Interim Results 2014

Press Release

Cyprotex PLC

("Cyprotex" or "the Company")

Interim Results 2014

CeeTox portfolio brings notable benefits

Cyprotex PLC (AIM: CRX), a specialist ADME-Tox Contract Research Organisation (CRO), today reports its interim results for the half year to 30 June 2014.

Financial Highlights

· Revenues up 19% to £5.41m (H1 2013: £4.55m)

· CeeTox acquisition contributed revenues of £0.78m with £4.63m from existing business

· Gross margins were 78.7% (H1 2013: 81.1%) as a result of greater outsourcing in the period

· Operating loss of £584,000 (H1 2013: profit £317,000) due to greater depreciation charges, increased R&D activity and one off costs associated with the CeeTox acquisition

· Underlying EBITDA^ of £41,000 (H1 2013: £703,000)

^ excluding share based payment charge

Operational Highlights

· Acquisition and integration of CeeTox business proceeding well

· Rebranded Apredica subsidiary as Cyprotex US, LLC to further integrate into the Cyprotex Group and improve global recognition of the Cyprotex brand

· 111 new customers in the period (H1 2013: 78):

− 28 new customers from CeeTox, mainly in the area of Cosmetics/Personal Care and Chemicals

− 83 new customers acquired from existing Cyprotex business

· Commencement of work on two large US Environmental Protection Agency (EPA) contracts

· New business from Japanese partner expected in H2

· Two new strategic deals with major pharmaceutical companies commenced

· Continued investment in new products and services including developing a new High Throughput ADME facility in Watertown, MA and in developing a new specialist facility in the BioHub, Alderley Park with additional capital investments in new instrumentation to support new service offerings

Post Period End Events

On 24 July 2014, following approval by shareholders at General Meeting the Company proceeded to effect a ten for one share consolidation. The effect of this share consolidation was to reduce the number of shares in issue by 90% from 224,340,569 to 22,434,056.

Ian Johnson, Chairman of Cyprotex PLC, said:

"Much has been achieved in the first half of 2014 to expand the Company's service offering and build scale in the business. The acquisition of CeeTox is proceeding well with the new business adding to the markets we serve. We have initiated a wide ranging investment in new instrumentation and screening service capabilities across the whole business which is expected to enhance revenues and profits within the next 12 months. Notwithstanding the good progress made to date, unforeseen delays to certain development work will impact the Company's performance for the year as a whole. With additional investment in sales and marketing resources, the Board remains confident of achieving further growth and building scale across a wider range of business sectors."

For further information:

About 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, MI in the US. The Company was established in 1999 and works with more than 900 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 Statement

Cyprotex has made a positive start to the year reporting a 19% increase in total sales over the corresponding period last year. This increase is predominately due to the revenues generated from the acquisition of the business and assets of CeeTox in January 2014. The CeeTox revenues are encouraging as it represents significant growth in new customers in industries that we are not traditionally associated with. This is in line with our stated policy of widening our customer base and industries we wish to service. As most of CeeTox's customers are based in the US, this has meant a significant increase in US based revenues for the Company, up from £1.93m (H1 2013) to £2.91m this half year, an increase of 50%. Our total revenues from US customers now form 54% of the Company's overall revenues. This achieves a strategic objective announced in the Annual Report last year of reaching greater than 50% of total revenues from US territories.

The integration of the business and assets of CeeTox has gone well and is expected to be complete by the year end. We have introduced several major cost reduction plans with the expectation that it will contribute to profitability in this division in 2015. One of the benefits of this asset acquisition is that we now have an excellent facility in the US Midwest to service customers from this region. We have also revamped much of the sales and marketing materials for the new CeeTox assays and they now have greater visibility on the new Cyprotex website. We have commenced work on an EPA contract that was signed prior to 31 December 2013 and we are hopeful that our EPA sponsored Endocrine Disruption Screening Panel assays will commence by early 2015 which has promise to be a significant revenue generator.

Sales of existing Cyprotex services, have increased overall compared to last year, however, they have been adversely affected by several of our largest customers being either acquired, involved in restructuring or closing sites in the first half of the year. We remain hopeful that the revenue shortfall in H1 from these sources will start to recover in H2.

