Final Results

25 March 2014

Cyprotex PLC

("Cyprotex" or the "Company" or the "Group")

Final results for the year ended 31 December 2013

Strong performance and investment for future growth

Cyprotex PLC (AIM: CRX), the preclinical ADME-Tox services company, today reports its final results for the year ended 31 December 2013.

Financial Highlights

· Strong revenue growth up 17.3% to £9.77 million (2012: £8.33 million)

· Operating profits up 88% at £0.61 million (2012: £0.33 million)

· Underlying EBITDA^, an indicator of cash generation, up 59% at £1.54 million (2012: £0.97 million)

· £6.88 million (net) raised by Company in total in September 2013

- £4 million by way of an issue of unsecured convertible loan notes; and

- £3 million of unsecured redeemable loan notes

· Loss after tax of £0.8 million (2012 Profit after tax: £0.2 million) due to exceptional non-cash finance charge relating to the issue of loan notes in the year of £1.6 million (2012: £nil)

· Loss per share at 0.36 pence (2012: earnings per share 0.09 pence)

^ excluding share-based payment charge and impairment of intangibles

Operational Highlights

· Strong performance across all divisions of the business

- 136 new customers generating £1.76 million of revenues

- Further de-risking of the business through a broadening customer base with our largest customer contributing less than 10% of revenues for the first time and top 5 customers accounting for 30.5%

· Increased investment in people and equipment

- Investment of £1.6 million in state of art liquid handling and analytical equipment

- Expansion of UK facility into Biohub at Alderley Park

- Increase in headcount to over 100 employees

· Alliances, collaborations and new contracts performing well

- US Environmental Protection Agency contract worth up to $10m over five years for ToxCast project

- Distribution agreement with Intralink to expand Cyprotex brand in the important Japanese market

- Evolution of Pfizer collaboration which now involves support work for specific projects

- Federated approach provides customers with a broad range of products and services

· Launch of eCiphrCardio and eCiphrNeuro, new proprietary services for the prediction of cardiotoxicity and neurotoxicity respectively

· Changes to the Board structure

- Ian Johnson joins as Chairman as Steve Harris becomes a Non-Executive Director

- Christopher Mills joins as Non-Executive Director following Chris Clothier departure

Post Period Events

· Acquisition of CeeTox Inc., a US specialist in in vitro toxicology screening for the personal care, cosmetics and industrial chemicals sectors

Ian Johnson, Chairman of Cyprotex PLC, said:

"2013 has been an excellent year in terms of operational performance and internal expansion which coupled with the recent acquisition is enabling us to build further value in our business. We have a clear vision to continue such growth strategies into 2014 and beyond, considerably aided by a successful fundraising of almost £7 million. Cyprotex was awarded the prestigious BioNow award for the best service business in the life science sector - an acknowledgment of the esteem and value our customers place in us. Our aim is to continue to build scale by delivering customer service of the highest standards and through the development of new and innovative products and services to satisfy the needs of our widening client base."

For further information:

Notes to Editors:

Cyprotex PLC

Cyprotex is listed on the AIM market of the London Stock Exchange (CRX). It has sites in Macclesfield, near Manchester in the UK, Watertown, MA and Kalamazoo in MI in the US. The Company was established in 1999 and works with more than 800 partners within the pharmaceutical and biotech industry, cosmetics and personal care industry and the chemical industry. Cyprotex acquired Apredica and the assets of Cellumen Inc. in August 2010 and the combined business provides support for a wide range of experimental and computational ADME-Tox and PK services, extending from early drug discovery through to IND submission. The acquisition of the assets and business of CeeTox in January 2014 has enabled Cyprotex to expand its range of services to target the personal care, cosmetics and chemical industries. The Company's core capabilities include high quality in vitro ADME screening services, mechanistic toxicology and high content toxicology screening services, including our proprietary CellCiphr® toxicity prediction technology, predictive modelling using PBPK and QSAR techniques, including Cloe® PK for in vivo PK prediction, and a range of skin, ocular and endocrine disruption services. For more information, see www.cyprotex.com

Chairman and Chief Executive Officer's Report

A strong performance from all sectors of the business has resulted in record turnover and EBITDA. Significant investment from new shareholders enables implementation of a rapid growth strategy.

