TIDMIQAI
RNS Number : 1650W
IQ-AI Limited
16 August 2022
16 August 2022
IQ-AI Limited (the "Company" or the "Group")
Half Yearly Report for the Period Ended 30 June 2022
Chief Executive's Statement
I am pleased to announce IQ-AI Limited's unaudited financial
results for the six months ended 30 June 2022.
For further information, please contact:
IQ-AI Limited
Trevor Brown/Vinod Kaushal/Brett
Skelly 0207 469 0930
Peterhouse Capital Limited
Lucy Williams/Heena Karani 0207 220 9797
Financial Highlights
Revenues of GBP256,000 were sustained by renewal subscriptions
of IB Clinic, as we successfully continued to manage the
after-effects of Covid 19. Major cancer centres continue to trial
IB platforms and remain viable prospects. Grant funding from the
National Institutes of Health (NIH) continue to provide support for
our continuing development of new disruptive technologies.
Major Developments
IB Zero G(TM)
As reported on May 31, we submitted an FDA 510(k) application to
the USFDA. IB Zero G(TM) is an automated processing pipeline that
leverages patented technology (US Patent No. 11,100,621) to output
enhanced post-contrast images using routinely acquired non-contrast
images as input. This technology is targeted at the
multibillion-dollar global MRI contrast media market offering cost,
convenience, and alleviating safety and environmental concerns. The
initial 510(k) application followed the Traditional 510(k) pathway.
Under this pathway, the sponsoring company identifies a previously
FDA cleared "predicate" device and uses the attributes of that
predicate device to demonstrate "substantial equivalence" for the
new device. The FDA has now determined that the patented artificial
intelligence (AI) technology contained in IB Zero G is a novel, a
"first in kind", such that no currently cleared device exists that
can serve as a predicate to establish substantial equivalence.
In the response, the FDA provided several alternatives including
a "de novo" application. The de novo pathway is specifically
designed for novel medical devices intended as Class I and Class II
(a risk-based classification) and allows the FDA to review new
technologies more expeditiously such that patients can have access
to safe and effective medical devices sooner. Prior to the
establishment of the de novo pathway, novel technologies were
automatically considered Class III (highest risk) and underwent a
much more rigorous and longer market clearance pathway, called a
Premarket Approval (PMA). We do not believe IB Zero G is
appropriately considered a Class III device, so IB intends to take
advantage of the de novo pathway and will be communicating with the
FDA for further clarification and guidance in advance of the de
novo submission.
The de novo pathway is simpler and is becoming more frequently
used, driven in part by the rapid pace of technology, computing
power, and AI algorithmic development.
We continue to advance this technology and have entered into a
second data use agreement with Phoenix Children's Hospital ("PCH").
PCH has begun providing anonymized datasets which will be used to
evaluate IB Zero G's capability in infants and neonates.
IB Rad Tech Automation
One of the derivative technologies that resulted from the
development of the IB Zero G AI is auto-segmentation. This AI
capability enables multiple opportunities that can streamline
workflows and automate processing of sophisticated parametric maps
that currently require manual intervention. One workflow is the for
the generation of IB's "fractional tumour burden" or "FTB" maps.
These perfusion-derived class maps quantify regions of blood
volume; a measurement that has been correlated with tumour grade. A
beta-release of this functionality will be deployed in Q4 2022 to
our luminary sites including the Mayo Clinic in Arizona, Froedtert
and the Medical College of Wisconsin, Stanford Medical Centre, and
Keck Medical Centre at USC.
IB Trax(TM)
IB Trax remains a high priority as it includes an elegant
reporting feature that quantifies disease progression over time, a
major medical need. To compress time to market, a phased release
approach is being implemented. The first release, which will serve
as a foundation for subsequent releases, displays volumetric
changes for IB's Delta T1 (patent-pending) and quantitative
perfusion class maps (also known as "fractional tumour burden" or
"FTB" maps). Feedback sessions were held with three experienced
clinicians who offered valuable insights into the design and
content of the reporting feature. Subsequent releases of IB Trax
will include automated identification and tracking of metastatic
lesions to systematically organize the data and improve clinical
workflows which are currently time-consuming and prone to high
error rates.
