Half-year Report

RNS Number : 4319W

FastForward Innovations Limited

11 December 2019

 

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

11 December 2019

FastForward Innovations Ltd

("FastForward", "FFWD" or the "Company")

Interim Results

FastForward Innovations Ltd, the AIM listed closed end investment fund with a focus on disruptive, high growth technology and life sciences businesses, is pleased to announce its interim results for the six months ended 30 September 2019.

Highlights from Investments

·    Progress across diverse portfolio of disruptive, high growth technology and life sciences businesses

·    EMMAC Life Sciences Ltd. raised £15 million via the successful issue of convertible loan notes, as announced post period end, on 15 October 2019

·    Factom launched minable network of stablecoins, PegNet, as announced post period end, on 15 October 2019

·    Successful closure of Juvenescence's Series B funding round at the targeted $100 million, as announced on 19 August 2019 

·    Investment in Portage Biotech Inc. in exchange for previous holding in Intensity Therapeutics

·    Leap Gaming partnered with established online betting and gaming platform Mansion Casino, as announced on 27 September 2019

Chairman's Statement

This has been a positive period for FastForward as the value of its investments in fast-growing, industry leading businesses, specifically in the life science, health and technology arenas, become apparent.   

Our aim is to give investors exposure to disruptive growth opportunities which they would otherwise be unable to access.  To this end, we currently have nine investments of varying size and spanning several sectors, which we believe have the near-term potential to re-rate and thus significantly impact our NAV.  Notably, FastForward does not charge management fees or take a fee on success; the intention is to either re-invest the capital generated or ultimately return value to investors by way of dividends, share-buybacks or other distributions.

During the period, several investee companies have been active.  Our second investment in the medical cannabis sector, EMMAC Life Sciences Ltd. ("EMMAC"), raised £15 million via the issue of convertible loan notes.  As Europe's leading independent cannabis company, I am delighted with the response to EMMAC's fundraise, which reflects the continuing attraction of EMMAC and its business plan to investors, despite the regulatory difficulties facing the sector.

Our investments within the technology sector are also showing promise.  Post period end in October 2019, we announced that blockchain solutions provider, Factom, launched PegNet, an open, distributed, autonomous and minable stablecoin network for an asset backed payment cryptocurrency, that enables users to store value in any of the listed fiat currencies, precious metals or cryptocurrencies.   Juvenescence, a biopharmaceutical company focused on therapeutic assets to target aging, regeneration and the diseases of aging, also made headway having raised $100 million through a Series B financing round.  Further details of investee news can be found in the Investee Company Review section below. 

On the corporate side, I have taken on the role of interim Chairman, in addition to my role as CEO, replacing Jim Mellon who resigned in August 2019 to focus on his other business activities, particularly Juvenescence in which we continue to be invested.  I'd like to thank Jim for his service and assistance over the years and look forward to continuing to work with him at Juvenescence. 

As our financial statements highlight, there is a disparity between the 30 September 2019 market cap of circa £11 million and the NAV of circa £20.4 million. It should be noted that whilst we have enjoyed gains on the back of foreign exchange rates between the Dollar and the Pound Sterling given the number of US investments, the NAV is liable to fluctuate in response to the effects on the exchange rate from the uncertainties of the US / China trade discussions. At home in the UK, the stock market is also experiencing uncertainties.  We are hopeful that once there is more clarity politically and economically investors will follow the lead of foreign investors, who continue to see the value of London listed companies, and that our share price will respond accordingly. 

Looking ahead, this is an exciting time for FastForward as our investee companies make notable progress towards building revenue/profits and becoming leaders in their niche markets, which we hope will ultimately lead to a liquidity event.  In tandem, we continue to evaluate other exciting and innovative opportunities within the medical cannabis, wellness and technology fields where we believe value can be generated. I look forward to updating shareholders as our investment portfolio advances and strengthens.

Lorne Abony

Chairman

11 December 2019

Investee Company Review

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. Juvenescence has raised USD $165 million to-date and its last fundraising was at a valuation of $400 million; it hopes to IPO in 2020. During the period, Juvenescence announced the successful closure of its Series B financing round at the targeted $100 million, providing it with sufficient working capital to progress many of its programmes to their initial inflection points.

EMMAC Life Sciences Plc (investment position: c.12% of NAV) is Europe's largest medical cannabis company by territory. It brings together cutting-edge scientific research with the latest innovations in cannabis cultivation, extraction and production and has plans for an IPO in the future.  Post period end in October 2019, it was announced by the Company that EMMAC may have an implied value of greater than £150 million based on the conversion price of the £15 million convertible loan notes issued.

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.  This was a new investment for the Company during this period, where we took a stake in Portage in exchange for our previous holding in Intensity Therapeutics.  Whilst there have been some issues (notably the suspension of trading of Portage stock on the Canadian Securities Exchange ("CSE") due to late filing of accounts), we understand from a recent announcement dated 27 November 2019 that the CSE have granted Portage an extension to remedy the issue and lift the suspension. Portage therefore expects that this will be resolved in the near future and importantly, there is no impairment to the carrying value of the investment in the meantime. We are excited to watch the development of both Portage and its underlying therapeutic companies.

Leap Gaming (investment position: 28% of NAV) is a B2B developer of high-end virtual reality ('VR') gaming applications whose games are already offered by leading global online and retail gaming operators generating tens of thousands of engagement points with end-users. It has a strategic partnership with global media giant, IMG, which is also one of the large investors, to drive the development of the business. In September 2019, Leap Gaming signed a new partnership with the established online betting and gaming platform Mansion Casino around distribution of Leap Gaming's game portfolio across Mansion's footprint. 

