TIDMTSP
RNS Number : 0853O
TruSpine Technologies PLC
29 September 2023
TruSpine Technologies plc
("TruSpine" or the "Company")
Final Results
TruSpine Technologies plc, (AQSE: TSP) the medical device
company focused on the development of its pioneering "screwless,"
spinal (vertebral) stabilisation systems, reports its full year
results for the year ended 29 March 2023.
The Company continues to be in a pre-revenue development phase
and remains loss making at this stage of its development. The loss
before taxation for the year was GBP853k (2022: GBP941k) after
administrative expenses of GBP846k (2022: GBP938k). The R&D tax
credit was GBP199k (2022: GBP88k) bringing the loss after tax to
GBP654k (2022: GBP853k). Development spend for the year was GBP363k
(2022: GBP851k). Consolidated net assets at 29 March 2023 amounted
to GBP2.773 million (2022: GBP2.642 million) including cash and
cash equivalents of GBP24k (2022: GBP3k).
The independent audit report draws attention to note 2.4 in the
financial statements, which indicates that that the group is
reliant upon FDA approval subsequent sales and/or further financing
to meet its working capital needs. There is no guarantee that these
will be achieved. As stated in note 2.4, these events or conditions
indicate that a material uncertainty exists that may cast
significant doubt on the company's ability to continue as a going
concern. The auditor's opinion is not modified in respect of this
matter. The Independent Auditor's Report is set out in full
below.
The Company continues to carefully manage its working capital
position.
The Annual Report and Financial Statements for the year ended 29
March 2023 will shortly be available on the Company's website.
Copies of the Annual Report and Financial Statements will be posted
to shareholders shortly.
This announcement contains inside information for the purposes
of the UK Market Abuse Regulation and the Directors of the Company
are responsible for the release of this announcement.
Enquiries:
TruSpine Technologies Plc Tel: +44 (0)20 7118 0852
Laurence Strauss, Chief Executive Officer
Cairn Financial Advisers LLP (AQSE Corporate Adviser) Tel: +44 (0)20 7213 0880
Liam Murray / Ludovico Lazzaretti
Peterhouse Capital Limited (Broker & Financial Adviser)
Tel: +44 (0)20 7469 0930
Lucy Williams / Duncan Vasey
Novus Communications (PR and IR) Tel: +44 (0)20 7448 9839
Alan Green / Jacqueline Briscoe novuscomms@truspine.org
CHIEF EXECUTIVE'S STATEMENT
I am pleased to report that since my involvement with the
Company shortly before the financial year end, we have made
significant progress.
In May 2022 the Company raised GBP700,000 before costs through a
Fundraise of 14,000,000 new Ordinary shares at a price of 5p per
share comprising a Placing and a Subscription. On 27 February 2023
the Company received a funding loan bearing an interest rate of 12%
per annum.
I was appointed on 1(st) March 2023 as Interim CEO to take
control of the Company. At the time of my appointment, the Company
had suffered a difficult year, during which its progress had been
repeatedly stalled due to external operational reasons, uncovered
following a review of the Company's operations.
I am pleased to report that since my appointment, adjustments to
the business, management structure, and supply chain have provided
the Company with better operational clarity and control. While
there is still work to be done, the company is now in a position to
progress with confidence and a clear vision for achieving
success.
The lodging of the FDA 510(k) application in July 2023 for
Cervi-LOK was a major milestone moment for the Company, and it is
pleasing to finally have that process underway. In addition to
ongoing plans, the Directors believe these efforts will contribute
to the Company's stability and potential for monetization in the
future if Cervi-LOK receives clearance from the FDA.
In April 2022 the Company entered into a master agreement with
Spartan Medical Inc ("Spartan") to develop a strategic partnership
and to provide funding, and an exclusive US Reseller Agreement to
market and distribute the Cervi-LOK(TM) device to US Government
healthcare facilities once the Cervi-LOK(TM) has completed FDA
clearance.
During recent discussions with Spartan, the Company has been
exploring a closer collaboration with Spartan taking a more active
management role in assisting the Company to bring our products to
market in the US once approved by the FDA and required processes
are completed. This will hopefully accelerate the process with a
particular emphasis on the launching of our first product Cervi-Lok
given Spartan's wealth of experience and know how in the field.
We have also continued to strengthen our Intellectual Property
position in the light of recent ownership misrepresentation and, in
order to re-confirm our position, our new IP lawyers are aiming to
cause publication of the transfer of the IP into the Company's
name.
The Company has been able to source interim funding, and with
the FDA submission finally lodged, we now have some interest from
other investors. Further funding would assist the Company towards
the commercialisation path for its Cervi-LOK product.
At the date of signing of the accounts, the Company is in
advanced discussions with a third party lender in relation to
potential funding.
Following the financial year end, it is important to mention the
extraordinary general meeting held in May 2023 ("EGM") by a group
of shareholders, proposing to remove certain directors, including
myself, with replacements, shortly after my appointment to steer
the Company in a new direction.
This event caused significant distraction and disrupted our
efforts to refocus the Company during a crucial period. Despite
this, the resolutions voted on EGM to replace the existing
Directors were defeated and concluded positively, allowing for a
return to normalcy and order within the Company.
The Company continues to be in a pre-revenue development phase
and remains loss making at this stage of its development. The loss
before taxation for the year was GBP853k (2022: GBP941k) after
administrative expenses of GBP846k (2022: GBP938k). The R&D tax
credit was GBP199k (2022: GBP88k) bringing the loss after tax to
GBP654k (2022: GBP853k). Development spend for the year was GBP363k
(2022: GBP851k). Consolidated net assets at 29 March 2023 amounted
to GBP2.773 million (2022: GBP2.642 million) including cash and
cash equivalents of GBP24k (2022: GBP3k).
The Global Spinal Implants and Surgery Devices Market size was
estimated at USD 12.3 billion in 2022, and is projected to grow at
a compound annual growth rate of 10.21% to reach USD 20.06 billion
by 2027 (Source Research and Markets.com). The Company has a phased
product development strategy and is planning, subject to FDA
regulatory clearance (currently in process), to commence initial
product marketing of Cervi-LOK in the USA.
The overall aim is to establish the Company's products as the
"go-to solutions" for the spinal stabilisation and fusion market.
In addition to the three-flagship products, the Company also has a
pipeline of additional and complementary IP and product offerings
at an early stage of development.
On behalf of the Board, I would also like to thank shareholders
for their support, and TruSpine's staff and valued commercial
partners for their hard work and professionalism during the year. I
look forward to working with you in the future, and both I and the
Board view the future with excitement.
Laurence Strauss
Chief Executive
The Directors present their Strategic Report on the Group for
the year ended 29 March 2023.
Review of the business and future developments
TruSpine Technologies Plc was incorporated on 8 December 2014.
On 7 May 2020, a resolution was passed approving a reduction of
capital whereby the share premium account of the Company was
cancelled by an amount of GBP2,250,000. The Company re-registered
as a public limited company on 28 May 2020. On 20 August 2020 the
Company was admitted to the Aquis Stock Exchange Growth Market with
the issue of 3,700,442 new ordinary shares raising gross proceeds
of circa GBP1.4m. Since then, the Company has raised a further
GBP2,098,500 through the subscription of 47,485,000 new ordinary
shares to date.
The Company has reduced its administrative costs by GBP92k in
2023 (GBP846k v (2022: GBP938k) and the loss after tax fell by
nearly GBP200k from GBP853k to GBP654k following a R&D Tax
credit of GBP199k. Development spend also fell by GBP488k as we
neared our goal of making the 510(k) submission to the FDA and we
had tighter control on our patent spend. Our Net Asset position
increased from GBP2.64m in 2022 to GBP2.77m in 2023.
The Company is developing disruptive technologies for use in the
spinal stabilisation market, commencing with the following three
devices:
- Cervi-LOK - for the cervical and upper thoracic spine
- Faci-LOK - for the lumbar and lower thoracic spine, and
- GRASP Laminoplasty - a treatment for decompression of the spinal cord.
These devices represent a potentially significant development in
spinal fixation, by providing stabilisation while not altering the
bony spinal anatomy of patients through the use of screws, staples
or other devices which currently dominate the spinal market.
The Company has completed all testing and validation and
verification testing for its Cervi-LOK product. The final testing
was completed by Element Materials Technology, implant packaging
and sterilisation by Guardian Medical and Instrument packaging and
sterilisation by Puracon.
The 510(k) application Cervi-LOK was submitted on 24 July 2023,
the FDA's decision to provide clearance normally takes up to 90
days, following which the Company will be able to commence
marketing and sales of Cervi-LOK in the US if Cervi-LOK receives
FDA clearance. In April 2022, the Company entered into a
distribution agreement with Spartan Medical Inc, and negotiations
are ongoing with further distributors in the USA. The Company plans
to commence further development work on its other two products
starting with Faci-LOK followed by GRASP Laminoplasty and will
subsequently seek clearance for both products.
The Company acquired the Patents relating to its technologies
from Professor Frank Boehm, (the inventor of the Technologies)
pursuant to the IP Sale Agreement. Details of the Patents are set
out in paragraph 6 of Part I and details of the IP Sale Agreement
are set out at paragraph 9.1 of Part IV in the Company's Admission
Document. The Company protects the intellectual property in its
Technologies and any future application thereof by submitting
patent applications in each country in which it intends to operate.
This is an active and ongoing process with new applications being
filed to cover revised design, usage and application of the
Technologies.
The Global Spinal Devices Market is currently estimated to be
worth USD$11.2 billion and is expected to grow at a compound annual
growth rate of 3.1 per cent to 2026. North America is the single
largest and most mature market accounting for around 54(Source per
cent of the total global revenues. (Source the Global Spinal
Devices Market Report 2020)
It is important to note that the Products have not yet been used
on live patients, as they are still subject to regulatory clearance
and approvals by the relevant national medical regulators.
Group Strategy and Business Model
Cervi-LOK and Faci-LOK are spine stabilisation devices used in
the fusion of the cervical, thoracic and lumbar spine respectively.
They differ from existing methods of vertebrae stabilisation as
they are non-intrusive. Cervi-LOK and Faci-LOK clamp onto specific
landmarks of the vertebrae bones rather than requiring fixation
with screws.
The minimally invasive products represent a potentially
significant development in spinal fixation, fusion and laminoplasty
techniques, providing stabilisation without altering the bony
spinal anatomy by requiring screws, staples or other such
attachments which dominate the current technologies and
irreversibly alter the anatomy of the spine. The Company's
philosophy is one of "preserving nature's design", and as such, the
devices have been designed to be safe, fast and easy to implant, as
well as being minimally intrusive. The Company aims to be one of
the first spinal companies to offer single use sterile packaged
implants and instruments, which will position the Company
favourably, especially in the ever expanding ambulatory surgical
centres in the USA.
The Directors believe that the Company's technologies will fill
a gap in the market due to its relative health advantages (for
example through not altering the patient's anatomy) as well as its
overall lower cost per procedure (resulting from the reduced
requirement for fluoroscopy, shorter surgery time and faster
patient recovery time). The Company's technologies cause minimal
tissue disruption allowing the normal spine anatomy to remain
intact and therefore aids the spinal stabilisation and fusion
process.
The Company has a phased product development strategy and
following the submission of the 510(k) to the FDA and subject to
regulatory clearance, it plans to commence initial product
marketing of Cervi-LOK in 2024. The overall aim is to establish the
Company's products as the "go-to solutions" for the spinal
stabilisation and fusion market. In addition to the three flagship
products, the Company also has a pipeline of additional and
complementary IP and product offerings at an early stage of
development.
The Company has a number of key commercial partners to develop,
design and manufacture its products, and assist it through the
regulatory process. Emergo Group ("Emergo"), a regulatory
consultant and Medical Device Academy Inc for our FDA application
are retained by the Company to provide it with regulatory advice.
Greenlight Guru will be providing our document management services.
Lincotek Medical LLC ("Lincotek") is retained by the Company to
provide product development and manufacturing.
Initially the Company is seeking to obtain clearance for use of
its products in the United States. For the products to be lawfully
marketed and sold in the United States, they are required to have
"clearance" from the FDA. The Company has initially sought FDA
clearance for its Cervi-LOK product. The FDA is responsible for
protecting the public health in the United States by (amongst other
things) ensuring the safety, efficacy, and security of medical
devices.
The Company's products are classified as "Class II" Medical
Devices under the FDA's device classification system and therefore
require FDA 510(k) clearance, which does not require clinical
studies prior to clearing the devices for marketing and sales. The
FDA 510(k) clearance process compares a product to a "predicate
device", measuring safety, function and strength. Under the notion
of "substantially equivalent", if a device performs in testing at
least as well as the accepted predicate device, FDA 510(k)
clearance will be granted.