The quantitative reporting feature of the initial release
capitalises upon the exclusive quantitative mapping capability of
IB's core technologies. It is conceivable that the report could be
shared directly with patients and provide them with a graphical
depiction of their treatment response. It is also planned to be
incorporated into the NIMBLE app outlined later in this update.
Phase I Clinical Trial - Oral Gallium Maltolate (IB 003)
Our sponsorship of the Phase I clinical trial at the Medical
College of Wisconsin Cancer Centre ("MCWCC") continues. Under phase
I trials, new agents are studied for safe dosing levels to be used
in phase II trials. Screening activity is ongoing and those
patients who meet the study's inclusion criteria are invited to
participate. Thus far, the enrolled subjects are tolerating the
agent well and are remaining on the treatment. The IB Clinic suite
of software continues to be used to monitor response to the agent
for follow-up imaging exams and we expect more patients to be
screened and enrolled.
To help broaden awareness about the trial, we have actively
engaged with various patient advocacy groups and brain tumour
associations both local to the MCWCC and internationally. For
example, the American Brain Tumour Association (ABTA) participated
in a day-long information exchange at our Milwaukee, WI offices.
Opportunities for continued collaboration and research funding were
discussed and being pursued. The 2022 ABTA Annual Conference is
being held virtually which we will attend.
In addition, the principal investigator of the study will be
traveling to other cancer centres starting in September to generate
further interest and promote participation.
NIMBLE - Network for the Integrated Management of Brain
Metastases
Through our interactions with the MCWCC and collaborations with
Professor Schmainda's laboratory, we became aware of a novel
smartphone "app" that is being used by Froedtert and the Medical
College of Wisconsin (Froedtert & MCW) to treat brain
metastases.
Developed by Dr. Joseph Bovi, MD, an experienced radiation
oncologist at MCW, the "NIMBLE" (Network for the Integrated
Management of Brain Metastases) app, engages the entire treatment
team swiftly and virtually to help navigate multi-disciplinary and
complex medical decisions, obviating the need for face-to-face
meetings which are often difficult to coordinate. Dr. Bovi's
institution, Froedtert & MCW, began using NIMBLE in March of
2020 during the onset of COVID 19 lockdowns and restrictions. Since
then, it has been used routinely to create timely, evidenced-based
treatment plans via remote live inputs from the clinician
teams.
NIMBLE provides a tool for both inpatient and outpatient
providers to implement a data-driven, comprehensive algorithm for
managing brain metastases, via a secure mechanism by which
providers can submit a patient for consideration to a virtual
tumour board for real-time guidance of the best possible management
for the patient.
The 'virtual tumour board' app has proven itself in a real-world
clinical setting such that we believe it may have much wider
utility. Therefore, we have entered into an exclusive world-wide
licensing agreement with MCW for the commercial rights to NIMBLE,
enlisting Dr. Bovi to continue its commercial adoption by third
party users. The architecture of NIMBLE is also potentially
applicable to other disease groups, such as immunotherapy and
cardiology and these other uses will be explored.
IB Clinic - Processing as a Service
Over the past several months, we have contemplated new ways for
clinicians to access our quantitative mapping solutions. One
promising idea is the provision of a post-processing service
whereby we offer clinicians an "a la carte" service by remotely
processing exams for them. This is a solution for institutions for
whom the significant investment a full installation of IB Clinic is
not economic on a patient throughput basis, while also minimizing
IT security reviews and approvals, and the burden of the already
constrained hospital resources with further training and
specialized support. Currently, two sites are reviewing service
agreements which would constitute a new revenue stream. One
advantage for a service income model is that we could potentially
directly address a global market directly from our Milwaukee
site.
Outlook
The development of both NIMBLE and the service model offer the
prospect of new income streams in the months ahead which could
complement our ongoing development projects discussed above.
Trevor Brown
Chief Executive
Results for the 2022 interim financial period
A summary of the key financial results is set out in the table
below:
30 June 2022
GBP
-------------------------------------------------- -------------
Revenue 255,609
-------------------------------------------------- -------------
Gross Profit 258,066
-------------------------------------------------- -------------
Operating expenses (583,339)
-------------------------------------------------- -------------
Finance costs (5,311)
-------------------------------------------------- -------------
Loss for the period from discontinued operations -
-------------------------------------------------- -------------
Loss for the period (330,584)
-------------------------------------------------- -------------
Interest
The net interest cost for the Group for the period was GBP5,311
(2021: GBP5,311).
