Key Statistics: Code IDP.L

Listing LSE Main Market

Sector Personal Goods

Market Cap £16.96m

Share in issue 11.16m

Current Price 152p

12 mnth High/Low 237.5p/70p

*Priced at 13:00 on 22/12/2016

Stock Performance

Source: Fidessa

Financials

Source: InnovaDerma Corporate Presentation and Hybridan LLP

Forecasts

Company Description InnovaDerma is a fast growing company with

proven products and brands in hair loss and

beauty. Its products are backed by evidence based

research, independent studies on efficacy, and a

large testimonial pool from its client base and

experts around the globe. Since taking on the

Skinny Tan self tanning brand in 2015 InnovaDerma

has increased revenue from this brand ten-fold.

2017 will see the full benefit of new distribution

agreements and we expect to see the launch of the

Leimo ‘Headmaster’ hair regeneration helmet

which has the potential to be the leading product

in its class.

HYBRIDAN LLP

20 Ironmonger Lane, London, EC2V 8EP

Website: www.hybridan.com

@HybridanLLP

Derren Nathan

Tel: 020 3764 2344

Email: derren.nathan@hybridan.com

Fat cheques for a skinny tan

InnovaDerma may not be a household name but its flagship brand Skinny

Tan is making a splash in the beauty world, and since hitting the shelves of

Superdrug in February 2016, became the number one tanning brand by

revenue in July 2016 across the nationwide health and beauty chain’s 800

stores. Having come to light as a ‘Dragons’ Den’ investee company, the

InnovaDerma team has given the brand a new lease of life, with a number of

high profile distribution agreements across Australia, Europe, Asia and most

recently North America.

This commercial success has been borne out in recent financial results with

Group revenue growing to A$8.5m in the year ending June 2016 vs just

A$1.05m in FY2015 reflecting a 10-fold growth in revenue growth from Skinny

Tan since its acquisition in May 2015.

InnovaDerma also derives revenues from its Leimo brand of hair regeneration

products (clinically proven hair loss treatment for men and women) and the

entire range is being refreshed to coincide with the expected FDA approval of

the company’s ‘Headmaster’ LED and laser helmet which is destined for the

home use market.

Our forecasts for the year ending June 2017 (to be reported in GBP) are

projecting a 53% increase in revenues on a constant currency basis driven by

the growing footprint of Skinny Tan. We have not assigned any growth to

Leimo in this year. We also see improving margins driven not only by scale but

also by the transfer of a significant amount of production to the UK which is

due to result in a reduction in freight and logistics costs. Our forecasts suggest

a 188% increase in operating profit to £699k and a 173% increase in EPS to

4.92p. Cashflow is likely to lag behind somewhat as the Company invests in

working capital and inventory to support the strong rate of growth, but the

recent fund raising activity should see the company through to operational

cash generation.

The shares are currently on a FYJun17 P/E multiple of c.30x and a price to sales

multiple of 2.56x and therefore not without expectations of some success.

However the Company has so far proved its ability to find and create winning

brands. In terms of the plentiful recent acquisition activity in the space this is

about mid-range with some parties paying up to 4 or 5 times revenues for

niche brands. The multiples are not out of line with the quoted peer group

either and a PEG analysis suggests that the shares offer good value for the

earnings growth we are projecting in FY2017. With plenty of growth drivers to

look forward to in 2018 we believe a share price of over 207p on an 18 month

view is achievable.

0

50

100

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200

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19 Sep 14 to 30

Jun 15A

Y/e 30 Jun

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Y/e 30 Jun

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£m £m £m

Revenue 0.54 4.31 6.61

PBT (0.46) 0.24 0.70

InnovaDerma

Initiation

22 December 2016

For analyst certification and other important disclosures, refer to the Disclosure Section

Contents

1. Background ..................................................................................................................... 3

2. Valuation ......................................................................................................................... 5

i. Listed comparators .......................................................................................................... 5

ii. Acquisition Activity ........................................................................................................ 5

iii. Conclusion ................................................................................................................... 6

