SalvaRx : Half Yearly Report 30 June 2019 RNS

FOR IMMEDIATE RELEASE

SalvaRx Group plc ("SalvaRx" or the "Company")

The following replaces the announcement released at 14.06 on 26 September 2019 under RNS number 8320N.

The Financial Results section in the Chairman's Statement has been replaced and now reads "During the period ended 30 June 2019, the Company incurred a net profit of £61.3 million (period ended 30 June 2018: loss of £0.2 million), representing a profit per share of 167 pence. Net assets stood at £5.7 million (2018: £1.4 million), which includes investments of £4.7 million (2018: £0), representing a net asset value per share of 15 pence."

All other information remains unchanged. The correct version of the announcement is below.

Unaudited Interim Results for the 6 months to 30 June 2019

SalvaRx Group plc (AIM: SALV) announces its unaudited interim results for the six months ended 30 June 2019.

Chairman's Statement

On 14 August 2018, the Company announced that it had entered into a conditional sale agreement for the disposal of its 94.2% interest in SalvaRx Limited to Portage Biotech Inc. ("Portage"), for a consideration of US$67.5 million, to be satisfied by Portage issuing and allotting 757,943,784 new Portage shares. The transaction was finally completed on 8 January 2019. The Company retained approximately 57 million Portage shares for its operating needs and distributed the remaining shares to its shareholders.

I believe that the disposal and the demerger was the best way to unlock and maximise value for shareholders without causing the dilution inherent in raising additional funds at a price which I did not believe reflected the value of the Company's underlying oncology assets.

Board changes

Following the conclusion of the AGM on 8 January 2019, Dr Ian Walters, Kam Shah, Richard Armstrong and Colin Weinberg resigned as directors of the Company. Denham Eke has been appointed as Chief Financial Officer and as a Director of the Company. The Board now comprises Jim Mellon (Non-executive Chairman), Dr Greg Bailey (Non-executive Director) and Denham Eke (Chief Financial Officer). As a result, the Board has no independent directors. However, the Directors are in the advanced stages of recruiting an independent non-executive director and the Company expects to provide an update on the progress of such appointment in due course.

Financial results

During the period ended 30 June 2019, the Company incurred a net profit of £61.3 million (period ended 30 June 2018: loss of £0.2 million),

representing a profit per share of 167 pence. Net assets stood at £5.7 million (2018: £1.4 million), which includes investments of £4.7 million

(2018: £0), representing a net asset value per share of 15 pence.

AIM Rule 15 Cash Shell

The disposal and the demerger resulted in the divestment of substantially all of the Company's existing business, assets and investments. As such, the Company is now classified as an AIM Rule 15 cash shell and is required to make an acquisition or acquisitions which constitut1e a reverse takeover under AIM Rule 14 (or seek re-admission as an investing company (as defined under the AIM Rules)).

As the Board had not identified a suitable acquisition by 9 July 2019, the shares were suspended. However, the Board is currently evaluating a number of potential acquisition opportunities and will make a further announcement as soon as practicable.

In the event that no suitable acquisition is made before 9 January 2020, admission to trading on AIM of the Company's shares will be cancelled.

Jim Mellon

Non-executive Chairman

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

For further information, please contact
SalvaRx Group PLC	S.P. Angel Corporate Finance LLP	Peterhouse Capital Limited
The Company	Nominated Adviser & Broker	Broker
Denham Eke	Matthew Johnson / Jamie Spotswood	Lucy Williams / Duncan Vasey
[phone]	[phone]	[phone]