Major company analysis in the spinal devices market currently
identifies a high number of competitors, who are able to benefit
from scale economies. However, these existing competitors'
technologies still utilise invasive technologies like lateral mass
and pedicle screws and therefore TruSpine should be well placed to
compete within the spinal stabilisation market because, crucially,
its products do not alter the bony anatomy of patients. TruSpine's
partnership with
Spartan Medical will also prove to be invaluable, with Spartan
handling the logistics and distribution of our products to their
existing customer base.
Promotion of the Company for the benefit of the members as a
whole
The Directors believe they have acted in the way most likely to
promote the success of the Company for the benefit of its members
as a whole, as required by s172 of the Companies Act 2006 as
detailed below.
The requirements of s172 are for the Directors to:
- Consider the likely consequences of any decision in the long term
- Act fairly between the members of the Company,
- Maintain a reputation for high standards of business conduct,
- Consider the interests of the Company's employees,
- Foster the Company's relationships with suppliers, customers and others, and
- Consider the impact of the Company's operations on the community and the environment.
Our Board of Directors remain aware of their responsibilities
both within and outside of the Group. Within the limitations of a
Group with so few employees we endeavour to follow these principles
and examples of the application of the s172 are summarised and
demonstrated below.
The Company operates as a medical device company developing
specific innovative products which is inherently speculative in
nature and at times may be dependent upon fund-raising for its
continued operation. The nature of the business is well understood
by the Company's members, employees and suppliers, and the
Directors are transparent about the cash position and funding
requirements.
All strategic decisions are properly discussed and evaluated in
terms of their impact on the company in both the short and long
term. All major decisions are passed by the Board for approval. One
example of an important decision made was in April 2022 when the
Company entered into a master agreement with Spartan Medical Inc to
develop a strategic partnership and to provide funding, and an
exclusive US Reseller Agreement to market and distribute the
Cervi-LOK(TM) device to US Government healthcare facilities once
the Cervi-LOK(TM) has completed FDA clearance.
Important decisions had to be made in relation to building the
right platform, particularly in relation to supply chain
restructuring and choosing the right partners to enable us to
prepare and lodge the FDA 510(k) application in July 2023.
The Company has invested considerable time in developing and
fostering its relationships with its key suppliers and entering
into a collaborative dialogue with potential distribution partners
especially establishing appropriate systems and discovering what is
required to build the right understanding of what is required to
make the partnership a successful one.
As a medical device company in the spinal fusion market with
operations based in the UK and USA, the Board takes seriously its
ethical responsibilities to the communities and environment in
which it works. As a pre-revenue business there is clearly limited
potential at this stage for impact on either the environment or the
community, however it is again worth noting that all elements of
product production, distribution and sales will be carried out by
qualified specialist organisations with the necessary regulatory
accreditation and associated processes.
The interests of employees and consultants are a primary
consideration for the Board and are planning to introduce an
inclusive share-option programme allowing them to share in the
future success of the company. Personal development opportunities
are encouraged and supported.
Results for the year
The Group's results for the year are included in the Chief
Executive's Statement on page 4 and are set out in the primary
statements.
Key performance indicators
Key performance indicators for the Group as a measure of
financial control are as follows:
Y ea r ended Y ea r ended
29 March 2023 29 March 2022
2020
GBP GBP
T ota l assets 3,704,066 3,020,865 3,382,344 3,020,865
Net assets 2,772,742 2,642,274
Cas h and cash equivalents 24,276 3,471
T rad e and other payables (532,895) (441,479)
Capitalised Development spend ( 354,815) (716,769)
Loss before tax for the year ( 853,461) (940,806)
Earnings per share (0.57)p (0.87)p
Principal risks and uncertainties
The Group is subject to various risks similar to all medical
device companies operating in overseas locations relating to
political, economic, legal, industry and nancial conditions, not
all of which are within its control. The Group identi es and
monitors the key risks and uncertainties affecting the Group and
runs its business in a way that minimises the impact of such risks
where possible.
The following risks factors, which are not exhaustive, are
particularly relevant to the Group's business activities:
Risk Relating to Obtaining Regulatory Approvals
There can be no assurance that the Company will receive the
regulatory approvals required in order to manufacture and sell its
Products, including approval by the FDA in the US and the granting
of Conformitè Europëenne (CE) mark in Europe, which affirms
conformity with European health, safety and environmental
protection standards. If the Products are not approved and cannot
be commercialised, the Company will be unable to generate revenue
from them, which would materially adversely affect its business,
financial condition and the results of its operations. Moreover,
any delay or setback in the regulatory approval process could have
a material adverse effect on the Company's business and prospects.
To mitigate this the Company employs two key commercial partners,
Emergo and Lincotek to develop its Products and ensure that they
achieve the regulatory approvals necessary for
commercialisation.
Acceptance of the Products in clinical settings
If the Company is unable to convince opinion leaders and health
professionals of the benefits of its Products, there could be weak
penetration of the market, which might have a material adverse
effect on the Company, its business, financial situation, growth
and prospects. The slow adoption of new methods and technologies
could result in timeframes being longer than anticipated by the
Company. However the Company has links with a network of
professionals and experts operating in these fields who have
advised and given positive feedback as to the suitability and
acceptability of the products in development.
No Live Patient Testing
Although Cervi-LOK has undergone significant laboratory-based
testing, it has not been tested on live patients and there is no
certainty that it will be as effective as envisaged, nor that it
will receive regulatory clearance for use in humans. Despite this,
the feedback from the FDA so far in relation to Cervi-LOK has not
highlighted any material issues and the Directors expect that it
will successfully achieve regulatory clearance.
Research and development and product obsolescence
Rapidly changing markets, technology, emerging industry
standards and frequent introduction of new products will
characterise the Company's business. The introduction of new
products embodying new technologies, including new manufacturing
processes, and the emergence of new industry standards may render
the Company's products, less competitive or less marketable.
The process of product development is complex and requires
significant continuing costs, development efforts and third-party
commitments. The Company's failure to develop new technologies and
products and the obsolescence of existing technologies and products
could adversely affect the business, financial condition and
operating results of the Company.
The Company may be unable to anticipate changes in its potential
customer requirements that could make its existing technology
obsolete. Its success will depend, in part, on its ability to
continue to enhance its existing technologies, develop new
technology that addresses the increasing sophistication and varied
needs of the market, and respond to technological advances and
emerging industry standards and practices on a timely and
cost-effective basis. The Company may not be successful in using
its new technologies or exploiting its niche markets effectively or
adapting its business to evolving customer or medical requirements
or preferences or emerging industry standards.
Dependence on key executives, personnel and consultants
The Company's future development and prospects are substantially
dependent on the continuing services and performance of the
Directors, the Consultants and the Medical Advisory Board.
The Directors cannot give assurances that they, the Consultants
or the Medical Advisory Board will remain with the Company,
although the Directors believe that the Company's culture and
remuneration packages are attractive. If key members of the
Company's management team depart, or are affected by illness, such
as COVID-19, and the Company is not able to find effective
replacements in a timely manner or at all, its business may be
disrupted or damaged.
No Current Revenues
The Products remain under development and no revenue has been
generated from them as at the date of this Document. As such, there
is no historical data on which to base the Company's estimated
revenue and costs. Therefore, given the high degree of uncertainty
in the economy currently and the dependency of the Company on
development milestones being met and regulatory approval being
obtained there cannot be certainty regarding the size of the market
for the Products following their launch or whether the Company has
the capacity to generate sufficient revenues to be profitable. To
mitigate this the Company has engaged consultants who have
extensive experience in the marketing and distribution of products
in this sector. Distribution agreements are also a way in which to
help secure future sales and mitigate the risk.
Risk of IP infringement
There is no certainty that the Company can protect its
proprietary information or intellectual property which is
particularly important considering the Company has developed a
number of Products that it regards as unique. There is also a risk
that should an employee with knowledge of the Products cease to be
employed by the Company they may seek to replicate the Products
with a competitor. Although the Company intends to vehemently
protect its intellectual property there can be no guarantee that
such action will be effective (and will be expensive in any case),
there is also a risk that the Company may be pursued by a third
party for alleged intellectual property infringement. This risk has
been mitigated by the Company engaging specialist patent attorneys
to analyse our products and report on the likelihood of the
Products infringing the intellectual property subsisting in
existing technologies. A Freedom to Operate report produced by
Schmeiser, Olsen & Watts has concluded that the likelihood of
patent infringement in relation to the Patents is low.
RISKS RELATING TO THE INDUSTRY
Competition in the Market for Spinal Devices
There are a number of companies in the spinal device market
offering products that would compete with the Company's Products.
These larger, well-funded companies are currently gaining a
competitive advantage in the spinal device market by reducing costs
through economies of scale. The Company may not currently have the
capacity to compete with these existing competitors because the
smaller scale of their operation leads to a higher unit cost. Major
competitors in the spinal device market include Zimmer Biomet,
Medtronic, Johnson & Johnson, NuVasive, Life Spine and Globus
Medical. However, TruSpine's devices are novel in their design in
that they represent a potentially significant development in spinal
fixation, by providing stabilisation while not altering the bony
spinal anatomy of patients as compared with the use of screws,
staples or other devices which currently dominate the spinal
market.
RISKS RELATING TO FINANCIAL MATTERS
Currency and Foreign Exchange Risks
The Company's functional and presentational currency is
sterling, and this is the currency of the Company's financial
statements. However, a significant proportion of the Company's
business is conducted in the United States in $USD and therefore
certain amounts will need to be translated into sterling. Due to
changes in exchange rates between sterling and $USD this could lead
to changes in the Company's reported financial results from period
to period. Among the factors that may affect currency values are
trade balances, levels of short-term interest rates, difference in
relative values of similar assets in different currencies, long
term opportunities for investments and capital appreciation and
political or regulatory developments.
Financing Risks and Requirements for Further Funds
It is likely that the Company will be required to seek further
equity financing. The Company's ability to raise further funds will
depend on the success of its strategy and operations. The Company
may not be successful in procuring the requisite funds on terms
that are acceptable to it, or at all. If such funding is
unavailable, the Company may be required to reduce the scope of its
operations and investments or anticipated expansion, abandon its
strategy, incur financial penalties or miss certain
opportunities.
The Directors review the Company's funding requirements on a
regular basis, and take such action as may be necessary to either
curtail expenditures and / or raise additional funds from available
sources including the issuance of debt or equity. Management has
successfully raised money to date, but there is no guarantee that
adequate funds will be available when needed in the future.
TRUSPINE TECHNOLOGIES PLC DIRECTORS' REPORT
The Directors present their report and the audited financial
statements for the year ended 29 March 2023.
General information
The principal activity of TruSpine Technologies Plc (the
'Company') and its subsidiaries (together the 'Group') is the
development of products for the spinal fusion market. The Group is
incorporated and domiciled in the United Kingdom .
Future developments
The Company continues to progress the development of the
company's three pioneering Spinal Stabilization products and has
completed the FDA submission for the first product to market, the
Cervi-LOK in July 2023. The FDA clearance process normally takes up
to 90 days, after which marketing and commercial sales are expected
to commence in 2024. For further details please refer to the Chief
Executive's Statement and Strategic Report.
Research and development
The Company is developing disruptive technologies for use in the
spinal stabilisation market, commencing with the following three
devices:
- Cervi-LOK - for the cervical and upper thoracic spine
- Faci-LOK - for the lumbar and lower thoracic spine, and
- GRASP Laminoplasty - a treatment for decompression of the spinal cord.
For further details please refer to the Strategic Report.
The Group's capitalised development spend, including Patent
costs, during the year was GBP363,072 (2022: GBP851,378)
Dividends
The Directors do not propose a dividend in respect of the year
ended 29 March 2023 (2022: Nil).
Directors and directors' interests
The directors who have held office during the year and to the
date of this report are as follows:
M C Armstrong - resigned 5 April 2023
I A Roberts - resigned 28 February 2023
L R Strauss - appointed 5 April 2023
N A C Lott
A M Schild - resigned 14 June 2023
T H D Evans
N K Patel
The interests (as de ned in the Companies Act 2006) of the
Directors holding of ce during the period in the share capital are
shown below:
Ordinary shares Ordinary shares
of 0.01p of 0.01p
29 March 2023 29 March 2022
M C Armstrong 741,333 333,333
I A Roberts* 886,111 886,111
N A C Lott 1,950,000 1,750,000
A M Schild 4,246,667 4,166,667
T H D Evans 246,667 166,667
N K Patel 1,330,000 171,667
* Includes shares held by family members
Board of Directors:
Laurence Strauss, Chief Executive Officer
Laurence started his career in 1986 working in the City and
built a private client broking business working for, inter alia,
Allied Provincial and Elders Finance. Laurence left the City in
1992, serving as a director of Longbrooke Electrical Ltd, an
electrical contracting business and overseeing its expansion,
following which he replicated the growth model in another business.
More recently, Laurence has been advising private clients on equity
investments and initial public offerings.