3. Key product ranges ......................................................................................................... 7

i. Skinny Tan ...................................................................................................................... 7

ii. Leimo ............................................................................................................................ 10

4. Recent results and current trading................................................................................. 13

5. Forecasts ....................................................................................................................... 14

i. P&L ............................................................................................................................... 14

ii. Cashflow and Balance Sheet ......................................................................................... 14

6. Board of Directors and Senior Management ................................................................ 16

7. Significant Shareholders at 21 December 2016 ............................................................ 20

8. Financial Statements ..................................................................................................... 21

9. Research Disclaimer ..................................................................................................... 24

1. Background InnovaDerma’s operating Company InnovaDerma Aus & NZ Pty was formed

in August 2013 and shortly after acquired the global distribution rights for the

Leimo Hair-loss System for the self-treatment of both male and the more

neglected female markets. Later that year it went on to acquire the Australian

and New Zealand distribution rights for the Pollogen non-invasive, aesthetic

skin-care treatments from Pollogen Ltd, an Israeli Company, amongst one of

the largest and most well-known companies operating in the clinically proven

anti-ageing sector.

The holding Company, InnovaDerma PLC, which is the listed vehicle, was

incorporated in September 2014 and went on to acquire the Assets of PROS

International Company Limited, in an all share deal which effectively meant

that the Leimo product range and associated IP and Trademarks became

100% owned.

In May 2015, Innovaderma acquired Skinny Tan Pty for AU$50,000, a

developer, manufacturer and distributor of self-tanning products. We see this

as an opportunistic acquisition given that the brand had already generated

AU$1.3m of revenues and broken even in the year to June 2014. Since coming

under ownership, InnovaDerma has grown Skinny Tan revenues to over $8m.

In December 2015, InnovaDerma sold 20% of Skinny Tan (the majority of

which went to the founders) for a nominal consideration. We understand the

Board of InnovaDerma has resolved to buy back this stake. (The Board has

since bought 9% and paid for that and now owns 89% of Skinny Tan).

The Company was listed on the GXG Main Quote in London in March 2015

and on the Marche Libre of the Euronext Paris SA in May of the same year.

The GXG Main Quote market has since ceased operations. InnovaDerma

InnovaDerma was

formed in 2013…

… and has

proceeded to

acquire several

niche health and

beauty brands

joined the main market of the London Stock Exchange trading on the

Standard segment. Trading has been suspended on the Marche Libre pending

an application to delist the shares after which London will remain the only

listing.

2. Valuation

i. Listed comparators InnovaDerma is of course relatively small in comparison to the personal

products giants that have been hoovering up fast growing niche brands of

late, a description that Skinny Tan certainly fits. We have compiled a peer

group of relevant comparators operating in the same space as InnovaDerma.

Source:www.4-traders.com 6 December 2016

ii. Acquisition Activity

We highlight some acquisitions of recent years which we believe are of

relevance to InnovaDerma. Many of the acquisitions take place at a slightly

later stage than that at which InnovaDerma finds itself, but given the rapid

growth SkinnyTan has enjoyed, and its recent progress in the United States,

it is certainly a brand that should catch the eye of the larger corporates.

Acquisition activity has been rife in the sector as the majors fight to pick up

fast growing niche brands. In terms of financial details many companies

choose to play their cards close to their chests but we detail some below

where we have been able to derive valuation metrics.

• Just last month Estée Lauder purchased Too Faced cosmetics – one

of the fastest growing cosmetic brands in the US for $1.4bn against

expected revenues of $270m, a multiple of over five times.

• In October this year Estée Lauder acquired BECCA Cosmetics from

Luxury Brand Partners, a youth focussed brand, with revenues of circa

Company y/e Currency Price Market Cap m PE 2016 PE 2017 P/Sales 2016 P/Sales 2017

Swallowfield plc Jun-16 £ 246.00 42.59 14.14 11.86 0.78 0.64

Coty Inc Jun-16 $ 18.57 13,837.00 42.20 54.62 3.18 1.84

Estee Lauder Jun-16 $ 77.50 28,248.47 24.22 23.34 2.51 2.38

PZ Cussons May-16 £ 297.90 1,279.53 18.45 20.13 1.56 1.64

Australian Pharmaceutical Aug-16 AUD 1.87 915.93 17.81 16.12 0.24 0.23

BWX ltd Jun-16 AUD 4.03 141.30 31.02 21.21 6.89 1.99

Average Average: 24.64 24.55 2.53 1.45

Major players in the

space are actively

acquiring fast

growing niche

brands

$80m at for an estimated consideration of $200m according to Forbes

implying a multiple of 2.5x.