Condensed Statement of Profit or Loss

		30 June 2019	30 June 2018	31 December
		(unaudited)	(unaudited)			(audited)
	Notes			(Note 1)	(as restated -	(as restated -
								Note 1)			Note 1)
Income
Unrealized investment gain/(loss)		11,447		-		-
Realized investment gain/loss		53,052		-		-
		64,499
Other operating costs		(3,195)		(190)		(549)
Operating profit/(loss)		61,304		(190)		(549)
Net finance cost	5	(27)		-		(28)
Profit/(loss) before tax		61,277		(190)		(577)
Tax		-		-		-
Net profit/(loss) for the period/year		61,277		(190)		(577)
Basic and diluted profit/(loss), £ per share		1.67		(0.005)		(0.016)
Condensed Statement of Financial Position
		30 June 2019	30 June 2018	31 December
		(unaudited)	(unaudited)			(audited)
	Notes			(Note 1)	(as restated -	(as restated -
								Note 1)			Note 1)
Assets
Non-current assets
Financial assets at fair value through profit and loss	2	4,678		-		-
Current assets
Trade and other receivables		37	53		36
Related party balances		2,061		2,312		2,069
Total current assets
	2,098		2,365		2,105
Total assets
	6,776		2,365		2,105
Liabilities
Current liabilities
Trade and other payables		286		207		226
Other loans		822		758		762
Total liabilities
	1,108		965		988
Net assets
	5,668		1,400		1,117

Equity

Share capital	3	917		911		917
Share premium	3	66		-		66
Reverse acquisition reserve		-		2,125		2,125
Treasury shares		-		(215)		(215)
Share-based payment reserves	3	386		507		540
Retained earnings/(deficit)		4,299		(1,928)		(2,316)
Total equity		5,668		1,400	1,117

Condensed Statement of Cash Flows

		30 June 2019	30 June 2018	31 December
		(unaudited)	(unaudited)		(audited)
	Notes		(Note 1)	(as restated -	(as restated -
						Note 1)		Note 1)
Profit/(loss) for the period/year		61,277	(190)		(577)
Adjustments for:
Share-based payments		3,095	49		93
Fair value gain on investments		(11,447)		-		-
Realised gain on disposal of investment		(53,052)		-		-
Finance cost	3	27		-		65
Foreign exchange adjustment on loans		25		-		-
Operating cash flows before movements in working capital		(75)		(141)		(419)
Change in receivables		(2)		(35)		(17)
Change in payables		68		65		84
Cash used in operations		-		(111)		(352)
Taxation received		-		-		-
Net cash outflow from operating activities		(9)		(111)		(352)
Investing activities
Investment in associates		-		-		-
Purchase of investments		-		-		-
Prepaid equity option		-		-		-
Net cash used in investing activities		-		-		-
Financing activities
Decrease/(increase) in related party receivables		9		(646)		(405)
Proceeds on issue of ordinary shares		-					-
Proceeds from the issue of other short-term loans		-		757		757
Proceeds from the issue of convertible loan notes		-		-		-
Net cash from financing activities		9		111		(352)
Net increase in cash and cash equivalents		-		-		-
Cash and cash equivalents at beginning of period/year		-		-		-

Effect of exchange rate on cashflow							-			-						-
Cash and cash equivalents at end of period/year					-			-						-
Condensed Statement of Change in Equity
Share capital	Share		Reverse		Purchase	Accumulated	Share-		Total
				premium	acquisition		of own			deficit	based		equity
						reserve		shares						payments
																	reserves
		£'000		£'000	£'000	£'000		£'000		£'000		£'000
At 1 January 2018	911		-	2,125	(215)		(1,738)	457		1,540
Share based payments charge	-		-	-	-		-		50		50
Net loss for the period	-		-	-	-		(190)		-		(190)
At 30 June 2018 (as restated - note	911		-	2,125	(215)	(1,928)	507		1,400
1)
Share based payment charge	-		-	-	-		-		33		33
Issue of equity for cash	6		66	-	-		-		-		72
Net loss for the period	-		-	-	-		(388)		-		(388)
At 31 December 2018 (as restated	917		66	2,125	(215)		(2,316)	540		1,117
- note 1)
Net profit for the period	-		-	-	-		61,277		-		61,277
Share based payment charge	-		-	-	-		-		3,095	3,095
Transfer - options cancelled	-		-	-	-		540		(540)		-
Exercise of options	-		-	-	-		-		(2,709)		(2,709)
Transfer to retained earnings -	-		-	(2,125)	215		1,910		-		-
disposal of investment
Distribution of redeemable shares	-		-	-	-		(57,112)		-		(57,112)
At 30 June 2019	917		66	-	-		4,299		386		5,668

1	General information

SalvaRx Group plc (the 'Company' and, together with its subsidiaries, the 'Group') is incorporated in the Isle of Man, British Isles under the Isle of Man Companies Act 2006. The address of the registered office is Commerce House, 1 Bowring Road, Ramsey, Isle of Man, British Isles, IM8 2LQ.