Yooya (investment position: c.8% of NAV) is currently a content-driven e-commerce platform focused on Asia, however, proposals are under review, which may result in it being converted to a CBD sales and marketing platform.

Vemo Education (investment position: c.1.5% of NAV) is one of the leading US providers of income share agreement programmes, 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.  This increases transparency around student experiences, helping schools improve, compete, succeed and fundamentally change the relationship they have with students.  Vemo recently raised additional capital and is in a strong position to continue to develop the business over the coming years.

Factom (investment position: c.26.5% of NAV) is a recognised leader in providing blockchain solutions that preserve, ensure and validate digital assets.  The commercial potential of its three divisions is beginning to be realised, having recently signed several large corporate and government clients that are likely to deliver significant recurring revenues.  It is looking to secure bridge funding of up to US$4 million in Q1 2020, if successful this will aid in supporting company development and prove its business case ahead of a Series B funding round.

Cryptologic (investment position: c.2% of NAV) is a Canadian listed company currently involved in cryptocurrency mining, but which is seeking to pivot into the Canadian Cannabis Industry by way of a proposed acquisition of assets from Wayland Group and the sale of its mining business.  The specifics of the proposed deal would preclude FastForward's continued involvement in the company due to UK regulatory constraints and is not in line with its investment mandate. As such, FastForward is in the process of selling its investment in Cryptologic, which is by way of market traded, convertible debentures; the sale of any outstanding debentures held by FastForward will in some ways be contingent upon the proposed Wayland transaction and liquidity in the debenture market. 

Interim Financial Statements

FASTFORWARD INNOVATIONS LIMITED

UNAUDITED CONDENSED HALF-YEARLY REPORT AND FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2019

INVESTING POLICY

The Company's Investing Policy is to invest in and/or acquire companies which have significant intellectual property rights which they are seeking to exploit, principally within the technology sector (including digital and content focused businesses) and the life sciences sectors (including biotech and pharmaceuticals). Initially the geographical focus will be North America and Europe but investments may also be considered in other regions to the extent that the Board considers that valuable opportunities exist and positive returns can be achieved.

In selecting investment opportunities, the Board will focus on businesses, assets and/or projects that are available at attractive valuations and hold opportunities to unlock embedded value. Where appropriate, the Board may seek to invest in businesses where it may influence the business at a board level, add its expertise to the management of the business, and utilize its industry relationships and access to finance; as such investments are likely to be actively managed.

The Company's interest in a proposed investment and/or acquisition may range from a minority position to full ownership and may comprise one investment or multiple investments. The proposed investments may be in either quoted or unquoted companies; are likely to be made by direct acquisitions or through an immediate investment; and may be in companies, partnerships, earn-in joint ventures, debt or other loan structures. The Board may focus on investments where intrinsic value can be achieved from the restructuring of investments or merger of complementary businesses.

The Board expects that investments will typically be held for the medium to long term, although short term disposal of assets cannot be ruled out if there is an opportunity to generate an attractive return for Shareholders. The Board will place no minimum or maximum limit on the length of time that any investment may be held.

There is no limit on the number of projects into which the Company may invest and the Company's financial resources may be invested in a number of propositions or in just one investment, which may be deemed to be a reverse takeover under the AIM Rules. The Directors intend to mitigate risk by appropriate due diligence and transaction analysis. Any transaction constituting a reverse takeover under the AIM Rules will also require Shareholder approval. The Board considers that as investments are made, and new promising investment opportunities arise, further funding of the Company may also be required.

Where the Company builds a portfolio of related assets it is possible that there may be cross holdings between such assets. The Company does not currently intend to fund any investments with debt or other borrowings but may do so if appropriate. Investments are expected to be mainly in the form of equity, with debt potentially being raised later to fund the development of such assets. Investments in later stage assets are more likely to include an element of debt to equity gearing. The Board may also offer new Ordinary Shares by way of consideration as well as or in lieu of cash, thereby helping to preserve the Company's cash for working capital and as a reserve against unforeseen contingencies including, for example, delays in collecting accounts receivable, unexpected changes in the economic environment and operational problems.

The Board will conduct initial due diligence appraisals of potential businesses or projects and, where it believes that further investigation is warranted, it intends to appoint appropriately qualified persons to assist. The Board believes it has a broad range of contacts through which it is likely to identify various opportunities which may prove suitable. The Board believes its expertise will enable it to determine quickly which opportunities could be viable and so progress quickly to formal due diligence. The Company will not have a separate investment manager. The Board proposes to carry out a comprehensive and thorough project review process in which all material aspects of a potential project or business will be subject to rigorous due diligence, as appropriate. Due to the nature of the sector in which the Company is focused it is unlikely that cash returns will be made in the short to medium term; rather the Company expects a focus on capital returns over the medium to long term.

CHAIRMAN'S STATEMENT

I am pleased to present the report and financial statements of FastForward Innovations Limited (the "Company" or "FastForward") for the six months ended 30 September 2019.

This has been a positive period for FastForward as the value of its investments in fast-growing, industry leading businesses, specifically in the life science, health and technology arenas, become apparent.  

Our aim is to give investors exposure to disruptive growth opportunities which they would otherwise be unable to access.  To this end, we currently have nine investments of varying size and spanning several sectors, which we believe have the near-term potential to re-rate and thus significantly impact our NAV.  Notably, FastForward does not charge management fees or take a fee on success; the intention is to either re-invest the capital generated or ultimately return value to investors by way of dividends, share-buybacks or other distributions.

