Audited results for period ending 31 Mar 2015

Rex Bionics Plc("Rex Bionics" or the "Company")

Audited results for the sixteen month period ending 31 March 2015

29 May 2015, Rex Bionics Plc (AIM: RXB) the pioneer of the REX Robot technology that enhances the mobility of wheel-chair users and enables robot assisted physiotherapy exercise, today announces its audited results for the sixteen month period ending 31 March 2015.

Highlights

Post-period operational highlights:

· Approval received from NHS National Institute for Health Research to start RAPPER II clinical trial. First patient due to be recruited imminently. Initial data expected before the end of 2015

· One sale recorded and a further confirmed customer order received

· First distributor appointments agreed in Hong Kong (April 2015), and Denmark and the Benelux countries (May 2015). Further distribution agreements expected in the next three months. Short-list of well-qualified potential partners identified for US and China

· Collaboration announced with the University Hospitals, Birmingham NHS Foundation Trust to explore the potential use of the REX robot in a critical care setting (May 2015)

· Continued implementation of five commercialisation priorities - clinical data, distributor recruitment, reference centres, US development and new medical applications.

Previously announced operational highlights over the sixteen month period:

· Improved manufacturing efficiency - unit cost of materials reduced by more than 25% since September 2014

· Initiation of a global Reference Centre programme with rehabilitation clinics in the UK, the US and New Zealand

· Launch by PhysioFunction of the UK's first physiotherapy service using the REX technology

· R&D grant award by the New Zealand government, potentially worth £0.75 million over the funding period.

· Transfer of listing from ISDX to AIM in conjunction with IPO raising £10m gross (May 2014). Completion of acquisition of Rex Bionics Ltd, in parallel with the IPO, and change of parent company name to Rex Bionics Plc

Audited results for the sixteen month period:

· Net loss £5.30m (12 months to 30 November 2013 - net loss £0.48 m)

· Period-end cash £4.37m (30 November 2013: £0.17m)

Commenting on the announcement, David Macfarlane, Chairman of the Board, said:

"REX is a unique technology with the potential to radically improve the lives of wheel-chair users. During 2014 we put in place the fundamentals to bring REX to a global customer base through our initial public offering, the scale-up of our manufacturing facility and the build-out of our sales and marketing infrastructure.

"Although we did not make the sales in the period that we would like to have done, user feed-back on REX remains overwhelmingly positive. We have a clear commercialisation strategy, and today's and other recent announcements show that we are now making good progress."

Crispin Simon, Chief Executive Officer, said: "Our strategy of generating rigorous clinical data to demonstrate the unique advantages REX brings to wheelchair users and clinicians is starting to bear fruit, as seen through our first two customer orders and the development of relationships with high-quality distributors. As we move through fiscal 2016, we will continue to focus on this."

For further information please contact:

Rex Bionics PlcCrispin Simon, Chief Executive Officer+44 (0) 7483 167851Peter Worrall, Chief Financial Officer+44 (0) 142 864 5416

Stifel Nicolaus Europe Limited (NOMAD and Broker)Jonathan Senior / Giles Balleny+44 (0) 20 7710 7600

Consilium Strategic CommunicationsMary-Jane Elliott / Jessica Hodgson / Chris Welsh / Lindsey [email protected]+44 (0) 203 709 5700

About Rex Bionics

Rex Bionics (AIM: RXB) is the UK AIM-listed pioneer of the REX Robot that enhances the mobility of wheel-chair users. Founded in Auckland, New Zealand by two robotics engineers with first-hand experience of wheelchair users and their needs, Rex Bionics is working with physiotherapists to develop the practice of Robot-Assisted Physiotherapy (RAP). In a session of RAP, REX lifts patients from a sitting position into a robot-supported standing position, allowing them to take part in a set of supported walking and stretching exercises, designed by specialist physiotherapists.

Wheelchair users are at risk of developing numerous medical complications from extended periods of sitting. By enabling them to spend more time standing, walking and exercising, REX may offer significant health benefits, including improved sleep, cardiovascular performance, maintenance of joint range, and a reduction in common abdominal problems and prescription drug use. A programme of clinical trials is now under way to evaluate these potential benefits.