Norman Lott , Chief Financial Officer
Mr. Lott is an experienced CFO with significant public company
experience, having held multiple roles with AIM companies quoted on
the London Stock Exchange. He is a member of the Institute of
Chartered Accountants in England and Wales having qualified in 1980
and aside from his experience as a CFO, he has also held positions
in business management including that of deputy CEO. He has also
been involved in several international corporate transactions and
has experience in the healthcare sector.
Dr Timothy Evans , Non-executive Director
Dr Evans qualified in 1979 from the Westminster Hospital Medical
School, and runs a private, independent general practice in London.
He specialises in women's health, and also has an interest in
functional and musculoskeletal medicine. Dr Evans has a wealth of
experience in his 40-year career, including setting up a specialist
practice in the care of women and children, as well as a fully
integrated practice in conventional, complementary and alternative
healthcare. He has worked extensively in Africa and re-established
primary health clinics in rural areas of Zimbabwe after ten years
of civil war. In 2003, he was appointed to the position of
Apothecary to HM the Queen and The Royal Households of London. In
2016 HM The Queen awarded him as a Lieutenant of the Royal
Victorian Order (LVO) for his services.
Mr Nikunj Patel , Non-executive Director
Mr Patel has been a practising Consultant Neurosurgeon and
Honorary Senior Clinical Lecturer at the Institute of Clinical
Neurosciences (University of Bristol) since his appointment in
2005, where he has developed specialist interests and expertise in
surgical treatments for spinal pain, cranial nerve hyperactive
disorders and functional brain disorders. His surgical and research
interests have focused on developing innovations and advancing
less-invasive and stream-lined procedural solutions. He has been
recognised for his neurosurgical research excellence with a Medical
Research Council fellowship; awards from both the American and the
European Associations of Neurological Surgeons; and a Hunterian
Professorship from the Royal College of Surgeons of England.
Issues of shares, options and warrants
During the year, 16,198,000 ordinary shares of 0.01p each were
issued as detailed in Note 23
During the year, 16,200,000 warrants were granted as detailed in
Note 23
Financial instruments
An explanation of the Company's financial risk management
objectives, policies and strategies is set out in note 3.
Internal financial control
The Board is responsible for establishing and maintaining the
Group's system of internal financial control. Internal financial
control systems are designed to meet the particular needs of the
Group and the risk to which it is exposed, and by their nature can
provide reasonable assurance but not absolute assurance against
material misstatement or loss. The Directors are conscious of the
need to keep effective internal financial control.
Due to the relatively small size of the Group's operations, the
executive Directors are closely involved in the day-to-day running
of the business and as such have less need for a detailed formal
system of internal financial control. The Board has reviewed the
effectiveness of the procedures presently in place and considers
that they remain appropriate to the nature and scale of the
operations of the Group.
Going concern
The Financial Statements have been prepared on a going concern
basis. In assessing whether the going concern assumption is
appropriate, the Directors take into account all available
information for the foreseeable future, in particular for a period
of at least twelve months from the date of approval of the
Financial Statements and perform scenario planning thereon. This
information includes management prepared cash flows forecasts and
available sources of funding.
The Company raised GBP1.4m at the time of the Company's
admission to trading on AQSE Growth Market and an additional
GBP620,500 in the year to March 2021. In the year to March 2022 the
Company raised GBP728,000 by way of share subscriptions. In the
year to March 2023, it has raised further funds of GBP700,000 in
May 2022 by way of share subscriptions, the monies being used to
further fund the Company's development programme and subsequent to
the year end a further GBP50,000 has been raised. At the date of
signing of the accounts, the Company is in advanced discussions
with a third party lender in relation to potential funding.
Management have considered a variety of scenarios in reaching
their going concern conclusion following their 510(k) -submission
including consideration of the potential success of achieving FDA
approval and their ability to raise money . Based on these
scenarios and the Board's assessment that the Company will be able
to raise additional funds, as and when required, to meet its
working capital and development expenditure requirements prior to
commercialisation, the Board of Directors have concluded that they
have a reasonable expectation that the Group and Company have
adequate resources to continue in operational existence for the
foreseeable future. Thus, they continue to adopt the going concern
basis of accounting in preparing the Financial Statements.
Events after the balance sheet date
Events after the reporting date have been disclosed in Note 28
to the Financial Statements.
Statement as to the disclosure of information to the
auditors
Each of the Directors at the date of approval of this Annual
Report con rms that:
-- so far as the Director is aware, there is no relevant audit
information of which the Company's auditor is unaware; and
-- the Director has taken all the steps that he ought to have
taken to make themselves aware of any relevant audit information
and to establish that the Company's auditor is aware of that
information.
Auditors
PKF Littlejohn LLP have expressed their willingness to continue
in of ce as auditors.
A resolution proposing the re-appointment of the auditors PKF
Littlejohn LLP will be put to shareholders at the Annual General
Meeting.
This report was approved by the board of Directors on 28
September 2023 and signed on its behalf by:
L R Strauss
Corporate governance report
The Directors are committed to maintaining high standards of
corporate governance, and propose, so far as is practicable given
the Company's size and nature, to comply with the QCA Code. For
further details please refer to the Company's website truspine.org
for the disclosure of its compliance with the principals of the QCA
code.
A statement of the Directors' responsibilities in respect of the
nancial statements is set out below giving a brief description of
the role of the Board and its committees, including a statement
regarding the Company's system of internal nancial control
The Board has put in place the corporate governance procedures
it believes are appropriate for the Company. The Board retains full
and effective control over the Company. The Company holds regular
Board meetings at which financial, operational and other reports
are considered and, where appropriate voted on. Apart from the
regular meetings, additional meetings are arranged when necessary
to review strategy, planning, operational, financial performance,
risk and capital expenditure and human resources and environmental
management. The Board is also responsible for monitoring the
activities of the executive management. To enable the Board to
perform its duties, all Directors have full access to all relevant
information and to the service of the Company Secretary. If
necessary the Non-Executive Director may take independent
professional advice at the Company's expense.
The Company has established an Audit Committee, a Remuneration
Committee and an Aquis Rules Compliance Committee. Details of these
committees are set out below:
Audit Committee
The Audit Committee is comprised of Nikunj Patel who chairs the
committee and Dr Tim Evans. The Audit Committee has primary
responsibility for monitoring the quality of internal controls and
ensuring that the financial performance of the Company is properly
measured and reported. It receives reports from the executive
management and auditors relating to the annual accounts. The Audit
Committee meets not less than twice in each financial year and has
unrestricted access to the Company's auditors.
Remuneration Committee
The Remuneration Committee comprises Dr Tim Evans who chairs the
committee and Nikunj Patel. The Remuneration Committee reviews the
performance of the executive directors and employees and makes
recommendations to the Board on matters relating to their
remuneration and terms of employment. The Remuneration Committee
considers and approves the granting of any Options pursuant to the
Option Plans and the award of shares in lieu of bonuses pursuant to
the Company's remuneration policy. The Remuneration Committee is
expected to meet formally at least twice a year and otherwise as
required.
Aquis Rules Compliance Committee
The Aquis Rules Compliance Committee is responsible for ensuring
that the Company has sufficient procedures, resources and controls
to enable it to comply with the Aquis Rules. The Aquis Rules
Compliance Committee comprises of at least two members and meets
not less than four times a year. The members of the Aquis Rules
Compliance Committee are Laurence Strauss (who chairs the
committee) and Nikunj Patel.
Nominations Committee
The Board has agreed that appointments to the Board will be made
by the Board as a whole and so has not created a Nominations
Committee.
Share Dealing
The Company has adopted a share dealing code in relation to
dealings in securities of the Company by the Directors and Persons
Discharging Managerial Responsibility which is appropriate for a
company whose shares are traded on the Aquis Stock Exchange Growth
Market. This constitutes the Company's share dealing policy for the
purpose of compliance with UK Legislation including the Market
Abuse Regulation. It should be noted that the insider dealing
legislation set out in the UK Criminal Justice Act 1993, as well as
provisions relating to market abuse apply to the Company and
dealings in Ordinary Shares.
Internal Controls
The Company has implemented an anti-bribery and corruption
policy and also implemented appropriate procedures to ensure that
the Board, employees and consultants comply with the UK Bribery Act
2010. The Directors have established financial controls and
reporting procedures, which are considered appropriate given the
size of and structure of the Company.
Report of the Remuneration Committee
The Remuneration Committee is currently chaired by Tim Evans and
also includes Nikunj Patel. Remuneration packages are determined
with reference to market remuneration levels, individual
performance and the nancial position of the Company. All
remuneration was short term in nature.
The remuneration of the individual Directors during the year
ended 29 March 2023 was as follows:
Directors Fees Share Total Fees Share Total
based based
payment payment
2023 2023 2023 2022 2022 2022
GBP GBP GBP GBP GBP GBP
L R Strauss 8,333 - 8,333 - - -
I A Roberts 91,667 - 91,667 100,000 - 100,000
N A C Lott 60,000 - 60,000 60,000 - 60,000
M C Armstrong 12,000 - 12,000 58,600 - 58,600
A M Schild 12,000 - 12,000 8,000 - 8,000
T H D Evans 12,000 - 12,000 8,000 - 8,000
N K Patel 12,000 - 12,000 10,000 - 10,000
Total 208,000 - 208,000 244,600 - 244,600
-------- --------- -------- -------- --------- --------
No share options were granted to the directors during the
year.
On behalf of the Remuneration Committee
T H D Evans
Committee Chairman
STATEMENT OF DIRECTOR'S RESPONSIBILITIES
The Directors are responsible for preparing the strategic
report, the annual report and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have elected to prepare the Group and Parent Company financial
statements in accordance with UK adopted International Accounting
Standards. Under Company law the Directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and Company
and of the profit or loss of the Group for that period.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether they have been prepared in accordance with UK
adopted International Accounting Standards, subject to any material
departures disclosed and explained in the financial statements;
and
-- prepare the financial statements on a going concern basis
unless it is inappropriate to presume that the company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are suf cient to show and explain the Group's and the
Company's transactions and disclose with reasonable accuracy at any
time the nancial position of the Group and the Company and enable
them to ensure that the nancial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the
assets of the Group and the Company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and nancial information included on the TruSpine
Technologies Plc website: www.truspine.org. Legislation in the
United Kingdom governing the preparation and dissemination of the
financial statements may differ from legislation in other
jurisdictions.
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF Truspine
Technologies PLC
Opinion
We have audited the financial statements of TruSpine
Technologies Plc (the 'parent company') and its subsidiaries (the
'group') for the year ended 29 March 2023 which comprise the Group
Statement of Comprehensive Income, the Group and Company Statement
of Financial Position, the Group and Company Statements of Changes
in Equity, the Consolidated and Company Statements of Cash Flows
and notes to the financial statements, including significant
accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and UK-adopted
international accounting standards and as regards the parent
company financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
In our opinion:
-- The financial statements give a true and fair view of the
state of the group's and of the parent company's affairs as at 29
March 2023 and of the group's loss for the year then ended;
-- the group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
-- the parent company financial statements have been properly
prepared in accordance with UK-adopted international accounting
standards and as applied in accordance with the provisions of the
Companies Act 2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the company
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Material uncertainty related to going concern
We draw attention to note 2.4 in the financial statements, which
indicates that that the group is reliant upon FDA approval
subsequent sales and/or further financing to meet its working
capital needs. There is no guarantee that these will be achieved.
As stated in note 2.4, these events or conditions indicate that a
material uncertainty exists that may cast significant doubt on the
company's ability to continue as a going concern. Our opinion is
not modified in respect of this matter.
In auditing the financial statements, we have concluded that the
director's use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the company's ability to
continue to adopt the going concern basis of accounting
included:
-- Obtaining cash flow forecasts, management accounts, and
budgets from management for a period of at least 12 months from the
date of signing the financial statements to give an indication of
the expected financial returns in future months;
-- Reviewing supporting documentation to assess the
reasonableness of management's cash flow forecasts and comparing
previous forecasts to actual results;
-- Reviewing future plans for fund raises and the dependence of
the group on these to continue as a going concern;
-- Challenging management's assumptions for going concern
assessment to supporting documents and alternative evidence;
-- Reviewing meeting minutes for any references to financial difficulties; and
-- Continued review of RNS releases and discussing subsequent
events and future plans with management.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Our application of materiality
Headline Performance Headline Performance Basis for Basis for
materiality materiality materiality materiality materiality performance
2023 2023 2022 2022 (2023 and materiality
2022) (2023 and
2022)
=================
Group GBP140,000 Group GBP112,000 Group GBP132,000 Group GBP105,600 5% of net 80% of headline
assets materiality
----------------- ----------------- ----------------- ----------------- ---------------- -------------------
Parent Company Parent Company Parent Company Parent Company 5% of net Set at a
GBP139,000 GBP111,200 GBP131,000 GBP104,800 assets (Capped level below
at a level group materiality
below group
materiality)
================= ================= ================= ================
The key driver in the business is the intangibles assets that
relates to the development of the product lines and their patents
and this will be the driver of future revenues. The intangible
assets are the foundation and core of the business. We therefore
have considered net assets to be the most significant determinant
of the group's financial position and performance used by
shareholders and the most appropriate benchmark of materiality. The
going concern of the group is dependent on its ability to fund
operations going forward, as well as on the valuation of its
assets, which represent the underlying value of the group.