• This summer, Japan’s Shiseido agreed to acquire Gurwitch Products

whose brands include Laura Mercier and Revive. The estimated

acquisition consideration was $260m against revenues of $175m, a

multiple of 1.5x.

• Private Equity monies have recently (May 2016) been in invested into

Paula’s Choice which sells skin care and cosmetics products online.

The Company also has a forum called Beautypedia for reviewing

products from other brands. Paula’s Choice’s revenue hovers around

$70 million in net sales with industry sources claiming the transaction

is valued at roughly $275 million or nearly 4x sales.

iii. Conclusion Since joining the London main market shares in InnovaDerma have

performed well, up 86% since admission. The shares are currently on

a FYJun17 P/E multiple of c. 30x and a price to sales multiple of 2.56x.

This is in the middle of the range of the acquisition multiples detailed

above and given the growth rates achieved so far, it is arguable that a

predator may seek to pay towards the top end of that range. These

are not small multiples in the context of the listed peer group but

similarly they are not out of the range either. On a PEG ratio of 0.13x

this suggests that the shares offer good value for the earnings growth

we are projecting in FY2017.

We do not have forecasts for FY2018, but this is a year where that

should see the first full year of the margin impact from the new

production arrangements, the first full year of the US deals

announced in October (with hopefully more to come) and the

A FY2017E PEG ratio

of 0.13x suggests

that the shares offer

good value for the

earnings growth we

are projecting in

FY2017.

commercial launch of the new Leimo range. A further 40% uplift in

EPS does therefore not seem unreasonable. A 30x PE multiple would

equate to a FY2018E PEG ratio of 0.75x and a share price of 207p.

InnovaDerma needs to prove it can execute the sales growth and

margin improvements required to achieve this but on an 18 month

view this is not an unreasonable valuation expectation. The success it

has had in promoting the Skinny Tan brand and gaining prime retail

exposure suggests that this is a team that knows the magic sauce

ingredients behind a successful personal care recipe, and can get it

into all the best restaurants!

3. Key product ranges

i. Skinny Tan

The Skinny Tan brand may seem familiar to some readers due to its successful

appearance on BBC Two’s Dragon’s Den back in August 2013. Its founders

Kate Cotton and Louise Ferguson, had set up just eighteen months previously,

and launched with Australia’s largest pharmaceutical chain by March 2012,

racking up A$920k of sales in the first six months according to the pitch

delivered in the den.

Skinny Tan is an all natural self-tan containing active slimming agent

(dissipating cellulite) with naturally derived skin smoothing actives to tan,

contour and reduce the visible appearance of cellulite. As the founder’s

mentioned in their pitch, smoothing creams and self-tanning products are

large markets in their own right but as stand-alone products would often

interfere with one another. We understand that the naturally derived tanning

agent Dihydroxyacetone (DHA) does not have the same overpowering smell

often associated with the synthesised version in competitor products, and

that it is gentler on the skin.

A further 40% uplift

in EPS in 2018 does

not seem

unreasonable

The track record so

far demonstrates

the Board’s ability

to execute

In 2013 Skinny Tan

secured investment

on the BBC’s

Dragon’s Den just

18 months after

launch

Skinny Tan is an all

natural self-tan

containing active

slimming agent

A selection of Skinny Tan products

Source: InnovaDerma Corporate Presentation

One of the Brand Leaders in self tanning, St Tropez was turning over £20.7m

prior to the £62.5m takeover by PZ Cussons in 2010. In the US, IBIS Market

Research estimates the self tanning industry to be worth some $300m. In

terms of slimming creams, the UK market has been estimated at some £30m.

