and feel preferred by surgeons. The graft has recently entered preliminary animal trials and once the desired outcome has been proven and achieved, design freeze will take place allowing both the longer term animal trials and the mechanical testing required to allow regulatory submissions to be made in order to begin marketing the products.

RUA Structural Heart

Over the past year, the Research and Development activities have progressed exceptionally well. The biggest step forward has been the development of a new manufacturing method that eliminates all of the manufacturing problems and constraints of the old method of dip casting valves in polymer solution. Early prototype valves have proven the concept of the manufacturing method which is currently being kept as a trade secret until the patent application process proceeds. In addition to being able to manufacture valves of a consistent quality, the method of manufacture removes all design constraints allowing us to manufacture what has been designed, rather than having to design what can be manufactured. This has allowed a valve to be designed and made that has substantially lower stress levels with the positive implications for durability.

The new valves will now undergo testing to confirm what has been modelled, allowing design freeze and ISO standard testing to be undertaken.

RUA Medical Devices

RUA Medical Devices is the recent acquisition by the Group. It is a specialist end to end sub-contract designer, developer and manufacturer of bespoke engineered medical devices with two facilities and four cleanrooms. The business is unique in the field of implantable textile devices in being equipped to take a customer's product idea and progress it from design straight through to delivering retail packaged devices for clinical use. RUA Medical Devices will continue to provide and grow these services to third party customers, but through the availability of Elast-Eon™ polymers and know how, will expand the offering to include textile medical devices enabled by Elast-Eon™. Additionally, the RUA Medical Devices team, facilities and systems are now fully available to continue the product development for RUA Vascular and RUA Structural Heart.

Covid-19 Implications

Covid-19 has had fewer implications for our medical device business than for most other sectors of UK industry, but the Board has taken a number of important steps to ensure the long-term viability of the business.

At a group level, it was decided to continue apace during lockdown with our R&D activities and the core R&D team was retained in the business. I am delighted with the progress that the team has achieved in bringing the Elast-Eon™ sealed vascular graft to implantation in a pilot animal trial and the large steps made in manufacturing a structural heart valve of a fully optimised design rather a design controlled by the manufacturing process. In these difficult circumstances, the team has probably achieved more than would have been done under normal working conditions.

The most important action RUA Medical Devices had to take was ensuring the safety and security of staff during the pandemic. Members of staff who can work at home have been instructed to do so, but the nature of the business is such that much of the work has to be done at our two facilities in Prestwick and Irvine. A detailed risk assessment exercise has been undertaken and procedures put in place to ensure social distancing and enhanced cleaning protocols. This has all been undertaken within the risk procedures as part of our Quality Management System and the business is fully Covid-19 compliant.

On a commercial basis, RUA Medical's main customer that sells long term implantable textile devices suffered from the global shut down of elective surgery. As a result, we had a two to three month period of little or no new order intake. In order to preserve cash resources, unfortunately some members of staff were placed on furlough and in the manufacturing side of the business a skeleton team was retained to progress the back order book to ensure products could be shipped to customers once they were ready to receive orders.

Early last month, RUA Medical received a further notification from its largest customer requesting it to prepare for the production of products and that orders would resume in the near future, but reserved the right to implement further suspension of orders in the event of the impact of a second wave of Covid-19. Since receipt of this notification, RUA Medical has now received new orders from its largest customer  for delivery in August 2020.

The Biomaterials business is currently performing at normal run rate for material supply, however it will take at least two quarters to fully appreciate any potential impact on royalty rates.

Both of the Group's product development businesses, RUA Vascular and RUA Structural Heart, are still in R&D and as such are not being impacted at the revenue level. The principal challenges are sourcing equipment and test facilities. We have experienced some frustration in being unable to participate in trials, but have not met with any significant barriers.

Despite the Covid-19 lockdown challenges encountered in my first 3 months as the Group CEO, I am pleased to confirm that RUA Life Sciences is well positioned to move forward in our plans to create significant shareholder value by providing innovative medical devices solutions that will improve the lives of patients worldwide.