During the period, several investee companies have been active.  Our second investment in the medical cannabis sector, EMMAC Life Sciences Ltd. ("EMMAC"), raised £15 million via the issue of convertible loan notes.  As Europe's leading independent cannabis company, I am delighted with the response to EMMAC's fundraise, which reflects the continuing attraction of EMMAC and its business plan to investors, despite the regulatory difficulties facing the sector.

Our investments within the technology sector are also showing promise.  Post period end in October 2019, we announced that blockchain solutions provider, Factom, launched PegNet, an open, distributed, autonomous and minable stablecoin network for an asset backed payment cryptocurrency, that enables users to store value in any of the listed fiat currencies, precious metals or cryptocurrencies.   Juvenescence, a biopharmaceutical company focused on therapeutic assets to target aging, regeneration and the diseases of aging, also made headway having raised $100 million through a Series B financing round.  Further details of investee news can be found in the Investee Company Review section below. 

On the corporate side, I have taken on the role of interim Chairman, in addition to my role as CEO, replacing Jim Mellon who resigned in August 2019 to focus on his other business activities, particularly Juvenescence in which we continue to be invested.  I'd like to thank Jim for his service and assistance over the years and look forward to continuing to work with him at Juvenescence. 

As our financial statements highlight, there is a disparity between the 30 September 2019 market cap of circa £11 million and the NAV of circa £20.4 million. It should be noted that whilst we have enjoyed gains on the back of foreign exchange rates between the Dollar and the Pound Sterling given the number of US investments, the NAV is liable to fluctuate in response to the effects on the exchange rate from the uncertainties of the US / China trade discussions. At home in the UK, the stock market is also experiencing uncertainties.  We are hopeful that once there is more clarity politically and economically investors will follow the lead of foreign investors, who continue to see the value of London listed companies, and that our share price will respond accordingly. 

Looking ahead, this is an exciting time for FastForward as our investee companies make notable progress towards building revenue/profits and becoming leaders in their niche markets, which we hope will ultimately lead to a liquidity event.  In tandem, we continue to evaluate other exciting and innovative opportunities within the medical cannabis, wellness and technology fields where we believe value can be generated. I look forward to updating shareholders as our investment portfolio advances and strengthens.

Results

The net assets of the Company at 30 September 2019 were £20,401,000 (31 March 2019: £19,072,000), equal to net assets of 12.63p per Ordinary Share (31 March 2019: 11.81p per Ordinary Share).

Lorne Abony

Chairman

10 December 2019

INVESTEE COMPANY REVIEW

Performance and valuation

The Company's Net Asset Value ("NAV") per share stands at 12.63p per share compared to 11.81p at 31 March 2019. Our share price moved from 9.79p per share at 31 March 2019 to 6.85p per share at 30 September 2019.

Portfolio

The table below lists the Company's holdings as at 30 September 2019.

Holding	Share Class	Category	Country of Incorporation	Number of Shares Held at 30 September 2019	Valuation at 30 September 2019 (£'000)
Juvenescence Limited	Ordinary	Biotech / Healthcare	BVI	128,205	2,576
EMMAC Life Sciences Ltd	Ordinary	Biotech / Healthcare	England	6,666,667	2,500
Factom, Inc.	Series Seed	Blockchain Tech	USA	400,000	581
Factom, Inc.	SAFE note	Blockchain Tech	USA	N/A	4,880
Leap Gaming (Fralis LLC)	Units	Gaming	Nevis	1,512	5,710
Yooya Media (EDA)	Series Seed Preferred	Media and Content	BVI	27,255	1,586
Portage Biotech Inc.	Ordinary	Biotech / Healthcare	BVI	12,980,061	1,119
Vemo Education Inc.	Pref Series Seed 2	Edtech	USA	1,000,000	264
Cryptologic Corp	Convertible Debentures & Warrants	Blockchain Tech	Canada	N/A	386
Diabetic Boot Company	Ordinary	Biotech / Healthcare	England	25,978	-
Total Investment Value					19,602
Cash and other net current assets					799
Net Asset Value					20,401

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. Juvenescence has raised USD $165 million to-date and its last fundraising was at a valuation of $400 million; it hopes to IPO in 2020. During the period, Juvenescence announced the successful closure of its Series B financing round at the targeted $100 million, providing it with sufficient working capital to progress many of its programmes to their initial inflection points.

INVESTEE COMPANY REVIEW (continued)

EMMAC Life Sciences Plc (investment position: c.12% of NAV) is Europe's largest medical cannabis company by territory. It brings together cutting-edge scientific research with the latest innovations in cannabis cultivation, extraction and production and has plans for an IPO in the future.  Post period end in October 2019, it was announced by the Company that EMMAC may have an implied value of greater than £150 million based on the conversion price of the £15 million convertible loan notes issued.

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.  This was a new investment for the Company during this period, where we took a stake in Portage in exchange for our previous holding in Intensity Therapeutics.  Whilst there have been some issues (notably the suspension of trading of Portage stock on the Canadian Securities Exchange ("CSE") due to late filing of accounts), we understand from a recent announcement dated 27 November 2019 that the CSE have granted Portage an extension to remedy the issue and lift the suspension. Portage therefore expects that this will be resolved in the near future and importantly, there is no impairment to the carrying value of the investment in the meantime. We are excited to watch the development of both Portage and its underlying therapeutic companies.

Leap Gaming (investment position: 28% of NAV) is a B2B developer of high-end virtual reality ('VR') gaming applications whose games are already offered by leading global online and retail gaming operators generating tens of thousands of engagement points with end-users. It has a strategic partnership with global media giant, IMG, which is also one of the large investors, to drive the development of the business. In September 2019, Leap Gaming signed a new partnership with the established online betting and gaming platform Mansion Casino around distribution of Leap Gaming's game portfolio across Mansion's footprint. 