During the first half of 2014, we commenced several major R & D projects. One of these investments is to replicate our UK based high throughput ADME screening platform in our Watertown US site. This investment has involved capital expenditure ("CAPEX") spend of £620,000 (including the purchase of two AB Sciex® QTRAP mass spectrometers, two Tecan Freedom EVO® liquid handling robots and associated infrastructure). We had initially expected this facility to come on stream in H1. However, the replication process has proved more challenging than originally anticipated with instrumentation variations, following feedback from customers, to enable the expansion of potential service offerings. The associated levels of automation programming also required extra resources. We have revised our expectation of a fully validated facility being available in H2 2014 to then service considerable interest in this facility.

The second major investment is a new facility based at the BioHub centre at Alderley Park (the former AZ site) some 4 miles from our Macclesfield site. This new facility will enable us to enhance our bioanalytical capabilities and offer several new assays, some of which are based on radiochemical read outs. The main CAPEX investment here includes a Waters Xevo® G2-S QTof high resolution accurate mass spectrometer for metabolite identification studies, a LabLogic Beta-Ram® radiochemical detector, a Waters Atmospheric Pressure Gas Chromatography (APGC) system and a PerkinElmer MicroBeta® scintillation counter. Building up these capabilities has involved the recruitment and training of new additional staff. Although we are already observing uptake of some of these services, we expect to see the real benefit of this investment later in H2. One exercise undertaken at the BioHub facility is to fully validate and develop a highly robust and reproducible transporter assay suite. This will allow us to offer to our customers both a comprehensive and a premium service. This will give us an in-house capability to provide these services in an area where we are seeing increased customer activity. We will also benefit from reduced outsourcing costs.

This targeted spend has, as anticipated, affected our cash balances but these are necessary investments if we are to grow the business in the longer term with additional higher quality revenues.

Further internal investment is occurring at our Macclesfield, UK site where we are significantly expanding our capabilities in the field of toxicology with validation of new services currently underway. These new services are being developed in response to updated regulatory guidelines on skin sensitisation and also include new state-of-the-art technologies for analysing 3D tissues and specific mechanisms of toxicity. We aim to provide an update on these new services at year end. We are also continuing R&D projects to develop and improve our proprietary technologies such as CellCiphr® Premier and SenCeeTox®.

We are pleased to report that the new assays based on the microelectrode array technology, eCiphrCardio (heart toxicity measurement) and eCiphrNeuro (neuro toxicity measurement) are gathering widespread acceptance. Cyprotex were the first to market such assays amongst our competitors and it demonstrates the benefit of having an active R&D investment strategy as part of our overall growth plans.

Customer Relationships

We have invested considerably in managing the former CeeTox customers since its acquisition. We have trained all our Business Development managers to be able to cross sell the CeeTox screens to new and existing customers. The improved marketing of the CeeTox assays through the upgraded Cyprotex website is beginning to bear fruit in attracting new customers to this part of our business.

Our relationships with our largest customers including Pfizer and the EPA and those that are not publically acknowledged have grown and developed over the last six months. We are continuing the previously disclosed Pfizer research collaboration contract, and have commenced two different yet significant contracts with the EPA, one at our Watertown site and one at our new Kalamazoo site. We have gained 83 new customers excluding the CeeTox customers, which compares favourably with 78 reported this time last year. Our largest customer is now just under 10% of current total revenues (2013 H1: 12.6%).

We have signed our first significant contract with a Japanese pharmaceutical company as a direct result of our investment over the last 12 months in marketing in the Far East territories. Further opportunities exist to grow the business in this region.

We have continued to market our services effectively in order to gain as much visibility as possible to new and existing customers. We have launched a new version of our website which optimises the viewing experience for mobile device users and has improved navigation. We now have four different language translations and we have streamlined our offerings of the former Apredica and CeeTox assets onto one main www.cyprotex.com website.

Financial Performance

Revenues are 19% higher than the comparable period last year mainly driven by revenues associated with the CeeTox acquisition but also from some growth from the existing business. Our Macclesfield site revenues, which contribute some two thirds of the total reported, are virtually identical to that reported in the comparative period, up 0.1%. Our revenues from the Watertown site are up some 45% on the comparative period, boosted in part by performing work previously outsourced by CeeTox.

Gross margins have fallen to 78.8% from 81.1% with increased outsourcing in H1 to partners. One aim of our current R&D program is to bring additional services in-house and thereby boost margins.