REX can be used by people with complete spinal cord injury, as well as people who have suffered a stroke or other traumatic brain injury; and people with multiple sclerosis and muscular dystrophy. REX P, for use in the home, enables users to walk and stand with their hands free - providing more work and recreation options. 

In May 2014, Rex Bionics joined AIM with a fundraising of £10 million (gross) to scale up production, distribution and marketing internationally, in order to support growing demand for both REX products as well as developing the next generation of REX devices, REX 3.

REX is not approved for At-Home use in the United States of America.

CHAIRMAN AND CHIEF EXECUTIVE'S JOINT STATEMENT

The period to March 2015 has been one of intense activity across all aspects of the business. Having put in place during 2014 the fundamentals to bring REX to a global customer base through our initial public offering, the scale-up of our manufacturing facility and the build-out of our sales and marketing infrastructure, we have in the last few months been focusing our efforts on our five commercialisation priorities: - clinical data, distributor recruitment, reference centres, US development and new medical applications.

Sales and marketing activity

During 2014 we expanded our commercialisation activities and invested in our global sales & marketing and business development teams.

In December 2014 we announced an innovative collaboration with PhysioFunction, one of the UK's leading providers of specialist neurological physiotherapy and rehabilitation technology services, enabling PhysioFunction to offer Robot-Assisted Physiotherapy using the REX technology to its substantial customer base at 15 physiotherapy clinics around the UK. Under the terms of the collaboration the Company will provide a REX to PhysioFunction in return for a share of the customer fees charged by PhysioFunction for each session with REX.

We also initiated a global Reference Centre programme with rehabilitation clinics in the UK (PhysioFunction in Northampton), the US (Houston Methodist Hospital, Texas), and New Zealand (Healthvision, Auckland). We made positively-received presentations at a senior level to the US Army and the US Department of Veterans Affairs.

After the period-end, we announced the signing of distribution agreements with new partners in Hong Kong, Denmark, Belgium and Holland. These companies all have an excellent reputation for service and innovation, as well as long-standing relationships with the rehabilitation community in their territories. We will use our initial experience in these markets to inform and develop our commercial and clinical proposition. In addition, an early priority in each country where we have a distribution partner, and in others, is the establishment of a reference centre. We will continue to enter markets where well-qualified distribution partners are available, but we are now prioritising the establishment of strong distribution systems in the US and China, the countries that we judge to have the greatest long-term potential.

Manufacturing

An important event in 2014 was the successful commissioning of our new manufacturing facility in Auckland, New Zealand, yielding additional capacity and improved efficiency. Our team in New Zealand has made great progress with the implementation of an ambitious programme of quality improvement and in reducing production costs.

Clinical Data

We have made good progress so far in 2015 with our plan to collect compelling clinical evidence to drive the commercialisation of REX. Preliminary data are now available from RAPPER I (Robot-Assisted Physiotherapy Exercises with REX), a registry of 11 wheelchair-dependent patients who were studied to assess the feasibility of carrying out sophisticated physiotherapy in the REX. The neurological level of impairment ranged from C4 to T10 (four quadriplegic and seven paraplegic patients). All participants in the study were able to complete the prescribed exercises and achieve competency in using the REX with the joystick, and there were no adverse events. 

We have also progressed the RAPPER II 100 patient clinical trial, which focuses on the safety and feasibility of a set of exercises that can be performed in the REX ("Rexercises"). Nick Birch, MBBS FRCS (Orth), an expert in spinal disorders, author of numerous peer-reviewed scientific papers and the Spine Specialty Editor of the Bone and Joint Journal, has agreed to act as the Principal Medical Investigator. We received approval from the ethics committee of the NHS National Institute for Health Research (NIHR) in early May to start recruitment into the trial. The first patient is expected to be recruited imminently and we anticipate receiving early data from the study by the end of 2015.

The Company's principal focus in RAPPER II is to provide robust evidence that patients with a more severe spinal cord injury can be safely and effectively treated and to show that the concept of Robot-Assisted Physiotherapy is viable for the patient and efficient for the physiotherapy clinic. Based on the market feedback we have received, we believe that confirmation of safety and feasibility reported in a peer-reviewed publication would facilitate sales and significantly assist our medium-term commercialisation programme. Our US clinical programme has attracted the interest of a number of leading institutions and we now have a trial design to submit to the FDA. 

