Corporate Update

RNS Number : 4599J

FastForward Innovations Limited

14 April 2020

 

FastForward Innovations Ltd / AIM: FFWD / Sector: Closed End Investments

14 April 2020

FastForward Innovations Ltd ("FastForward" or "FFWD")

Corporate Update

FastForward Innovations Ltd, the AIM quoted company focusing on making investments in fast growing and industry leading businesses, is pleased provide a corporate update in respect of its portfolio of investee companies.

Investee Company Overview

· Leap Gaming performing well - most recently it has signed a deal to develop an official virtual tennis product with IMG Arena in partnership with ATP Media, which will be released in May 2020

· Factom - as announced on 2 April 2020 and as further explained below, Factom is seeking vital funding to continue operations. FFWD is playing a central role in these negotiations given its SAFE investment in Factom

· Juvenescence has raised USD $168 million to-date and in strong cash position

· EMMAC launched UK's first operational distance pharmacy dedicated to fulfilling medical cannabis prescriptions, extended operations in Germany and successfully completed its first export into Israel

· Yooya - in the process of being restructured and repositioned into a new company, which intends to be an Asia-focused social commerce platform company promoting hemp based wellness products into China

· Portage Biotech Inc.'s portfolio companies continuing to advance

o  Invested $950,000 into iOx Therapeutics Ltd. supporting commencement of human studies to collect safety data for drug treatment in cancer patients

o  Intensity Therapeutics announced initial patient dosing as part of a clinical trial collaboration agreement with Merck to kill tumours and increase immune system recognition - safety lead portion of trial successfully completed

· Vemo Education on strong financial footing having doubled colleges and public universities on platform in 2019 to +60 and helped partners process +$100m in ISAs

Lorne Aborny, Chairman of FastForward, commented, "We continue to focus on providing investors with exposure to disruptive growth opportunities that have near-term re-rating potential and would otherwise be inaccessible.  To this end, we currently have eight investee companies of varying size and spanning several sectors, some of which have had recent notable successes whilst others have not performed as we'd hoped. 

"Many of FastForward's portfolio companies are yet to release statements about the impact of the COVID-19 pandemic ('the 'Pandemic') on their operations. However, we expect that there will likely be an effect on some, albeit not as pronounced as in customer facing businesses such as retail or services. Accordingly, we are working closely with each of our investee companies to monitor their positions and assess any potential impact. Naturally, it is a hard market for fundraising, which will delay the growth of some companies, however, others are performing well such as online gaming group, Leap Gaming, which is seeing an increase in interest and business under the Pandemic circumstances.

"Importantly, FastForward has cash reserves available and is therefore well positioned to weather this difficult period with no adverse effects to its own operation."

Investee Company Updates

Leap Gaming (investment position: c.28 % of NAV)* is a B2B developer of high-end virtual gaming applications whose games are offered by leading global online and retail gaming operators, generating tens of thousands of engagement points with end-users to drive the development of the business. Leap Gaming presently offers 13 virtual sports products (seven scheduled and six in the instant suite), with the 14^th (golf) featuring a special arrangement with Carnoustie Golf Course set to go live within the next month.

Leap Gaming has developed various innovations for the virtual sports market, one of which was the introduction of Leap's Instant Suite, which overcomes one of the "weaknesses" of sports betting and traditional virtual sports; that of having to wait for "scheduled" events. By empowering users to create their own experience in their own time, Leap Gaming has been able to meet fans need for instant gratification by way of a suite of "instant" games such as Instant Horses, Instant Football, Instant Greyhounds, Instant Speedway, Instant Trotting and Instant Velodrome. This has been a huge success with sales of the product increasing by 240% year-on-year (prior to the recent further, significant uplifts seen as a result of the cessation of real life sporting events).

As announced at 27 September 2019, Leap Gaming entered into an agreement with Mansion Casino ('Mansion'), which sees Mansion distributing Leap Gaming's game portfolio across its platform, with new games being developed and released regularly. Performance metrics over the past year have been impressive with daily active users and number of transactions for Q4 2019 being more than double that of Q4 2018, as well as more than 40% up compared to Q3 2019. Transactional turnover is also up 70% on the full year 2019 compared to 2018.

Leap Gaming is also seeing the benefits of its strategic partnership with global media giant, IMG Arena, which is also one of its investors. As announced on 2 April 2020, Leap Gaming has signed a deal to develop and distribute an official virtual tennis product with IMG Arena in partnership with ATP Media, which will be released next month. The recent cessation of sporting events around the world as a result of the Pandemic, has resulted in a significant rise in the volume of players and bets levied on Leap Gaming's virtual sports. Most recent figures show that daily turnovers have as much as quadrupled, compared to January 2020, and the new business pipeline has increased by similar multiples, indicating a strong future potential for increased business in the coming months. 