We applied the concept of materiality both in planning and
performing our audit, and in evaluating the effect of
misstatements.
We agreed with the audit committee that we would report to the
committee all audit differences identified during the course of our
audit in excess of GBP7,000 (2022: GBP6,600) for the group and
GBP6,950 (2022: GBP6,550) for the parent company.
Our approach to the audit
In designing our audit, we determined materiality and assessed
the risk of material misstatement in the financial statements. In
particular, we looked at areas requiring the directors to make
subjective judgements, for example in respect of assessing the
carrying value of intangible assets comprising of the development
assets and patent; the accounting treatment with respect to the
capitalisation of development cost and patent related costs and the
consideration of future events that are inherently uncertain, such
as FDA approval. We also addressed the risk of management override
of internal controls, including evaluating whether there was
evidence of bias by the directors that represented a risk of
material misstatement due to fraud and the risk of inadequate
disclosures of related parties in the financial statement. An audit
was performed on the financial information of the group's only
significant operating component TruSpine Technologies Plc ("Parent
Company"), which for the year ended 29 March 2023, which was
carried out by the group audit team located in the United Kingdom.
Analytical procedures were performed on components that were not
considered significant nor material to the users of these financial
statements.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Key Audit Matter How our scope addressed this matter
Recognition and carrying value of development costs and ownership
of the Intellectual Property ("IP") (Note 12)
The carrying value of Our work in this area included:
the group's Intellectual -- Updating our understanding of the
Property ('IP') at 29 group's policy of capitalising development
March 2023 represents costs and ensuring that the policy is
a significant total of in line with IAS 38;
the group's total assets. -- Performing substantive testing on
This relates to the development a sample of additions, vouching to supporting
of the entities product invoices and ensuring they have been
lines and their relevant appropriately capitalised;
patents which will be -- Challenging management's assumptions
the driver of future on the valuation and criteria for capitalisation;
revenue and is the whole -- Reviewing costs that fall under research
foundation and core of costs and not development and assessing
the business. the appropriate classification;
IP should be recognised -- Obtaining evidence from management
in accordance with IAS of their continued existence and reviewing
38 and there is a risk for indicators of impairment;
of incorrect valuation, -- Obtaining IP ownership documentation
carrying value and recognition to gain assurance over the rights to
of development costs the asset; and
capitalised. -- Obtaining supporting documentation
There is a risk that for applications submitted to the Food
the assets may be impaired, and Drug Administration (FDA), reviewing
resulting in incorrect responses received from management and
valuation. In addition, advisors' correspondence on the application
there is a risk that process to demonstrate appropriate valuation
the IP ownership does of intangible assets.
not actually lie with Key Observations:
the company and thus As referred to elsewhere, FDA approval
the right to use the is not certain at the date of this report.
asset would not sit with If approval was not to be obtained,
the group. The assessment this could impact the carrying value
requires areas of management of the Group's Intangible Assets.
judgement and estimation
uncertainty, and therefore
has been assessed as
a key audit matter.
===================================================
Other information
The other information comprises the information included in the
annual report, other than the financial statements and our
auditor's report thereon. The directors are responsible for the
other information contained within the annual report. Our opinion
on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing
so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company
and its environment obtained in the course of the audit, we have
not identified material misstatements in the strategic report or
the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the financial statements are not in agreement with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors'
responsibilities, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the
directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
-- We obtained an understanding of the group and company and the
sector in which it operates to identify laws and regulations that
could reasonably be expected to have a direct effect on the
financial statements. We obtained our understanding in this regard
through discussion with management, industry research, application
of cumulative audit knowledge and experience of the sector.
-- We determined the principal laws and regulations relevant to
the group and parent company in this regard to be those arising
from Companies Act 2006, AQUIS Listing Rules, Bribery Act 2011, UK
employment laws, UK tax legislation and QCA Code.
-- We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by
the company with those laws and regulations. These procedures
included, but were not limited to:
o Enquires of management;
o Review of board minutes and RNS announcements; and
o Review of legal and professional fees incurred in the
year.
-- We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to
the non-rebuttable presumption of a risk of fraud arising from
management override of controls the carrying value of intangible
assets. We addressed this by challenging the estimates made by
management as referred to in the key audit matter section
above.
-- As in all of our audits, we addressed the risk of fraud
arising from management override of controls by performing audit
procedures which included, but were not limited to: the testing of
journals; reviewing accounting estimates for evidence of bias; and
evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business. In this
context we view the significant estimates as being the key
assumptions underlying the value in use calculations in the
assessment of the intangible assets impairment.
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or
non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and
transactions reflected in the financial statements, as we will be
less likely to become aware of instances of non-compliance. The
risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities .
This description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone, other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Nicholas Joel (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 29 MARCH 2023
Year ended Year ended
29 March 2023 29 March 2022
Note GBP GBP
------------------------------------- ---- --------------- ---------------
Administrative expenses (845,818) (937,641)
Operating loss (845,818) (937,641)
Finance expense 9 (7,643) (3,165)
Loss before tax (853,461) (940,806)
--------------- ---------------
Tax credit 10 199,007 87,613
Loss (654,454) (853,193)
--------------- ---------------
Loss attributable to:
Owners of the parent (654,454) (853,193)
--------------- ---------------
Other comprehensive income:
Items that will or may
be reclassified to profit
or loss:
Exchange translation differences
on foreign operations 3,237 1,456
--------------- ---------------
Total comprehensive income (651,217) (851,737)
--------------- ---------------
Total comprehensive income
attributable to equity shareholders (651,217) (851,737)
=============== ===============
Earnings per share basic
and diluted (pence) 11 (0.57)p (0.87)p
--------------- ---------------
All operations are continuing.
GROUP STATEMENT OF FINANCIAL POSITION
AS AT 29 MARCH 2023
Year ended Year ended
29 March 2023 29 March 2022
Note GBP GBP
---------------------------- ---- -------------- ---------------
Non-current assets
Intangible assets 12 3,461,227 3,098,155
Tangible fixed assets 13 3,324 4,183
Right of use assets 14 - 120,538
3,464,551 3,222,876
-------------- ---------------
Current assets
Trade and other receivables 16 215,239 73,523
Digital assets 17 - 82,474
Cash and cash equivalents 18 24,276 3,471
239,515 159,468
-------------- ---------------
Total assets 3,704,066 3,382,344
-------------- ---------------
Current liabilities
Trade and other payables 19 657,768 574,579
Borrowings 19 73,556 42,500
Lease liabilities 20 - 14,261
731,324 631,340
-------------- ---------------
Non-current liabilities
Lease liabilities 20 - 108,730
Borrowings 21 200,000 -
-------------- ---------------
200,000 108,730
Total liabilities 931,324 740,070
Net assets 2,772,742 2,642,274
-------------- ---------------
Equity attributable to
owners of the parent
Share capital 23 11,795 10,175
Share premium 23 4,535,069 3,782,215
Share based payment reserve 24 71,430 44,219
Other reserves 23 (205,000) (205,000)
Translation reserve (20,786) (24,023)
Retained earnings (1,619,766) (965,312)
-------------- ---------------
Total equity attributable
to owners of the parent 2,772,742 2,642,274
-------------- ---------------
Total equity 2,772,742 2,642,274
-------------- ---------------
The financial statements were approved by the Board of Directors
and authorised for issue on 28 September 2023 and were signed on
its behalf by
L R Strauss
Director
The notes are an integral part of these Financial
Statements.
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 29 MARCH 2023
Attributable to owners of the parent
Share
based
Share Share Payment Other Translation Retained
capital premium Reserve reserves reserve earnings Total
GBP GBP GBP GBP GBP GBP GBP
-------------------------- ---- ---------- --------- -------- --------- ----------- ----------- -----------
Balance as at 29 March
2021 9,398 3,062,103 17,007 (205,000) (25,479) (112,119) 2,745,910
========== ========= ======== ========= =========== =========== ===========
Loss for the year - - - - - (853,193) (853,193
Other comprehensive
income - - - - 1,456 - 1,456
---------- --------- -------- --------- ----------- ----------- -----------
Total comprehensive
income for the year - - - - 1,456 (853,193) (851,737)
---------- --------- -------- --------- ----------- ----------- -----------
Issue of shares, net
of issue costs 777 747,324 - - - - 748,101
Share based payment
charge (27,212) 27,212 - - - -
Transactions with owners,
recognised directly
in equity 777 720,112 27,212 - - - 748,101
---------- --------- -------- --------- ----------- ----------- -----------
Balance as at 29 March
2022 10,175 3,782,215 44,219 (205,000) (24,023) (965,312) 2,642,274
========== ========= ======== ========= =========== =========== ===========
Balance as at 29 March
2022 10,175 3,782,215 44,219 (205,000) (24,023) (965,312) 2,642,274
========== ========= ======== ========= =========== =========== ===========
Loss for the year - - - - - (654,454) (654,454)
Other comprehensive
income - - - - 3,237 - 3,237
---------- --------- -------- --------- ----------- ----------- -----------
Total comprehensive
income for the period - - - - 3,237 (654,454) (651,217)
---------- --------- -------- --------- ----------- ----------- -----------
Issue of shares, net
of issue costs 1,620 780,065 - - - - 781,685
Share based payment
charge - (27,211) 27,211 - - - -
Transactions with owners,
recognised directly
in equity 1,620 752,854 27,211 - - - 781,685
---------- --------- -------- --------- ----------- ----------- -----------
Balance as at 29 March
2023 11,795 4,535,069 71,430 (205,000) (20,786) (1,619,766) 2,772,742
========== ========= ======== ========= =========== =========== ===========
Share Capital - Amount subscribed for share capital at nominal
value.
Share Premium - Amount subscribed for share capital in excess of
nominal value.
Retained earnings - The retained earnings reserve includes all
current and prior periods retained profits and losses.
Other reserves comprise of 666,667 shares that were acquired
from a third party in exchange for monies paid out by the Company
on the third party's behalf during the year to 29 March 2019.
Share based payment reserve - amount arising on the issue of
warrants and share options which are exercisable at the statement
of financial position date.
Translation reserve - The translation reserves includes foreign
exchange movements on translating the overseas subsidiaries
records, denominated in USD, to the presentational currency,
GBP.
The notes are an integral part of these Financial
Statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 29 MARCH 2023
Year ended Year ended
29 March 29 March
2023 2022
Note GBP GBP
------------------------------------- ---- ------------ -----------
Cash flows from operating activities
Loss before tax (850,224) (940,806)
Adjustments for:
Depreciation and amortisation 21,421 21,146
Increase in Fair Value of digital
asset - (7,872)
Gain on derecognition of Right
of use asset 1,831 -
(Decrease)/Increase in trade
and other receivables (141,716) 113,167
Increase in trade and other
payables 83,189 337,102
Decrease in digital assets 82,474 130,256
Cash used in operations (803,025) (347,007)
------------ -----------
Income tax credit 199,007 87,613
Net cash flows from operating
activities (604,018) (259,394)
------------ -----------
Investing activities
Purchase of intangible assets (363,072) (1,027,378)
Purchase of tangible assets (707) (1,239)
Net cash used in investing
activities (363,779) (1,028,617)
------------ -----------
Financing activities
Proceeds from Issue of shares,
net of issue costs 781,685 763,845
Proceeds from loan finance 235,000 -
Repayments of loans (3,944) -
Lease payments (24,139) (17,339)
Net cash generated from financing
activities 988,602 746,506
------------ -----------
Net increase/(decrease) in
cash and cash equivalents 20,805 (541,505)
Cash and cash equivalents at
beginning of period 3,471 543,520
Exchange rate differences on
cash and cash equivalents - 1,456
------------ -----------
Cash and cash equivalents and
end of period 18 24,276 3,471
------------ -----------
The following non-cash transactions took place during the
year:
- third party creditors amounting to GBP77,500 were settled in shares
The notes are an integral part of these Financial
Statements.
