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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Intelligent Ultrasound Group Plc | LSE:MED | London | Ordinary Share | GB00BN791Q39 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 14.50 | 14.00 | 15.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2021 to May 2024
TIDMIUG
RNS Number : 9529J
Intelligent Ultrasound Group PLC
03 May 2022
The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is considered to be in the public domain.
Intelligent Ultrasound Group plc
("Intelligent Ultrasound" or the "Group" or the "Company")
Unaudited Preliminary Results for the Year Ended 31 December 2021
Intelligent Ultrasound Group plc (AIM: IUG), the 'classroom to clinic' ultrasound company, specialising in artificial intelligence (AI) software and simulation, announces its unaudited preliminary results for the year ended 31 December 2021, showing a positive year of simulation revenue growth, a small reduction in operating losses and encouraging progress in the clinical AI portfolio, despite the restrictions of the pandemic.
Financial highlights:
-- Revenue grew by 47% to GBP7.6m (2020: GBP5.2m) -- Operating loss reduced to GBP4.3m (2020: GBP4.5m) -- Net cash used in operating activities reduced by 20% to GBP1.8m (2020: GBP2.3m) -- Cash and cash equivalents of GBP5.0m (2020: GBP8.8m)
Operational highlights:
-- GE Healthcare continued the rollout of the ScanNav Assist AI technology on the Voluson SWIFT ultrasound machine
-- ScanNav Anatomy Peripheral Nerve Block (PNB), the Group's second AI product, received CE approval in April and was subsequently launched in the UK market
-- NeedleTrainer, the Group's third AI-related product, which incorporates the PNB trainer software to teach ultrasound-guided needling to medical professionals, was soft launched in October
-- BabyWorks, our new simulator platform aimed at the global neonate and paediatric markets, was launched in September
Post year end:
-- The new HeartWorks 3D Echo simulator module was launched in January 2022
-- In January 2022 we announced an extension to our existing exclusive women's healthcare AI agreement with GE Healthcare that was signed at the end of December 2021
Current trading and outlook
-- We have had a strong start to the year and, even with some element of first half weighting, we expect full year revenue in 2022 to be ahead of current market expectations
Commenting on the results, Riccardo Pigliucci, Chairman of Intelligent Ultrasound said: "This has been a positive year for the Group. We have increased Group revenue by almost 50% and we expect this growth to continue in 2022. In addition, we are building an excellent partnership with GE Healthcare, the world's leading ultrasound company, and have launched two new AI-related products into the exciting real-time ultrasound imaging market, as well as introducing a number of product extensions to our simulation portfolio. This has been achieved despite the ongoing pandemic that severely limited the critical phase of new product introduction at shows and medical exhibitions. These restrictions have also impacted the US based studies required for regulatory clearance of our new AI products. However, with restrictions around the world relaxing, we are focussed on growing sales in both the more established simulation market and the newer, but potentially higher growth AI imaging market. We therefore continue to balance cash, R&D investment in new AI products and expansion of our sales networks against this anticipated sales growth curve, but we remain excited about the potential of our 'Classroom to Clinic' business."
For further information, please contact:
Hot Features
Premium
Intelligent Ultrasound Group www. intelligentultrasound.com
plc
Stuart Gall, CEO Tel: +44 (0)29 2075 6534
Helen Jones, CFO
Cenkos Securities - Nominated Advisor
and
Broker
Giles Balleny/Max Gould (Corporate Tel: +44 (0)20 7397 8900
Finance)
Michael Johnson/Julian Morse
(Sales)
Walbrook PR Tel: +44 (0)20 7933 8780 or intelligentultrasound@walbrookpr.com
Anna Dunphy/Paul McManus Mob: +44 (0)7876 741 001 / Mob: +44
(0)7980 541 893
About Intelligent Ultrasound Group
Intelligent Ultrasound (AIM: IUG) is one of the world's leading 'classroom to clinic' ultrasound companies, specialising in real-time hi-fidelity virtual reality simulation for the ultrasound training market ('classroom') and artificial intelligence-based clinical image analysis software tools for the diagnostic medical ultrasound market ('clinic'). Based in Cardiff in the UK and Atlanta in the US, the Group has two revenue streams:
Simulation
Real-time hi-fidelity ultrasound education and training through simulation. Our main products are the ScanTrainer obstetrics and gynaecology training simulator, the HeartWorks echocardiography training simulator, the BodyWorks Eve Point of Care and Emergency Medicine training simulator with covid module and the new BabyWorks Neonate and Paediatric training simulator. To date over 1,350 simulators have been sold to over 650 medical institutions around the world.
