Interim Results

6 September 2018

DeepMatter Group Plc

("DeepMatter", the "Group" or the "Company")

Interim results for the six months ended 30 June 2018

DeepMatter (AIM: DMTR), the AIM quoted company focusing on digitizing chemistry, announces its unaudited interim results for the six months ended 30 June 2018.

Highlights:

· On track to deliver the Company's strategic roadmap to digitize chemistry

· Has now entered into agreements with five international organisations for its DigitalGlassware™ Pioneer Programme

· Loss after tax of £0.98 million (2017: loss £0.51 million)

· Cash and short-term deposits at 30 June 2018 of £2.07 million (31 December 2017: £3.27 million)

· Net assets at 30 June 2018 of £7.14 million (31 December 2017: £8.11 million)

· Post period end, Mark Warne appointed Chief Executive Officer on 3 July 2018

Mark Warne, Chief Executive Officer of DeepMatter, said:

"Our DigitalGlassware™ platform brings code, structure and order into the chemistry lab environment and enables recordable, shareable, reproduceable chemistry whilst also championing speed, simplicity and unhindered discovery.

The Group is progressing well with its DigitalGlassware™ Pioneer Programme and, moving forward, we keenly anticipate further deployments with key innovators. We remain focused on building credibility, awareness and understanding of the DigitalGlassware™ platform, before rolling out the platform to the broader community."

For further information:

CHAIRMAN AND CHIEF EXECUTIVE'S JOINT STATEMENT

The year to date has seen important corporate and operational developments at DeepMatter as the Company has moved from a focus on R&D activity to its first corporate engagements. We are pleased to report that the Group remains on track in progressing its strategic roadmap to digitize chemistry.

In May 2018, to better represent its vision and strategy, the Company rebranded as DeepMatter, and concurrently launched a new website (www.deepmattergroup.io). This has been received well by the Group's stakeholders, commercial partners and the wider industry. The Group announced in June 2018 that Mark Warne would join the Company full time as Chief Executive Officer, while James Ede-Golightly, then a Non-Executive Director of the Company, would become Non-Executive Chairman on an interim basis whilst the search for a new Non-Executive Chairman was undertaken. This search is now in process and we anticipate making a further announcement on this appointment in due course.

The Group has steadily progressed adoption of its DigitalGlassware™ big data and analysis platform, which helps people involved across research and process development sectors to perform and work together, addressing the industry need for reproducibility in chemistry. The Company's vision is to ultimately enable an autonomous synthesis engine, the Chemputer™. DigitalGlassware™ comprises a powerful and easy-to-use software interface with a unique, low footprint sensor array, which collects, stores and processes data generated from chemical experiments and allows access to reproducible chemistry via internet protocols.

Shortly after the end of the period, the Group announced that it had entered into agreements with a total of five organisations for its DigitalGlassware™ Pioneer Programme (the "Pioneers"), representing the Company's minimum target for the whole of 2018. The Pioneers include two leading international life science reagent and chemicals manufacturers, a world-renowned US-headquartered research centre and two universities - one in the UK and one in North America. Entering into agreements with this range of target users reflects the Company's previously described plan to select a range of companies and institutions to trial its technology, allowing observation of technology performance in different operating environments and locations worldwide. The Group anticipates entering into further pioneer agreements during the remainder of this year.

Experiments and tests using DigitalGlassware™ as part of the Pioneer Programme are contributing towards context rich data content, capable of being interrogated with artificial intelligence and machine learning algorithms, helping to provide the chemistry community an understanding of how it can help to improve the outcomes of chemical processes, including precision and reproducibility, while also discovering/enabling new synthetic routes and chemical entities.

Scientific credibility of the Group's approach, ultimately an important factor in the Group's industry engagements, has been underpinned by relevant high-profile publications and Nature, Science and PNAS by the Group's Scientific Founder, Professor Lee Cronin FRSE FRSC, and the granting of patents assigned to the Group under its agreement with the University of Glasgow.

Financial Review

For the half year ended 30 June 2018, the Group incurred a loss before tax of £905,000 (2017: loss of £573,000) which less a tax credit of £98,000 (2017: tax credit £68,000) and coupled with a loss of £173,000 from discontinued operations of the Scanning Ion Conductance Microscope ("SICM") business (2017: loss from discontinued operations £nil), resulted in an overall loss after tax of £980,000 (2017: loss of £505,000).