We have exhibited at several international exhibitions and medical conferences during 2014 and early 2015 to continue to raise awareness of the REX technology amongst medical professionals and wheelchair users.

After the period-end, the Company signed a collaboration agreement with The University Hospitals, Birmingham NHS Foundation Trust to explore the potential use of the REX in the Critical Care setting. Critical (or 'Intensive') Care medicine is the treatment of critically ill, injured or post-operative patients requiring intensive treatment, nursing and monitoring. Muscle mass has been shown to decrease at a rate of between 2-4% a day during the first two weeks following admission to an intensive care unit (ICU) and the benefits of early mobilisation, in terms of mobility at ICU discharge, length of stay (ICU and hospital) and in-hospital mortality, are well documented.

This is an entirely new opportunity for REX, which builds on the concept of Robot-Assisted Physiotherapy but focuses on patients who typically will not have a spinal cord injury or use a wheelchair at the time of treatment. The Company estimates that there are at least 5,000 critical care units in hospitals in the US.

This collaborative programme will focus on the efficiency and effectiveness of Robot-Assisted Physiotherapy in comparison with treatment protocols currently in use, and could contribute to the development of additional robot system functionality and intellectual property. An important milestone will be the start of a clinical evaluation, possibly as early as 2016.

Research & Development Pipeline

Rex Bionics is now working across three continents with some of the world's leading research institutions in the field of control of a robot with non-manual control systems. In September 2014, Jose Luis Contreras-Vidal, Professor of Electrical, Computer and Biomedical Engineering at the University of Houston, Texas, presented and filmed a working prototype of a mind-controlled REX at a scientific conference in Spain which showed how REX's superior stability and safety makes it an ideal choice for therapies designed for people with the most severe disabilities.

In line with our plan, we are working on a number of other enhancements to the current REX product that are intended to increase its therapeutic effect and to provide access to new categories of users. These include in-built electrical stimulation technology, user performance data analytics and a number of new country registrations.

Work continues to progress on REX 3, the next generation, re-modelled and lower-cost product earmarked for release in 2017. The R&D group made a valuable and important contribution to the manufacturing projects in 2014 and we plan to free up more of their capacity to work on new product development programmes in the future.

In August, Rex Bionics' New Zealand subsidiary received a substantial grant from the New Zealand Government to support the research and development of REX 3, potentially worth £0.75 million over the period of the development programme.

We also started discussions with a number of clinics about the use of the REX technology in clinical fields other than spinal cord injury, such as stroke, traumatic brain injury and multiple sclerosis, and we will continue these going forward.

Financial Review

Following the acquisition of Rex Bionics Ltd the Company changed its financial year-end from 30 November 2014 to 31 March 2015 to align it with Rex Bionics Ltd's year-end. This was achieved by having a 16 month accounting period from 1 December 2013 to 31 March 2015, with two sets of interim results covering the six months ended 31 May 2014, announced in August 2014, and the 12 months ended November 2014, announced in February 2015. In subsequent years the Group will report interim results covering the six months ended 30 September and final results covering the 12 months ended 31 March.

Consolidated Statement of Comprehensive Income

The net loss for the sixteen months ended 31 March 2015 amounted to £5.30 million (net loss year ended 30 November 2013: £0.48 million). On 8 May 2014 the Company completed the acquisition of Rex Bionics Ltd. The current period figures include the results of Rex Bionics Ltd from May 2014, the month of its acquisition by the Company, and the results of Rex Bionics Pty Ltd, a wholly-owned Australian subsidiary of the Company incorporated in May 2014, from October 2014 when it commenced operations.

In addition to the impact of the longer current period due to the change of accounting reference date, the increase in the current period net loss compared to the net loss for the year ended 30 November 2013 also reflects legal and advisory costs relating to the acquisition of Rex Bionics Ltd and the Company's IPO in May 2014; the additional operating costs arising from the inclusion of the results of Rex Bionics Ltd and Rex Bionics Pty Ltd from May 2014 and October 2014 respectively; and an increase in the rate of expenditure for the Group as a whole from May 2014 onwards when the Company commenced its implementation plans for the commercialisation of the REX technology.

