Issuer/Manager THE TRENDLINES GROUP LTD.
Securities THE TRENDLINES GROUP LTD. – IL0011328858 – 42T
Stapled Security No
Announcement Title Financial Statements and Related Announcement
Date & Time of Broadcast 10 May 2016 23:46:20
Status New
Announcement Subtitle First Quarter Results
Announcement Reference SG160510OTHR6OQZ
Submitted by (Co./Ind. Name) Yosef Ron
Designation Joint Company Secretary
Description Please see attached press release and Financial Highlights Q1 2016 Presentation.
The Trendlines Group Ltd. (the "Company") was listed on Catalist of the Singapore Exchange Securities Trading Limited (the "SGX-ST") on 26 November 2015. The initial public offering of the Company was sponsored by PrimePartners Corporate Finance Pte. Ltd. (the “Sponsor"). This press release has been prepared by the Company and its contents have been reviewed by the Sponsor for compliance with the SGX-ST Listing Manual Section B: Rules of Catalist. The Sponsor has not verified the contents of this press release. This press release has not been examined or approved by the SGX-ST. The Sponsor and the SGXST assume no responsibility for the contents of this press release, including the accuracy, completeness or correctness of any of the information, statements or opinions made or reports contained in this press release. The contact person for the Sponsor is Ms Gillian Goh, Director, Head of Continuing Sponsorship, at 16 Collyer Quay, #10-00 Income at Raffles, Singapore 049318, telephone (65) 6229 8088.
Attachments Press Release and Financial Highlights Presentation Q1 2016
1
For Immediate Release
Trendlines’ total portfolio value increases to US$86.9 million
• Total income of US$1.1 million for 1Q2016, lower than 1Q2015 primarily due to
change in fair value of investments in Portfolio Companies
• Income from contracted R&D services increased to US$0.3 million from US$0.1
million supported by new collaboration agreements in relation to R&D services
provided by Trendlines Labs
• Net loss of US$0.8 million for 1Q2016
• Multiple achievements in establishing strategic partnerships with renowned
multinational companies year to date, to enhance deal flow and future growth
Singapore, 10 May 2016 – The Trendlines Group Ltd. (the “Company”, and together with its
subsidiaries and associated companies, the “Group”), an Israeli company focused on developing
technology-based companies in the medical and agricultural fields, announced its financial results for
the three months ended 31 March 2016 (“1Q2016”) today.
2
1Q2016 1Q2015 Change
US$'000 US$'000 %
Gain(loss) from change in fair value of
investments in Portfolio Companies (992) 1,202 N.M.
Income from services to portfolio companies 1,281 1,231 4.0
Income from contracted R&D services 330 102 223.2
Total income 1,140 3,160 (63.9)
Total expenses 2,633 2,218 18.7
Net income (loss) and total comprehensive
income (loss) (770) 580 N.M.
*N.M.: Not meaningful
Total income for the Group was US$1.1 million in 1Q2016, compared to US$3.2 million in 1Q2015. The
reduction in total income is primarily attributable to a net loss in the fair value of investments in
portfolio companies of US$1 million, compared to a net gain in 1Q2015 amounting to US$1.2 million.
This net loss in the fair value of portfolio companies in 1Q2016 takes into account an increase of
US$3.9 million in the fair value of the Most Valuable Portfolio Company1, as well as an aggregate fair
value gain of US$0.6 million for some other portfolio companies as a result of the completion of fund
raising exercises at favourable valuations and general commercial and technological progress during
the quarter. However, this gain was offset by an aggregate fair value loss of US$4.8 million, as a result
of the completion of fund raising exercises for some other portfolio companies at less favourable
terms to the Company, as well as general commercial or technological difficulties in some companies
and the write off of two portfolio companies during the quarter in the amount of US$1.0 million.
Income from services to portfolio companies remained relatively unchanged in 1Q2016 as compared
to 1Q2015. Income from contracted R&D services increased to US$0.3 million from US$0.1 million due
to new collaboration agreement in relation to R&D services provided by Trendlines Labs to a third
party.
1 As defined in the Company’s offer document dated 16 November 2015
3
Our loss before taxes was US$1.5 million for the quarter compared to a gain of approximately US$0.9
million in first quarter of 2015.