Cyprotex continued to deliver excellent growth in 2013, a record year for both turnover and EBITDA. All parts of our business performed well as we focused our efforts in selling our most popular assays in both ADME and toxicity services. During the year, we added two new toxicity assays, eCiphrCardio and eCiphrNeuro, for the effective prediction of cardiotoxicity and neurotoxicity respectively, which have seen rapid uptake from our client base.

Geographically, US customer revenues were 40.7% (2012: 39.9%) and in Europe customer revenues were 57.6% (2012: 56.6%), with our Macclesfield site delivering an increase of 19.4% in sales reflecting the continuing dominance of European customers to our revenue base. Whilst we saw a small improvement in US sales, we have made a deliberate attempt to redress this balance towards the world's largest market for ADME-Tox through internal investments and acquisitions in the US.

We believe that the Asia Pacific region will become increasingly important to our revenues over the next few years and to this end we have commenced a sales drive in Japan with a specialist consultancy company. We expect to see rest of world revenues increase in the coming years as a result of this initiative.

As the business has grown we have expanded our main Macclesfield HQ site and this site is now almost at capacity. To take account of our strategy for future growth, we have commenced an expansion programme in the UK by initially leasing two laboratories and associated administration space in the new BioHub facility at the former AstraZeneca headquarters site in nearby Alderley Park, Cheshire, with the likelihood of further expansion in 2014. We have also continued to expand our Watertown, MA, US site in terms of people and equipment. A new replica of our Macclesfield high throughput ADME screening laboratory has been created which will come into operational effect in early 2014 to provide larger strategic ADME screening contracts for US based customers more reluctant to outsource overseas to the UK facility.

Our Board composition has changed this year with Mr Ian Johnson joining the Board as Chairman following Mr Steve Harris stepping down. We are delighted that Steve has remained with the Company as a Non-Executive Director and we are very grateful for his five year tenure as Chairman where he oversaw a significant transition bringing the business into growth and profitability.

We are also pleased to announce that funds managed by Harwood Capital LLP ('Harwood') have taken a significant holding in the Company and have replaced IPGL Ltd, Dr Katya Tsaioun and Mr Doug Bates as the largest investors in Cyprotex. As a result, we welcome Mr Christopher Mills to the Board as a Non-Executive Director. Mr Chris Clothier stepped down as a Non-Executive director of the Company in 2013 following our successful fundraising and we thank Chris for his services to the Company.

The acquisition of 29.0% of the issued share capital by funds managed by Harwood and additional significant purchases by other institutional investors has changed the investment profile of the business considerably. Furthermore, a fund raising exercise in August 2013 led by Harwood and one of its managed funds, Trident Private Equity Fund III LP, of £4.0 million via Convertible Loan Notes and £3.0 million via Redeemable Loan Notes has significantly strengthened the Company's cash position. We have subsequently developed an investment strategy to expedite growth in Cyprotex involving a combination of focused internal service development together with acquisitions of businesses or assets which complement the current service offerings.

In line with this strategy we were pleased to announce the purchase of the trade and assets of CeeTox, Inc ('CeeTox') on 1 January 2014. CeeTox is a specialist in vitro toxicological screening business with an in silico prediction capability. Technically and strategically, CeeTox complements Cyprotex's existing offering, not only by providing Cyprotex customers with new products and services, but through entry to the Personal Care, Cosmetics and Industrial Chemicals space, new territories for the Company. Many of the CeeTox assays are run under GLP (Good Laboratory Practice) guidelines, which is an area we have been keen to enter. Also like Cyprotex, CeeTox has previously announced a significant contract with the US Environmental Protection Agency which has the potential to significantly grow revenues. CeeTox is a world leader in the provision of Endocrine Disruptor Screening Panels which is also a highly valuable capability we wanted to acquire. This acquisition provides excellent sales synergies and opportunities for cross selling. The location of CeeTox in Kalamazoo, MI, USA expands our footprint in the key US territory and affords closer access to the Midwest pharma and biotech hubs.