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 29 MARCH 2023
Year ended Year ended
29 March 2023 29 March 2022
Note GBP GBP
---------------------------- ---- -------------- ---------------
Non-current assets
Intangible assets 12 3,327,066 3,001,630
Tangible assets 13 3,324 4,183
Right of use assets 14 - 120,538
3,330,390 3,126,351
-------------- ---------------
Current assets
Trade and other receivables 16 580,881 379,065
Digital assets 17 - 82,474
Cash and cash equivalents 18 24,276 3,471
605,157 465,010
-------------- ---------------
Total assets 3,935,547 3,591,361
-------------- ---------------
Current liabilities
Trade and other payables 19 642,942 534,357
Borrowings 19 73,556 42,500
Lease liabilities 20 - 14,261
716,498 591,118
Non-current liabilities
Lease liabilities 20 - 108,730
Borrowings 21 200,000 -
-------------- ---------------
200,000 108,730
Total liabilities 916,498 699,848
Net assets 3,019,049 2,891,513
-------------- ---------------
Equity attributable to
owners of the parent
Share capital 23 11,795 10,175
Share premium 23 4,535,069 3,782,215
Share based payment reserve 24 71,430 44,219
Other reserves 23 (205,000) (205,000)
Translation reserve (12,511) (12,511)
Retained earnings (1,381,734) (727,585)
-------------- ---------------
Total equity attributable
to owners of the parent 3,019,049 2,891,513
-------------- ---------------
Total equity 3,019,049 2,891,513
-------------- ---------------
The Company has elected to take the exemption under section 408
of the Companies Act 2006 not to present the Parent Company
Statement of Comprehensive Income.
The loss for the Parent Company for the year was GBP654,149
(2022: GBP852,512).
The financial statements were approved by the Board of Directors
and authorised for issue on 28 September 2023 and were signed on
its behalf by
L R Strauss
Director
The notes are an integral part of these Financial
Statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 29 MARCH 2023
Share
based
Share Share Payment Other Translation Retained
capital premium reserve reserves reserve earnings Total
Note GBP GBP GBP GBP GBP GBP GBP
-------------------------- ----- -------- --------- ---------- --------- ----------- ----------- ---------
Balance as at 29 March
2021 9,398 3,062,103 17,007 (205,000) (12,511) 124,927 2,995,924
======== ========= ========== ========= =========== =========== =========
Loss for the year - - - - - (852,512) (852,512)
Other comprehensive - - -
income - - - -
-------- --------- ---------- --------- ----------- ----------- ---------
Total comprehensive
income for the year - - - - - (852,512) (852,512)
-------- --------- ---------- --------- ----------- ----------- ---------
Issue of shares, net
of issue costs 777 747,324 - - - - 748,101
Share based payment
reserve - (27,212) 27,212 - - - -
Transactions with owners,
recognised directly
in equity 777 720,112 27,212 - - - 748,101
-------- --------- ---------- --------- ----------- ----------- ---------
Balance as at 29 March
2022 10,175 3,782,215 44,219 (205,000) (12,511) (727,585) 2,891,513
======== ========= ========== ========= =========== =========== =========
Balance as at 29 March
2022 10,175 3,782,215 44,219 (205,000) (12,511) (727,585) 2,891,513
======== ========= ========== ========= =========== =========== =========
Loss for the year - - - - - (654,149) (654,149)
Other comprehensive - - -
income - - - -
-------- --------- ---------- --------- ----------- ----------- ---------
Total comprehensive
income for the period - - - - - (654,149) (654,149)
-------- --------- ---------- --------- ----------- ----------- ---------
Issue of shares, net
of issue costs 1,620 780,065 - - - - 781,685
Share based payment
reserve - (27,211) 27,211 - - - -
Transactions with owners,
recognised directly
in equity 1,620 752,854 27,211 - - - 781,685
-------- --------- ---------- --------- ----------- ----------- ---------
Balance as at 29 March
2023 11,795 4,535,069 71,430 (205,000) (12,511) (1,381,734) 3,019,049
======== ========= ========== ========= =========== =========== =========
Share Capital - Amount subscribed for share capital at nominal
value.
Share Premium - Amount subscribed for share capital in excess of
nominal value.
Retained earnings - The retained earnings reserve includes all
current and prior periods retained profits and losses.
Other reserves comprise of 666,667 shares that were acquired
from a third party in exchange for monies paid out by the Company
on the third party's behalf during the year to 29 March 2019.
Share based payment reserve - amount arising on the issue of
warrants and share options which are exercisable at the statement
of financial position date.
Translation reserve - The translation reserves includes foreign
exchange movements on translating the overseas subsidiaries
records, denominated in USD, to the presentational currency,
GBP.
The notes are an integral part of these Financial
Statements.
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEARED 29 MARCH 2023
Year ended Year ended
29 March 29 March
2023 2022
Note GBP GBP
--------------------------------------- ---- ---------- ----------
Cash flows from operating activities
Loss before tax (853,156) (940,125)
Adjustments for:
Depreciation and amortisation 21,421 21,146
Increase in Fair Value of digital
asset - (7,872)
Gain on derecognition of Right
of use asset 1,831
(Increase)/decrease in trade and
other receivables (201,816) 91,845
Increase in trade and other payables 108,585 296,900
Decrease in digital assets 82,474 130,256
Cash used in operations (840,661) (407,850)
---------- ----------
Income taxes credit 199,007 87,613
Net cash flows used in operating
activities (641,654) (320,237)
---------- ----------
Investing activities
Purchase of intangible assets (325,436) (965,079)
Purchase of tangible assets (707) (1,239)
Net cash used in investing activities (326,143) (966,318)
---------- ----------
Financing activities
Proceeds from Issue of shares,
net of issue costs 781,685 763,845
Proceeds from loan finance 235,000 -
Repayments of loans (3,944) -
Lease payments (24,139) (17,339)
Net cash generated from financing
activities 988,602 746,506
---------- ----------
Net increase/(decrease) in cash
and cash equivalents 20,805 (540,049)
Cash and cash equivalents at beginning
of period 3,471 543,520
Cash and cash equivalents and
end of period 18 24,276 3,471
---------- ----------
The notes are an integral part of these Financial Statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 29 MARCH 2023
1. General Information
The principal activity of TruSpine Technologies Plc (the
'Company') and its subsidiaries (together the 'Group') is the
development of products for the spinal fusion market. The Company
is a public company, limited by shares, which is listed on the
Aquis Stock Exchange and is incorporated and domiciled in England.
The address of its registered office is located at Spectrum House
AF33, Beehive Ring Road, Gatwick Airport, Gatwick, RH6 0LG, United
Kingdom.
2. Accounting policies
The principal accounting policies applied in the preparation of
these Financial Statements are set out below ('Accounting Policies'
or 'Policies'). These Policies have been consistently applied to
all the periods presented, unless otherwise stated.
2.1. Basis of Preparation
The Consolidated Financial Statements of TruSpine Technologies
Plc has been prepared in accordance with UK-adopted international
accounting standards in accordance with the requirements of the
Companies Act 2006. The Consolidated Financial Statements has also
been prepared under the historical cost convention but is adjusted
to fair value where appropriate.
The Financial Statements are presented in UK Pounds Sterling
rounded to the nearest pound.
The preparation of Financial Statements in conformity with UK
adopted International accounting standards requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group's
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 in Note
4.
2.2. Changes in accounting policies and disclosures
(a) New and amended standards mandatory for the first time for
the financial period under review
The Group has adopted all recognition, measurement and
disclosure requirements if IFRS, including any new and revised
standards and interpretations of IFRS, in effect for annual periods
commencing 30 March 2022. The adoption of these standards and
amendments did not have a material impact on the financial result
of the position of the Group.
(b) New standards, amendments and interpretations in issue but
not yet effective or not yet endorsed and not early adopted
The standards and interpretations that are issued, but not yet
effective, up to the date of issuance of the Financial Statements
are listed below. The Group intends to adopt these standards, if
applicable, when they become effective.
Effective
Standard Impact on initial application date
-------------------- ------------------------------------------ -----------
IAS 1 (Amendments) Presentation and Classification 1 January
of Liabilities as Current or Non-Current 2024
IAS 16 (Amendments) Lease Liability in a sale and leaseback 1 January
2024
IAS 1 (Amendments) Presentation of Financial Statements 1 January
2024
The Group is evaluating the impact of the new and amended
standards above. The Directors believe that these new and amended
standards are not expected to have a material impact on the Group's
results or shareholders' funds.
2.3. Basis of consolidation
The Consolidated Financial Information consolidate the Financial
Statements of the Company and of all of its subsidiary undertakings
for all periods presented.
Subsidiaries are entities over which the Group has control. The
Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over
the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated
from the date that control ceases.
Inter-company transactions, balances and unrealised gains on
transactions between group companies are eliminated. Unrealised
losses are also eliminated. Where necessary, adjustments are made
to the financial information of subsidiaries to bring the
accounting policies used into line with those used by other members
of the Group. All intercompany transactions and balances between
Group enterprises are eliminated on consolidation.
2.4. Going concern
The Financial Statements have been prepared on a going concern
basis. In assessing whether the going concern assumption is
appropriate, the Directors take into account all available
information for the foreseeable future, in particular for a period
of at least twelve months from the date of approval of the
Financial Statements and perform scenario planning thereon. This
information includes management prepared cash flows forecasts and
available sources of funding.
In prior years the Company raised GBP1.4m at the time of the
Company's Listing and an additional GBP620,500 in the year to March
2021. In the year to March 2022 the Company raised GBP728,000 by
share subscriptions and shares issued to settle liabilities. In the
year to March 2023 it has raised further funds of GBP700,000 in May
2022 by way of share subscriptions, the monies being used to
further fund the Company's development programme and subsequent to
the year end a further GBP50,000 has been raised.
At the date of signing of the accounts, the Company is in
advanced discussions with a third party lender in relation to
potential funding.
Management have considered a variety of scenarios in reaching
their going concern conclusion following their 510(k) submission
including consideration of the success of achieving FDA approval
and their ability to raise money .
Based on these scenarios and the Board's assessment that the
Company will be able to raise additional funds, as and when
required, to meet its working capital and development expenditure
requirements prior to commercialisation, the Board of Directors
have concluded that they have a reasonable expectation that the
Group and Company have adequate resources to continue in
operational existence for the foreseeable future. Thus, they
continue to adopt the going concern basis of accounting in
preparing the Financial Statements however as a result of the
requirement to raised funds, there is a material uncertainty to the
groups going concern position.
2.5. Foreign currencies
a) Functional and presentation currency
Items included in the financial statements of each of the
Group's entities are measured using the currency of the primary
economic environment in which the entity operates (the 'functional
currency'). The functional currency of the Company is Pounds
Sterling. The consolidated financial statements are presented in
Pounds Sterling (GBP), rounded to the nearest pound, which is the
Company's and Group's functional and presentation currency.
b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions or valuation where such items are re-measured. 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 that relate to borrowings and cash and cash equivalents are
presented in the income statement within 'finance income or costs.
All other foreign exchange gains and losses are presented in the
income statement within 'Other net gains/(losses)'. Translation
differences on non-monetary financial assets and liabilities such
as equities held at fair value through profit or loss are
recognised in profit or loss as part of the fair value gain or
loss. Translation differences on non-monetary financial assets
measured at fair value, such as equities classified as available
for sale, are included in other comprehensive income.
2.6. Intangible assets
Research costs are expensed as incurred. Development
expenditures derive from costs incurred by third party contractors
and management's view of time spent by individual consultants that
are directly attributable to individual projects. These costs are
recognised as intangible assets when the Group can demonstrate:
-- the technical feasibility of completing the intangible asset
so that it will be available for use or sale;
-- its intention to complete the intangible asset and its ability to use or sell the asset;
-- how the intangible asset will generate future economic benefits;
-- the availability of resources to complete the asset; and
-- the ability to measure reliably the expenditure attributable
to the intangible asset during its development
2.7. Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the Board, who is considered to be
the Chief Operating Decision Maker ('CODM'). The Board makes the
strategic decisions and separates its activities by geographical
location.
2.8. Impairment of Non-Financial Assets
Intangible assets that have an indefinite useful life or are not
ready to use are not subject to amortisation and are tested
annually for impairment. At each year-end date, the Group reviews
the carrying amounts of its intangible assets to determine whether
there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where the asset does not generate
cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs. Recoverable amount is the higher of fair
value, less costs to sell, and value in use. In assessing value in
use, the estimated future cash flows are discounted to their
present value, using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows
have not been adjusted. If the recoverable amount of an asset (or
cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (cash-generating unit) is
reduced to its recoverable amount. An impairment loss is recognised
as an expense immediately.
2.9. Financial Assets
Initial recognition
A financial asset is recognised in the statement of financial
position when it arises or when the Company becomes part of the
contractual terms of the financial instrument.
Classification
The Group and Parent Company classifies its financial assets at
amortised cost.
The Group and Parent Company measures financial assets at
amortised cost if both of the following conditions are met:
-- the asset is held within a business model whose objective is
to collect contractual cash flows; and
-- the contractual terms of the financial asset generating cash
flows at specified dates only pertain to capital and interest
payments on the balance of the initial capital.
Financial assets which are measured at amortised cost, are
measured using the Effective Interest Rate Method (EIR) and are
subject to impairment. Gains and losses are recognised in profit or
loss when the asset is derecognised, modified or impaired.