Income tax for the quarter was a tax benefit of approximately US$0.7, due to the effect of reduction in
the deferred taxes which was caused mainly by the reduction in tax rate from 26.5% to 25%. This
resulted in a net loss for the quarter of US$0.8 million, compared to a profit of US$0.5 million in
1Q2015.
The Group maintained a strong financial position. As at 31 March 2016, the Group had cash and cash
equivalents of US$8.2 million, compared to US$7.0 million as at 31 December 2015. Current assets as
at 31 March 2016 were $21.5 million, as compared to US$24.0 million at the end of 2015. The
reduction in current assets reflects investments in our portfolio companies and current operations
during the first quarter which reduced short term investments to US$12.0 million, from US$16.4
million on 31 December 2015.
The fair value of all the portfolio companies (“portfolio value”), including the fair value of a company
carried at equity value, as at 31 March 2016 was approximately US$86.9 million, compared to US$85.8
million as at 31 December 2015. The increase was primarily attributable to an increase of US$3.9
million in the fair value of the Most Valuable Portfolio Company.
Commenting on the 1Q2016 financial results, Mr. D. Todd Dollinger, Co-Chairman and CEO of the
Group, said, “The nature of our business has two distinct characteristics in our financials as compared
to that of any traditional business. Firstly, the fair value of our portfolio companies changes according
to the progress in their fund raising and technological and commercial development, and the varying
rates of progress at different companies could lead to variations in fair value on a portfolio level from
quarter to quarter. Secondly, as significant monetary gain is generated chiefly by exits from our
portfolio companies, the financial performance and earnings can be volatile.
“Trendlines’ value to portfolio companies lies in providing support ranging from technological
development and business development to marketing and fund raising. Our goal is to assist portfolio
companies to achieve a relatively smooth growth path to commercialization, and to eventually exit
from these investments with optimal returns. We are working hard to achieve this goal, and we will
update the market as exit projects materialize.”
4
Mr. Steve Rhodes, Co-Chairman and CEO of the Group, added, “Despite the quarterly numbers, we
made a promising start for 2016. We entered into a definitive collaboration agreement with B. Braun
on establishing mutual deal flow and the development of new technologies; Bayer AG committed
US$10 million in the Bayer Trendlines Agtech Innovation Fund which will focus on making early-stage
agritech investments and will be managed by Trendlines. Separately, Trendlines Labs entered into a
collaboration agreement with a major MNC headquartered in Japan to develop innovative medical
device products for manufacturing and marketing by the Japanese MNC. Trendlines Labs also
received an additional order from a large U.S. medical device company, following its successful
collaboration with the company earlier.
“These partnerships are an endorsement of Trendlines’ business model and our R&D capabilities.
Collaboration with these industry leaders in their respective fields will raise Trendlines’ visibility in the
medical and agricultural technologies space, provide us with a larger platform to improve human
condition, stimulate our growth, and enhance the potential for us to generate long-term value to our
shareholders.”
- The End -
__________________________________________________________________________________
Issued for and on behalf of The Trendlines Group Ltd.
By Financial PR Pte Ltd.
For more information, please contact:
Romil SINGH / Reyna MEI
[email protected] / [email protected]
Tel: (65) 6438 2990, Fax: (65) 6438 0064
__________________________________________________________________________________
The Trendlines Group Ltd. (the "Company") was listed on Catalist of the Singapore Exchange Securities
Trading Limited (the "SGX-ST") on 26 November 2015. The initial public offering of the Company was
sponsored by PrimePartners Corporate Finance Pte. Ltd. (the “Sponsor"). This press release has been
prepared by the Company and its contents have been reviewed by the Sponsor for compliance with
5
the SGX-ST Listing Manual Section B: Rules of Catalist. The Sponsor has not verified the contents of this
press release. This press release has not been examined or approved by the SGX-ST. The Sponsor and
the SGX-ST assume no responsibility for the contents of this press release, including the accuracy,
completeness or correctness of any of the information, statements or opinions made or reports
contained in this press release. The contact person for the Sponsor is Ms Gillian Goh, Director, Head of
Continuing Sponsorship, at 16 Collyer Quay, #10-00 Income at Raffles, Singapore 049318, telephone
(65) 6229 8088.