Operational Performance

The excellent operational performance in 2013 was a reflection of an increase in revenues in the major customer territories. Our two operational sites grew their revenues with an outstanding performance by the Macclesfield site. The increased focus on diversifying our screening offerings, especially in toxicology, has seen a reduced dependence on our traditional customer base of pharma and biotech. There has been a concomitant increase in non-pharma based business, mainly in Personal Care, Cosmetics, Agrochemical and Industrial Chemical industries contributing £1.15 million in 2013 (£0.59 million for 2012). This deliberate diversification of industry base is a response to the highly fragmented nature of the ADME-Tox CRO ('Contract Research Organisation') business segment to ensure further growth and revenue security. Similarly, we have seen our dependence on our largest single customer drop from 11.3% to below 10% for the first time, which is further evidence of our continuing efforts to reduce reliance and de-risk our revenues.

The total number of customers serviced during 2013 was 325 compared to 317 in 2012 with 136 new customers in the period. Revenues per customer for new clients significantly increased to an average of £13,000 compared to around £10,000 for 2012 which is indicative of improving quality of revenues per customer.

Expansion of our Macclesfield and Watertown sites, moving into Alderley Park and the acquisition of Kalamazoo facilities (CeeTox) has meant that our headcount has increased to over 100 for the first time in the Company's history. We recognise that key to our business is continuing to grow our revenues whilst keeping costs and overheads under control and we are proud to have continued profitable trading since 2008.

We have continued our investment in capital expenditure on both the UK and US sites. Notable purchases have been two further Waters Xevo® triple quadrupole mass spectrometers, two further Agilent Infinity UHPLC instruments, two further Tecan Freedom EVO® 200 liquid handling robots to further bolster capability in high throughput ADME assays and an AB Sciex QTRAP® to enhance our analytical platform at the Macclesfield site. We have, in replicating our high throughput ADME screening platform in Watertown, purchased, installed and validated two AB Sciex QTRAP® mass spectrometers, two Tecan Freedom EVO® 200 liquid handling robots and two Agilent Infinity UHPLC instruments. To enhance our radiochemical detection capability we have purchased a PerkinElmer MicroBeta® scintillation counter for our laboratories in the Alderley Park, BioHub facility. These investments totalled £1.6 million signifying a commitment to be at the leading edge of technical capability in the ADME-Tox services industry.

With our internal and external growth plans for 2014 and beyond already well defined and partly executed, we expect a similar spend on capital expenditure for 2014 and we will focus spending on where we can see a fast and high quality revenue return for these investments.

We have continued our collaboration with Pfizer during 2013 and this has evolved from being a proof of principle agreement to performing dedicated support work for specific projects. We have also continued developing our dedicated 'Federated' approach to certain service offerings with Sygnature Discovery Limited (medicinal chemistry, integrated drug discovery services), Sirius Analytical Limited (high throughput physical chemistry), InSphero AG (3D microtissues), SOLVO Biotechnologiai ZRT(transporter assays) and Sigma-Aldrich, Inc (transporter assays).

Financial Performance

Group revenues grew by 17.3% in 2013 (2012: 5.3%) to £9.77 million (2012: £8.33 million) - a record turnover for the business. Given we are a highly operationally geared business this revenue translated to a record underlying EBITDA figures of £1.54 million (2012: £0.97million) and operating profit of £0.613 million (2012: £0.326 million). This is the sixth consecutive year of operational profitability.

Following the strong operational performance and the fundraising via £4 million of Convertible Loan Notes and £3 million of Redeemable Loan Notes, the balance sheet continues to be strong with net assets of £6.3 million (2012: £7.0 million) including cash of £7.1 million (2012: £0.9 million).