Current period income of £0.24 million (year ended 30 November 2013: £nil) comprised charges of £0.18 million for sales & marketing and other support provided by the Company to Rex Bionics Ltd prior to the date of its acquisition and £0.06 million in relation to receipts under a New Zealand Government research & development grant awarded to Rex Bionics Ltd in July 2014.

Administrative expenses for the period of £5.65m (year ended 30 November 2013: £0.48m) included research & development expenditure of £0.51 million (year ended 30 November 2013: £nil), relating primarily to ongoing work on the REX 3 development programme as well as further development work on the existing products and towards the introduction of the REX P personal device.

Also included in administrative expenses were exceptional transaction costs of £0.64 million in aggregate (year ended 30 November 2013: £0.16 million) relating to the acquisition of Rex Bionics Ltd and the Company's IPO in May 2014, and amortisation of £0.64 million (year ended 30 November 2013: £nil) on the fair value of intellectual property intangible assets acquired as part of the acquisition of Rex Bionics Ltd.

The taxation credit of £0.17 million (year ended 30 November 2013: £nil) reflected a reduction in the deferred tax liability on intellectual property assets of Rex Bionics Ltd capitalised following its acquisition by the Company as a result of a fall in the net book value of those assets since the acquisition date due to amortisation.

Consolidated Statement of Financial Position and Cash Flows

The net assets of the Group at 31 March 2015 were £15.65 million (30 November 2013: net liabilities £0.21 million). The major elements of the £15.9 million increase in net assets during the current period were:

· Proceeds of shares issues of £10 million before expenses and convertible loan note issues of £0.98 million before expenses (year ended 30 November 2013: £nil).

· Capitalisation of intangible assets of £8.0 million net of deferred tax (year ended 30 November 2013: £nil) and £3.3 million of goodwill (year ended 30 November 2013: £nil) arising from the acquisition of Rex Bionics Ltd.

· Net cash outflows from operating activities £4.83 million (year ended 30 November 2013: £0.21 million)

Net funds

Net funds at 31 March 2015 of £4.37 million (30 November 2013: £0.17 million) comprised cash and short term deposits with maturities of less than three months, primarily denominated in Pounds Sterling and New Zealand Dollars. The Group had no bank borrowings at 31 March 2015 (30 November 2013: £nil).

The major elements of the increase of £4.20 million in net funds during the period were net proceeds of financing activities of £10.32 million, offset by the loss from operations of £5.42 million, capital expenditure of £0.38 million and an increase in working capital of £0.49 million.

Key objectives for 2015

As set out at the time of our 2nd interim results statement in February 2015, we have developed a list of key priorities for the next period, targeted for completion by March 2016 to coincide with our fiscal year-end, as follows:

1. Initiation of clinical trials designed to persuade the rehabilitation community of the clinical benefit and value-for-money of REX. (On Track - see comments on RAPPER II under Clinical Data section)

2. Implementation of a US Clinical Trial to secure FDA 510(k) clearance of REX for At-Home use in the USA.

We have brought this programme forward in view of the quality and size of the opportunity. A favourable review could then lead to clearance for At-Home use in late 2016. The first significant milestone in this programme would be approval by FDA of an Investigational Device Exemption (IDE) for the start of this trial. (Making progress - see comments under Clinical Data section)

3. Evidence of progress with other projects that demonstrate the value of REX in accelerating the rehabilitation of patients who have experienced other traumatic or degenerative neurological injury. (On Track - see comments under Clinical Data section on project with University Hospitals, Birmingham)

4. The recruitment of further Reference Centres in order to achieve our target of ten Reference Centres by the end of 2015. (On Track - see comments under Sales & Marketing Activity section)

5. The recruitment of distribution partners and other commercialisation initiatives (On Track - see comments under Sales & Marketing Activity section).