Loss before tax
Loss before tax for the period was GBP330,584 (2021:
GBP207,135).
Taxation
Taxation charge was GBPnil for the period (2021: GBPnil).
Earnings per share
Basic and diluted earnings per share for the period were 0.18p
loss (2021: 0.12p loss).
Financial position
The Group's balance sheet as at 30 June 2022 can be summarised
as set out in the table below:
Net assets
GBP'm
GBP
----------------------------- -----------
Non-current assets 815,800
----------------------------- -----------
Net current assets 5,798
----------------------------- -----------
Net assets and total equity 821,598
----------------------------- -----------
Cash flow
Net cash outflow for the period was GBP373,854 (2021: GBP241,072
outflow).
Consolidated Income Statement
For the six months ended 30 June 2022
Half year (Audited) Half year
ended Full year ended
ended
30 Jun 2022 31 Dec 2021 30 Jun 2021
GBP GBP GBP
Continuing operations
--------------------------------------- ------------ ------------ ------------
Revenue 255,609 521,069 238,488
Cost of sales 2,457 (17,047) (4,070)
--------------------------------------- ------------ ------------ ------------
Gross profit 258,066 504,022 234,418
--------------------------------------- ------------ ------------ ------------
Administrative expenses (583,346) (994,388) (436,247)
Other income 7 18 5
--------------------------------------- ------------ ------------ ------------
Operating loss (325,273) (490,348) (201,824)
Finance costs (5,311) (10,710) (5,311)
--------------------------------------- ------------ ------------ ------------
Loss before income tax (330,584) (501,058) (207,135)
Income tax - - -
--------------------------------------- ------------ ------------ ------------
Loss for the year from continuing
operations (330,584) (501,058) (207,135)
Discontinued operations
Loss for the period from discontinued -
operations - -
Loss for the year attributable
to owners of the Company (330,584) (717,534) (207,135)
--------------------------------------- ------------ ------------ ------------
Earnings per share attributable
to owners of the Company
From continuing operations:
Basic & diluted (pence per share) (0.18) (0.29) (0.12)
From discontinued operations:
Basic & diluted (pence per share) (0.00) (0.00) (0.00)
Total earnings per share (pence
per share) (0.18) (0.29) (0.12)
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2022
Half year (Audited) Half year
ended Full year ended
ended
30 Jun 2022 31 Dec 2021 30 Jun 2021
GBP GBP GBP
------------------------------------- ------------ -------------- ------------
Loss for the period (330,584) (501,058) (207,135)
------------------------------------- ------------ -------------- ------------
Other comprehensive income
------------------------------------- ------------ -------------- ------------
Items that may be subsequently
reclassified as profit or loss
Exchange differences on translation
of foreign operations (16,956) 737 (67)
------------------------------------- ------------ -------------- ------------
Total comprehensive loss for
the year attributable to the
owners of the Company (347,540) (500,321) (207,202)
------------------------------------- ------------ -------------- ------------
Total comprehensive loss for
year arises from:
Continuing operations (347,540) (500,321) (207,202)
Discontinuing operations - - -
------------------------------------- ------------ -------------- ------------
(347,540) (500,321) (207,202)
------------------------------------- ------------ -------------- ------------
Consolidated Balance Sheet
As at 30 June 2022
(Audited)
30 Jun 2022 31 Dec 2021 30 Jun 2021
GBP GBP GBP
Non-current assets
--------------------------------- ------------- ------------- -------------
Property, plant and equipment 5,426 4,440 3,090
Goodwill 219,263 205,203 202,800
Intangible assets 591,111 567,060 599,663
--------------------------------- ------------- ------------- -------------
Total non-current assets 815,800 776,703 805,553
--------------------------------- ------------- ------------- -------------
Current assets
--------------------------------- ------------- ------------- -------------
Trade and other receivables 166,025 78,189 175,836
Cash 354,732 728,586 237,838
Assets classified as held
for sale - - -
--------------------------------- ------------- ------------- -------------
Total current assets 520,757 806,775 413,674
--------------------------------- ------------- ------------- -------------
Current liabilities
--------------------------------- ------------- ------------- -------------
Trade and other payables 514,959 392,787 356,064
Liabilities directly associated
with assets classified as