David Richmond

Group Chief Executive Officer

10 July 2020

STRATEGY

The strategy of the Group is simple. To exploit the benefits of the Company's IP and the family of biostable polymers with exceptional long-term performance. This is being undertaken through:

· licensing Elast-Eon™ to third parties through RUA Biomaterials;

· developing textile based and Elast-Eon™ coated implantable devices through RUA Vascular;

· developing a revolutionary and market disrupting Elast-Eon™ leaflet polymeric heart valve through RUA Structural Heart; and

· becoming a centre of excellence for designing, developing and manufacturing Elast-Eon™ based medical devices through RUA Medical Devices whilst continuing to serve and expand its current customer base.

RUA Life Sciences is the holding company of each of these divisions or subsidiaries and 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.

 

Consolidated income statement

		Year ended 31 March 2020			Year ended 31 March 2019
		Pre-exceptional items	Exceptional items	Total	Pre-exceptional items	Exceptional items	Total
Notes		GB£000	GB£000	GB£000	GB£000	GB£000	GB£000
Revenue		489	-	489	463	-	463
Other income		14	-	14	-	-	-
Administrative expenses		(1,123)	-	(1,123)	(816)	(6)	(822)
Other expenses: share-based payments		(91)	-	(91)	(42)	-	(42)
Other expenses: Bad debt expense		(37)	-	(37)	(19)	-	(19)
Other expenses: amortisation of intangible assets		(193)	-	(193)	(218)	-	(218)
Total administrative expenses		(1,444)	-	(1,444)	(1,095)	(6)	(1,101)
Operating loss		(941)	-	(941)	(632)	(6)	(638)
Finance (expense) / income		44	-	44	29	-	29
Loss before taxation		(897)	-	(897)	(603)	(6)	(609)
Corporation tax		81	-	81	-	-	-
Loss from continuing operations attributable to owners of the parent company		(816)	-	(816)	(603)	(6)	(609)
Loss attributable to owners of the parent company		(816)	-	(816)	(603)	(6)	(609)
Loss per share Basic & Diluted (GB Pence per share)	4			(5.55)			(4.72)

Consolidated balance sheet

				31 March 2020		31 March 2019
				GB£000		GB£000
Assets
Non current assets
	Intangible assets			255		448
	Property, plant and equipment			5		1
Total non current assets				260		449
Current assets
	Trade and other receivables			258		238
	Cash and cash equivalents			1,976		2,412
Total current assets				2,234		2,650
Total assets				2,494		3,099
Liabilities
Current liabilities
	Trade and other payables			(219)		(99)
Total current liabilities				(219)		(99)
Total liabilities				(219)		(99)
Net assets				2,275		3,000
Equity
	Issued capital			12,574		12,574
	Share premium			4,550		4,550
	Other reserve			(1,825)		(1,916)
	Profit and loss account			(13,024)		(12,208)
Total equity attributable to equity holders of the parent				2,275		3,000

Consolidated cash flow statement

	Year ended  31 March 2020		Year ended  31 March 2019
	GB£000		GB£000
Cash flows from operating activities
Group loss after tax	(816)		(609)
Adjustments for:
Amortisation of intangible assets	193		218
Depreciation of property, plant and equipment	1		-
Share-based payments	91		42
Interest income	(7)		(7)
Tax income	(81)		-
Effect of exchange rate during the year	-		-
(Increase) / decrease in trade and other receivables	(20)		(104)
Increase / (decrease) in trade and other payables	120		31
Cash generated from operations	(519)		(429)
Tax received	81		-
Net cash flow from operating activities	(438)		(429)
Cash flows from investing activities
Purchase of equipment	(5)		(1)
Purchase of intangible assets	-		-
Acquisition of subsidiary	-		(139)
Interest received	7		7
Net cash flow from investing activities	2		(133)
Cash flows from financing activities
Proceeds of issue of share capital, net of issue costs	-		2,552
Net cash flow from financing activities	-		2,552
Net (decrease)/increase in cash and cash equivalents	(436)		1,990
Cash and cash equivalents at beginning of year	2,412		422
Cash and cash equivalents at end of year	1,976		2,412

