Trendlines Delivers First Exit After Listing, Medical Incubator in Singapore Established

SINGAPORE, Aug. 10, 2016 /PRNewswire/ -- The Trendlines Group Ltd. (the "Company" and, together with its subsidiaries and associated companies, the "Group"), an Israeli company focused on developing technology-based companies in the medical and agricultural fields, announced its financial results for the three months ended 30 June 2016 ("2Q2016") today.

Total income decreased from US$5.9 million in 2Q2015 to a loss of US$2.9 million in 2Q2016, primarily due to the loss from changes in the fair value of the portfolio companies. The change in the fair value of investments in portfolio companies resulted in a loss of approximately US$4.7 million in 2Q2016 compared to a gain of approximately US$4.5 million in 2Q2015, mainly due to (i) a decrease of approximately US$2.6 million in the fair market value of various portfolio companies; (ii) the write off of four portfolio companies during the second quarter in the amount of US$1.8 million; (iii) and a reduction in the quarter of approximately US$1 million in the fair value of our Most Valuable Portfolio Company¹  due to a delay in a product launching, as the purchaser needs additional time to make minor changes to an accessory. These losses were partially offset by an aggregate gain in fair value of approximately US$0.8 million during the second quarter for some portfolio companies as a result of the completion of fund raising exercises at higher valuation and general commercial and technological progress in 2Q2016.

Financial Highlights

*N.M.: Not meaningful

Income from services to portfolio companies decreased by approximately US$0.1 million to US$0.9 million mainly due to fewer portfolio companies under the incubators during 2Q2016, as compared to 2Q2015.

Income from contracted R&D services increased by approximately US$0.2 million to US$0.3 million due to a new collaboration agreement in relation to R&D between Trendlines Labs and a third party.

Total expenses increased by 67.9% to US$2.6 million, primarily due to the higher operating, general and administrative expenses following its listing on the Catalist Board of SGX-ST.

The Company maintained a strong financial position as at 30 June 2016. It had cash and cash equivalents of US$17.8 million (31 December 2015: US$7.0 million). The actual fair value of all the portfolio companies ("portfolio value"), including the fair market value of the associated company, E.T.View Medical Ltd., was approximately US$84.7 million, compared to US$85.8 million as at 31 December 2015. The Company would also like to highlight that the Loans from the Israeli Chief Scientist of US$4.0 million is a debt of different nature, as it's a contingent, non-recourse debt that only needs to be repaid if the Company has exits from specific companies.

In June 2016, the Company announced that it has entered into a definitive agreement for the sale of Trendlines' 26.5% stake in its associate company, E.T.View Medical Ltd. ("E.T.View"), with a gain of approximately US$2.0 million before tax. The gain is expected to be recognized in the financial results for the second half of 2016 ("2H2016"),  upon completion of the disposal.

Commenting on the financial results, Mr. D. Todd Dollinger, Co-Chairman and CEO of the Group, said, "In each quarter following our IPO, we see that the investment community is better able to understand the nature of our business and the changes in portfolio value from quarter to quarter. As the fund raising process and the pace of technological / commercial development tend to vary at different portfolio companies, portfolio value fluctuates over short time frames. However, in the long term, we expect the portfolio value and income to become less volatile as the number of companies increases, and the total portfolio value continues to grow as they make business progress. 

Our goal is to assist portfolio companies to achieve a relatively smooth growth path to commercialization, and to eventually exit from these investments with optimal returns. In June, we announced the sale of our stake in E.T.View, as the first exit since Trendlines' listing on the Singapore Exchange. We look to materialize more exits at appropriate times."

Mr. Steve Rhodes, Co-Chairman and CEO of the Group, added, "Despite the quarterly numbers, we made encouraging progress on multiple fronts during the past few months. Further to Trendlines Medical's incubator license being extended to 2023, we received the approval from the Israeli Office of the Chief Scientist to expand Trendlines Medical's Mandate and include agtech investments. We introduced the ADR program to support the expansion of the Company's investor base in the U.S.. We established 3 new companies, and brought 7 portfolio companies to meet hundreds of Asian investors across 5 cities.

As planned, we announced the establishment of Trendlines Medical Singapore Pte Ltd., a platform for investment in and incubation of early-stage healthcare companies in Singapore. Trendlines has been proactively building up the platform and stimulating the advancements at portfolio companies, through which driving towards our mission of improving the human condition."

About The Trendlines Group

The Trendlines Group is an innovation commercialization company that invents, discovers, invests in, and incubates innovation-based medical and agricultural technologies to fulfill its mission to improve the human condition. As intensely hands-on investors, Trendlines is involved in all aspects of its portfolio companies from technology development to business building. The Trendlines Group is traded on the Singapore Stock Exchange (SGX:42T). Pending FINRA approval, the Company's ADR will trade on the OTCQX under the symbol TRNLY.

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[1] As defined in the Company's offer document dated 16 November 2015 

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For further information

Trendlines IR (Israel): Judith Kleinman
Telephone: +972-72-0260-7258
Email: [email protected]

US contact
PCG Advisory Group: Adam Holdsworth
Telephone: +1-646-862-4607
Email: [email protected]

SOURCE The Trendlines Group Ltd.

Related Links

http://trendlines.com