Clinical AI software
Deep learning-based algorithms to make ultrasound machines smarter and more accessible using our proprietary ScanNav ultrasound image analysis technology. Current products on the market utilising this technology are GE Healthcare's SonoLyst software that is incorporated in their Voluson SWIFT ultrasound machine; ScanNav Anatomy PNB that simplifies ultrasound-guided needling by providing the user with real-time AI-based anatomy highlighting for a range of medical procedures; and NeedleTrainer that teaches real-time ultrasound-guided needling and incorporates ScanNav Anatomy PNB.
www.intelligentultrasound.com
NOTE: ScanNav Anatomy PNB is CE approved, but not yet available for sale in the US or any other territory requiring government approval for this type of product.
CHAIRMAN'S STATEMENT
This has been a year of significant progress across our 'classroom to clinic' ultrasound business. We have increased Group revenue by 47% with the majority of this growth coming from our established ultrasound simulation sales operation, which contributed GBP4.5m gross profit (2020: GBP3.2m) towards the Group's overheads. We launched two new artificial intelligence (AI) related products into the real-time clinical ultrasound image analysis market, and have also added to our ultrasound simulation portfolio. In addition, we are building an excellent partnership with GE Healthcare, the world's leading ultrasound company - that has been expanded with a new product extension to the agreement. We slightly reduced our operating loss to GBP4.3m (2020: GBP4.5m). All this has been achieved despite the ongoing pandemic that has restricted activities, such as the US based clinical studies required for new product regulatory clearance, as well as the critical face-to-face introduction of new products at shows and medical exhibitions.
Strategy
We continue to progress our 'Classroom to Clinic' ultrasound strategy:
-- We are one of the world's leading real-time ultrasound simulation companies and are growing the Group's 'classroom' related revenues through sales of our existing simulator platforms; and by expanding our range of ultrasound training simulators into new medical market segments
-- This 'classroom' expertise in teaching the hard to learn real-time ultrasound scanning skills has enabled us to develop real-time AI software that aims to make ultrasound scanning in the clinic easier to learn and simpler to use. We are building our 'clinic' related AI revenues through royalty income from ultrasound machine manufacturers, such as our partnership with GE Healthcare, that incorporates our ScanNav AI technology in their latest women's health ultrasound systems; by direct sales of our newly launched proprietary stand-alone AI driven - ScanNav Anatomy and NeedleTrainer systems; and by expanding our AI-based product offerings with new proprietary products for new medical markets
We believe the on-going expansion of all parts of the 'Classroom to Clinic' business confirms our strategic positioning, and we look forward to continuing this growth in 2022.
Board and governance
The Board aims to maintain the highest standards of corporate governance and is successfully transitioning from a typical founder and venture driven board to a board more typical of a mature public entity.
Following an independent review of our Board and meetings with a number of our major shareholders, in 2021 we set ourselves the goal of increasing the diversity and relevant experience of the Directors in the markets we now serve and the technologies we utilise; with the longer-term aim of also reducing the size of the Board.
I'm pleased to say that we are well on the way to achieving this goal:
-- During 2021 we appointed two new, highly experienced Non-executive Directors (NEDs) - Ingeborg Øie and Michèle Lesieur
-- During 2022 two current NEDs are expected to retire from the Board
-- By the end of 2023 we expect to have recruited two new NEDs and to have reduced the Board to seven members
In addition, during 2021, in compliance with ISS recommendation, I stepped down as a Member of the Remuneration and Audit Committees.
People
I would like to thank all our staff for working so hard and performing so well during the year. We had all hoped to see an end to the pandemic in 2021 and although the restrictions had an effect on elements of the business, such as remote regulatory trials and new product roll out, the team responded brilliantly and were able to minimise the negative impact of the pandemic.
Our head office in Cardiff has given us the space to conduct important study trials on site, as well as increased flexibility in the new hybrid work environment. We were also able to welcome some of our larger shareholders to our first in-house technology open day, where we were able to give hands-on demonstrations of both our new AI technology platforms, as well as all our simulation products.
ESG
I'm particularly pleased that we are presenting our first full ESG report in this year's annual report. Our CEO, Stuart Gall, has headed up our ESG Working Group and over the last year we've reviewed our carbon footprint, achieved carbon neutral status, and instigated several new initiatives to promote better practices for travel, hybrid working, employee engagement plus an emphasis, where possible, on buying and employing locally. We believe our business has a positive impact - locally, nationally and globally and look forward to continuing to build on this.
Outlook
With a growing range of both AI and simulation related products, a scalable operational base and pandemic related restrictions around the world relaxing, we have had a strong start to 2022. We have had a high number of NHS financial year-end orders in the first quarter, and we therefore expect revenue for 2022 to be ahead of current market expectations. We are focussed on growing sales in both the more established simulation market and the newer, potentially higher growth AI imaging market, but will continue to monitor cash and overheads against this anticipated sales growth curve and any future investment of new AI products and expansion of our sales networks. We remain excited about the potential of our 'Classroom to Clinic' business.