Factom Inc. (investment position: c.26.5% of NAV)* provides blockchain solutions that preserve, ensure and validate digital assets. On 2 April 2020, the Company announced that Factom had advised investors (including FastForward) that in the absence of further funding, it would be unable to continue trading.  Following this announcement much discussion has taken place internally as to the legal options open to both Factom and FastForward and clarification has been received from Factom management that a winding up is not as imminent as their initial communication might have suggested as they continue to engage with potential investors (both new and existing) with a view to saving the business and continuing development of their Blockchain as a Service business. As matters currently stand, the Company does not believe a Dissolution Event under the terms of its SAFE Agreement has occurred; as such the Company retains the rights provided under the original terms of the SAFE Agreement as announced on 23 July 2018.

Clearly in this time of increased caution by investors, it is harder to raise new monies, however FastForward acknowledges Factom managements resolve to both cut costs and extend their ability to continue to trade legally whilst these discussions continue.  Furthermore, as a result of these communications by Factom (and indeed FFWD's own announcements to the AIM market), the Company is aware that a number of new parties have come forward to register interest in either investing in Factom or investigating the potential synergies of the patented Factom technologies; proprietary code; and/or the high profile engineering contracts which Factom undertake, with their own businesses.  FastForward continues to communicate regularly with Factom's management and hope to have more updates on progress to share in the near future. 

To be clear, in the event that additional funding is not secured before Factom's remaining reserves are exhausted, FastForward expects the Factom Board to recommend to shareholders that the company be wound up and that FastForward as the largest creditor should lead the receivership of Factom.  In such a scenario, FastForward would hope to recover some value by sale of those proprietary assets mentioned earlier.

Whether Factom is ultimately restructured, receives new investment or is wound-up, it is likely that the continuing value of the Company's investment or any amount recovered by the sale of assets, will be a fraction of that invested.  As such in the interim, and until such time as a clear value can be attributed to the Factom investment by virtue of progress along one of the possible scenarios, FastForward will be treating this as a complete loss.

The Company will update shareholders on any successful fundraising, restructuring or move to wind-up Factom as soon as commercial conditions allow. 

Juvenescence Ltd. (investment position: c.12.5 % of NAV)* is a biopharmaceutical company with a pipeline of therapeutic assets that target aging, regeneration and the diseases of aging. It actively works with scientists and leading research institutions to create joint ventures combining their IP and its own resources.

Having raised US$168m to-date, Juvenescence opened 2020 in a positive cash position, which will see it through even the longest estimates for the Pandemic and enable continued development of its exciting initiatives. It has a very real chance of growing itself into a position of being 'The Anti-aging Company' and FastForward looks forward to updating shareholders as it continues to advance its strategy.

EMMAC Life Sciences Group (investment position: c.12% of NAV)*, Europe's leading independent medical cannabis company, exited 2019 in a strong position having successfully raised an additional £15 million via a Convertible Loan Note ("CLN") in Q4 of 2019, bringing the total funds it raised for the year to £34 million. The CLN Issue provided for notes to be converted to ordinary shares at a price of up to £0.50 per share giving EMMAC an implied value in excess of £150 million.

At the close of 2019, EMMAC launched its first unlicensed medical cannabis products for the UK and European market.  This range was extended in early 2020 to incorporate several different strengths and THC/CBD/CBG formulations in Oil and Flos (whole dried female cannabis flowers) formats, to address a wide range of specialist requirements.

EMMAC's medical cannabis products are already being prescribed to a growing number of patients in the UK.  To further cement its position and to meet demand for these products, on 25 February 2020, it launched the UK's first operational distance pharmacy dedicated to fulfilling medical cannabis prescriptions, through a division of its wholly-owned subsidiary, Rokshaw, a leading UK EU-GMP certified Specials manufacturer. 

Rokshaw is EMMAC's second GMP-certified laboratory and is MHRA approved.  It works in close conjunction with Medalchemy, the company's GMP-certified facility, which includes the research and development centre, in Spain.  The full integration of the EMMAC supply chain, combined with licensed distribution channels for medical cannabis in the UK, Germany and Italy, has positioned EMMAC to deliver the highest-quality medical cannabis product for the UK and European market.

As announced on 31 March 2020, EMMAC has secured its pharmaceutical, wholesalers and narcotics handling permits for Germany, which enable it to drive immediate revenue growth in Germany with the sale of medical cannabis products. The Bank of Montreal estimate that the German medical cannabis market could be a US$5 billion market on the assumption that 7.5% of sleep, anxiety and pain prescriptions in Germany will be replaced with medicinal cannabis over the coming seven years. 2020 has also seen the first export of EMMAC's medical cannabis to Israel, which has a mature medical cannabis market; 400 kilograms of medical cannabis was exported to the Bazelet Group, the largest medical cannabis company in Israel, making EMMAC the first independent European company to export medical cannabis to Israel.