Derecognition
A financial asset is derecognised when:
-- the rights to receive cash flows from the asset have expired, or
-- the Company has transferred its rights to receive cash flows
from the asset or has undertaken the commitment to fully pay the
cash flows received without significant delay to a third party
under an arrangement and has either (a) transferred substantially
all the risks and the assets of the asset or (b) has neither
transferred nor held substantially all the risks and estimates of
the asset but has transferred the control of the asset.
Impairment
The Group and Parent Company recognise a provision for
impairment for expected credit losses regarding all financial
assets. Expected credit losses are based on the balance between all
the payable contractual cash flows and all discounted cash flows
that the Group and Parent Company expect to receive. Regarding
trade receivables, the Group and Parent Company applies the IFRS 9
simplified approach in order to calculate expected credit losses.
Therefore, at every reporting date, provision for losses regarding
a financial instrument is measured at an amount equal to the
expected credit losses over its lifetime without monitoring changes
in credit risk. To measure expected credit losses, trade
receivables and contract assets have been grouped based on shared
risk characteristics.
2.10. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, and
are subject to an insignificant risk of changes in value.
2.11. Digital assets
Digital assets, including tokens and cryptocurrency, do not
qualify for recognition as cash and cash equivalents or financial
assets, and have an active market which provides pricing
information on an ongoing basis.
On initial recognition, Digital Assets are held at cost. Any
movements in the fair value at the end of the year are allocated to
the profit and loss account.
Digital assets were disposed of during the year.
2.12. Share Capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
2.13. Share-based payments
Equity-settled share-based payments are measured at fair value
at the date of grant by reference to the fair value of the equity
instruments granted using the Black-Scholes model. The fair value
determined at the grant date is expensed on a straight-line basis
over the vesting period, based on the estimate of shares that will
eventually vest. A corresponding adjustment is made to equity.
When the terms and condition of equity settled share-based
payments at the time they were granted are subsequently modified,
the fair value of the share-based payment under the original terms
and conditions and under the modified terms and conditions are both
determined at the date of the modification. Any excess of the
modified fair value over the original fair value is recognised over
the remaining vesting period in addition to the grant date fair
value of the original share-based payment. The share-based payment
expense is not adjusted if the modified fair value is less than the
original fair value.
2.14. Financial liabilities including trade and other payables and borrowings
Financial liabilities measured at amortised cost using the
effective interest rate method include current borrowings and trade
and other payables that are short term in nature. Financial
liabilities are derecognised if the Group or Parent Company's
obligations specified in the contract expire or are discharged or
cancelled.
Amortised cost is calculated by taking into account any discount
or premium on acquisition and fees or costs that are an integral
part of the effective interest rate ("EIR"). The EIR amortisation
is included as finance costs in profit or loss. Trade payables
other payables are non-interest bearing and are stated at amortised
cost using the effective interest method.
Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are subsequently carried at
amortised cost: any difference between the proceeds and the
redemption value is recognised in the income statement over the
period of the borrowings, using the effective interest method.
Borrowings are classified as current liabilities unless the Group
or Parent Company has an unconditional right to defer settlement of
the liability for at least one year after the end of the reporting
period.
2.15. Taxation
The tax expense for the period comprises current tax. Tax is
recognised in the income statement, except to the extent that it
relates to items recognised directly in equity. In this case the
tax is also recognised directly in other comprehensive income or
directly in equity, respectively.
The current income tax charge is calculated on the basis of the
tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Company operates and
generates taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Deferred tax represents the tax expected to be payable or
recoverable on the temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. The Group has
reoccurring tax losses which can be used to offset future profits.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the asset can be utilised. No deferred tax asset has been
recognised in the current year.
The Group receives small and medium sized enterprises research
and development tax relief for their costs incurred in developing,
implementing and testing the platform software. The R&D relief
is calculated on the basis of the tax laws enacted at the end of
the reporting period in the United Kingdom and is recognised in the
period in which it is received.
2.16. Earnings per share
Basic and diluted earnings per share is calculated by
dividing:
-- the profit attributable to owners of the company, excluding
any costs of servicing equity other than ordinary shares;
-- by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary
shares issued during the year and excluding treasury shares (note
23).
2.17. Leased assets
At the commencement date of a lease, the Group recognises a
lease liability at fair value, which is the present value of
future lease payments made over lease term. The lease liability
comprises fixed payments, less any lease incentives, less estimated
restoration costs that would be payable upon exit of the lease.
Short-term leases and low value are expensed to the Statement
of Comprehensive Income on a straight-line basis over the life
of the lease. Short-term leases are leases with a term of 12
months or less. Low value leases are those with a total lease
value of less than GBP5,000.
In calculating the present value, lease payments are discounted
using the discount rate implicit in the lease, if available,
alternatively, if that rate cannot be readily determined, the
Group's incremental borrowing rate is used. Subsequently, the
lease liability is increased to reflect the accretion of interest
and reduced by payments made. In addition, the carrying amount
of lease liabilities is remeasured if there is a modification
to the lease.
The Group recognises right-of-use assets at the commencement
date of the lease. Right-of-use assets are measured at cost,
less any accumulated depreciation and impairment losses. The
cost of right of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments
made at or before the commencement date less any lease incentives
received. Right-of-use assets are depreciated on a straight-line
basis over the shorter of the lease term and the estimated
useful lives of the assets which are consistent with those
shown in the Property, Plant and Equipment accounting policy.
3. Financial risk management
3.1. Financial risk factors
The Group's activities expose it to a variety of financial
risks. The Group's Board monitors and manages the financial risks
relating to the operations of the Group. This note describes the
Group's objectives, policies and processes for managing those risks
and the methods used to measure them. Further quantitative
information in respect of these risks is presented throughout this
financial information.
Financial instruments
The financial instruments used by the Group, from which
financial instrument risk arises, are trade and other receivables
(see note 16), cash (see note 18) and trade and other payables (see
note 19). All are held at amortised cost.
General objectives, policies and processes
The Directors have overall responsibility for the determination
of the Company's risk management objectives and policies. Further
details regarding these policies are set out below:
Credit risk
Credit risk arises from cash and cash equivalents as well as any
outstanding receivables. Essentially it is the risk of financial
loss to the Group and Parent Company if a counterparty to a
financial instrument fails to meet its contractual obligations and
arises principally from the Group and Parent Company's receivables
from third parties. Management does not expect any losses from
non-performance of these receivables. To manage this risk, the
Board periodically assesses the financial reliability of any
counterparties the Group deal with.
The Group considers the credit risk on cash and cash equivalents
to be limited because the counterparties are banks with high credit
ratings assigned by international credit rating agencies.
The carrying amount of financial assets recorded in the
financial statements represent the Group's maximum exposure to
credit risk.
At Company level, there is the risk of impairment of
inter-company receivables if the full amount is not deemed as
recoverable from the relevant subsidiary company. These amounts are
written down when their deemed recoverable amount is deemed less
than the current carrying value
Market risk - Foreign exchange risk
The Group is exposed to market risk, primarily relating to
foreign exchange from its US subsidiary operation and to US
suppliers. The Group does not hedge against market risks as the
exposure is not deemed sufficient to enter into forward contracts.
The Group has not sensitised the figures for fluctuations in
foreign exchange as the Directors are of the opinion that these
fluctuations would not have a material impact on the Financial
Information of the Group at the present time. The Directors will
continue to assess the effect of movements in market risks on the
Group's financial operations and initiate suitable risk management
measures where necessary.
Liquidity risk
The Group's continued future operations depend on its ability to
raise sufficient working capital through the issue of share capital
and generate revenue.
4. Critical accounting estimates and judgements
The preparation of the financial information in conformity with
IFRS requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial information and the reported amount of expenses during
the year. Actual results may vary from the estimates used to
produce this financial information.
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. Revisions to accounting estimates are recognised in
the period in which the estimate is revised where the revision
affects only that period, or in the period of the revision and
future periods where the revision affects both current and future
periods.
Significant accounting judgements, estimates and assumptions
Management has considered the significant accounting judgements,
estimates and assumptions and consider the following to be the
critical estimate and judgement which would materially affects the
Financial Statements.
Capitalisation of Intangible Assets - Development Costs (note
12)
The Directors make judgements in respect as to when development
costs are capitalised. The judgements made give specific
consideration of the requirements of IAS 38 "Intangible Assets"
including judgements over the commerciality of the products and
success in achieving regulatory approval.
Valuation of intangible assets (note 12)
The directors considered whether any impairments were required
on the value of the development costs capitalised in intangible
assets, in accordance with the accounting policy. Where applicable,
the recoverable amounts of cash generating units have been
determined based on value in use calculations using information
from third parties and an internal evaluation of future income
streams in conjunction with the development stage the Group has
reached at any one stage. These calculations require the entity to
estimate future cash flows expected to arise from the cash
generating unit and apply a suitable discount rate, based on market
conditions in order to calculate present value. They also include
judgements about the products obtaining the necessary regulatory
approvals in terms of assessing the quality and attributes of the
products and their likelihood of success after undergoing the
examination and testing processes required to obtain clearance.
There is also a judgement as to their suitability and acceptability
in terms of it being a novel yet safe product and that it can
function in these terms when compared with a predicate comparable
device in that it will and can perform at least as well as the
accepted predicate device. The directors have concluded that no
impairment charge is necessary.
5. Segment information
Management has determined the operating segments based on
reports reviewed by the Board of Directors that are used to make
strategic decisions. During the periods presented the Group had
interests in two key geographical segments, being the UK and the
USA. The Group is concentrating on developing one product at a time
and is currently focussing on its Cervi-LOK product. However, it
has incurred development and patent costs on each of its products
and these have been separated out in note 12 on Intangible
assets.
Group
UK USA Total
Year to 29 March 2023 GBP GBP GBP
-------------------------------- ---------- --------- ----------
Loss from operations
per reportable segment (804,160) (305) (804,465)
--------------------------------- ---------- --------- ----------
Depreciation (1,566) - (1,566)
Finance cost (7,642) - (7,642)
Income tax 199,007 - 199,007
Additions to non-current
assets 325,437 37,635 363,072
Reportable segment assets 3,569,905 134,161 3,704,066
Reportable segment liabilities (875,145) (14,826) (889,971)
--------------------------------- ---------- --------- ----------
UK USA Total
Year to 29 March 2022 GBP GBP GBP
-------------------------------- ---------- --------- ----------
Loss from operations
per reportable segment (936,360) (681) (937,641)
--------------------------------- ---------- --------- ----------
Depreciation (1,354) - (1,354)
Finance cost (3,165) - (3,165)
Income tax 87,613 - 87,613
--------------------------------- ---------- --------- ----------
Additions to non-current
assets 789,079 62,299 851,378
Reportable segment assets 3,165,281 96,525 3,261,806
Reportable segment liabilities (576,857) (40,222) (617,079)
--------------------------------- ---------- --------- ----------
6. Expenses by nature
Year ended Year ended
29 March 29 March
Group 2023 2022
GBP GBP
--------------------------------------- ---------- ------------
Consultancy fees 188,552 277,286
Salaries 240,333 216,933
Professional and legal costs 200,035 151,550
Conference/Registration costs - 1,870
Marketing & PR 46,955 77,275
Website costs 4,340 4,200
Office costs 31,043 38,783
Premises costs 47,159 48,351
Travel, entertainment and subsistence
costs 11,398 49,760
Meeting expenses 274 1,738
Insurance 13,460 12,404
Other Administration expenses 62,269 65,363
Gain in fair value of digital asset at
reporting date - (7,872)
845,818 937,641
---------- ------------
7. Auditor's Remuneration
Services provided by the group's auditor and its associates
During the year, the Group (including its overseas subsidiaries)
obtained the following services from the Company's auditor and its
associates:
Year ended Year ended
29 March 29 March
2023 2022
GBP GBP
------------------------------------------- ---------- ----------
Fees payable to the Company's auditor
and its associates for the audit of the
Parent Company and consolidated financial
statements 35,000 30,750
35,000 30,750
---------- ----------
8. Employee benefits expenses
The number of employees were as follows:
Number of Employees
Year ended Year ended
Group and Company 29 March 2023 29 March 2022
Directors 2 2
Employees 1 1
All of the research and development was completed by external
consultants, whose costs are shown in Note 6. Ian Roberts
remuneration includes GBPNil (2022: GBP41,667) consultancy fees.
Other directors provided consultancy services to the Group, details
of their remuneration are detailed below. All amounts are short
term in nature:
Year ended Year ended
Group and Company 29 March 2023 29 March 2022
GBP GBP
--------------------------------------- ------------ --------------
Ian Roberts 100,000 100,000
Laurence Strauss 8,333 -
Norman Lott 60,000 60,000
Martin Armstrong 12,000 58,600
Annabel Schild 12,000 8,000
Dr Timothy Evans 12,000 8,000
Nick Patel 12,000 10,000
Employees Salaries 32,333 24,000
Employers NIC 18,815 10,816
267,481 279,416
------------ --------------
The average number of directors in the year to 29 March 2023 was
6 (2022: 6).