Yooya (investment position: c.8% of NAV) is currently a content-driven e-commerce platform focused on Asia, however, proposals are under review, which may result in it being converted to a CBD sales and marketing platform.

Vemo Education (investment position: c.1.5% of NAV) is one of the leading US providers of income share agreement programmes, 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.  This increases transparency around student experiences, helping schools improve, compete, succeed and fundamentally change the relationship they have with students.  Vemo recently raised additional capital and is in a strong position to continue to develop the business over the coming years.

Factom (investment position: c.26.5% of NAV) is a recognised leader in providing blockchain solutions that preserve, ensure and validate digital assets.  The commercial potential of its three divisions is beginning to be realised, having recently signed several large corporate and government clients that are likely to deliver significant recurring revenues.  It is looking to secure bridge funding of up to US$4 million in Q1 2020, if successful this will aid in supporting company development and prove its business case ahead of a Series B funding round.

INVESTEE COMPANY REVIEW (continued)

Cryptologic (investment position: c.2% of NAV) is a Canadian listed company currently involved in cryptocurrency mining, but which is seeking to pivot into the Canadian Cannabis Industry by way of a proposed acquisition of assets from Wayland Group and the sale of its mining business.  The specifics of the proposed deal would preclude FastForward's continued involvement in the company due to UK regulatory constraints and is not in line with its investment mandate. As such, FastForward is in the process of selling its investment in Cryptologic, which is by way of market traded, convertible debentures; the sale of any outstanding debentures held by FastForward will in some ways be contingent upon the proposed Wayland transaction and liquidity in the debenture market. 

DIRECTORS' RESPONSIBILITIES STATEMENT

The Directors are responsible for preparing these unaudited condensed half-yearly financial statements, which have not been reviewed or audited by the Company's independent auditors, and are required to:

• prepare the unaudited half-yearly financial statements in accordance with International Accounting Standard 34: Interim Financial Reporting;

• include a fair review of important events that have occurred during the period, and their impact on the unaudited half-yearly financial statements, together with a description of the principle risks and uncertainties of the Company for the remaining six months of the financial year as detailed in the Chairman's Statement and Investee Company Review; and

• include a fair review of related party transactions that have taken place during the six month period which have had a material effect on the financial position or performance of the Company, together with disclosure of any changes in related party transactions from the last annual financial statements which have had a material effect on the financial position of the Company in the current period.

The Directors confirm that the unaudited condensed half-yearly financial statements comply with the above requirements and are signed on behalf of the Board of Directors by:

Lance De Jersey					Ian Burns
Director					Director
10 December 2019					10 December 2019

CONDENSED HALF-YEARLY STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30 September 2019

		1 April 2019 to		1 April 2018 to
		30 September 2019		30 September 2018
		(unaudited)		(unaudited)
	Note	£'000		£'000
Investment gains and losses
Realised gain/(loss) on investments at fair value through profit and loss	5	528		(418)
Unrealised gain on investments at fair value through profit and loss	5	1,156		1,686
Interest income on investments at fair value through profit and loss		58		33
Total investment gains		1,742		1,301
Income
Bank interest income		11		2
Total income		11		2
Expenses
Legal and professional fees		(109)		(90)
Adviser and broker's fees		(36)		(63)
Administration fees		(55)		(40)
Other expenses		(30)		(99)
Recognition of Directors share based expense	4, 12	(85)		(78)
Directors' remuneration and expenses	12	(225)		(127)
Total expenses		(540)		(497)
Net profit from operating activities before gains and losses on foreign currency exchange
		1,213		806
Net foreign currency exchange gain		31		69
Total comprehensive profit for the period		1,244		875
Profit per Ordinary Share - basic and diluted	7	0.77p		0.62p

All the items in the above statement are derived from continuing operations.

  The accompanying notes on pages 10 to 17 form an integral part of these unaudited condensed half-yearly financial statements.

CONDENSED STATEMENT OF FINANCIAL POSITION

as at 30 September 2019

		30 September 2019		31 March 2019
		(unaudited)		(audited)
	Note	£'000		£'000
Non-current assets
Financial assets designated at fair value through profit or loss	5	19,602		18,604
Current assets
Other receivables		58		112
Cash and cash equivalents		999		504
		1,057		616
Total assets		20,659		19,220
Current liabilities
Payables and accruals		(258)		(148)
Total liabilities		(258)		(148)
Net assets		20,401		19,072
Capital and reserves attributable to equity holders of the Company
Share capital	11	1,614		1,614
Deferred share reserve	11	630		630
Employee stock option reserve		1,318		1,233
Other reserve		2,293		2,293
Distributable reserves		14,546		13,302
Total equity shareholders' funds		20,401		19,072
Net assets per Ordinary Share - basic
and diluted	10	12.63p		11.81p

       The accompanying notes on pages 10 to 17 form an integral part of these unaudited condensed half-yearly financial statements.