Whilst delivering two important new assays, R&D spend in 2013 was lowered to £0.331 million (2012: £0.443 million). As mentioned above, due to investment in our UK and US sites, we have spent over £1.6 million on essential CAPEX purchases (2012: £1.0 million). When non-cash items are deducted, the underlying EBITDA recorded for the year was £1.54 million (2012: £0.97 million). This remains a key indicator of the Group's continuing ability to generate cash from its core operations. We have incurred additional cost to rent and run the additional laboratory facilities in the Alderley Park BioHub of £0.03 million per annum.

Immediately after the trading period we announced the purchase of the trade and assets of CeeTox, Inc. The initial purchase price of £0.61 million was funded by our own resources. There will be a further commission payment of 5% on certain sales of assays achieved in the next two years (to a maximum of £3.1 million) to the former owners of CeeTox Inc., North American Science Associate, Inc. We have agreed a rental payment of approximately £0.1 million per annum for the Kalamazoo facility and expect to continue trading on this site for at least a further 12 months before moving operations to our Watertown facility.

Outlook and Summary

2013 has been an excellent year in terms of operational performance and internal expansion which coupled with the recent acquisition is enabling us to build further value in our business. We have a clear vision to continue such growth strategies into 2014 and beyond, considerably aided by a successful fundraising of almost £7 million. Our aim is to deliver customer service of the highest standards through the development of new and innovative services to satisfy the needs of our widening client base.

25 March 2014

Consolidated income statement

year to 31 December 2013

Consolidated statement of comprehensive income

year to 31 December 2013

Consolidated statement of financial position

at 31 December 2013

Consolidated statement of changes in equity

year to 31 December 2013

The other reserve arose on the acquisition of Cyprotex Discovery Limited by the Company in January 2002, which was accounted for as a merger. Additions in the year of £164,496 relate to the equity component of Convertible loan notes issued in the year ended 31 December 2013 (see note 11).

Consolidated statement of cash flows

year to 31 December 2013

Notes to the final results

year to 31 December 2013

1. Nature of operations and general information

Cyprotex PLC ('Cyprotex') and subsidiaries' (together 'the Group') principal activity is the provision of in vitro and in silico ADMET/PK (Absorption, Distribution, Metabolism, Excretion, Toxicity/Pharmacokinetic) information to a number of different industries including the Pharmaceutical, Biotechnology, Cosmetic, Personal Care, Agrochemical, Chemical Industries and Academia.

Cyprotex's vision is to accurately predict the human clinical outcome following exposure to a chemical or drug using high quality, robust in vitro methods combined with in silico technology. Rather than being a pure data provider, we add value and relevance to the ADME-Tox data supplied to our customers in the Pharmaceutical, Cosmetics, Personal Care and Chemical Industries.

Cyprotex PLC is the Group's ultimate parent company. It is incorporated and domiciled in England and Wales. The address of Cyprotex PLC's registered office is 100 Barbirolli Square, Manchester M2 3AB. The address of its principal places of business are 15 Beech Lane, Macclesfield, Cheshire, United Kingdom, SK10 2DR and 313 Pleasant Street, Watertown, Massachusetts MA 02472 USA. It trades through its wholly owned subsidiaries: Cyprotex Discovery Limited based in Macclesfield in the UK and Cyprotex US, LLC (formerly known as Apredica, LLC) in Watertown in the USA. Cyprotex PLC's shares are listed on the Alternative Investment Market of the London Stock Exchange.

The consolidated financial information set out in this announcement are presented in Pounds Sterling (£), which is also the functional currency of the parent. The consolidated financial information has been approved for issue by the Board of Directors on 25 March 2014.

The information in this preliminary announcement does not constitute statutory accounts within the meaning of sections 434 to 436 of the Companies Act 2006 and no statutory accounts have yet been filed with the Registrar of Companies for the year ended 31 December 2013. Statutory accounts for the year ended 31 December 2012 have been filed with the Registrar of Companies. The auditors report on these accounts was unqualified and did not contain an emphasis of matter, nor did it contain a statement under section 498 of the Companies Act 2006. The statutory accounts for the year ended 31 December 2013 will be delivered to the registrar of Companies following the Company's Annual General Meeting.