Riccardo Pigliucci
Non-executive Chairman
CEO REVIEW
AI remains a key element of our 'Classroom to Clinic' approach to ultrasound as we expand both our simulation and clinical AI revenue streams. The report below details the progress made in 2021 and the key challenges faced during the year.
SIMULATION
Training medical professionals in the specialist skills required to competently scan a patient using the diagnostic capabilities of ultrasound is a key foundation stone of our business. We understand the clinical needs of medical professionals who rely on real-time ultrasound imaging and consider ourselves one of the world's leading companies in this growing market.
We design, develop and sell some of the world's leading real-time, hi-fidelity ultrasound training simulators for teaching ultrasound scanning to medical professionals and medical device companies. Our simulators are, in the main, high value capital equipment sales sold through our direct sales forces in the US and UK, as well as through a network of resellers covering the rest of the world.
During the year ultrasound simulation revenue grew by 43% to GBP7.4m (2020: GBP5.2m) and contributed GBP4.5m (2020: GBP3.2m) of gross profit towards the Group overheads. Over 650 medical institutions around the world now use our ultrasound simulators.
We also expanded our product range and now operate in the following markets:
-- Obstetrics and gynaecology (OBGYN) -- Echocardiography and anaesthesiology (ECHO) -- Emergency medicine and point-of-care (PoCUS) -- Critical care and intensive care -- Neonate and paediatrics
Research & Development
During the year, we invested GBP1.2m in simulation R&D (2020: GBP0.9m). The team focussed on developing the new BabyWorks ultrasound simulator platform for neonate and paediatric scanning, the new HeartWorks 3D Echo module, and a number of product upgrades that aim to provide remote eLearning capability for our HeartWorks and BodyWorks simulators, especially important in the current environment.
BabyWorks is an ultra-realistic baby manikin offering medical professionals a safe and effective training tool for point-of-care ultrasound (PoCUS) and echocardiography in paediatric and neonatal care. The combination of an anatomically accurate, tactile manikin combined with real patient ultrasound scans provides a high fidelity, precise scanning experience that replicates scanning a real baby. Initial feedback from the launch in the second half of 2021 has been very positive and we look forward to building sales during 2022.
Geographical Review
United Kingdom
Revenue increased by 76% to GBP2.5m (2020: GBP1.4m)
The UK had a record year, with spending on our simulators continuing to grow across all product lines. The launch of BabyWorks in the second half of 2021 was well received and combined with the HeartWorks 3D Echo simulator that was launched in January 2022, there continues to be strong purchasing interest in the UK market.
We look forward to continuing the growth of the UK revenues in 2022.
North America
Revenue increased by 18% to GBP2.7m (2020: GBP2.3m)
Despite the pandemic impacting access to hospitals in several important US states, sales in North America also grew to a record high. With an established operational base in Alpharetta, Georgia, we are expanding the sales team in 2022 to take advantage of the revenue potential in the North American market.
As with 2020, there were almost no major face-to-face trade exhibitions in the US during the year, but we continued to adapt well to the pressures of operating in a restricted market. During 2020 and 2021, the pandemic restrictions enabled products to be demonstrated live over the internet, and although it is expected that the medical profession will wish to revert to face-to-face product demonstrations in 2022, we will look to try and increase the use of this cost-effective demonstration tool. As such, during 2022 we will be upgrading the web demonstration facilities in Alpharetta to match the facilities in our head office in Cardiff.
As with the UK, the launch of BabyWorks and HeartWorks 3D Echo was well received by the market, and we look forward to growing our North American revenues in 2022.
Rest of the World
Revenue increased by 53% to GBP2.2m (2020: GBP1.4m)
This was a year of recovery for our reseller sales, although revenue is still 18% below our pre-pandemic sales of 2019. Reduced sales in a number of countries, including China and Germany, that continued to be affected by the pandemic, were offset by encouraging sales in Eastern Europe and Japan. In the second half of the year, we initiated a joint sales venture with Skills Meducation, one of our Western Europe resellers, whereby we are jointly investing in a dedicated Intelligent Ultrasound salesperson. The long-term aim is to increase French sales to the equivalent UK level and, if successful, roll out to other reseller markets.
We have continued to provide training and product sales support from our head office web demonstration facilities and have been able to minimise sales and training related travel throughout the year. The BabyWorks new product launch was conducted entirely online and was well received. We do, however, expect sales support and training related costs to increase in 2022.
With the pandemic restrictions easing in the many of our markets, we look forward to growing reseller revenues in 2022 and beyond.
Challenges to our simulation revenue streams
Ultrasound continues to be a growing medical diagnostic tool, with increasing demand for training that can enhance a medical practitioner's scanning skills. However, there have historically always been capital expenditure limitations on medical training budgets for high value simulators within the global healthcare market. As such funds for purchasing departments can be hard to access and revenues difficult to predict, especially during times of government cutbacks, political upheaval or global pandemics, when funds can be diverted from training to frontline care.