CONDENSED HALF-YEARLY STATEMENT OF CHANGES IN EQUITY

for the six months ended 30 September 2019 (unaudited)

		Share capital	Deferred shares reserve	Other reserve	Employee stock option reserve	Distributable reserves	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 March 2019		1,614	630	2,293	1,233	13,302	19,072
Total comprehensive profit for the period		-	-	-	-	1,244	1,244
Transactions with shareholders
Employee share scheme - value of employee services		-	-	-	85	-	85
Balance at 30 September 2019		1,614	630	2,293	1,318	14,546	20,401
		Share capital	Deferred shares reserve	Other reserve	Employee stock option reserve	Distributable reserves	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 March 2018		1,306	630	2,293	1,086	8,219	13,534
Total comprehensive profit for the period		-	-	-	-	875	875
Transactions with shareholders
Issue of Ordinary shares		308	-	-	-	3,618	3,926
Employee share scheme - value of employee services		-	-	-	83	-	83
Balance at 30 September 2018		1,614	630	2,293	1,169	12,712	18,418

The accompanying notes on pages 10 to 17 form an integral part of these unaudited condensed half-yearly financial statements.

CONDENSED HALF-YEARLY STATEMENT OF CASH FLOWS

for the six months ended 30 September 2019

	1 April 2019 to 30 September 2019		1 April 2018 to 30 September 2018
	(unaudited)		(unaudited)
	£'000		£'000
Cash flows from operating activities
Bank interest received	6		2
Other Income	3		-
Nominated Adviser and broker's fees paid	(75)		(116)
Legal and professional fees paid	(124)		(105)
Administration fees paid	(51)		(29)
Other expenses paid	(35)		(50)
Directors' remuneration paid	(65)		(71)
Net cash outflow from operating activities	(341)		(369)
Cash flows from investing activities
Cash flows from investing activities
Purchase of investments	-		(9,007)
Sale of investments	805		8,307
Net cash inflow/(outflow) from investing activities	805		(700)
Cash flows from financing activities
Proceeds from issue of Ordinary Shares	-		3,926
Net cash inflow from financing activities	-		3,926
(Decrease)/increase in cash and cash equivalents	464		2,857
Cash and cash equivalents brought forward	504		72
(Decrease)/Increase in cash and cash equivalents	464		2,857
Foreign exchange movement	31		69
Cash and cash equivalents carried forward	999		2,998

The accompanying notes on pages 10 to 17 form an integral part of these unaudited condensed half-yearly financial statements.

 

NOTES TO THE CONDENSED HALF-YEARLY FINANCIAL STATEMENTS

for the six months ended 30 September 2019

1.   General Information

FastForward Innovations Limited ("The Company") is a closed-ended investment company. The Company is domiciled and incorporated as a limited liability company in Guernsey. The registered office of the Company is 11 New Street, St Peter Port, Guernsey, GY1 2PF.            

With effect from 3 May 2018 the Company has been authorised as a Closed-ended investment scheme by the Guernsey Financial Services Commission (the "GFSC") under Section 8 of the Protection of Investors (Bailiwick of Guernsey) Law, 1987 and the Authorised Closed-Ended Investment Schemes Rules.                                                                                                                                                                                  

The Company's Ordinary Shares are traded on AIM, a market operated by the London Stock Exchange.

2.   Statement of Compliance

These condensed half-yearly financial statements, which have not been independently reviewed or audited by the Company auditors, have been prepared in accordance with International Accounting Standard 34: Interim Financial Reporting. They do not include all of the information required for full annual financial statements and should be read in conjunction with the audited financial statements for the year ended 31 March 2019.

 The unaudited condensed half-yearly financial statements were approved by the Board of Directors on 10 December 2019.

3.   Significant Accounting Policies

These unaudited condensed half-yearly financial statements have adopted the same accounting policies  as  the  last  audited financial statements, which were prepared in accordance with International Financial Reporting Standards ("IFRS"), issued by the International Accounting Standards Board, interpretations issued by the IFRS Interpretations Committee and applicable legal and regulatory requirements of Guernsey Law and reflect the accounting policies as disclosed in the Company's last audited financial statements, which have been adopted and applied consistently.

The Company has adopted all revisions and amendments to IFRS issued by the IASB, which may be relevant to and effective for the Company's financial statements for the annual period beginning 1 April 2019. No new standards or interpretations adopted during the period had an impact on the reported financial position or performance of the Company.

4.   Critical Accounting Estimates and Judgments

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates.

Management makes estimates and assumptions concerning the future of the Company. The resulting accounting estimates will, by definition, seldom equal the related actual results. Management believe that the underlying assumptions are appropriate and that the financial statements are fairly presented. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below:

NOTES TO THE CONDENSED HALF-YEARLY FINANCIAL STATEMENTS (continued)