held for sale - - -
--------------------------------- ------------- ------------- -------------
Total current liabilities 514,959 392,787 356,064
--------------------------------- ------------- ------------- -------------
Net current assets 5,798 413,988 57,610
--------------------------------- ------------- ------------- -------------
NET ASSETS 821,598 1,190,691 863,163
--------------------------------- ------------- ------------- -------------
Equity
Share capital 1,826,214 1,825,076 1,701,076
Share premium 20,553,499 20,547,343 20,076,343
Capital redemption reserve 23,616 23,616 23,616
Merger reserve 160,000 160,000 160,000
Convertible loan note reserve 212,385 207,074 201,675
Share based payment reserve 71,808 71,808 76,140
Foreign currency reserve (30,141) 20,973 (4,411)
Retained losses (21,995,783) (21,665,199) (21,371,276)
--------------------------------- ------------- ------------- -------------
Equity attributable to owners
of the Company 821,598 1,190,691 863,163
TOTAL EQUITY 821,598 1,190,691 863,163
--------------------------------- ------------- ------------- -------------
Consolidated statement of changes in equity
For the six months ended 30 June 2022
Share Share Capital Merger Convertible Share Foreign Retained TOTAL
Capital premium redemption reserve loan note based currency losses EQUITY
reserve reserve payment reserve
reserve
GBP GBP GBP GBP GBP GBP GBP GBP GBP
--------------- ---------- ----------- ----------- -------- ------------ -------- --------- ------------- ----------
Balance at 1
January 2021 1,701,076 20,076,343 23,616 160,000 196,364 63,087 15,009 (21,164,141) 1,071,354
--------------- ---------- ----------- ----------- -------- ------------ -------- --------- ------------- ----------
Loss for the
year - - - - - - - (501,058) (501,058)
Exchange
differences
on
translation
of foreign
operations - - - - - - 737 - 737
--------------- ---------- ----------- ----------- -------- ------------ -------- --------- ------------- ----------
Total
comprehensive
loss for the
year - - - - - - 737 (501,058) (500,321)
--------------- ---------- ----------- ----------- -------- ------------ -------- --------- ------------- ----------
Shares issued 124,000 496,000 - - - - - - 620,000
Cost of shares
issued - (25,000) - - - - - - (25,000)
Share based
payments - - - - - 8,721 - - 8,721
Movement in
the year - - - - 10,710 - 5,227 - 15,937
--------------- ---------- ----------- ----------- -------- ------------ -------- --------- ------------- ----------
Balance at 31
December 2021 1,825,076 20,547,343 23,616 160,000 207,074 71,808 20,973 (21,665,199) 1,190,691
--------------- ---------- ----------- ----------- -------- ------------ -------- --------- ------------- ----------
Loss for the
period - - - - - - - (330,584) (330,584)
Exchange
differences
on
translation
of foreign
operations - - - - - - (16,956) - (16,956)
--------------- ---------- ----------- ----------- -------- ------------ -------- --------- ------------- ----------
Total
comprehensive
loss for the
period - - - - - - (16,956) (330,584) (347,540)
--------------- ---------- ----------- ----------- -------- ------------ -------- --------- ------------- ----------
Shares issued 1,138 6,156 - - - - - - 7,294
Share based - - - - - - - - -
payments
Movement in
the period - - - - 5,311 - (34,158) - (28,847)
--------------- ---------- ----------- ----------- -------- ------------ -------- --------- ------------- ----------
Balance at 30
June 2022 1,826,214 20,553,499 23,616 160,000 212,385 71,808 (30,141) (21,995,783) 821,598
--------------- ---------- ----------- ----------- -------- ------------ -------- --------- ------------- ----------
Consolidated Cash Flow Statement
For the six months ended 30 June 2022
Half year (Audited) Half year
ended Full year ended
30 Jun ended 30 Jun
2022 31 Dec 2021
2021
GBP GBP GBP
--------------------------------------- ---------- ----------- -----------
Cash flows from operating activities:
Operating loss (330,584) (501,058) (207,135)
Adjustment for:
Depreciation and amortisation 69,704 133,474 61,848
Impairment of intangible assets - 42,303 -
Fees in exchange for shares 7,293 - -
Share based payment expense - 8,721 13,053
Foreign exchange loss (125,842) 509 14,261
Finance costs 5,311 10,710 -
Increase in receivables (87,836) (14,616) (112,263)
Increase/(Decrease) in payables 122,172 31,198 (5,525)
Net cash used in operating activities (339,782) (288,759) (235,761)
--------------------------------------- ---------- ----------- -----------
Cash flows from investing activities
Purchase of equipment (2,129) (5,874) -
Purchase of intangible assets (31,943) (50,691) -
Net cash used in investing activities (34,072) (56,565) -