Skinny Tan is showing real signs of being able to dislodge St Tropez from the

top spot.

The key selling points of Skinny Tan can be summarised as natural, non-sticky

and non-orange, the latter two being common complaints about competing

products. And of course, the key message of the brand is that it makes you

look slimmer. Independent studies in the UK showed almost 90% users of

Skinny Tan believed that using the product made them “feel good” about

their body image, and whilst much of this could be attributed to having a tan

the rising popularity of the brand is evident with its retail success and

popularity on social media where there is a fast growing community on

Facebook (over 200,000 likes) and 10,000+ on Instagram.

Skinny Tan could

eventually dislodge

St Tropez as the

number one self-

tanning brand

(acquired for

£62.5m in 2010)

It has a number of

differentiating

selling points…

Social media and celebrity endorsements such as “Made in Chelsea’s” Lucy

Watson are key elements to the marketing plan which the Board believes will

generate superior returns to traditional advertising. Since coming under the

InnovaDerma umbrella, we understand that Skinny Tan has averaged in

excess of a 3.8 to 1 return in revenue for each US$1 invested in advertising.

Spend increased from under AUD 90,000 per month in the period to 30 June

2015 to over AUD 175,000 in the period to 31 December 2015 translating into

high growth in the recently reported FY June 2016 numbers where skin and

beauty products sales leapt nearly 60 fold to A$7.5m, albeit from a low base.

Skinny Tan is sold through a combination of direct online sales and retail

outlets. Skinny Tan, launched in Superdrug in February 2016, is now stocked

in UK stores nationwide and since achieved being the No.1 selling tanning

brand by revenue in July 2016. We understand Superdrug has significantly

increased the space available to Skinny Tan products in store commencing

from Feb many 2017. During FYJun16 other major retail deals included Olive

Young where Skinny Tan is now stocked across 700 stores in Korea, and

Chemist Warehouse in Australia which distributes the product across 320

stores. Over FY2016 the Skinny Tan brand has grown from 14 to 25 products,

with a strong emphasis on product development to increase shelf space and

cater for multiple international markets. Product development continues

with further Skinny Tan brand extensions expected to be rolled out soon.

…and enjoys

celebrity

endorsements and

popularity on social

media

This is translating

into strong sales

growth

Skinny Tan has

quickly become

Superdrug’s number

one selling tanning

brand

The product range

has grown quickly

under

InnovaDerma’s

stewardship and

further

development is

under way

At the year end, the Company had 2,500 retail points (FY2015: 250) in seven

countries and this trend has continued into the current year with the signing

in October of retail and e-tailer distribution deals for Skinny Tan in the United

States. Skinny Tan was named Best New Product Introduction at Skin Care &

Bath ECRM in the United States in June 2016.

In terms of production, InnovaDerma announced in October that it is to move

a significant part of its production to the UK, from Australia and has appointed

leading skincare and haircare manufacturer Prestige Personal Care to

undertake production of InnovaDerma's products, which will initially be

distributed to the UK market but with plans to extend this to other global

markets. Production in the UK is expected to begin this month and is expected

to have a materially positive impact on operating margins due to lower freight

and logistics costs. This move will also reduce currency exposure.

ii. Leimo The Leimo range currently on sale incorporates the world’s first hand held

laser comb using Laser and LED to prevent the progression and recurrence of

hair thinning conditions by slowing down the build-up of Dihydrotestosterone

(DHT) in the scalp. It is a clinically proven device showing 92% success rate in

stopping hair loss & re-growing hair in Independent clinical studies. In a study

at Yeungnam University Medical Centre hair concentration was shown to

increase from 102.77 hairs per cm2 to 132.55 cm2 after 16 weeks with daily

usage for ten minutes. The improvements are clearly visible in the graphic

below.

InnovaDerma’s

products are in over

2,500 retail points.

This number

continues to grow

strongly

The Leimo laser

comb is a clinically

proven device

showing a 92%

success rate in

stopping hair loss &

re-growing hair in

Independent clinical

studies.