for the six months ended 30 September 2019

4.  Critical Accounting Estimates and Judgments (continued)

Judgments Going concern After making reasonable enquiries, and assessing all data relating to the Company's liquidity, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and do not consider there to be any threat to the going concern status of the Company. For this reason, they continue to adopt the going concern basis in preparing the financial statements. Estimates and assumptions
Fair Value of financial instruments
The fair values of securities that are not quoted in an active market are determined by using valuation techniques as explained in the IPEV Guidelines, primarily earnings multiples, discounted cash flows and recent comparable transactions. The models used to determine fair values are validated and periodically reviewed by the Company. In some instances, the cost of an investment is the best measure of fair value in the absence of further information. The inputs in the earnings multiple's models include observable data, such as the earnings multiples of comparable companies to the relevant portfolio company, and unobservable data, such as forecast earnings for the portfolio company. In discounted cash flow models, unobservable inputs are the projected cash flows of the relevant portfolio company and the risk premium for liquidity and credit risk that are incorporated into the discount rate. However, the discount rates used for valuing equity securities are determined based on historic equity returns for other entities operating in the same industry for which market returns are observable. Management uses models to adjust the observed equity returns to reflect the actual equity financing structure of the valued equity investment. Models are calibrated by back-testing to actual results/exit prices achieved to ensure that outputs are reliable, where possible.
Valuation of Options The fair values of the Options are measured using the Black-Scholes model, for those options with non-market vesting conditions, and a Monte Carlo Simulation model for those Options with market related vesting conditions. The key estimates and assumptions which are used as inputs in these valuation models are as follows;                                                                                                                                                                                                           •              any market vesting conditions;         •              the expected vesting period;                                                                                                            •              the term of the options;                                                                                     •              the expected volatility of the company's share price as at grant date;                                     •              the risk-free rate of return available at grant date;                                                                      •              the company's share price at grant date;                                                                                                        •              the expected dividends on the company's shares over the expected term of the options; and         •              the exercise (strike) price of the options.                                                                                                                                       For those Options which did not vest immediately on issue, non- market vesting conditions, the expected vesting period of the options is estimated to be 5 years from the grant date. 5 years is deemed to be a realistic timeframe in which the performance conditions can be expected to be achieved. However, the options can be exercised at any point after vesting and prior to the Option expiry date.                NOTES TO THE CONDENSED HALF-YEARLY FINANCIAL STATEMENTS (continued) for the six months ended 30 September 2019
5. Investments designated at fair value through profit or loss A reconciliation of the opening and closing balances of assets designated at fair value through profit or loss classified as Level 3 is as follows:

	30 September 2019	31 March 2019
	£'000	£'000
Opening valuation	18,110	5,682
Purchases	-	9,837
Disposal proceeds	(1,374)	-
Realised gains	562	(1,377)
Net unrealised change in fair value of financial assets	800	3,968
	18,098	18,110

 

A reconciliation of the opening and closing balances of assets designated at fair value through profit or loss classified as Level 1 is shown below:

	30 September 2019	31 March 2019
	£'000	£'000
Opening valuation	494	6,728
Purchases	1,033	1,304
Disposal proceeds	(345)	(7,286)
Realised losses	(34)	(418)
Net unrealised change in fair value of financial assets	356	166
	1,504	494
Total value of investments at fair value through profit or loss	19,602	18,604

There were no transfers between fair value hierarchy levels during the period (31 March 2019: None).

During the period, the Company swapped 288,458 in Intensity Therapeutics Incs with Portage Biotech Inc. for a consideration of $1,298,061 represented by 12,980,610 ordinary shares.

The valuations used to determine fair values are validated and periodically reviewed by experienced personnel and are in accordance with the International Private Equity and Venture Capital Valuation Guidelines. The valuations, when relevant, are based on a mixture of:

·      third party financing (if available);

·      cost, where the investment has been made during the year and no further information has been available to indicate that cost is not an appropriate valuation;

·      proposed sale price;

·      discount to NAV calculations;

·      discount to last traded price; and

·      discounted cash flow.

 

 

NOTES TO THE CONDENSED HALF-YEARLY FINANCIAL STATEMENTS (continued)

for the six months ended 30 September 2019

 

6.  Segmental Information

In accordance with International Financial Reporting Standard 8: Operating Segments, it is mandatory for the Company to present and disclose segmental information based on the internal reports that are regularly reviewed by the Board in order to assess each segment's performance and to allocate resources to them.

Management information for the Company is provided internally to the management for decision-making purposes. The management's asset allocation decisions are based on an integrated investment strategy and the Company's performance is evaluated on an overall basis. The single segment is investments in companies which have significant intellectual property rights which they are seeking to exploit, principally within the technology sector (including digital technology, gaming and content focused businesses) and the life sciences sectors (including biotech and pharmaceuticals). Initially the geographical focus will be North America and Europe but investments may also be considered in other regions to the extent that the Board considers that valuable opportunities exist and positive returns can be achieved.

Segment assets                                                                                                                                                                  

The internal reporting provided to the Board for the Company's assets, liabilities and performance is prepared on a consistent basis with the measurement and recognition principles of IFRS. Segment assets are measured in the same way as in the financial statements. These assets are allocated based on the operations of the segment and the physical location of the asset. At 30 September 2019 the cross section of segment assets between geographical focus and economic sectors were as follows:

Geographical Focus	Technology sector	Life sciences sector	Total
Private equity investments	£'000	£'000	£'000
- North America	5,725	-	5,725
- Europe	-	2,500	6,195
- Other	7,682	3,695	7,682
Total segment assets	13,407	6,195	19,602

 

Segment liabilities

Segment liabilities are measured in the same way as in the financial statements. These liabilities are allocated based on the operations of the segment. At 30 September 2019 there were no segmented liabilities.

Other profit and loss disclosures

At 30 September 2019 the cross section of the realised losses, unrealised gains and interest income generated from private equity investments between geographical focus and economic sectors were as follows:

Geographical Focus Technology sector Life sciences sector Total Private equity investments £'000 £'000 £'000 - North America 350 41 391 - Europe - 500 744 - Other 607 244 607 Total gains on investments 957 785 1,742

NOTES TO THE CONDENSED HALF-YEARLY FINANCIAL STATEMENTS (continued)

for the six months ended 30 September 2019

6.  Segmental Information (continued)

All the Company's investment portfolio income was derived from its investments whose business focus is in the sectors as described above. The only other revenue generated by the Company during the period was interest of £11,000 (30 September 2018: £2,000), arising from cash and cash equivalents, which was generated in Guernsey. The Company is domiciled in Guernsey.

7. Profit per Ordinary Share - basic and diluted

The profit per Ordinary Share of 0.77p (30 September 2018: 0.62p) is based on the profit for the period of £1,244,000 (30 September 2018: £875,000) and on a weighted average number of 161,500,105 Ordinary Shares in issue during the period (30 September 2018: 140,651,009 Ordinary Shares).