--------------------------------------- ---------- ----------- -----------
Cash flows from financing activities
Shares issued - 595,000 -
Cost of shares issued - - -
Less shares issued arising from
convertible loan notes - - -
Convertible loan notes - - -
Unclaimed dividends - - -
Interest cost - - (5,311)
Net cash from financing activities - 595,000 (5,311)
--------------------------------------- ---------- ----------- -----------
Net decrease in cash and cash
equivalents (373,854) 249,676 (241,072)
--------------------------------------- ---------- ----------- -----------
Cash and cash equivalents brought
forward 728,586 478,910 478,910
Effects of exchange rate changes - - -
on cash and cash equivalents
--------------------------------------- ---------- ----------- -----------
Cash and cash equivalents carried
forward 354,732 728,586 237,838
--------------------------------------- ---------- ----------- -----------
Summary of significant accounting policies
IQ-AI Limited (the "Company") is a limited liability company
incorporated and domiciled in Jersey.
The financial statements are presented in pounds sterling (GBP)
since that is the currency of the primary environment in which the
Group and Company operates.
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all the years presented, unless
otherwise stated.
Basis of preparation
These financial statements have been prepared and approved by
the Directors in accordance with International Financial Reporting
Standards (IFRS) and IFRIC interpretations (IFRS IC) as adopted by
the European Union.
The financial statements have been prepared under the historical
cost convention, as modified for the assets held for sale measured
at fair value less costs to sell.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and
estimates are significant to the financial statements, are
disclosed under the heading 'Critical accounting estimates and
judgements' below.
Going concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Chief Executive Officer's Statement.
The current economic conditions continue to create uncertainty,
particularly over (a) the level of demand for the group's products;
and (b) the availability of finance for the foreseeable future. The
group's forecasts and projections, taking account of reasonably
possible changes in trading performance, show that additional
funding will be required either via an issue of equity or through
the issuance of convertible loan notes. The Directors are
reasonably confident that funds will be forthcoming if and when
they are required. The Chief Executive Officer has provided a
letter of financial support to the Group to make sufficient funds
available, if required, to ensure the Group can meet its
obligations over the going concern period.
Taking in to account the comments above, the Directors have, at
the time of approving the financial statements, a reasonable
expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Therefore, they continue to adopt the going concern basis of
accounting in preparing the financial statements
New standards, amendments and interpretations adopted by the
Group and Company
The following IFRS or IFRIC interpretations were effective for
the first time for the financial year beginning 1 January 2021.
Their adoption has not had any material impact on the disclosures
or on the amounts reported in these financial statements:
Standards /interpretations Application
--------------------------- ------------------------------------------------
IAS 1 & IAS 8 amendments Definition of Material
IFRS 3 amendments Business Combinations
IFRS 16 Amendments to provide lessees with an exemption
from assessing whether a COVID-19 related
rent concession is a lease modification
New standards, amendments and interpretations not yet
adopted
Standards /interpretations Application
--------------------------- -----------------------------------------------------
IAS 1 amendments Presentation of Financial Statements: Classification
of Liabilities as Current or Non-Current.
Effective: Annual periods beginning on
or after 1 January 2023
IFRS 3 amendments Business Combinations - Reference to the
Conceptual Framework.
Effective: Annual periods beginning on
or after 1 January 2022
IFRS 7, IFRS 9, Amendments regarding replacement issues
IFRS 16 in the contract of IBOR reform.
Effective: Annual periods beginning on
or after 1 January 2021
IFRS 16 Amended by Covid-19 Related Rent Concessions
beyond 30 June 2021 (amendment to IFRS
16)
Effective: Annual periods beginning on
or after 1 April 2021
IAS 1 amendments Presentation of Financial Statements: Classification
of Liabilities as Current or Non-Current.