We continue to develop our commercial activities, with the US in particular a priority. We will be presenting more detail on the RAPPER I clinical trial at various medical conferences, and we expect patient recruitment for our RAPPER II study to commence imminently following the receipt of ethics committee approval. We are also continuing with an active programme of attendance at the major international neuro-rehabilitation conferences during 2015, including the ISCOS/ASIA conference in Montreal in May and the ISPRM conference in Berlin in June.

Over the coming months we intend to continue with our recruitment programme for commercial representation, including expanding our direct representation into the US and seeking to expand our distributor representation in Europe, the Middle East and Asia.

Our work on the development of REX 3 will continue and we intend that, through the use of new materials, we will be able to make a REX 3 with improved functionality and at a lower cost. We also intend for the REX 3 platform to be used for other medical robot devices and to have compatible connectivity with other devices.

We would like to thank our shareholders for their continued support. We continue to believe that the application of robotic technology for wheel-chair users in the rehabilitation and home care settings offers a substantial and growing market opportunity and we look forward to providing further updates during 2015.

David Macfarlane Crispin Simon

Chairman Chief Executive

29 May 2015

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the sixteen months ended 31 March 2015

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 March 2015

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the sixteen months ended 31 March 2015

CONSOLIDATED STATEMENT OF CASH FLOWS

For the sixteen months ended 31 March 2015

NOTES TO THE PRELIMINARY RESULTS ANNOUNCEMENT

For the sixteen months ended 31 March 2015

1 General information

Rex Bionics Plc, formerly Union MedTech Plc (the "Company") is a public limited company incorporated and domiciled in England and Wales (registration number 06425793). Its registered office address is 5th Floor, 7 Swallow Place, London W1B 2AG and its principal place of business is Thame Park, Thame Park Road, Thame, OX9 3PU. The Company's Ordinary Shares are traded on the AIM market of the London Stock Exchange Plc under the ticker "RXB".

The principal activities of the Company and its subsidiaries (together the "Group") are the research & development, manufacture and commercialisation of advanced robotic devices designed to provide physiotherapy to and improve the physical and psychological well-being of people with major mobility impairment as a result of spinal cord injury or other neurological damage.

2 Basis of preparation and statement of compliance with IFRSs

During the current reporting period the Company changed its accounting reference date from 30 November 2014 to 31 March 2015. The Consolidated Financial Statements cover the sixteen-month period from 1 December 2013 to 31 March 2015. They include eleven months of trading by Rex Bionics Limited, an Auckland, New Zealand based company acquired by the Company in May 2014, and six months of trading by Rex Bionics Pty Limited, a wholly-owned Melbourne, Australia based subsidiary established by the Company in May 2014 which commenced trading in October 2014. Prior period comparative figures, where shown, cover the twelve-month period ended 30 November 2013.

The Company completed an initial public offering on AIM on 8 May 2014, raising £10 million before expenses. On the same day it acquired the entire issued share capital of Rex Bionics Limited, a New Zealand registered company, and changed its own name from Union MedTech Plc to Rex Bionics Plc. The Rex Bionics Group (the "Group") comprises Rex Bionics Plc and its subsidiary companies.

The Consolidated Financial Statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union ('EU'), IFRIC Interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. They were approved and authorised for issue by the Board of Directors on 29 May 2015.

The financial statements are presented in Thousand Pound Sterling (£'000). All amounts are rounded to the nearest thousand Pounds unless otherwise indicated.

The financial information in this preliminary results announcement does not constitute the Group's statutory accounts for the sixteen months ended 31 March 2015 or the Company's statutory accounts for the year ended 30 November 2013 as defined in section 434 of the Companies Act 2006, but is derived from those accounts. The Company's Annual Report and Accounts for the year ended 30 November 2013 were approved by the Board of Directors on 21 March 2014 and have been filed with the Registrar of Companies. The report of the auditors on those financial statements included an unmodified opinion together with an emphasis of matter paragraph on going concern relating to the Company's requirement to raise further funds to continue to trade, and did not contain any statement under section 498 of the Companies Act 2006. The Group's Annual Report and Accounts for the sixteen month period ended 31 March 2015 will be filed with the Registrar in due course. The auditor has confirmed that the auditor's report that is required to be contained in the Annual Report and Accounts 2015 includes an unmodified opinion.