Source: http://www.innovaderma.com/pdf/LeimoClinicalTrials.pdf

Whilst the technology clearly has consumer appeal, Innovaderma has decided

to take it to the next level and has developed the Laser & LED ‘Headmaster’

Helmet.

Source: InnovaDerma PLC

Rather than manually combing the hair several times per week with the comb

based product, the user will be able to wear the helmet whilst continuing to

carry out their day to day functions. What is more, the usage time compared

to the comb is expected to be approximately halved. This is a step change in

user friendliness and we would therefore expect an improvement in user

compliance and therefore results. The Company is targeting FDA approval

and product launch in H2 CY2017. There are competitors in the market but

many are not FDA registered and the Headmaster is being positioned as the

first FDA registered product at an affordable price point. Prices for the closest

competitor in the US start at $895.

InnovaDerma will be relaunching and enhancing its range of consumable ‘wet

products’ that supplement the devices. These comprise high quality hair and

scalp topical products which promote hair volume, scalp and hair condition

and in the case of Leimo Instant Hair™ fibres that bond to existing hair and

instantly give thinning hair the boost of fuller looking hair in seconds. The wet

products are designed to provide a high level of recurring revenues with the

helmet acting as something of a Trojan horse in terms of capturing a loyal

customer base. As a result of exclusive agreements with major distributors to

create a comprehensive, world-wide distribution network for Leimo,

InnovDerma is well positioned to pursue its target markets once the

refreshed product range is launched.

Even though management is not currently devoting much attention to

growing the sales of Leimo, until the helmet is launched, the existing range of

haircare products still made a meaningful contribution to revenues in

FYJun16 of A$951.6k. Leimo has customers in some forty countries.

According to Kerastem’s analysis of the market, the annual hair loss market

size is circa $7bn growing at a cagr of 4.8%, with roughly a third of the market

being accounted for by topical treatments.

The ‘Headmaster’

will offer a step

change in user

friendliness

The associated wet

products are

designed to provide

a high level of

recurring revenues

The legacy range

already has

customers in some

40 countries

4. Recent results and current trading

In October, InnovaDerma put out final results for the year ending June 2016.

This was the first year with a full contribution from Skinny Tan, a period which

saw the product being launched in Superdrug which now stocks the range

across its stores nationwide. This was one of the deals that resulted in a ten

fold expansion in the number of selling points across which InnovaDerma’s

products are distributed, contributing to the eight fold increase in revenues

to A$8.4m. Gross profit also rose significantly from A$0.7m to A$4.8m, a

margin of 57% and the Company recorded a maiden full year pre-tax profit of

A$0.5m. Operating cash outflows halved to $421.8k remaining negative

largely due to the A$0.8m investment in inventory made to assist with the

Company’s growth.

The Company ended the period with cash of $207k and non current

borrowings of A$1.1m made up primarily of directors’ loans. Subsequent to

the results announcement, the balance sheet received a further cash

injection via a £0.54m placing ($c. A$0.9m) priced at 70p and taken up by new

institutional shareholders. This was supplemented by a placing in December

of £800k at 110p in order to build inventories ahead of its continuing sales

drive.

In terms of outlook, the statement made reference to the entry into the US,

planned extensions to the Skinny Tan brand, the focus on expanding the

distribution and retail network (both physical stores and e-tailers) in new and

existing territories, and product development with regard to new and highly

effective products in hair care, hair loss treatment and skin rejuvenation for

release in 2017.

In FYJun16

Company recorded

a maiden full year

pre-tax profit of

A$0.7m.

The Company has

raised £1.3m in new

equity since the

year end

2017 stands to be

an exciting year

with new product

launches and

expansion of the

terrestrial and

online retail

network

5. Forecasts

i. P&L We have taken the translated pound sterling accounts in the Company’s

corporate presentation as the baseline for our forecasts and given the

relatively wide geographic spread of the Company’s revenues have deemed

it reasonable to assume constant exchange rates. Given that the

‘Headmaster’ has not been launched as yet, we are assuming flat revenues

for haircare products for FYJun17. On skin and beauty products, we are

projecting sales growth of 60%, which should be achievable for several

reasons: 1) First full year contributions from Superdrug, Olive Young and

Chemist Warehouse; 2) Increased brand awareness and growing support

from Superdrug who are now dedicating additional shelf space to the range.