Effective: Annual periods beginning on
or after 1 January 2023
There are no IFRS's or IFRIC interpretations that are not yet
effective that would be expected to have a material impact on the
Company or Group.
Basis of consolidation
The Group financial statements consolidate the financial
statements of the Company and all its subsidiaries ("the Group").
Subsidiaries include all entities over which the Group is exposed,
or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its
power over the investee. The existence and effect of potential
voting rights that are currently exercisable or convertible are
considered when assessing whether the Group controls another
entity. Subsidiaries are consolidated from the date on which
control commences until the date that control ceases. Intra-group
balances and any unrealised gains and losses on income or expenses
arising from intra-group transactions, are eliminated in preparing
the consolidated financial statements.
The acquisition method of accounting is used to account for
business combinations. The cost of an acquisition is measured as
the fair value of the assets given, equity instruments issued, and
liabilities incurred or assumed at the date of exchange, and the
equity interests issued. Identifiable assets acquired, and
liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair value at the
acquisition date. Acquisition related costs are expensed as
incurred. Where necessary, amounts reported by subsidiaries have
been adjusted to conform with the Group's accounting policies.
Investments in subsidiaries
Investments in subsidiaries are held at cost less any
impairment.
Goodwill
Goodwill on acquisition of subsidiaries represents the excess of
the cost of acquisition over the fair value of the Group's share of
the identifiable net assets and contingent liabilities acquired.
Identifiable assets are those which can be sold separately, or
which arise from legal rights regardless of whether those rights
are separable. Goodwill on acquisition of subsidiaries is included
in intangible assets. Goodwill is not amortised but is tested
annually, or when trigger events occur, for impairment and is
carried at cost less accumulated impairment losses.
Segment reporting
An operating segment is a component of the Group that engages in
business activity from which it may earn revenues and incur
expenses, including revenues and expenses that relate to
transactions with and of the Group's other components. All
operating segments' operating results, for which discrete financial
information is available, are reviewed regularly by the Group's
Board to make decisions about resources to be allocated to the
segment and assess its performance. As a result of the acquisition
during the year, the Group reports on a two-segment basis - holding
company expenses and medical software.
Foreign Currency Translation
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income
statement. Foreign exchange gains and losses are presented in the
income statement within 'finance income or costs.'
The results and financial position of Group entities that have a
functional currency different from the presentation currency are
translated into the presentation currency as follows:
-- assets and liabilities for each Statement of Financial
Position presented are translated at the closing rate at the date
of that Statement of Financial Position;
-- income and expenses for each Income Statement presented are
translated at average exchange rates (unless this average is not a
reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and
expenses are translated at the rate on the dates of the
transactions); and
-- all resulting exchange differences are recognised in other comprehensive income.
Goodwill and fair value adjustments arising on the acquisition
of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate. Exchange
differences arising are recognised in other comprehensive
income.
Intangible Assets - Intellectual property and internally
generated software
Separately acquired intellectual property is shown at historic
cost. Intellectual property acquired in a business combination is
recognised at fair value at the acquisition date. Amortisation is
calculated using the straight-line method over the estimated useful
life of up to 5 years.
Development costs that are directly attributable to the design
and testing of identifiable and unique software products controlled
by the Group are recognised as intangible assets when the following
criteria are met:
-- it is technically feasible to complete the software product
so that it will be available for use;
-- management intends to complete the software product and use or sell it;
-- there is an ability to use or sell the software product;
-- it can be demonstrated how the software product will generate
probable future economic benefits;
-- adequate technical, financial and other resources to complete
the development and use or sell the software product are available;
and
-- the expenditure attributable to the software product during
its development can be reliably measured.
Directly attributable costs that are capitalised as part of the
software product include the software development employee costs
and an appropriate portion of relevant overheads.
Other development expenditure that does not meet these criteria
is recognised as an expense as incurred.
Development costs previously recognised as an expense are not
recognised as an asset in a subsequent period.
Software development costs recognised as assets are amortised
over their estimated useful lives, which do not exceed 5 years.
Amortisation commences when regulatory approval is obtained, and
the product is commercially available.
