Annual Report and Accounts: 2017

Turnover for the year was £118,000 (2016: £116,000). Gross profit increased to £110,000 (2016: £108,000) and the operating profit was £88,000 (2016: £34,000 loss). Cash and cash equivalents increased to £38,000 at the year-end (2016: £36,000).

Company revenue is derived from two primary sources:

• Release of deferred income in respect of the agreement signed with BD in 2008 (£64K). There remains £350K of deferred income on the Balance Sheet.

• Revenue from the agreement signed with Croda (£54K)

The non-cash nature of deferred income recognition and a significant unrealised foreign exchange gain (£36K) resulted in positive cash flow during the year of just £2K despite the operating profit of £88K

The Company remains wholly dependent on revenues generated through its licence agreements with Croda and BD. To date, the agreement with Croda has delivered revenues envisaged in the original agreement and Croda has guaranteed payment of minimum royalties through end-2018 in order to avoid possible cancellation of the agreement.

In contrast, the agreement with BD has yet to generate revenues of any significance. Potential receipt of royalties from the agreement with BD will depend on a lengthy period of product development, trial and evaluation.