3) Extension of the product range; 4) and New distribution deals in the US

with GNC Holdings (655/6,000 stores initially), Amazon subsidiary Quidsi, and

Jet.com, a subsidiary of Wal-Mart.

In aggregate, we are forecasting a 53% increase in Group revenue to £6.6m.

In FY2017 the Group will benefit from just over half a year of production at

its UK based manufacturing partner which should be a significant boost to

gross margins. We are assuming a 760 basis point increase in gross margin to

65%. As InnovaDerma expands in size and geographies we see marketing

costs nudging towards 30% of total revenues (from 27%) and admin expenses

and wage costs rising just over £1.5m. The aggregate result is a 188% increase

in operating profit to £699k (after transaction and listing costs of £160k) and

a 173% increase in earnings per share to 4.92p.

ii. Cashflow and Balance Sheet

However we expect operating cashflow to lag behind as the Company invests

in inventory and does more business with blue chip retailers who can have

demanding payment terms. We anticipate a total operating cash outflow of

We are forecasting

53% revenue

growth to £6.6m in

FY2017

We are assuming a

760 basis point

increase in gross

margin to 65% due

to actions taken to

reduce production

costs

circa £1m, more than offset by recent fundraising activities and anticipate the

Company ending the financial year with a cash balance of £249k up from

£131k. This would still leave the Company with borrowings of £700k but

looking ahead we would hope that some of the working capital movement

would unwind, and that profitability would continue to grow.

6. Board of Directors and Senior Management

Haris Chaudhry FAIM MAICD - Founder & Executive Chairman

A serial business developer with a 17 year career creating new business

opportunities and expanding existing ones throughout the globe, Haris has

delivered excellent outcomes whilst working in senior business development

and executive roles and as an entrepreneur.

Haris created InnovaDerma™ in 2013 through the acquisition of assets,

products, distribution platforms and Intellectual Property (IP) in multiple

companies and set about on an aggressive growth strategy through the

development of new products, acquisition of global IP for the core product

range (LEIMO) and in setting up hundreds of new distribution points

throughout Australia and around the globe.

Haris also founded Climate Ventures™ (an energy management and

emissions consulting firm) with a diverse project base in Asia and acquired

project funding and commercial contracts with one of the largest energy

trader globally, Vitol.

Prior to that Haris worked as Director for Global Partnerships & Business

Development for Carbon Planet Limited (a Public company), a world leader in

carbon economy with emissions reductions projects around the globe. Haris

identified and secured country partnerships and projects in Malaysia,

Singapore, Indonesia, Bangladesh, Pakistan, Jordan, Brazil, Columbia,

Mozambique and Azerbaijan.

Haris also worked for Rocksoft Limited (a Public Company) as Director for

Asia-Pacific where he set up business distribution and channel distribution

partners throughout Asia-Pac and in Europe.

Haris also worked in Senior Business Development roles with Upstream, a

fully owned subsidiary of Fuji-Xerox Australia.

Haris is the founder & Executive Director of Climate Ventures™, Director for

Farris Marketing Concepts and founder & Non Executive Chairman for Pak

Energy & Agro Ventures (a recycling & oil refining operation turning landfill

into fuel).

He is a Fellow of The Australian Institute of Management and a member of

Australian Institute of Company Directors and lives in Melbourne.

Joe Bayer FCPA GAICD - Executive Director

Joe has over 3 decades of executive experience gained in healthcare,

pharmacy, consumer products and capital raising areas whilst working

globally in senior executive roles for some of the largest consumer and

healthcare companies including CSR, Faulding, Mayne Health and Fletchers.

Joe also served as Chairman for Cynergy Health (Australia) for 2 years.

He is currently a Director of Cygenta Capital & Advisory and formerly Chief

Executive Officer for Kain Corporate & Commercial Lawyers. Joe is a Fellow of

CPA Australia and is a Graduate of the Australian Institute of Company

Directors and lives in Adelaide.