Creating & Developing Companies To Improve the Human Condition
Financial Highlights Q1 2016 May 2016
Legal Disclaimer
IMPORTANT NOTICE
This presentation is for informational purposes only and does not constitute or form any part of any offer for sale or subscription of, or solicitation of, any offer to buy or subscribe for any securities of The Trendlines Group Ltd. (“Company”) or any of its portfolio companies nor shall it or any part of it form the basis of, or be relied on in connection with, any contract, commitment or any investment decision whatsoever in Singapore, Israel, the United States or in any other jurisdiction. The summary information herein does not purport to be complete. The information in this presentation should not be relied upon as representation or warranty, express or implied, of the Company. No reliance should be placed on the fairness, accuracy, completeness or correctness of the information, or opinions contained in this presentation. The information is subject to change without notice.
The past performance of the Company is not necessarily indicative of its future performance. This presentation may contain statements that constitute forward-looking statements which involve risks and uncertainties. These statements include descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the results of business operations and financial condition, industry, environment and future events and plans of the Company. Such forward-looking statements are not guarantees of future results, performance or achievements. Actual results, performance or achievements of the Company may differ from those expressed in the forward-looking statements as a result of various factors, such as known and unknown risks and uncertainties, and assumptions including those risk factors discussed in our Offer Document dated 16 November 2015 and in our other filings with the SGXNET. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. In light of these risks and uncertainties, actual events, results and developments could differ materially from those expressed or implied by the forward-looking statements. Reliance should not be placed on these forward-looking statements, which reflect the view of the Company or its officers as of the date of this presentation only. The Company does not undertake any obligation to update or revise any of the forward-looking statement, whether as a result of new information, future events or otherwise.
None of the Company or any of its respective affiliates, advisers or representatives shall have any liability whatsoever for any loss howsoever arising, whether directly or indirectly, from any use, reliance or distribution of this presentation or its contents or otherwise arising in connection with this presentation.
Neither this presentation nor any of its content may be used without the prior written consent of the Company.
2
I. Overview & Business Model
II. Financial Highlights Balance Sheet Profit & Loss
III. Portfolio Highlights
IV. Q1 2016 Highlights
V. Stock Information
VI. Upcoming Events
Contents
3
I. Overview & Business Model
4
The Trendlines Group invents, discovers, invests in, and incubates life science companies in the fields of medical and agricultural technologies.
Trendlines: Innovation Commercialization
Invest through Israeli Government-Franchised Incubators Invest in life sciences companies
Internal Innovation Center Invents and develops technologies to address unmet market needs
5
Trendlines: Deal Flow to Exit
6
II. Financial Highlights Balance Sheet
Profit & Loss
7
Trendlines: Balance Sheet Summary
31 March 2016 Unaudited
31 Dec 2015 Audited
US$’000 US$’000
ASSETS
Total Current Assets 21,472 24,000
Total Non-Current Assets 85,739 84,988
Total Assets 107,211 108,988
LIABILITIES AND EQUITY
Total Current Liabilities 3,287 3,657
Total Long-Term Liabilities 20,292 21,173
EQUITY
Total 83,598 84,124
Non-Controlling Interests 34 34
Total Equity 83,632 84,158
Total Liabilities and Equity 107,211 108,988
Key Financial Ratios
Current Assets to Current Liabilities 6.53
Total Assets to Total Liabilities 4.55
Price to Book Value* 0.92
Price to Portfolio Value* 0.88
*Based on market value as of close of trading on 6 May 2016 of S$ 104.3 million. Portfolio Value includes value of company reported on equity basis.
8
Trendlines: Profit & Loss Summary
Three months ended: 31 March 2016
Unaudited 31 March 2015
Unaudited
US$’000 US$’000
Total income 1,140 3,160
Total expenses before non-recurring, non-cash expenses related to discount on pre-IPO RCL upon IPO conversion 2,633 2,218
Income/(loss) before income taxes (1,493) 942
Income tax credit/(expense) 723 (362)
Net Income/(loss) and total comprehensive income/loss (770) 580
9
10
III. Portfolio Highlights
Trendlines: Growth of Portfolio Value
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
31.12.07* 31.12.08* 31.12.09* 31.12.10* 31.12.11* 31.12.12 31.12.13 31.12.14 31.12.15 31.3.16**
Portfolio Values US$ 000
FV of investments in consolidated non-operatingsubsidiaries
Fair Value ("FV") of investments in companiesaccounted for under the equity method
Portfolio Value
47,499
74,639 77,494
85,776
* Audited under IFRS but not reported to the public ** Unaudited
29,309 25,486
22,760
16,189
8,517
86,899
11
Trendlines: Building Value Over Time
One of our 10 most valuable portfolio companies as at 31 March 2016.