Going Concern

The financial statements have been prepared on a going concern basis, notwithstanding the trading losses being carried forward and the expectation that the Company will continue to make trading losses for some time to come.

The Group is currently consuming cash resources, and will continue to do so until sales revenues are sufficiently high to generate net cash inflows. Until the Group begins to generate positive net cash flows, it remains dependent upon securing additional funding, primarily through the injection of capital from share issues. During the current period the Company has met its day to day financing through the proceeds of an issue of £0.98 million of convertible loan notes and a separate issue of £10 million of equity share capital, both before expenses.

At 31 March 2015 the Company had net cash reserves of £4.37 million. It is the Directors' intention to raise further funds over the course of the next financial year via the issue of further equity share capital, and the Directors have a reasonable expectation that this can be achieved, although there can be no certainty that additional funds can be raised on suitable terms or at all. If further funds cannot be raised within the period the Directors believe, after taking into account current cash resources, their financial forecasts for the Company and after making due and careful enquiries and considering all uncertainties, that measures can be taken to reduce expenditure so as to ensure that the Company and Group will have adequate resources to continue in operational existence for the foreseeable future (being a period of at least twelve months from the date of this report). For this reason the Directors continue to adopt the going concern basis in preparing the annual report and financial statements. The financial statements do not include any adjustments that would result from the basis of preparation being inappropriate.

3 Acquisitions and disposals

On 8 May 2014 the Company completed the acquisition of the entire issued share capital of Rex Bionics Limited, an Auckland, New Zealand based company, thereby obtaining control. Rex Bionics Limited is the developer of the REX range of robotic physiotherapy devices that the Group is now commercialising. The primary reason for the business combination was to acquire Rex Bionics Ltd's technology, including patents and other intellectual property rights, and workforce.

Goodwill comprises access to the co-founders and inventors of the REX technology and other retained staff of Rex Bionics Ltd, the established supply chain for proprietary REX components, and other synergies of the business combination.

Consideration for the acquisition of Rex Bionics Ltd was 7,668,330 ordinary £1 shares of the Company at an estimated fair value of £1.366 per share, representing the market price of the Company's shares at the date of the acquisition less a discount to reflect restrictions imposed on the majority of Rex Bionics Ltd's shareholders under lock-up agreements entered into under the terms of the acquisition.

Acquisition-related costs are not included as part of consideration transferred and have been recognised as an expense in the Consolidated Statement of Comprehensive Income under administrative expenses.

Identifiable net assets

The fair value of identifiable net assets acquired amounted to £8.19 million, including intangible technology assets of £8.06 million net of deferred tax.

Rex Bionics Ltd's contribution to the Group results

Rex Bionics Ltd incurred a loss of £2.01 million for the 11 month period from the acquisition date to 31 March 2015, reflecting ongoing losses due to the early stage of business.

If Rex Bionics Ltd had been acquired on 1 December 2013, the Group's loss for the period would have increased by £0.92 million.

4 Loss from operations

Non-recurring transaction costs represent legal and other advisory costs in connection with the acquisition of Rex Bionics Ltd and the Company's IPO on AIM in May 2014.

5 Share capital and share premium

The share capital of Rex Bionics Plc consists only of fully paid ordinary shares with a nominal (par) value of £1 per share. All shares are equally eligible to receive dividends and the repayment of capital and represent one vote at shareholders' meetings of the Company.

In December 2013 and January 2014 the Company issued a total of £0.98 million in convertible loan notes of £1 each in two separate tranches of £0.75 million and £0.23 million respectively (the "UMT Loan Notes"). The £750k tranche was subscribed by Philip Asset Management ("PAM") as Trustee for Asia Pacific Healthcare Fund II ("APH"), a fund administered by Bioscience Managers Pty Ltd, a company of which Jeremy Curnock Cook is a director. The £230k tranche was subscribed by third party investors.

The UMT Loan Notes were automatically convertible into shares in the Company on successful completion of an IPO on AIM, at a 25% discount to the IPO price. If not converted, interest on the UMT Loan Notes accrued from 1 July 2014 at a rate of 7% per annum, and the principal of the UMT Loan Notes together with accrued interest was redeemable in full on 30 September 2015.