The Group's statutory financial statements for the year ended 31 December 2012 and 31 December 2011, prepared under International Financial Reporting Standards (IFRS) have been filed with the Registrar of Companies.

Whilst the financial information included in this final results announcement has been computed in accordance with IFRS, this announcement in itself does not contain sufficient information to comply with IFRS.

2. Basis of preparation

The consolidated final results are for the year ended 31 December 2013. They have been prepared in accordance with the requirements of International Financial Reporting Standards (IFRS) as adopted by the European Union (EU), including International Accounting Standards (IAS) and interpretations issued by the International Financial Reporting Committee (IFRIC) and applied in accordance with the Companies Act 2006. Practice is continuing to evolve on the application and interpretation of IFRS. Further standards may be issued by the International Accounting Standards Board (IASB) and standards currently in issue and endorsed by the EU may be subject to interpretations issued by IFRIC.

The consolidated final results have been prepared in accordance with the accounting policies set out in the Group's statutory financial statements for the year ended 31 December 2013.

The accounting policies have been applied consistently throughout the Group for the purposes of preparation of this consolidated financial information.

3. Going concern

Whilst the Group recorded a loss after taxation of £796,948 in the year ended 31 December 2013, this included an exceptional finance charge of £1,592,319 based upon a valuation of an embedded derivative associated with the issue of Loan Notes by the Company in the year. The value of this embedded derivative is based upon the share price performance of the Company and only crystallises at the maturity date of 30 September 2018 or earlier on a change of control or scheme of arrangement. Cash inflows from operations in the year ended 31 December 2013 are a record at £1,533,179. Cash and deposits at 31 December 2013 are £7,094,608. The Directors have reviewed the budget, financial forecasts including cash flow forecasts and other relevant information. They believe that the Group has adequate resources to continue in operation for the foreseeable future. The general economic environment in its main European and US markets could adversely affect demand for the Group's services and there is the possibility that the Group's actual trading performance during the coming year may be different from management's expectation. Accordingly, they continue to adopt the going concern basis in preparing the annual financial statements.

4. Segmental information

Revenue represents the amounts derived from the provision of goods and services which fall within the Group's ordinary activities and is stated net of value added tax and trade discounts.

The Group has a single operating and reportable segment, that of providing in vitro and in silico ADMET/PK (Absorption, Distribution, Metabolism, Excretion, Toxicity/Pharmacokinetic) information to a number of different industries including the Pharmaceutical, Biotechnology, Cosmetic, Personal Care, Agrochemical, Chemical Industries and Academia. The revenue and operating profit for the year are derived from the Group's single operating and reportable segment.

The Group gives a geographic analysis of revenue by destination. Key markets for the Group are identified as North America, Mainland Europe and the United Kingdom.

5. (Loss)/earnings per share

The calculation of the basic (loss)/earnings per share is based on the (loss)/earnings attributable to ordinary shareholders divided by the weighted average number of ordinary shares in issue during the period.

The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of ordinary shares and the post tax effect of dividends and/or interest, on the assumed conversion of all dilutive options and other dilutive potential ordinary shares to the extent that the result is not anti-dilutive.

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below.

6. Share issues

The Company has only one class of shares. During the year to 31 December 2013, 653,084 ordinary shares were issued. Shares issued may be summarised as follows:

7. Taxation

At 31 December 2013, the Group has tax losses and deductibles totalling approximately £6.1 million that are available for offset against future profits arising from the same trade.

8. Additions and disposals of property, plant and equipment

The following tables show the significant additions and disposals of property, plant and equipment.

9. Finance lease and hire purchase arrangements

The Group entered into two separate finance lease or hire purchase agreements, over three to five year terms, in the year ended 31 December 2013 (2012 : four; 2011: one) to assist with the upgrade of the UK analytical platform and robotic handling equipment. The cost of this equipment and amount of funding received are as follows:

These additions to property, plant and equipment can be reconciled to the amounts disclosed in the statement of cash flows and the statement of financial position as follows:

10. Intangible assets

The following tables show the significant movements in intangible fixed assets.