As at 31 March 2016; 19 written-off portfolio companies and 2 companies established before September 2007 not listed. IPO indicates reverse mergers into public companies.
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Trendlines: 10 Most Valuable Portfolio Companies
Company Name Initial Investment % Owned
(Fully Diluted)
ApiFix Ltd. 2011 29.42
Arcuro Medical Ltd. 2013 42.59
E.T.View Medical Ltd. 2008 27.86
Leviticus Cardio Ltd. 2010 29.27
Liola Technologies Ltd. 2010 29.14
NeuroQuest Ltd. 2008 30.75
Omeq Medical Ltd. 2013 42.89
Stimatix GI Ltd. 2009 27.17
STS Medical Ltd. 2013 35.37
VivoText Ltd. 2008 26.22
Total estimated fair market value of our 10 most valuable portfolio companies: approximately US$62.2*million, representing 71.6% of total portfolio value of approximately US$86.9*million as at 31 March 2016.
*Including FV of investments in companies accounted for under the equity method in the amount of US$1,700,000
13
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IV. Q1 2016 Highlights
• Definitive cooperation agreement signed with B. Braun Melsungen AG.
• Trendlines Labs
• Signed framework agreement with large Japanese medtech multinational.
• Received new order from large U.S. medtech multinational.
• Moshe Katzenelson named VP International Incubators.
• Trendlines Company Showcase (27 January) attracted more than 400 attendees.
15
Trendlines: Corporate News Q1 2016
• New Company established: AquiNovo Ltd.
• Significant raises:
• Saturas Ltd. about US$1 million
• Magdent Ltd. about US$800,000
• E.T.View Medical Ltd. reported 2015 sales increased 31% compared to 2014 to NIS 7.74 million
• Trendlines Agtech franchise from OCS not renewed; request submitted to OCS to merge Agtech investment activity into Trendlines Medical.
16
Trendlines: Companies & Incubator News Q1 2016
• Bayer AG signs agreement committing to invest US$10 million in the Bayer Trendlines Ag Innovation Fund.
17
Trendlines: Significant Events Since 31 March 2016
• Arcuro Medical Ltd. raises US$500,000 from Chinese medical device company Naton Medical Group Ltd.
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V. Stock Information
Trendlines: Stock Overview & Peers
Price to Portfolio (FMV)*
Allied Minds (LSE:ALM) 2.06
Imperial Innovations (AIM:IVO) 1.86
IP Group (LSE:IPO) 1.64
PureTech Health (LSE:PRTC) 1.48
Average Price to Portfolio 1.76
Trendlines Price to Portfolio 0.88
*Based on market cap at 6 May 2016, divided by last available portfolio value Peer Group as identified in DBS Vickers report of 11 Feb 2016
As at 6 May 2016 SGD
Last Price 0.205
IPO Price 0.330
52 Wk High 0.395
52 Wk Low 0.133
Market Cap 104.3 million
Shares Outstanding 508.8 million
Free Float 365.8 million
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VI. Upcoming Events
Trendlines Singapore Medical Company Showcase
8 Companies. 5 Cities. 5 Days.
Singapore, Beijing, Shanghai, Shenzhen, Hong Kong
4-8 July 2016
21
Events Around the World
Showcasing the Israeli agtech ecosystem
Weizmann Institute of Science Rehovot, Israel
27 September 2016
4th ANNUAL
+972.72.260.7000 | www.trendlines.com
Creating & Developing Companies To Improve the Human Condition
Todd Dollinger, Chairman & CEO Steve Rhodes, Chairman & CEO
11 May 2016
Judith Kleinman, Director Investor Relations & Corporate Communications [email protected]
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