On receipt of the funds from the issue of UMT Loan Notes, the Company subscribed for convertible loan notes of NZD1 each issued by Rex Bionics Ltd (the "B Loan Notes") in two separate tranches amounting in aggregate to NZD1.903 million. The B Loan Notes were secured by a charge over the assets of Rex Bionics Ltd and were convertible into shares of Rex Bionics Ltd at the Company's discretion on successful completion of its acquisition of that company. As at the reporting date the Company has not yet exercised its conversion right.

If not converted the B Loan Notes were to accrue interest from 1 July 2014, although the Company has elected to waive its entitlement to interest, and they mature on 30 June 2015, at which point they are repayable or convertible at the Company's discretion.

Also in December 2013, PAM, as trustee for APH, subscribed for a total of NZD1.421 million in convertible loan notes of NZD1 each issued by Rex Bionics Ltd (the "A Loan Notes"). The A Loan Notes were automatically convertible into shares in Rex Bionics Ltd one day ahead of the completion of Rex Bionics Ltd's acquisition by the Company. In parallel the Company and PAM entered into a separate agreement, the "Share Sale and Purchase Agreement", the effect of which was that shares in Rex Bionics Ltd acquired by APH on conversion of the A Loan Notes would convert automatically into shares in the Company on completion of its IPO, at a 25% discount to the IPO price.

On 29 April 2014 the Company undertook a 1 for 100 consolidation of its ordinary shares under which 33,955,000 ordinary shares of £0.01p each were converted into 399,500 ordinary shares of £1.00 each.

On 7 May 2014, the A Loan Notes held by APH converted into shares in Rex Bionics Ltd.

On 8 May 2014 the Company completed an IPO on AIM in which it issued 5,555,556 ordinary £1 shares at a price of £1.80p per share, raising £10 million before expenses.

On the same day, the Company completed the acquisition of the entire issued share capital of Rex Bionics Limited in exchange for 7,668,330 new £1 ordinary shares in the Company, including 546,632 new £1 ordinary shares issued to APH in exchange for the shares in Rex Bionics Ltd acquired by APH on conversion of the A Loan Notes, and issued a further 725,924 new £1 ordinary shares as a result of the automatic conversion of the UMT Loan Notes.

6 Loss per share

Both the basic and diluted earnings per share have been calculated using the loss attributable to shareholders of the Parent Company as the numerator, ie no adjustments to loss were necessary in 2013 or 2015. At 31 March 2015, there were 1,024,029 options and 142,014 warrants outstanding (30 November 2013: Nil options and 45,714 warrants outstanding).

*A consolidation of the Company's ordinary share capital took place on 29 April 2014, in which shareholders received 1 new £1 ordinary share for every 100 £0.1p ordinary shares held.

Share-based payment transactions

The Company issues equity-settled share-based payments to several of its Directors, as well as employees of its subsidiaries. In accordance with IFRS 2, for all grants of share options and awards the cost of the equity-settled share-based payments is measured at fair value at the date of grant.

Where employees are rewarded using share-based payments, the fair values of employees' services are determined indirectly by reference to the fair value of the instrument granted to the employee. The fair value is appraised at the grant date and excludes the impact of non-market vesting conditions. That fair value is expensed on a straight line basis over the vesting period for the related options based upon the Company's estimate of the shares that will eventually vest, with a corresponding credit to "share option reserve".

A modification to a share option is accounted for by continuing with the existing accounting for the old option scheme and in addition recognising the increment in fair value of the new option scheme over the vesting periods. The incremental fair value granted is the difference between the fair value of the replacement equity instruments and the net fair value of the cancelled equity instrument sat the date the replacement equity instruments are granted.

The net fair value of the cancelled instruments is their fair value immediately before the cancellation, less the amount of any payment made to the employee on cancellation of the equity instruments. No expense is recognised for awards that do not ultimately vest as a result of the relevant employee ceasing to be employed by the Group.

Fair value is measured using the Black Scholes Option Pricing Model. The expected life used in the model is the expiry date of the options. Upon exercise of share options, the proceeds received net of any directly attributable transaction costs up to the value of the shares issued are allocated to share capital with any excess being recorded as share premium.