Until 8 January 2019, the principal activity of the Group was drug pre-clinical development with particular focus on developing a series of compounds for cancer immunotherapy. Following the disposal of SalvaRx Limited, the Company became an AIM Rule 15 cash shell.

The comparative information for the year ended 31 December 2018 and period ended 30 June 2018 comprise the Group. On 8 January 2019, the Company disposed of its interest in SalvaRx Limited. From this date, the financial statements of the Company have been prepared on a stand- alone basis. The comparative financial information for the period ended 30 June 2018 and year ended 31 December 2018 has been restated to reflect that of the Company only.

Basis of preparation

The interim financial information has been prepared using policies based on International Financial Reporting Standards ('IFRSs') as issued by the International Accounting Standards Board (the 'IASB') and as adopted by the European Union (the 'EU'). These policies and practices are consistent with those adopted in the Group's financial statements for the year ended 31 December 2018.

The interim financial statements have not been audited, and have not been prepared in compliance with International Accounting Standard ('IAS') 34, 'Interim Financial Reporting'. In the opinion of the Directors, the interim financial information for the period represents fairly the financial position, results from operation and cash flows for the period in conformity with generally accepted accounting principles consistently applied.

These interim financial statements include the accounts of the Company and its subsidiaries up until the date of disposal on 8 January 2019.

The Group's interim financial statements are presented in pounds sterling, which is the Group's functional and presentational currency, and all values are rounded to the nearest thousands (£000) except loss per ordinary share and figures and numbers in the Notes.

Going concern

As part of their going concern assessment, the Directors have followed the guidelines published by the Financial Reporting Council entitled "Guidance on Risk Management and Internal Control and Related Financial and Business Reporting".

At 30 June 2019, the Group had cash and cash equivalent of £Nil. The Company is in a net current asset position of £990,000, and an overall net asset position of £5,668,000. Following the disposal and demerger, the Company has limited cash reserves and its principal assets are up to 56,657,531 Retained Shares in Portage Biotech Inc. worth approximately US$5,099,178 (approximately, £4,015,325). As shares in a Canadian listed entity, these are readily convertible into cash and are to be set aside for general working capital requirements.

As a cash shell, the Company has a low level of underlying overhead. The Directors have prepared forecasts that demonstrate that the Company has adequate resources (comprising cash in hand and the Retained Shares) to cover these costs for at least the next twelve months from the date of this report. The Directors have therefore concluded that it remains appropriate to prepare these interim financial statements on a going concern basis.

2	Significant accounting policies

Financial assets and financial liabilities

Classification of financial assets

When the Company first recognises a financial asset, it classifies it based on the business model for managing the asset and the asset's contractual cash flow characteristics, as follows:

• Amortised cost - a financial asset is measured at amortised cost if both of the following conditions are met:

1. the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and

• 1. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
• Fair value through profit or loss - any financial assets that are not held as amortised costs assets are measured at fair value through profit or loss.

Financial assets are not reclassified subsequent to their initial recognition, unless the Company changes its business model for managing financial assets, in which case it must reclassify all affected financial assets.

Classification of financial liabilities

The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management.

All financial liabilities are classified and measured at amortised cost.

1. Recognition

The Company recognises financial assets and financial liabilities on the date it becomes a party to the contractual provisions of the instrument.

2. Subsequent measurement

Equity and preference share investments are stated at fair value through profit or loss. Loans and receivables are stated at amortised cost less any impairment losses.

The Company determines asset fair values using IPEV guidelines and other valuation methods with reference to the valuation principles of IFRS

13. The valuation principles adopted are classified as Level 3 for unquoted investments and Level 1 for quoted investments in the IFRS 13 fair value hierarchy. IPEV guidelines recommend the use of an appropriate valuation methodology based on the investments held.

The Company then seeks to determine whether holding the investment at recent available transaction price is appropriate given the implied value, or whether an adjustment should be made to achieve fair value: whether this be in the form of an impairment or a write-up.

'Fair value' is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantages market to which the Company has access at that date. The fair value of a liability reflects its non-performance risk.