Garry G Lemair FAICD - Non Executive Director

With a 40 year career spanning leadership, executive and board roles with

some of the largest corporates including the Fortune 500 companies globally,

Garry is an experienced visionary executive and leader with an immensely

rich background and skill set gained through driving change and delivering

excellent shareholder value whilst working across Asia, Europe and the

Americas.

Garry served as Senior Vice President & Director for Citibank for Asia, Board

member for Diners Club International, CEO & Regional Director for Pepsi Co/

KFC, President Asia Pacific for Fluor Daniels, Managing Director Asia-Pacific

for Taubmans/ Coultaulds, President Asia-Pacific for TRS Staffing and as an

Interim CEO and Director for a JV created by Westpac, CBA and ANZ banks.

He is currently a board member for multiple ASX listed companies including

Adcorp Australia Limited and Mariner Corporation Limited and is a Chairman

of Lemair International, Grenada International and the fast-growing firms

Webprofits Pty Ltd and Telegate Pty Ltd.

Garry is a Fellow of The Australian Institute of Company Directors and lives in

Sydney.

Rodney Turner MBT GAICD - Non Executive Director

Rodney comes from a strong clinical & regulatory environment with deep

experience in global compliance and technology. He possesses in-depth skills

and prior experience in developing product and regulatory strategies for

market access and consumer goods such as OTC, medical devices and

prescription medicines including many products within the dermatology field

and with senior leadership roles in a diverse range of companies.

Rodney currently runs his own consulting and contracting business and is

engaged with a number of well known global and regional Pharmaceutical

and Medical Device companies, providing strategic and operational

Regulatory Affairs, Quality Management and Compliance direction.

Previously, Rodney held positions as Asia-Pacific Head of Regulatory Affairs

and Compliance for Sandoz (one of the largest global generic and biosimilar

Pharmaceutical companies) and worked in regional lead roles with iNova

Pharmaceuticals, Valeant, Gambro & Fresenius-Kabi Australia.

Rodney lives in Sydney and is a Graduate of The Australian Institute of

Company Directors.

Clifford Giles - Non Executive Director

Clifford Giles is a Founder & Managing Director of IPO Capital Partners Ltd

(IPO Capital), a pre-IPO investment firm based in London. Clifford’s

background is in financial services focused on equity markets and his

strengths lie in capital raising for small and medium enterprises. His scope

includes insight, commercial rigour, product position, end to end delivery of

product roll out to introducing capital at any stage of an enterprise’s trading

cycle.

Highlights from his career include executive and leadership roles with Reed

Business Publishing, Asia Pacific.

Founder of imove, a developer of web-based change of address applications

for publishing houses and other mass mailers, listing the Company in 2001.

Founder of SportsCredit, a financial product enabling elite athletes to borrow

against their on-field contracts to accelerate wealth aspiration. Most

recently, founder of IPO Capital Partners, a pre-IPO investment firm providing

capital to innovative and high growth enterprises committed to listing on a

recognised exchange. Clifford has built IPO Capital Partners from start-up in

early 2012 through to funding and listing numerous companies with a

combined market capitalisation in excess of £200m and now focused on

extending funding to a wider global business community through

partnerships.

Michael Hume - General Manager for the UK and Europe

Michael was appointed just this month. Latterly he has been the Senior Buyer

for Skincare at Superdrug where he has been a member of the senior

commercial team for more than 5 years and has significant experience across

a number of divisions including Beauty Accessories, Fine Fragrance, and

Skincare, where he has been responsible for promoting and managing brand

portfolios, and delivering revenue and profit growth. Prior to Superdrug,

Michael held buying positions within the commercial divisions of prominent

grocery and high street retailers.