During the year the Board decided to rebrand its US operations. The Apredica trade name which was acquired in August 2010 was superseded and the US now trades as Cyprotex, US. Accordingly the carrying amount associated with the Apredica trade name has been subject to full impairment in the year to 31 December 2013 and the remaining balance of £135,801 written off.

Goodwill is subject to a yearly impairment test. Goodwill and other intangible assets relate to the acquisition of Cyprotex US, LLC (formerly known as Apredica, LLC) in August 2010 and Cyprotex US, LLC is defined as the cash - generating unit for impairment testing purposes.

The Group performed its annual impairment test as at 31 December 2013. As a listed entity on the AIM market of the London Stock Exchange, at the highest level, the Group considers the relationship between its market capitalisation and book value.

Where Goodwill has been separately indentified to a particular set of assets and liabilities, as in the case with Cyprotex US, LLC, a value - in - use calculation has been determined using detailed cash flow projections based upon those forecast to be generated by the Cyprotex US, LLC unit over the next five years. Beyond five years, a terminal growth rate is used with reference to previous growth achieved in the ADME-Tox market by the Group taking into consideration the forecast growth in the market or markets in which Cyprotex US, LLC currently operates. Following the impairment review, as at 31 December 2013, the Board is satisfied that there was no impairment to the carrying value of goodwill.

Additions in the years ended 31 December 2011 and 31 December 2012 to Technology & Know-How (internally generated) relate to development work carried out on CellCiphr® technologies.

11. Other borrowings

The Group entered into a Subscription Agreement on 21 August 2013 with Trident Private Equity Fund III LP, the ultimate outcome of which was the issue of £3 million of unsecured Redeemable Loan Notes ("Redeemables") and £4 million of unsecured Convertible Loan Notes ("Convertibles") in September 2013. By way of an Open Offer the Company issued £4 million nominal value of Convertible Loan Notes at par. Additionally it also, by way of subscription, issued £3 million nominal value of Redeemable Loan Notes at par. Details of these fundraisings where sent to all shareholders by way of a circular. Both instruments pay interest in the form of 'payment in kind' ('PIK') notes at the rate of 5% per annum on a compound basis, payable on each anniversary of issue for a period of five years. Under the Open Offer, Convertible Loan Notes were offered and issued such that each shareholder would be entitled to 0.01783003 of nominal value £1.00 Convertible Loan Notes. Convertible Loan Notes are convertible at 6 pence per share. Redeemable Loan Notes were issued subject to a notional conversion price of 6 pence per ordinary share. Issue costs associated with this fundraising amounted to £122,000. Net proceeds from the issue of Loan Notes amounted to £6,878,000.

The fair values attributed to the Loan Notes at 31 December 2013 are as follows:

The Convertible Loan Notes and associated PIK notes can be converted at the election of the holders of Convertible Loan Notes into ordinary shares of the Company on 30 September 2014 and/or on each anniversary of that date. Subject to conversation rights being exercised by the Noteholder, Loan Notes are repayable by the Company on the earlier of:

· the Offer Date where there is a change in control of the Company or a scheme of arrangement put in place.

· the Maturity Date (30 September 2018). The Maturity Date in respect of the Convertible Loan Notes and Redeemable Loan Notes may also be extended by up to two years at the option of a 50% majority of the holders of Convertible Loan Notes and Redeemable Loan Notes respectively.

The amount to be paid by the Company in respect of the redemption of the Loan Notes will be the greater of:

i) the nominal amount of the Loan Notes and the PIK Notes: and

ii) where a change in control of the Company or a scheme of arrangement is put in place, the amount calculated by applying the Offer Price per ordinary share applicable to the Offer to the number of Ordinary Shares represented by the Notes on the assumption that the nominal value of the Loan Notes then in issue (including any PIK notes issued or to be issued on or immediately prior to the Offer Date) had been converted in to Ordinary Shares at the Conversion Price (6 pence) or Notional Conversion Price (6 pence), as the case may be, on the Offer Date: and

iii) where the Loan Notes are redeemed on the Maturity Date the amount calculated by applying the average mid-market closing price of the Ordinary Shares in the 30 Business days prior to the Maturity Date to the number of Ordinary shares represented by the Loan Notes on the assumption that the nominal value of the Loan Notes then in issue (including any PIK notes issued or to be issued on or immediately prior to the Maturity Date) had been converted into Ordinary shares at the Conversion Price (6 pence) or the Notional Conversion price (6 pence) on the Maturity date (30 September 2018).