We invest in R&D projects to be able to launch new, competitive assays to the ADME-Tox market. In terms of capital expenditure, which is undertaken to support R&D programmes and drive new efficiencies, total additions in H1 2014 exceeded £1.5m, with total investments in laboratory equipment in the last 18 months exceeding £3.0m. In 2014, we have invested further to enhance our analytical and instrumentation capabilities with the purchase of a Waters Xevo® G2-S QTof mass spectrometer, a Waters Atmospheric Pressure Gas Chromatography (APGC) system, a Thermo Scientific ArrayScan XTI high content screening instrument and a Seahorse XFe analyser. Upgrading our equipment and investment in new capabilities brings additional depreciation charges to the income statement and as a consequence the depreciation charge at £495,000 (H1 2013: £304,000) is 63% or £191,000 higher.

We have invested substantially in our internal expertise, skills and knowledge base increasing staff numbers from 79 at 30 June 2013 to 112 at 30 June 2014.

There have been a number of one-off additional costs incurred in the first half of 2014 associated with the purchase of the trade and assets of CeeTox, including restructuring, loyalty payments and legal fees all of which under IFRS are reported as costs in the income statement in H1 2014 and these total some £170,000.

The granting of 29,999,999 share options to executives in the period gives rise to a share based payment charge of £61,300.

The combined effect of a reduction in gross margin, increased staffing costs to accomplish either R&D or replicate our high throughput platform in the US, additional infrastructure costs from operating on four sites (H1 2013: 2 sites), increasing depreciation charges, share based payment charges and one off charges associated with the acquisition of the business and trade of CeeTox has all adversely affected operating profitability. The Company reports an operating loss of £584,000 (H1 2013: profit £317,000), a reduction of £901,000. Similarly underlying EBITDA has fallen to £41,000, down from £703,000.

In September 2013, the Company issued Loan Notes to the value of £7.0m. One of the conditions attached to the issue of these notes is that their value is linked to changes in the Company's share price via conversion or notional conversion rights into ordinary shares. The Loan Notes then effectively share with ordinary shareholders any increase in value of the Company from 6 pence per share. The value of both Loan Note liabilities is linked to the average share price in the 30 days preceding the reporting date. At 30 June 2014, this was 6.96 pence (v 7.238 pence at 31 December 2013). It has been calculated that this relative fall in share price leads to a downward revision in the fair value of the Loan Notes by £385,000 which is recorded as finance income in the income statement in H1 2014.

The Company's cash balances remain robust and stood at £4.6m at period end, down £2.5m from the start of the year. Principal movements are £0.9 million used in operations, £1.4m spent on tangible and intangible fixed assets and £0.2m in servicing debt and contingent consideration obligations.

Post period end on 25 July 2014, following approval by shareholders at General Meeting the Company proceeded to effect a ten for one share consolidation. The effect of this share consolidation was to reduce the number of shares in issue by 90% from 224,340,569 to 22,434,056. Accordingly historic reported (loss)/earnings per share after that date will be rebased by multiplying by a factor of ten in future reports. Also, following the ten for one share consolidation, the conversion or notional conversion price for Loan Notes issued by the Company, and the target and exercise price of any share option awards, are all adjusted upwards by a factor of ten.

Strategy

Our stated strategy for future growth is dependent on three factors. The first is growing our existing service revenues by better marketing our services and by outperforming our competitors in what is still a fragmented market. The second is growing revenues by investing in R&D to provide new services to address customer needs which will provide superior quality revenues. And finally, to grow the business by acquisition of selective companies which are technically and philosophically aligned with the Cyprotex vision.

We have invested in new marketing tools and been more assertive in the business development process particularly in relaunching some of the CeeTox assays. We have invested in several large and small R&D projects, all of which we aim to validate during 2014 and expect to be significantly revenue generating in 2015.

We continue to evaluate the potential acquisition of companies that strategically fit with the Company technically, geographically and financially.

Outlook

We have been pleased with the integration of the CeeTox business and the number and quality of new customers that we now serve. The fact that most of these new customers are in the Cosmetics/ Personal Care and Industrial Chemicals sectors further enhances the potential volume of business that we already derive from our more traditional Pharma, Biotech and Agrochemical customers.