Impairment of Non-Financial Assets
Intangible assets that have an indefinite useful life or
intangible assets not ready to use are not subject to amortisation
and are tested annually for impairment. Assets that are subject to
amortisation are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by
which the asset's carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset's fair value less
costs of disposal and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there
are largely independent cash inflows (cash-generating units). Prior
impairments of non-financial assets (other than goodwill) are
reviewed for possible reversal at each reporting date.
Financial instruments
Financial assets and financial liabilities are recognised in the
Group's balance sheet when the Group becomes a party to the
contractual provisions of the instrument.
Financial assets
The Group classifies its financial assets in the following
categories financial assets as "at fair value through profit and
loss" and "loans and receivables". The classification depends on
the nature and purpose of the financial assets and is determined at
the time of initial recognition. Management determines the
classification of its financial assets at initial recognition.
Loans and receivables
Trade receivables are amounts due from customers for merchandise
sold or services performed in the ordinary course of business.
Trade receivables are held with the objective of collecting the
contractual cash flows. If collection is expected in one year or
less (or in the normal operating cycle of the business if longer),
they are classified as current assets. If not, they are presented
as non-current assets.
Trade receivables are recognised initially at fair value, and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment. The Group applies
the IFRS 9 simplified approach to measuring expected credit losses
which uses a lifetime expected loss allowance for all trade
receivables and contract assets.
Due to the short-term nature of the other current receivables,
their carrying amount is considered to be the same as their fair
value.
A financial asset is assessed at each reporting date to
determine whether there is any evidence that it is impaired. A
financial asset is considered impaired if objective evidence
indicates that one or more events have had a negative effect on the
estimated future cash flows of that asset. Individual significant
financial assets are tested for impairment on an individual basis.
The remaining financial assets are assessed collectively in groups
that share similar credit risk characteristics. All impairment
losses are recognised in the consolidated income statement.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at
call with banks and other short-term highly liquid investments with
maturities of three months or less. In the consolidated Statement
of Financial Position, bank overdrafts are shown within borrowings
in current liabilities.
Financial liabilities and equity instruments issued by the
group
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the Group after deducting all of
its liabilities. Equity instruments issued by the Group are
recorded at the proceeds received, net of direct issued costs.
Non-Current Assets (or Disposal Groups) Held-for-Sale and
discontinued operations
Non-current assets (or disposal groups) are classified as assets
held for sale when their carrying amount is to be recovered
principally through a sale transaction and a sale is considered
highly probable. They are stated at the lower of carrying amount
and fair value less costs to sell. A discontinued operation is a
component of the Group that is classified as held for sale and that
represents a separate line of business or geographical area of
operations. The results of discontinued operations are presented
separately in the Consolidated Income Statement.
Convertible loan notes
The convertible loan note ("CLN") is a compound financial
instrument that can be converted to share capital at the option of
the holder. As the CLN, and the accrued interest, can only be
repaid by the issue of shares, it has been recognised in equity
only, with no liability component. Interest is accounted for on an
accruals basis and charged to the Consolidated Income Statement and
added to the carrying amount of the equity component of the
CLN.
Trade and other payables
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities
if payment is due within one year or less (or in the normal
operating cycle of the business if longer). If not, they are
presented as non-current liabilities.
Trade and other payables are recognised initially at fair value,
and subsequently measured at amortised cost using the effective
interest method. The carrying amounts of trade and other payables
are considered to be the same as their fair values.
Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares and share
options are recognised as a deduction from equity, net of any tax
effects, from the proceeds.
Share-Based Payments
The Company operates an equity-settled, share-based compensation
plan, under which the entity receives services from employees as
consideration for equity instruments (options) of the Company. The
fair value of the employee services received in exchange for the
grant of the options is recognised as an expense. The total amount
to be expensed is determined by reference to the fair value of the
options granted:
-- including any market performance conditions (for example, an entity's share price);
-- excluding the impact of any service and non-market
performance vesting conditions (for example, profitability or sales
growth targets, or remaining an employee of the entity over a
specified time period); and
-- including the impact of any non-vesting conditions (for
example, the requirement for employees to save or holding shares
for a specific period of time).