There were no pension benefits paid or payable to any of the
directors in any of the periods under review.
9. Finance expense
Year ended Year ended
29 March 29 March
Group 2023 2022
GBP GBP
------------------------- ------------ ------------
Other interest expense 3,628 486
Bank and finance charges 4,015 2,679
7,642 3,165
------------ ------------
10. Taxation
Tax recognised in profit or loss
Group Year ended Year ended
29 March 2023 29 March
GBP 2022
GBP
----------------------------------------- ----------------- ---------------- ---
Current tax credit 199,007 87,613
Deferred tax - -
----------------------------------------- ----------------- ---------------- ---
Net tax credit 199,007 87,613
----------------------------------------- ----------------- ---------------- ---
Year ended
29 March Year ended
2023 29 March 2022
GBP GBP
------------------------------------------------ ----------- ---------------
Loss before tax (853,461) (940,806)
================================================ ----------- ---------------
Standard rate of UK corporation tax 19% 19%
Loss on ordinary activities before tax
multiplied by standard rate UK corporation
tax (162,158) (178,753)
Tax adjustment - -
Unrelieved tax losses carried forward 162,158 178,753
UK research and development tax credit 199,007 87,613
----------- ---------------
Tax credit 199,007 87,613
----------- ---------------
At 29 March 2023, the Group are carrying forward estimated tax
losses of GBP2.07m (2022: GBP1.92m) in respect of various
activities over the years. The Company did not recognise a deferred
income tax credit due to uncertainty concerning the timescale of
its recoverability.
11. Earnings per share
Basic and diluted earnings per share is calculated by dividing
the profit attributable to equity holders of the Company by the
weighted average number of ordinary shares in issue during the
year, excluding ordinary shares purchased by the Company and held
as treasury shares. Diluted EPS is not shown as the Group is loss
making.
Profit attributable to equity holders Year ended Year ended
of the Company 29 March 2023 29 March
2022
Loss attributable to equity holders
of the Company (654,454) (853,193)
Weighted average number of ordinary
shares in issue 115,516,050 98,491,414
--------------- -----------
Earnings per share basic and diluted
(pence) (0.57) (0.87)
=============== ===========
12. Intangible assets
Software Development Development Development Patent
Development costs costs costs rights Total
------------
Cervi-LOK Faci-LOK GRASP
Group GBP GBP GBP GBP GBP GBP
-------------------------- ------------ ----------- ----------- ------------- ------- ---------
Cost
As at 30 March
2021 - 957,330 423,874 486,529 173,044 2,040,777
------------ ----------- ----------- ------------- ------- ---------
Additions 206,000 716,769 - - 134,609 1,057,378
Disposals - - - - - -
------------ ----------- ----------- ------------- ------- ---------
As at 29 March
2022 206,000 1,674,099 423,874 486,529 307,653 3,098,155
------------ ----------- ----------- ------------- ------- ---------
Additions - 354,815 - - 8,256 363,071
Disposals - - - - - -
------------ ----------- ----------- ------------- ------- ---------
As at 29 March
2023 206,000 2,028,914 423,874 486,529 315,909 3,461,226
------------ ----------- ----------- ------------- ------- ---------
Amortisation/Impairment
As at 30 March
2022 - - - - - -
------------ ----------- ----------- ------------- ------- ---------
As at 29 March
2023 - - - - - -
------------ ----------- ----------- ------------- ------- ---------
Net book value
------------ ----------- ----------- ------------- ------- ---------
As at 29 March
2022 206,000 1,674,099 423,874 486,529 307,653 3,098,155
------------ ----------- ----------- ------------- ------- ---------
As at 29 March
2023 206,000 2,028,912 423,874 486,529 315,909 3,461,226
------------ ----------- ----------- ------------- ------- ---------
Software Development Development Development Patent
Development costs costs costs rights Total
------------
Cervi-LOK Faci-LOK GRASP
Company GBP GBP GBP GBP GBP GBP
----------------------------- ------------ ----------- ------------- ----------- ------- -----------
Cost
As at 30 March
2021 - 950,215 423,874 486,529 145,933 2,006,551
------------ ----------- ------------- ----------- ------- -----------
Additions 206,000 655,751 - - 133,328 995,079
Disposals - - - - -
------------ ----------- ------------- ----------- ------- -----------
As at 29 March
2022 206,000 1,605,966 423,874 486,529 279,261 3,001,630
------------ ----------- ------------- ----------- ------- -----------
Additions - 319,023 - - 6,414 325,437
Disposals - - - - -
------------ ----------- ------------- ----------- ------- -----------
As at 29 March
2023 206,000 1,924,989 423,874 486,529 285,675 3,327,067
------------ ----------- ------------- ----------- ------- -----------
Amortisation/Impairment
As at 30 March
2022 - - - - - -
------------ ----------- ------------- ----------- ------- -----------
As at 29 March
2023 - - - - - -
------------ ----------- ------------- ----------- ------- -----------
Net book value
------------ ----------- ------------- ----------- ------- -----------
As at 29 March
2022 206,000 1,605,966 423,874 486,529 279,261 3,001,630
------------ ----------- ------------- ----------- ------- -----------
As at 29 March
2023 206,000 1,924,989 423,874 486,529 279,261 3,327,067
------------ ----------- ------------- ----------- ------- -----------
The Group is currently actively developing, with a view to
commercialising, three key medical products as follows:-
- Faci-LOK spinal system
- Cervi-LOK spinal system
- GRASP Laminoplasty system
Development costs comprise of costs incurred by third party
contractors and management's view of time spent by individual
consultants The Group and Parent Company capitalise development
costs and details of the accounting policy can be found in Note
2.7.
The intangible assets are reviewed for impairment annually and
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The recoverable
amount of intangible assets is determined based on a value in use
calculation using cash flow forecasts derived from the most recent
financial model information available, using a conservative
discount rate of 20% based on the cost of capital. The resultant
net present values calculated are well in excess of the carrying
value of the intangible assets and as of 29 March 2023, no
impairment is necessary.
The intangible assets have not been amortised in the periods
covered in these statements as the assets are still in their
development stage and not yet been put in to use/commercialised.
The key estimate used by management is in respect of the timing of
the commercialisation of the products and when the first revenues
commence.
13. Tangible assets
Software Office Furniture
development equipment and Fixtures Total
Group GBP GBP GBP GBP
--------------------------- ------------ ---------- ------------- --------
Cost
As at 30 March 2021 30,000 2,469 3,059 35,528
Additions - - 1,239 1,239
Disposals (30,000) - - (30,000)
------------ ---------- ------------- --------
As at 29 March 2022 - 2,469 4,298 6,767
Additions - 707 - 707
Disposals - - - -
------------ ---------- ------------- --------
As at 29 March 2023 - 3,176 4,298 7,474
Accumulated depreciation
------------ ---------- ------------- --------
As at 30 March 2021 - 618 612 1,230
------------ ---------- ------------- --------
Charge for the year - 618 736 1,354
------------ ---------- ------------- --------
As at 29 March 2022 - 1,236 1,348 2,584
------------ ---------- ------------- --------
Charge for the year - 707 859 1,566
------------ ---------- ------------- --------
As at 29 March 2023 - 1,943 2,207 4,150
------------ ---------- ------------- --------
Net book value
------------ ---------- ------------- --------
As at 29 March 2022 - 1,233 2,950 4,183
------------ ---------- ------------- --------
As at 29 March 2023 - 1,233 2,091 3,324
------------ ---------- ------------- --------
Software Office Furniture
development equipment and Fixtures Total
Company GBP GBP GBP GBP
--------------------------- ------------ ---------- ------------- --------
Cost
As at 30 March 2021 30,000 2,469 3,059 35,528
Additions - - 1,239 1,239
Disposals (30,000) - - (30,000)
------------ ---------- ------------- --------
As at 29 March 2022 - 2,469 4,298 6,767
Additions - 707 - 707
Disposals - - - -
------------ ---------- ------------- --------
As at 29 March 2023 - 3,176 4,298 7,474
Accumulated depreciation
------------ ---------- ------------- --------
As at 30 March 2021 - 618 612 1,230
------------ ---------- ------------- --------
Charge for the year - 618 736 1,354
------------ ---------- ------------- --------
As at 29 March 2022 - 1,236 1,348 2,584
------------ ---------- ------------- --------
Charge for the year - 707 859 1,566
------------ ---------- ------------- --------
As at 29 March 2023 - 1,943 2,207 4,150
------------ ---------- ------------- --------
Net book value
------------ ---------- ------------- --------
As at 29 March 2022 - 1,233 2,950 4,183
------------ ---------- ------------- --------
As at 29 March 2023 - 1,233 2,091 3,324
------------ ---------- ------------- --------
14. Right of use assets
Group and Company
GBP
Cost
----------
As at 29 March 2022 137,251
Additions -
Disposals (137,251)
----------
As at 29 March 2023 -
----------
Depreciation
----------
As at 29 March 2022 16,713
Charge for the year 20,448
Disposal (37,161)
----------
As at 29 March 2023 -
----------
Net Book Value
----------
As at 29 March 2023 -
----------
As at 29 March 2022 120,538
----------
The Right of Use asset is no longer valid as the Company gave up
its office leases in the US.
15. Investment in Subsidiaries
Year ended Year ended
29 March 29 March
2023 2022
Company GBP GBP
--------------------- ---------- ----------
As at 30 March 2022 - -
Additions - -
--------------------- ---------- ----------
Cost at 29 March 2023 - -
--------------------- ---------- ----------
The following are the principal subsidiaries of the Company:
Principal Share
Name of Place Registered Parent Class capital
company of Business office address company of shares held Nature of business
-------------- ------------- ------------------- ------------- ------------ -------- ------------------------
TruSpine England Spectrum House TruSpine Ordinary 100% Medical Devices
Technologies & Wales Af33 Beehive Technologies Company developing
International Ring Road, Limited spinal fusion products
Limited London Gatwick
Airport, Gatwick,
England, RH6
0LG
TruSpine United 90 State Street, TruSpine Ordinary 100% Medical Devices
Technologies States Suite 700, Technologies Company developing
International of America Albany NY, Limited spinal fusion products
Inc 1220, USA
16. Trade and other receivables
Group Group Company Company
Year ended Year ended Year ended Year ended
29 March 29 March 29 March 29 March
2023 2022 2023 2022
GBP GBP GBP GBP
--------------------------- ----------- ----------- ----------- -----------
VAT receivable 10,143 5,256 10,143 5,256
Other receivables 205,096 68,267 205,096 68,267
Amount due from subsidiary
company - - 365,642 305,542
215,239 73,523 580,881 379,065
----------- ----------- ----------- -----------
Other receivables relate to monies owed by third parties as
follows:
Other receivables include monies owed to the Company by OPP
Systems Ltd as detailed in note 25 on Related parties. None of
these are past due.
17. Digital assets
Group and Company 29 March 29 March
2023 2022
GBP GBP
Balance as at 29 March 2022 82,474 220,602
Crypto assets sold (82,474) (146,000)
Fair value through profit and loss - 7,872
--------- ----------
Balance as at 29 March 2023 - 82,474
========= ==========
At the year end the Company held Nil (2022: 108,206) USDT tokens
representing a fair value of GBPNil (2021: GBP82,474). USDT is a
cryptocurrency with tokens issued by Tether Limited. USDT is a
stable coin, a type of cryptocurrency which aims to keep
cryptocurrency valuations stable and avoids the extreme volatility
of other cryptocurrencies while keeping value within the crypto
market.
18. Cash and cash equivalents
Group and Company
Year ended Year ended
29 March 29 March
2023 2022
GBP GBP
------------------------- ------------ ------------
Cash at bank and in hand 24,276 3,471
24,276 3,471
------------ ------------
The majority of the Group and Company's cash at bank is held
with institutions with an BAA1 credit rating. No interest rate
sensitivity has been applied on the grounds management consider the
impact to be immaterial.
19. Trade and other payables
Group Group Company Company
Year ended Year ended Year ended Year ended
29 March 29 March 29 March 29 March
2023 2022 2023 2022
GBP GBP GBP GBP
--------------- ----------- ----------- ----------- -----------
Trade payables 379,248 392,749 364,422 352,527
Loans 73,556 42,500 73,556 42,500
Accruals 124,873 133,100 124,873 133,100
Other payables 153,647 48,730 153,647 48,730
731,324 617,079 716,498 576,857
----------- ----------- ----------- -----------
Loan movements
Group Group Company Company
Year ended Year ended Year ended Year ended
29 March 29 March 29 March 29 March
2023 2022 2023 2022
GBP GBP GBP GBP
----------------------------- ----------- ----------- ----------- -----------
Opening balance 42,500 50,000 42,500 50,000
Borrowings during the period 35,000 - 35,000 -
Repayments of loans (3,944) (7,500) (3,944) (7,500)
73,556 42,500 73,556 42,500
----------- ----------- ----------- -----------
The company obtained a bounce bank loan through the government
scheme from HSBC bank. Interest is charged on the loan at a rate of
2.5%. The loan is unsecured and is repayable in monthly instalments
over a period of 5 years.