We have noticed a greater willingness for larger pharmaceutical companies to outsource their non-core ADME -Tox screening to CROs and we have been well placed with our state-of-the-art platform to benefit from this, winning several large, strategic contracts in recent years. Two more such contracts were signed in H1 2014 and we are confident that the Company is well placed to continue to benefit from this trend in the future.

Our investment in new R&D, to provide state-of-the-art equipment and valuable assays is well underway and these new services have either been launched, or will be launched over the coming months. While we anticipate that the Company will benefit from the usual seasonality in H2, the delays in bringing these products to market, coupled with the related staffing costs, is likely to impact the performance of the year as a whole. Nevertheless we expect the various investment programmes to start to yield significant benefits later in H2 and through 2015.

The Board believes that the Company is well placed for future growth and looks forward with enthusiasm and confidence.

28 August 2014

Consolidated interim income statement

six months to 30 June 2014

Consolidated interim statement of comprehensive income

six months to 30 June 2014

Consolidated interim statement of financial position

at 30 June 2014

Consolidated interim statement of changes in equity

six months to 30 June 2014

Consolidated interim statement of cash flows

six months to 30 June 2014

Notes to the interim condensed consolidated financial statements

six months to 30 June 2014

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, and 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 provide, in partnership with our customers in drug discovery and development, the highest quality, fastest turnaround and most cost effective ADMET and pharmacokinetic data to those customers.

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 addresses of its principal places of business are 15 Beech Lane, Macclesfield, Cheshire, United Kingdom, SK10 2DR, 313 Pleasant Street, Watertown, Massachusetts, MA02472 USA and 4717 Campus Drive, Kalamazoo, Michigan MI49008 USA. It trades through its wholly owned subsidiaries, Cyprotex Discovery Limited based in Macclesfield in the UK and Cyprotex US, LLC in Watertown and Kalamazoo in the USA. Cyprotex PLC's shares are listed on the Alternative Investment Market of the London Stock Exchange.

Cyprotex's interim condensed consolidated financial statements ('the interim financial statements') are presented in Pounds Sterling (£), which is also the functional currency of the parent company. These interim financial statements have been approved for issue by the Board of Directors on 28 August 2014.

The financial information for the year ended 31 December 2013 set out in these interim financial statements does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 December 2013 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain statements under section 498(2) or section 498(3) of the Companies Act 2006.

2. Basis of preparation, going concern and accounting policies

Basis of preparation

These interim financial statements are for the six months to 30 June 2014. They have been prepared in accordance with IAS 34, Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the annual consolidated financial statements of the Group for the year ended 31 December 2013.

Going concern

The Directors have reviewed the budget, financial forecast including cash flow forecasts and other relevant information. They believe that the Group has adequate resources to continue in operation for the foreseeable future.

Accounting policies -

New standards, interpretations and amendments adopted by the Group

The accounting policies adopted in the preparation of the interim financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2013, except for the adoption of new standards and interpretations effective as of 1 January 2014.

The Directors do not consider that the adoption of these standards and interpretations would have a material impact on the consolidated or company financial statements in the period of initial application.

3. Seasonal fluctuations

Historically revenues are strongest in the second half of the year. Revenues slow following the Christmas and New Year holidays, and again during the summer holidays, particularly from European clients.

The provision of ADMET services is subject to seasonal fluctuations, historically with peak demand in the second half of each year. For the six months ended 30 June 2014, revenues represented 55.4% of the annual level of revenues in the year ended 31 December 2013.

4. Segmental information

The Group has a single operating and reporting segment, that of providing in vitro and in silico ADMET/PK (Absorption, Distribution, Metabolism, Excretion, Toxicity, and 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 or loss for the periods are derived from the Group's single operating and reportable segment. This has been determined by reference to the information that the Chief Operating Decision Maker receives about the Group.

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. Finance income and finance cost

Finance income comprises the following:

Finance cost comprises the following:

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 fundraising were 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. 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 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 conversion 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 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. Any decrease in debt, relating to share price movements of the Company, is accounted for under International Financial Reporting Standards ("IFRS") as an additional finance income 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 or finance income. 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 anotional 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 the date of issue.

Subsequent fair value measurement to the balance sheet date of the liability component gives rise to a finance charge or finance income. 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 period ended 30 June 2014 this additional credit for both the Redeemable and Convertible Loan Notes totalled £384,993.