At the end of each reporting period, the group revises its
estimates of the number of options that are expected to vest based
on the non-market vesting conditions and service conditions. It
recognises the impact of the revision to original estimates, if
any, in the income statement, with a corresponding adjustment to
equity.
In addition, in some circumstances employees may provide
services in advance of the grant date and therefore the grant date
fair value is estimated for the purposes of recognising the expense
during the period between service commencement period and grant
date.
When the options are exercised, the company issues new shares.
The proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share
premium.
The grant by the Company of options over its equity instruments
to the employees of subsidiary undertakings in the Group is treated
as a capital contribution. The fair value of employee services
received, measured by reference to the grant date fair value, is
recognised over the vesting period as an increase in investment in
subsidiary undertakings, with a corresponding credit to equity in
the parent entity accounts.
The social security contributions payable in connection with the
grant of the share options is considered an integral part of the
grant itself, and the charge will be treated as a cash-settled
transaction.
Revenue recognition
The group derives revenue from the transfer of goods and
services at a point in time and over time. Revenue from external
customers arise on the sales of software licences, including
associated maintenance, and consultancy services.
Revenue from licence sales is measured at the agreed transaction
price at a point in time. A receivable is recognised when access to
the software is granted, since this is the point in time that the
consideration is unconditional because only the passage of time is
required before the payment is due. Support and maintenance
services are provided on the product supplied; this is deemed to be
a separately identifiable product and is recognised over time.
Revenue from consulting services are recognised in the accounting
period in which the services are rendered.
Taxation
The Company is registered in Jersey, Channel Islands and is
taxed at the Jersey Company standard rate of 0%. However, the
Company's subsidiaries are situated in jurisdictions where taxation
may become applicable to local operations.
The major components of income tax on profit or loss include
current and deferred tax.
The tax currently payable is based on the taxable profit for the
period using the tax rates that have been enacted or substantially
enacted by the balance sheet date. Taxable profit differs from the
net profit as reported in the income statement because it excludes
items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or
deductible.
Deferred tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the Group financial
statements. Deferred tax is determined using tax rates that have
been enacted or substantially enacted at the balance sheet date and
are expected to apply when the related deferred income tax asset is
realised of the deferred tax liability is settled.
Deferred tax assets are only recognised to the extent that it is
probable that future taxable profit will be available against which
the asset can be utilised. Deferred tax is charged or credited in
the income statement, except when it relates to items charged or
credited to equity, in which case the deferred tax is also dealt
with in equity.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
Critical Accounting Estimates and Assumptions
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom
equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next
financial year are discussed below.
Fair value measurement
Management uses valuation techniques to determine the fair value
of assets held for sale. This involves developing estimates and
assumptions consistent with how market participants would price the
instrument. Management bases its assumptions on best observable
data available as far as possible. Estimated fair values may vary
from the actual prices that would be achieved in an arm's length
transaction at the reporting date.
Critical judgments in applying the entity's accounting
policies
The following are the critical judgements that the Directors
have made in the process of applying the Group's accounting
policies and that have the most significant effect on the amounts
recognised in the financial statements.
Capitalisation of internally developed software
Distinguishing the research and development phases of the
software suites and determining whether the recognition
requirements for the capitalisation of development costs are met
requires judgement. After capitalisation, management monitors
whether the recognition requirements continue to be met and whether
there are any indicators that capitalised costs may be
impaired.
Earnings per share
Basic and diluted
Earnings per share is calculated by dividing the loss
attributable to the equity holders of the Company by the weighted
average number of Ordinary shares in issue during the period,
excluding Ordinary shares purchased by the Company and held as
treasury shares.
Audited
Half year Full year Half year
ended ended ended
30 Jun
2022 31 Dec 2021 30 Jun 2021
------------------------------------------ ------------ ------------ ------------
Loss attributable to equity
holders of the Company (GBP) (330,584) (501,058) (207,135)
Loss from discontinued operation - -
attributable to equity holders
of the parent (GBP)
Weighted average number of
shares in issue (number) 182,595,616 172,757,472 170,107,609
------------------------------------------ ------------ ------------ ------------
Loss per share (pence)
-From continuing operations (0.18) (0.29) (0.12)
-From discontinued operations (0.00) (0.00) (0.00)
------------------------------------------ ------------ ------------ ------------
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END
IR EAPPKFALAEEA
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