Consolidated statement of changes in equity
	Issued share capital GB£000	Share premium GB£000	Other reserve GB£000	Profit and loss account GB£000	Total equity GB£000
Balance at 31 March 2018	12,118	2,500	(2,003)	(11,599)	1,016
Share-based payments	-	-	42	-	42
Share warrants	-	(45)	45	-	-
Issue of equity share capital (net of issue costs)	456	2,095	-	-	2,551
Transactions with owners	456	2,050	87	-	2,593
Total comprehensive income for the year	-	-	-	(609)	(609)
Balance at 31 March 2019	12,574	4,550	(1,916)	(12,208)	3,000
Share-based payments	-	-	91	-	91
Share warrants	-	-	-	-	-
Issue of equity share capital	-	-	-	-	-
Transactions with owners	-	-	91	-	91
Total comprehensive income for the year	-	-		(816)	(816)
Balance at 31 March 2020	12,574	4,550	(1,825)	(13,024)	2,275

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.  Basis of preparation

The extracts from the Consolidated financial statements are for the year ended 31 March 2020. They have been prepared in compliance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRIC) interpretations as adopted by the European Union as at 31 March 2020.

The Consolidated financial statements have been prepared under the historical cost convention.

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 30 September 2021 which incorporate planned investment in new product development and assumptions related to the return towards normal 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 has 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.

The Board however recognises that the period of this forecast could be further impacted by policy decisions related to the Covid-19 pandemic which at present are not possible to forecast, particularly surrounding the possibility of a second peak in global infection rates. These events and conditions indicate a material uncertainty exists that may cast significant doubt on the Group's and parent company's ability to continue as a going concern.  To mitigate the risk the Group would reassess its plans for product development and investment in capital equipment, would undertake a process of cost cutting and seek additional finance through Government backed Covid-19 support schemes, other debt funding options or an equity fund raise.

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 balance sheet at 31 March 2020, the summarised consolidated income statement, the summarised consolidated statement of changes in equity and the summarised consolidated cash flow statement for the year then ended have been extracted from the Group's statutory financial statements for the year ended 31 March 2020 upon which the auditor's opinion includes reference to a 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 2020 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 2019 have been delivered to the Registrar of Companies. The 31 March 2020 accounts were approved by the Directors on 10 July 2020, but have not yet been delivered to the Registrar of Companies.

4. Earnings per share

The basic and diluted loss per ordinary share of 5.55 pence (2019: loss of 4.72 pence) is calculated on the loss of the Group of £816k (2019: loss of £609k) and on 14,686,608 (2019: 12,910,847)  ordinary shares, being the weighted average number of shares in issue during the year.

Posting and availability of accounts

   The annual report and accounts for the year ended 31 March 2020 will be sent by post or electronically to all registered shareholders on 16 July 2020.  Additional copies will be available for a month thereafter from the Company's office at Unit 26 Prospect House, Gemini Crescent, Dundee, DD2 1TY. 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-third Annual General Meeting of RUA Life Sciences plc will be posted with the Annual

Report and Accounts and will be held at RUA Medical's premises at 2 Drummond Crescent, Riverside Business Park, Irvine, Ayrshire KA11 5AN on Tuesday, 11 August 2020 at 11:00am.

The Company has been monitoring developments in relation to the Covid-19 pandemic, including the public heath guidance. The health of our shareholders and our employees is of paramount importance to us. The Board has decided on special arrangements to apply for the holding of this year's AGM.  Accordingly, based on current guidance, this AGM will be run as a "closed meeting".  Further details will be included in the Annual Report and will published on the Company's website at www.rualifesciences.com.

 

END

 

 

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