The share price of the Ordinary Shares throughout the period, and as at 30 September 2019, was below the lowest exercise price of the Options (lowest exercise price of 19.00 pence). Therefore, at no point during the period, or as at 30 September 2019, did the Options have any dilutive effect.

8.  Dividends
The Directors do not propose an interim dividend for the period ended 30 September 2019 (30 September 2018: £Nil).
9. Tax Effects of Other Comprehensive Income
There were no tax effects arising from income disclosed in the Statement of Comprehensive Income (30 September 2018: £Nil).
10. Net Assets per Ordinary Share
Basic and diluted
The basic net assets value per Ordinary Share is based on the net assets attributable to equity shareholders of £20,401,000 (31 March 2019: £19,072,000) and on 161,500,105 Ordinary Shares in issue at the end of the period (31 March 2019: 161,500,105 Ordinary Shares).
The share price of the Ordinary Shares throughout the period and as at 30 September 2019 was below the lowest exercise price of the Options (lowest exercise price of 19.00 pence). Therefore, at no point during the period, or as at 30 September 2019, did the Options have any dilutive effect.
11. Share Capital and Options
				30 September 2019							31 March 2019
				£'000							£'000
Authorised:
1,910,000,000 Ordinary Shares of 1p				19,100							19,100
100,000,000 Deferred Shares of 0.9p				900							900
				20,000							20,000
Allotted, called up and fully paid:
161,500,104 Ordinary Shares of 1p				1,614							1,614
70,700,709 Deferred Shares of 0.9p				630							630
				2,244							2,244
Options:
Share options				15,647,992							15,647,992

NOTES TO THE CONDENSED HALF-YEARLY FINANCIAL STATEMENTS (continued)

for the six months ended 30 September 2019

11. Share Capital and Options (continued)

Ordinary Shares

There were no issue of shares during the period ended 30 September 2019 (31 March 2019: 30,769,230 Ordinary shares at a price of 13p per share).

Deferred Shares

In aggregate (not per share), the holders of Deferred Shares shall be entitled to receive up to £1 only as a preferred dividend or distribution. The Deferred Shares have zero economic value. The holders of Deferred Shares, in respect of their holdings of Deferred Shares, shall not have the right to received notice of any general meeting of the Company, nor the right to attend, speak or vote at any such general meeting. The Company has the right to transfer the Deferred Shares to such persons as it wishes, without the consent of the holders of the Deferred Shares, and to cancel Deferred Shares with the consent of such transferee. No movement in deferred shares has occurred in the period.

Options

No issue of Options has occurred during the current period.

Directors' Authority to Allot Shares

The Directors are generally and unconditionally authorised to exercise all the powers of the Company to allot relevant securities. As approved at the Company Annual General Meeting on 9 October 2019 the Directors may determine up to a maximum aggregate nominal amount of 10% of the issued share capital during the period until the following Annual General Meeting. The Guernsey Companies Law does not limit the power of Directors to issue shares or impose any pre-emption rights on the issue of new shares.

Shares held in Treasury

As a result of share repurchases in prior years, at period end the Company has a total of 5,413,623 ordinary shares held as Treasury shares (31 March 2019: 5,413,623). No shares were repurchased during the period (31 March 2019: Nil).

12. Related Parties

Mr Mellon

Mr Mellon, a director of FastForward until 21 August 2019, is a life tenant of a trust which owns Galloway Limited ("Galloway"), which held 10,425,992 (31 March 2019: 10,425,991) Ordinary Shares in the Company as at 30 September 2019 and at the date of signing this report. Mr Mellon also holds 5,857,730 (31 March 2019: 5,857,730) shares directly in his own name as at 30 September 2019. Total direct or indirect holding was 16,283,822 shares (31 March 2019: 16,283,822).

At 30 September 2019 FastForward held 25,978 (31 March 2019: 25,978) Ordinary Shares in The Diabetic Boot Company Ltd ("DBC"). Galloway also holds shares in DBC. The combined shareholding in DBC is in excess of 30%.

Mr Mellon holds 20,500,000 (31 March 2019: 20,500,000) shares in EMMAC Life Sciences Limited ("EMMAC"), which equates to 7.1% of the shares in issue.

Mr Mellon also holds an interest in 3,783,199 shares of Juvenescence Limited, equating to 17.75% of the issued shares.

 

Mr Mellon was entitled to an annual salary of £30,000, payable quarterly in arrears.

 

 

NOTES TO THE CONDENSED HALF-YEARLY FINANCIAL STATEMENTS (continued)

for the six months ended 30 September 2019

 

12. Related Parties (continued)

Mr Burns

Mr Burns, a director of the company, is the legal and beneficial owner of Smoke Rise Holdings Limited ("Smoke"), which held 1,374,024 (31 March 2019: 1,374,024) Ordinary Shares in the Company at 30 September 2019 and at the date of signing this report.

Regent Mercantile Holdings Limited ("Regent"), a company in which Mr Ian Burns is a Director, is a shareholder of Juvenescence. Regent hold 0.34% of Juvenescence (31 March 2019: 0.34%) (on a fully diluted basis).

Mr Burns is entitled to an annual salary of £24,000, payable quarterly in arrears.

Mr Abony

Mr Abony, a director of the company, held 14,843,211 (31 March 2019: 14,843,211) Ordinary Shares in the Company at 30 September 2019 and at the date of signing this report.