A core tenant of EMMAC is the belief that growth of medical cannabis must be underpinned by the most robust science.  In line with this, EMMAC continues to drive pioneering research programmes with Imperial College London and the University of Insubria.

EMMAC's Wellness division also continues to witness significant growth.  Its CBD wellness and cosmetic brand, Blossom, has been launched across a new e-commerce platform to accelerate online sales and meet growing consumer demand with activation plans in place for the key European markets.  Furthermore, the white label part of the business has new products in development with Boots, building on the initial Boots own-label CBD muscle balm developed by EMMAC. A particular new range in development will open distribution opportunities in the US market through Walgreens. EMMAC Wellness has also started producing own label products for international online wellness retailer, weight world and has started producing own label CBD products for a pharmacy listed across the UK.

Yooya ( investment position: c. 8 % of NAV)* is, a s announced at 20 March 2020, in the process of being restructured and repositioned into a new company (the 'Acquirer'), which intends to be an Asia-focused social commerce platform company promoting hemp based wellness products into China.

The initial sale of Yooya into the new company will likely be at well below FastForward's carrying value. However, the Acquirer intends to raise funds in the near term once initial milestones are met and following this will be able to implement its business plan to commence promotion of hemp based wellness products into China. The impact on the longer term carrying value will therefore depend on the final terms of any fundraising by the Acquirer and the resulting success of the business activities in China and subsequently other Asian Jurisdictions. Further updates will be provided as information becomes available to FastForward over the coming weeks.

Portage Biotech Inc. (investment position: c. 5.5 % of NAV)* is a biotechnology company focused on developing best-in-class or first-in-class therapeutics.  To this end, it provides funding and advice to a portfolio of nine subsidiary companies; projects under development include research and treatments for various cancers, eye disease and acute kidney injury. 

As announced on 31 January 2020, Portage invested a further $950,000 into one of its portfolio companies, iOx Therapeutics Ltc. ('iOx'), a UK-based immunoconcology company. This supported the commencement of human studies to collect safety data for iOx's drug treatment in cancer patients, which represents a major milestone in its work.

Another of Portage's portfolio companies is Intensity Therapeutics, a clinical-stage biotechnology company developing proprietary technology and products to kill tumours and increase immune system recognition. On 31 October 2019, Intensity Therapeutics announced initial patient dosing using a combination of its own INT230-6 drug and Merck's Ketruda as part of a clinical trial collaboration agreement with Merck to kill tumours and increase immune system recognition.  On 30 March 2020, Intensity Therapeutics provided a further update that the safety lead portion of this trial has been successfully completed.

Interests in other companies include: Nekonal Oncology, focussed on the development of treatments for both solid and hematological malignancies; RIFT Biotherapeutics, currently conducting preclinical testing on treatments using antibodies in the inflammatory tumour and tumour-infiltrating immune cell microenvironments; Stimunity, which is conducting a preclinical study to demonstrate proof of concept for novel systemic and local formulations of STING antagonists for cancer treatment in patients that do not respond to conventional immunotherapy; and Saugatuck Therapeutics, an early stage biotech company focused on developing co-formulations of different immune based therapeutics to improve safety and efficacy of different therapies.

Portage has filed an application to the Ontario Securities Commission to revoke an outstanding cease trade order ('CTO') issued on 2 August 2019. As announced on 17 March 2020, The CTO is in the process of being reviewed and Fastforward will continue update shareholders with any material developments as they occur.

Vemo Education (investment position: c. 1.5 % of NAV)* is one of the leading US providers of Income Share Agreement programmes ('ISAs'), which enable students to defer some of their costs to a US college or university in exchange for a fixed percentage of their post-graduation income for a fixed period.  The company h ad a strong performance in 2019, doubling its school count meaning it now has over 60 colleges and public universities on its platform. In total, Vemo has helped its partners process over $100m in ISAs. Vemo remains on a strong financial footing and FastForward looks forward to updating shareholders on the advancement of its innovative business model which continues to be well executed.

*NAV percentages are as at the last published accounts at 30 September 2019.  New percentages will be provided within the 31 March 2020 financial statements in due course.

ENDS

For further information on the Company please visit www.fstfwd.co   or contact:

Ed McDermott / Lance de Jersey	FastForward Innovations Ltd	Email: [e-mail]
James Biddle / Roland Cornish	Beaumont Cornish Limited, Nomad	Tel: [phone]
Jeremy King	Optiva Securities Limited, Broker	Tel: [phone]
Isabel De Salis / Beth Melluish	St Brides Partners Ltd, Financial PR	Tel: [phone]

Notes

FastForward Innovations is an AIM quoted investment company focused primarily on disruptive high growth life sciences and technology businesses particularly within the medical cannabis arena. The Company's strategy is to identify early stage opportunities that have an upcoming investment catalyst and grow its portfolio in terms of value whilst limiting the number of investee companies to a level where relevant time can be devoted to each.

 

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