The Convertible Loan Notes and Redeemable Loan Notes are subject to a multiplier based upon the increase in share price from the Conversion or Nominal Conversion price of 6 pence. In both cases any increase in the average mid-market closing price of Cyprotex shares from a nominal base of 6 pence in the 30 prior market dealing days leads to a broadly proportionate increase in the amount of potential Loan Note related debt repayable on maturity. This increase in debt, relating to share price movements of the Company, is accounted for under International Financial Reporting Standards ("IFRS") as an additional finance cost in the income statement.

The Convertible Loan Notes have three separate economic components as follows:

· a liability component being a discounted fixed rate debt;

· an equity component due to the holders right to convert into Ordinary shares; and

· an embedded derivative due to conversion rights being linked to the Company's share price.

Each of these components is measured to fair value at the issue date.

This results in recognition of £164,496 (net of associated issue costs) as an equity component and the initial recognition of the debt component.

Subsequent fair value measurement to the balance sheet date of the liability component gives rise to a finance charge. In addition the embedded derivative value associated with the Convertible Loan Note is also calculated at the balance sheet date resulting in an additional finance charge and liability being recorded within the fair value of the Convertible Loan Note.

The Redeemable Loan Notes have two separate economic components as follows:

· a liability component being a discounted fixed rate debt; and

· an embedded derivative due to conversion rights being linked to the Company's share price via a notional issue price

Each of these components is measured to fair value at the issue date and a gain of £122,734 is deferred in respect of differences in market and coupon rates at date of issue.

Subsequent fair value measurement to the balance sheet date of the liability component gives rise to a finance charge. In addition the embedded derivative value associated with the Redeemable Loan Note is also calculated at the balance sheet date resulting in an additional finance charge and liability being recorded within the fair value of the Redeemable Loan Note.

For the year ended 31 December 2013 this additional charge for both the Redeemable and Convertible Loan Notes totalled £1,592,319.

A summary of the components of the finance costs associated with the issue of Redeemable and Convertible Loan Notes is as follows:

12. The Annual Report

The 2013 Annual Report and Accounts of the Group will be available to shareholders on 29 May 2014. Copies will be available on request from the Company Secretary, Cyprotex PLC, 15 Beech Lane, Macclesfield, Cheshire, SK10 2DR.

13. Annual General Meeting

The Annual General Meeting of the Company is scheduled to be held at 10:00am on Thursday 24 July 2014 at the offices of N+1 Singer Advisory LLP, One Bartholomew Lane, London EC2N 2AX.

14. Post balance sheet event

On 1 January 2014 the group's US subsidiary, Cyprotex US, LLC, under an asset purchase agreement ('APA'), purchased certain assets and trade of Ceetox, Inc. (CeeTox) from North American Science Associates, Inc ('NAMSA'). CeeTox is based in Kalamazoo, Michigan, USA. The initial purchase price was approximately £610,000 and was paid on completion. Under the APA the group acquired fixed assets and working capital balances of approximately £250,000 and the balance of the purchase price and any additional consideration in excess of the fair value of assets acquired will be allocated to intangibles and goodwill. There is potentially further consideration payable to NAMSA at a rate of 5% of net sales until 30 September 2015 if sales of certain indentified assays exceed the level achieved in the year to 30 September 2013 in subsequent 12 month periods to a maximum of £3.1 million. In the year to 30 September 2013, CeeTox recorded total revenues of £2 million and reported an operating loss of £1 million.

A fair value assessment of the acquired assets and liabilities has not yet been completed at the date of the approval of the Annual Report and Accounts and so a full disclosure of the valuation of the acquired assets and liabilities has not been made.