As at 30 September 2019 FastForward held no non-assessable series-1 preferred stocks (31 March 2019: 2,527,059)  and 1,000,000 (31 March 2019: 1,000,000) non-assessable series-2 preferred stocks in Vemo Education. Inc ("Vemo"), a company related by virtue of common shareholdings with Mr Abony. On 13 May 2019, FastForward sold the 2,527,059 non-assessable series-1 preferred stocks.

Mr Abony holds US$1m ordinary shares of Juvenescence Limited on the same terms as the Company.

Mr Abony holds 20,833,333 shares in EMMAC, which equates to 7.2% of the shares in issue. On 19 November 2019, Mr Abony was appointed as Chairman of the Board of Directors of EMMAC.

Mr Abony is entitled to an annual salary of £250,000, payable monthly in arrears.

Mr McDermott

Mr McDermott was until December 2018 a part of the corporate finance team at Optiva Securities Limited, the Company's Broker. A total of £7,472 was incurred by the Company in respect of Broker fees to Optiva Securities Limited during the period (31 March 2019: £117,000).

Mr McDermott was a co-founder of, and is an executive director of, EMMAC Life Sciences Limited ("EMMAC"). Mr McDermott owns 11,250,000 (31 March 2019: 11,250,000) shares in EMMAC, which equates to 3.9% of the shares in issue.

Mr McDermott is entitled to an annual salary of £40,000, payable quarterly in arrears.

Mr De Jersey

During the period Mr De Jersey purchased 400,000 ordinary shares in the Company. Following the purchase his holding represents 0.25% of the Company's issued share capital.

Lance De Jersey is entitled to an annual salary of £80,000 per annum.

 

 

NOTES TO THE CONDENSED HALF-YEARLY FINANCIAL STATEMENTS (continued)

for the six months ended 30 September 2019

12. Related Parties (continued)

30 September 2019

	Directors' Remuneration	Recognition of share based expense	Total
	£'000	£'000	£'000
Ian Burns	12	-	12
Jim Mellon	12	8	20
Lorne Abony	146	61	207
Ed McDermott	20	16	36
Lance De Jersey	35	-	35
	225	85	310

30 September 2018
	Directors' Remuneration	Recognition of share based expense	Total
	£'000	£'000	£'000
Ian Burns	22	-	22
Jim Mellon	3	7	10
Lorne Abony	82	61	143
Ed McDermott	20	10	30
	127	78	205

No pension contributions were paid or were payable on behalf of the Directors.

13. Events after the financial reporting date

Mr Lorne Abony (Chairman of Fastforward) was appointed as Chairman of EMMAC (Investee of the Company) on 19 December 2019.

14. Capital management policy and procedures

The Company does not ordinarily intend to fund any investments through debt or other borrowings but may do so if appropriate. Investments in early stage assets are expected to be mainly in the form of equity, with debt potentially being raised later to fund the development of such assets. Investments in later stage assets are more likely to include an element of debt to equity gearing. The Company may also offer new Ordinary Shares by way of consideration as well as cash, thereby helping to preserve the Company's cash for working capital and as a reserve against unforeseen contingencies including, for example, delays in collecting accounts receivable, unexpected changes in the economic environment and operational problems.

The Board monitors and reviews the structure of the Company's capital on an ad hoc basis. This review includes:

• The need to obtain funds for new investments, as and when they arise.

• The current and future levels of gearing.

• The need to buy back Ordinary Shares for cancellation or to be held in treasury, which takes account of the difference between the net asset value per Ordinary Share and the Ordinary Share price.

• The current and future dividend policy; and

• The current and future return of capital policy.

The Company is not subject to any externally imposed capital requirements.

DIRECTORS
Jim Mellon - resigned 21 August 2019
Ian Burns (Non- Executive Director)
Lorne Abony (Chief Executive Officer and Chairman)
Edward McDermott (Non Executive Director) Lance De iersey(Finance Director)
Lance De Jersey (Finance Director)
ADVISERS
Administrator, Secretary  and Registered Office	Nominated Adviser
Vistra Fund Services (Guernsey) Limited	Beaumont Cornish Limited
11 New Street	10th Floor
St Peter Port	30 Crown Place
Guernsey	EC2A 4EB
GY1 2PF	London
Registrar	Independent Auditor
Link Market Services Limited	PricewaterhouseCoopers CI LLP
PO Box 627	Royal Bank Place
Bulwer Avenue	1 Glategny Esplanade
St Sampsons	St Peter Port
Guernsey	Guernsey
GY2 4LH	GY1 4ND
Brokers	Guernsey Legal Adviser to the Company
Optiva Securities Limited	Collas Crill
2 Mill Street	Glategny Esplanade
London	St Peter Port
W1S 2AT	Guernsey
	GY1 1WN
Investor Relations	English Legal Adviser to the Company
St Brides Partners Ltd	Hill Dickinson LLP
51 Eastcheap	The Broadgate Tower
London	20 Primrose Street London EC2A 2EW
EC3M 1JP	London  EC2A 2EW

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

Cautionary Statement

The AIM Market of London Stock Exchange plc does not accept responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. All statements, other than statements of historical fact, in this news release are forward-looking statements that involve various risks and uncertainties, including, without limitation, statements regarding potential values, the future plans and objectives of FastForward Innovations Ltd. There can be no assurance that such statements will prove to be accurate, achievable or recognizable in the near term.

Actual results and future events could differ materially from those anticipated in such statements. These and all subsequent written and oral forward-looking statements are based on the estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. FastForward Innovations assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.

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]
Graham Dickson	Optiva Securities Limited Broker	Tel: [phone]
Beth Melluish	St Brides Partners Ltd Financial PR	Tel: [phone]

 

END

 

 

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