The Group continues to benefit from a sound balance sheet with a cash balance at 30 June 2018 of £2.07 million (30 June 2017: £4.28 million) compared to £3.27 million at 31 December 2017. The £1.2 million decrease in cash during the half year is mainly attributable to the continuing operations of the Group, in particular research and development and overhead expenditure costs, together with funding SICM's losses ahead of our planned exit from this business.

Outlook 

Our DigitalGlassware™ platform brings code, structure and order into the chemistry lab environment and enables recordable, shareable, reproduceable chemistry whilst also championing speed, simplicity and unhindered discovery.

The Group is progressing well with its DigitalGlassware™ Pioneer Programme and, moving forward, we keenly anticipate further deployments with key innovators. We remain focused on building credibility, awareness and understanding of the DigitalGlassware™ platform, before rolling out the platform to the broader community.

James Ede-Golightly (Non-Executive Chairman) and Mark Warne (Chief Executive Officer)

6 September 2018

Company Number: 05845469

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS TO 30 JUNE 2018

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2018

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2018

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

1) BASIS OF PREPARATION

The condensed interim financial statements of DeepMatter Group Plc are unaudited condensed consolidated financial statements for the six months ended 30 June 2018. These include unaudited comparatives for the six months ended 30 June 2017 together with audited comparatives for the year ended 31 December 2017.

The interim financial statements do not include all of the information required for full annual financial statements and do not comply with all the disclosures in IAS 34 'Interim Financial Reporting' and should be read in conjunction with the Group's annual financial statements as at 31 December 2017. Accordingly, whilst the interim statements have been prepared in accordance with IFRS, they cannot be construed as being in full compliance with IFRS.

The financial information for the year ended 31 December 2017 does not constitute statutory financial statements within the meaning of section 435 of the Companies Act 2006. A copy of the audited financial statements for that year has been delivered to the Registrar of Companies. The Auditors' opinion on those financial statements was unqualified, did not draw attention to any matters by way of an emphasis of matter paragraph, and it contained no statement under section 498(2) or section 498(3) of the Companies Act 2006.

The accounting policies adopted are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2017. As at 1 January 2018 there are no new standards or interpretations that resulted in any impact on the accounting policies, financial position or performance of the Group. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

Going concern

Information on the business environment, financial position and the factors underpinning the Group's future prospects and portfolio are included in the Chairman's Statement. The Directors confirm that they are satisfied that the Group has adequate resources to continue in business for the medium term based on the current liquid resources available. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

2) SIGNIFICANT ACCOUNTING POLICIES

The accounting policies adopted are consistent with those followed in the preparation of the consolidated annual financial statements of Cronin Group Plc for the year ended 31 December 2017.

3) SEGMENTAL REPORTING

The Board is of the opinion that the business operates only one reportable operating segment, being that of the digitization of chemical space and of innovative chemical discovery.

No operating segments have been aggregated to form the above reportable operating segment. Individual projects do not meet the definition of segments, and as such the revenues and costs of individual projects are not formally separated. In addition, due to the research and development nature of the business, many projects are transitory, depending on success, and thus no meaningful data can be provided through such analysis.

4) LOSS PER SHARE (BASIC AND DILUTED)

Basic earnings or loss per share is calculated by dividing the gain or loss attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period.

For diluted earnings or loss per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares.

Basic loss per share is based on the loss after tax for the period and the weighted average number of ordinary shares of £0.0001 each in issue during the period. Diluted loss per share is calculated by adjusting the average number of ordinary shares in issue during the period to assume conversion of all dilutive potential ordinary shares. The Company had a total of 23,873,334 potentially issuable dilutive ordinary shares in existence at the 30 June 2018 period end; (31 December 2017: 23,936,667; 30 June 2017: nil), comprised of 1,873,334 share options and 22,000,000 deferred consideration shares issued in relation to the acquisition of OpenIOLabs Limited. The 23,873,334 potentially issuable dilutive shares have not been included in the calculations below due to their potential issuance having an effect to reduce loss per share attributable to equity holders.

5) RELATED PARTY TRANSACTIONS

The Group has taken advantage of the exemptions contained within IAS 24 - 'Related Party Disclosures' from the requirement to disclose transactions between Group companies as these have been eliminated on consolidation.

In addition, during the period the Company paid remuneration to the Directors' in accordance with their service contracts and letters of appointment.

6) HALF YEAR FINANCIAL REPORT

A copy of the half year report, as well as the prior year annual statutory accounts, is available on the Company's website at www.deepmatter.io.