20. Lease liabilities
Group and Company 29 March 29 March
2023 2022
GBP GBP
Brought forward 122,991 137,251
Payment of lease liabilities (24,139) (17,339)
Accretion of interest 3,069 3,079
Surrender of leases (101,921) -
Carried forward - 122,991
========== =========
Maturity
------------- --- --------
Current - 14,261
Non-current - 108,730
- 122,991
================= ========
21. Long Term Loans
Group and Company 29 March 29 March
2023 2022
GBP GBP
Brought forward - -
Borrowings during the period 200,000 -
Repayments of loans - -
Carried forward 200,000 -
========= =========
On 27 February 2023 the Company received a funding loan bearing
an interest rate of 12% per annum. On repayment of the Funding
Loan, the Company will issue a warrant over 8,000,000 new ordinary
shares in the Company with an exercise price of 2.5 pence per
share, this warrant will expire on the second anniversary from the
date of issue. The loan carries a fixed and floating charge over
the Company's intellectual property to the lender.
22. Financial risk management
Foreign Exchange
The Group operates internationally and is exposed to foreign
exchange risk arising from commercial transactions, translation of
assets and liabilities and net investments in foreign operations.
Exposure to commercial transactions arises from purchases by
operating companies in currenc i es other than the companies'
functional currency. Currency exposures are reviewed regularly. The
Group considers to have an immaterial exposure to foreign exchange
risk due to the current limited balances held within the Group's
overseas entities and as a result has not disclosed the impact of
foreign exchange movements thereon as they do not consider them to
be material.
Interest rate risk
Interest rate risk refers to the risk that fluctuations in
interest rates cause losses to the Company. The Group and Company
have no exposure to interest rate risk except on cash and cash
equivalent which carry variable
interest rates
At 29 March 2023, the Group and Company has a GBP bank loan of
GBP38,556 (2022: GBP42,500) at a rate of 2.5% per annum. Given the
quantum of the balances the board do not consider that any
reasonable considered changes to interest rates would materially
impact the loan interest payable and as such have not been
disclosed.
Liquidity risk
The Group's continued future operations depend on its ability to
raise sufficient working capital through the issue of share capital
and generate revenue.
Liquidity risk refers to the risk that the Company has
insufficient cash resources to meet working capital requirements.
The Group and Company manages its liquidity requirements by using
both short- and long-term cash flow projections and raises funds
through debt or equity placings as required. Ultimate
responsibility for liquidity risk management rests with the Board
of Directors, which has built an appropriate liquidity risk
management framework for the management of the Group's short-,
medium- and long-term funding and liquidity management
requirements.
The Group closely monitors and manages its liquidity risk. Cash
forecasts are regularly produced, and sensitivities run for
different scenarios. The profile of what the Group consider to be
its key payable/debt profile is as follows:
Group Group Company Company
2023 2022 2023 2022
Categorisation of Borrowings GBP GBP GBP GBP
--------------------------------- ------- ------- ------- -------
Less than six months - Loans and
borrowings - - - -
Less than six months - Trade and
other payables 616,415 574,579 601,589 534,357
Between six months and a year 73,556 42,500 73,556 42,500
Over one year 200,000 - 200,000 -
Capital risk management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern.
It is the aim of the Directors to manage the capital structure
in order to reduce the overall cost of capital. The capital
comprises the shareholders' equity and going forward it is also
expected to include cash and cash equivalent, and borrowings.
The Group defines capital based on the total equity of the
Company. The Group monitors its level of cash resources available
against future planned operational activities and may issue new
shares in order to raise further funds from time to time.
There are currently no restrictions on the capital of the
Company.
Financial instruments by category
Financial Financial Financial Financial
assets at liabilities assets at liabilities
amortised at amortised amortised at amortised
cost 29 cost 29 cost 29 cost 29
Group March 2023 March 2023 March 2022 March 2022
Categorisation of Financial Assets
and Liabilities GBP GBP GBP GBP
-------------------------------------- ----------- ------------- ----------- -------------
Other receivables 205,096 - 68,268 -
Cash and cash equivalents 24,276 - 3,471 -
Interest-bearing loans and borrowings - 273,556 - 42,500
Trade and other payables - 616,415 - 574,579
Lease liability - - - 122,991
-------------------------------------- ----------- ------------- ----------- -------------
Financial Financial Financial Financial
assets at liabilities assets at liabilities
amortised at amortised amortised at amortised
cost 29 cost 29 cost 29 cost 29
Company March 2023 March 2023 March 2022 March 2022
Categorisation of Financial Assets
and Liabilities GBP GBP GBP GBP
-------------------------------------- ----------- ------------- ----------- -------------
Other receivables 205,096 - 68,267 -
Cash and cash equivalents 24,276 - 3,471 -
Amount due from subsidiary Company 365,642 305,542
Interest-bearing loans and borrowings - 273,556 - 42,500
Trade and other payables - 601,589 - 534,357
Lease liability - - - 122,991
-------------------------------------- ----------- ------------- ----------- -------------
23. Equity and other reserves
Group and Company
Share
based
Number Share Share payment Other
Group of shares capital premium reserve reserves Total
GBP GBP GBP GBP GBP
-------------------- ------------- -------- ----------- -------- --------- ---------
Issued and fully
paid
------------- -------- ----------- -------- --------- ---------
As at 29 March 2021 93,983,967 9,398 3,062,103 17,007 (205,000) 2,883,508
------------- -------- ----------- -------- --------- ---------
Movement during
the year 8,129,902 777 720,112 27,212 - 748,101
------------- -------- ----------- -------- --------- ---------
As at 29 March 2022 102,113,869 10,175 3,782,215 44,219 (205,000) 3,631,609
------------- -------- ----------- -------- --------- ---------
Movement during
the year 16,198,000 1,620 752,854 27,211 - 781,685
------------- -------- ----------- -------- --------- ---------
As at 29 March 2023 118,311,869 11,795 4,535,069 71,430 (205,000) 4,413,294
------------- -------- ----------- -------- --------- ---------
During the year, 16,250,000 warrants were granted. The total
number of outstanding warrants granted amount to 30,737,789 as at
29 March 2023.
In May 2022 the Company raised GBP700,000 before costs through a
Fundraise of 14,000,000 new Ordinary shares at a price of 5p per
share comprising a Placing and a Subscription. 10,800,000 New
Ordinary Shares were issued by way of the Placing raising gross
proceeds of GBP440,000 and 3,200,000 New Ordinary Shares issued
through the Subscription raising gross proceeds of GBP160,000. An
additional 1,550,000 shares were issued at a price of 5 pence per
ordinary share to third party creditors of GBP77,500 in lieu of
services rendered ("Settlement Shares"). Each Placing share,
Subscription share and Settlement Share issued had a warrant
attached (15,550,000 warrants) allowing the holder to subscribe for
one additional share in the Company at an exercise price of 7.5
pence for a period of 3 years from 31 May 2022 the date of
admission of the shares to trading on AQSE.
Fee Shares and Director Participation
Accrued director fees of GBP97,200 were settled through the
issue of 648,000 new ordinary shares on 31 May 2022 at a price of
15 pence per share ("Fee Shares").
Norman Lott and Nikunj Patel (directors of the Company)
participated in the Fundraise. Details of their participation are
set out in the table below along with the revised shareholdings of
the Directors following the issue of Fee shares.
Resultant shareholding following
Director Current Shares Fee Shares Subscription shares Admission
------------------- ---------------- ------------ --------------------- ------------------------------------------
Ian Roberts 861,111 - - 861,111
Norman Lott 1,750,000 - 200,000 1,950,000
Martin Armstrong 333,333 408,000 - 741,333
Annabel Schild 4,166,667 80,000 - 4,246,667
Dr Tim Evans 166,667 80,000 - 246,667
Nikunj Patel 250,000 80,000 1,000,000 1,330,000
Total 7,527,778 648,000 1,200,000 9,375,778
The total number of New Ordinary Shares issued on 31 May 2022
were 16,198,000 giving a total number of ordinary shares in issue
of 118,311,869 at the date of the signing of this statement.
As part of their fees Oberon and Peterhouse were granted
warrants over 540,000 new ordinary shares exercisable at a price of
7.5 pence per share at any time until the third anniversary of
Admission.
24. Share based payments
On 20 August 2020 the Company granted 877,789 warrants to Cairn
the Company's corporate adviser exercisable at a price of GBP0.36
for a period of up to five years. The warrants were granted in
return for services carried out in relation to the listing of the
Company o n 20 August 2020 on the Aquis Stock Exchange Growth
Market. As a result of this the fair value of the share options was
determined at the date of the grant using the Black Scholes model,
using the following inputs:
Share price at the date of amendment 36p
Strike price 36p
Volatility 50%
Expected life 1,825 days
Risk free rate 0.5%
The share-based payment charge for these warrants for the year
to 29 March 2023 was GBP27,211, which has been taken to the
share-based payment reserve and the resultant fair value of the
warrants as at 29 March 2023 was determined to be GBP71,430 (2022:
GBP44,219).
During the year the Company issued 16,250,000 (2022: 13,610,000)
warrants attached to shares issued to investors who took part in
the fundraising on 31 May 2022. As there were no services provided
in respect of these warrants the Company did not incur a
share-based payment expense.
Details on the warrants outstanding at the year end are as
follows:
Weighted average exercise Weighted average contracted
No of warrants price life
-------------------------------- ---------------- -------------------------------- --------------------------------
At 29 March 2022 14,487,789 15p 3 years
Warrants issued - 31 May 2022 16,250,000 7.5p 3 years
At 29 March 2023 30,737,789 10.92p
---------------- -------------------------------- --------------------------------
25. Commitments and contingencies
There are no further single matters pending that the Group
expects to be material in relation to the Group's business,
financial result or results of operations.
At the balance sheet date, the Group had outstanding commitments
for future minimum lease payments, which fall due as follows:
2023 2022
GBP GBP
Land and buildings
Within one year 1,271 2,721
Within 2-5 years - -
Total 1,271 2,721
====== ======
Commitments represent rentals payable by the Company for its
office properties on short term and low value leases.
26. Related parties
The following transactions were carried out with related parties:
Directors' transactions
Ian Roberts provided consultancy services while he was a director
amounting to GBPNil (2022: GBP41,667) during the year as detailed
in note 8. The non-executive directors provided consultancy
services to the Company, details of their remuneration are
covered in note 8.
Elizabeth Roberts, the wife of Ian Roberts, while he was a
director provided consultancy services for office management
amounting to GBPNil (2022: GBP10,000) for the year.
Loans to OPP systems Limited
OPP Systems Limited is a related party of the Group because
Norman Lott was a director of the company for part of the year, he
resigned on 21 December 2022.
Loan funds were extended to OPP Systems Limited by the Company.
The amounts payable at each period end are as follows:
Year ended Year ended
29 March 2023 29 March 2022
OPP Systems Limited GBP GBP
-------------------- --------------- ---------------
29 March 2022 55,000 55,000
-------------------- --------------- ---------------
Amount repaid (28,000) -
-------------------- --------------- ---------------
Amount written off (25,000) -
-------------------- --------------- ---------------
OPP Systems Limited 2,000 55,000
-------------------- --------------- ---------------
These amounts are repayable on demand, unsecured and interest is
chargeable at a rate of 12%.
The loan was repaid on 12 May 2023.
Transactions with Copian Capital Partners Limited
Copian Capital Partners Limited is a related party of the Group
because Norman Lott was a director of the company, he resigned on
14 February 2023.
Copian Capital Partners Limited provide management services to
the Company. Copian Capital Partners Limited made the following
charges to the Company together with the balances owing as detailed
below:
Year ended Year ended
29 March 2023 29 March 2022
GBP GBP
-------------------------------------------- --------------- ---------------
Services charged by Copian Capital Partners
Limited 53,439 48,000
Balance owed by Copian Capital Partners
Limited to the Company - 8,665
Balance owed by the Company to Copian
Capital Partners Limited 156 7,356
27. Ultimate controlling parties
The Directors consider that there is no ultimate controlling
party of the Company.
28. Events after the reporting date
On 24 July 2023 the Company's FDA 510(k) submission for
Cervi-LOK was made to the FDA.
On 15 August 2023 the Company raised GBP50,000 before costs
through a Subscription of 2,000,000 new Ordinary shares at a price
of 2.5p per share. Following the issue of the 2,000,000 new
ordinary shares the total number of ordinary shares in the Company
at the date of the signing of this statement was 120,311,869.
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END
NEXSEAEFAEDSELU
(END) Dow Jones Newswires
September 29, 2023 02:00 ET (06:00 GMT)
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