7. Significant Shareholders at 21 December 2016

Zaymar Investments Pty Ltd (Owned by Haris Chaudry) 51.5%

Jenepe Capital 3.76%

Source: InnovaDerma PLC

8. Financial Statements Profit & Loss

Source: Reported Numbers InnovaDerma PLC Corporate Presentation, Forecasts Hybridan LLP

Period from 19

September 2014 to 30

June 2015 A

Year ended 30

June 2016 A

Year ended 30 June

2017 E

(£ '000) (£ '000) (£ '000)

Revenue 537 4,314 6,610

Cost of sales (177) (1,836) (2,313)

Gross profit 360 2,478 4,296

Other income 0 33 0

Marketing

expenses(436) (1,158) (1,983)

Administrative

expenses(221) (536) (837)

Wages and

salaries(95) (542) (727)

Listing expenses (70) (34) (50)

Operating

profit/(loss)(462) 242 699

Profit/(loss) before

tax(462) 242 699

Tax expense 0 (64) (150)

Net profit/(loss) for

the period (462) 178 549

Other

comprehensive

income/(loss)

(4) 13 0

Total

comprehensive

income/ (loss) for

the period

(466) 191 549

Attributable to:

Owners of the

parent(466) 126 500

Non-controlling

interests0 64 49

(466) 191 549

Basic & diluted

profit/(loss) per

share p

(6.0) 1.8 4.92

Cash Flow Statement

Source: Reported Numbers translated from InnovaDerma PLC Final results statement at

A$1.59/GBP. Forecasts Hybridan LLP

Period from 19

September 2014 to 30

June 2015 A

Year ended 30

June 2016 A

Year ended 30 June

2017 E

(£ '000) (£ '000) (£ '000)

Cash flows from

operating

activities

Receipts from

customers630 4,122 6,279

Payments to

suppliers and

employees

(1,075) (4,428) (7,321)

Interest received 0 0 0

EMDG Grants

received0 41 0

Payments for

corporate listing

(non-repeating)

(86) 0 0

Net cash used by

operating

activities

(531) (265) (1,041)

Cash flows from

investing

activities

Purchase of

property, plant and

equipment

(12) 0 (20)

Payments for

product

development

(20) (39) (50)

Net cash received

on acquisition of

subsidiaries

21 0 0

Purchase of

Skinny Tan Pty Ltd(31) 0 0

Net cash used by

investing

activities

(42) (39) (70)

Cash flows from

financing

activities

Proceeds from

borrowings14 246 0

Repayments of

borrowings(67) 0 0

Proceeds from

convertible notes80 0 0

Proceeds from

shares issued875 40 1,340

Transaction costs

for shares issued(196) 0 (110)

Net cash from

financing

activities

707 286 1,230

Increase/(decreas

e)in cash and

cash equivalents

134 (19) 119

Cash and cash

equivalents at the

beginning of the

period

0 134 131

Effect of movement

in foreign exchange

rates

0 16 0

Cash and cash

equivalents at

the end of the

period

134 131 249

Balance Sheet

Source: Reported Numbers InnovaDerma PLC Corporate Presentation, Forecasts Hybridan LLP

Period from 19

September 2014 to 30

June 2015 A

Year ended 30

June 2016 A

Year ended 30 June

2017 E

(£ '000) (£ '000) (£ '000)

Current assets

Cash and cash

equivalents134 131 249

Trade and other

receivables71 1,239 2,239

Inventory 215 697 1,697

Prepayments and

other assets44 47 47

Total current

assets463 2,114 4,232

Non-current

assets

Property, Plant and

Equipment10 9 29

Intangible assets 2,150 2,189 2,239

Other assets 2 0 0

Deferred tax asset 0 111 111

Total non-current

assets2,162 2,309 2,379

Total assets 2,625 4,423 6,612

Current liabilities

Trade and other

payables496 1,761 2,061

Total current

liabilities496 1,761 2,061

Non-current

liabilities

Borrowings 433 679 679

Deferred tax

liability0 5 5

Total non-current

liabilities433 683 683

Total liabilities 929 2,444 2,744

Net assets 1,697 1,979 3,868

Equity

Shares 1,559 1,570 2,240

Share premium 1,568 1,606 2,276

Merger reserve (823) (823) (823)

Foreign exchange

reserve(5) 11 11

Accumulated

losses(603) (463) 36

Non-controlling

interests0 79 128

Total equity and

reserves1,697 1,979 3,868

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