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 (income)/costs associated with the issue of Redeemable and Convertible Loan Notes is as follows:

In the case of the embedded derivatives in calculating their values, principal assumptions used were a share price volatility of 38%, a credit spread of 20% and a risk free rate of 2%.

6. (Loss)/profit per ordinary 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 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 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.

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

Where a loss is reported for a period the weighted average number of ordinary shares in issue, for the purpose of calculating diluted earnings per share, is the same as that used for the basic earnings per share calculation. This is because outstanding share options would have the effect of reducing the loss per ordinary share and would therefore not be dilutive.

7. Share issues

No shares were issued in the 6 month period to 30 June 2014.

During the period to 30 June 2013, 653,084 ordinary shares were issued pursuant to the exercise of options by employees at values ranging between 1.13 pence and 4.25 pence. The share issues yielded £8,256 in cash and increased equity by £8,256. The weighted average share price at the date of exercise was 1.26 pence. Shares issued may be summarised as follows:

The Company has only one class of shares.

8. Share based payment

The Company adopted a Long Term Incentive Plan ('LTIP') on 22 January 2014. The purpose was to allow participants, who are executives in the Company, to potentially share in the creation of value for shareholders. A total of 29,999,999 share options under the LTIP have been awarded in the six months to 30 June 2014. The vesting of these executive options is on grant, at an exercise price of 6 pence per share, and are exercisable only upon change of control of the Company within a ten year period, dependent upon the Company's share price performance and subject to a minimum share price of 12 pence.

In order to calculate the fair value of potential awards a Monte Carlo simulation was used. The principal inputs to the valuation model were as follows:

9. Additions and disposals of property, plant and equipment

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

10. Intangible fixed assets

The following tables show the movement on intangible fixed assets:

Additions in the period to 30 June 2014 to technology & knowhow relate to development work associated with Transporter technology. Additions in the period to 30 June 2014 to goodwill arose on the acquisition of certain assets and trade of CeeTox, Inc (see note 11).

11. Purchase of the trade and assets of CeeTox, Inc

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 paid on completion. There is potentially further consideration payable to NAMSA at a rate of 5% of net sales until 30 September 2015 if sales of certain identified 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. Under the APA the Group acquired fixed assets and working capital balances and the balance of the purchase price and any additional consideration in excess of the fair value of assets acquired is allocated to goodwill.

The current estimate of contingent consideration payable is £36,600. The Company will reassess all the assets and liabilities acquired including any potential contingent consideration during the year to 31 December 2014 and make any necessary adjustments at that reporting date.

12. Contingent consideration

On 4 August 2010 prior to the acquisition of Cyprotex US, LLC by Cyprotex PLC; Cyprotex US, LLC acquired certain assets and the trade of Cellumen, Inc under an asset purchase agreement. Under the terms of that agreement Cyprotex US, LLC agreed to pay a contingent payment based on future sales revenues using the CellCiphrTM technology acquired for a period up to four years at a rate of between 10% and 20%.

These potential payments have been classified as contingent consideration and the provision below represents an estimate of potential payments that may fall due under that agreement.

13. Taxation

At 30 June 2014, the Group has tax losses and tax deductibles of approximately £6.5 million that are available for offset against future profits arising from the same trade.

14. Post balance sheet event - ten for one share consolidation

On 24 July 2014, following approval by shareholders at General Meeting the Company proceeded to effect a ten for one share consolidation. The effect of this share consolidation was to reduce the number of shares in issue by 90% from 224,340,569 to 22,434,056. Accordingly historic reported (loss)/earnings per share after that date are rebased by multiplying by a factor of ten.

Under the Share Consolidation every ten existing ordinary shares with nominal value £0.001 was consolidated into one new ordinary share with nominal value £0.01. The rights attaching to the New Ordinary Shares are identical in all respects to those of the Existing Ordinary Shares. Application was made for 22,434,056 New Ordinary Shares of £0.01 each to be admitted to trading on AIM with dealing commencing on 28 July 2014, with any fractional entitlements aggregated and sold in the market and the proceeds given to charity.

Following the ten for one share consolidation the conversion or notional conversion price for Loan Notes issued by the Company, and the target and exercise price of any share option awards are all adjusted upwards by a factor of ten.