During 2022 we expect the restrictions caused by the pandemic to recede in the majority of our markets, but there may be some exceptions that impact sales in countries such as China, where zero tolerance Covid-19 policies are operated and regions can be locked down at short notice, but we would not expect these to materially impact the Group. The absence of exhibitions and conferences has restricted the growth of the Group's lead pipeline during the pandemic and there is a risk that the leads from our increased number of email campaigns may have a lower sales conversion rate.
The impact of rising inflation causing medical device costs to rise faster than hospital budgets in 2022/23 could potentially reduce future health spending.
The risk of inflation related interest rate rises pushing countries into recession could also impact on medical training budgets in the longer term.
Although we do not sell to or purchase from the Ukraine, sales to our Russian reseller are currently on hold and we have adjusted our 2022/23 forecasts accordingly. Russia accounted for 2% of our sales in 2021.
The purchasing decisions in the high-fidelity sector of the ultrasound simulation market continue to be based on quality of training and value for money, rather than simply the lowest priced solution. During the year, we continued to respond well to new competitive products and pricing and margin pressures, by expanding our range of simulators that provide the highest standard of ultrasound training, offering a variety of purchase price points and increasing our eLearning options that can work in tandem with our hands-on training simulators.
2021 saw an increase in key component supply chain pressure and this remains a concern for companies of our size. Costs are increasing across the board and lead times are lengthening. Although we work closely with our suppliers, we have had to increase our key component stock holdings to provide some insurance against potential supply disruption and this is continuing in 2022. Despite the challenges, our current stock combined with our stock order commitments indicate we should be able to deliver all expected orders over the coming 12 months.
CLINICAL AI
A key part of the company's 'Classroom to Clinic' vision is to follow medical professionals, as they graduate out of the classroom-based simulation training environment and provide them with access to real-time AI-based clinical software that makes ultrasound easier to use.
This vision became a reality in 2021, with our ScanNav image analysis AI technology, which provides real-time support to clinicians whilst they are scanning, being incorporated into three products in the market:
-- GE Healthcare's SonoLyst software which is incorporated in their Voluson SWIFT ultrasound machine, utilises our ScanNav Assist technology
-- ScanNav Anatomy PNB (Peripheral Nerve Block) that simplifies ultrasound-guided needling by providing the user with real-time AI-based anatomy highlighting for a range of medical procedures
-- NeedleTrainer that teaches real-time ultrasound guided needling and incorporates ScanNav Anatomy PNB
We continue to follow a two-pronged go-to market strategy of:
-- Signing royalty-based, 'on-machine' licences for the provision of real-time AI software with the major manufacturers, whose established sales networks can provide faster access to our technology in the new ultrasound machine markets
-- Selling proprietary 'plug-in' real-time AI enabled devices direct to the global pool of existing ultrasound machines, through our own sales network
Clinical AI related revenue for the year was GBP0.2m (2020: GBP0.0m) and reflects the impact of the pandemic in 2021 that limited global new product roll-out, reduced key opinion leader contact and resulted in almost no exhibitions or congress events. As we said at the beginning of 2021, as the pandemic restrictions relax and face-to-face meetings and exhibitions restart, we anticipate 2022 to be the year where we generate more significant sales growth from our AI based products.
During the year, we invested GBP2.1m in clinical AI related R&D (2020: GBP1.7m).
ScanNav Assist
Our ScanNav Assist AI technology acts like a personal scanning assistant, by comparing the image or view acquired to specific criteria on standard views within a fetal scan, to ensure they contain the required anatomy for the imaging plane. The software aims to provide real-time workflow enhancements, that support faster, more standardised scanning, but importantly also support decision making, so that the stress of scanning is reduced and the 'burn-out' of operators being asked to increase productivity is minimised.
In 2019, we entered a long-term partnership agreement for our ScanNav Assist AI software with GE Healthcare, one of the world's leading ultrasound manufacturers, that provides for the integration of our real-time AI image analysis software into GE Healthcare's full range of Voluson women's health ultrasound machines.
At the end of September 2020 GE Healthcare launched the Voluson SWIFT, which is the first GE ultrasound system to feature SonoLyst, the new software that utilises our ScanNav Assist real-time image analysis software and is the world's first fully integrated AI tool that recognises the 20 views recommended by the ISUOG mid-trimester practice guidelines for fetal sonography imaging. SonoLyst is an optional add-on and feedback during the year has been encouraging, despite the pandemic related impact on global roll-out that restricted sales training and key opinion leader contact. As pandemic restrictions relax, w e expect to see increased revenue in 2022.
Post year-end we announced we had signed an extension to the GE Healthcare agreement to enable GE Healthcare to utilise the ScanNav Assist AI software in a new women's health segment of automated ultrasound image analysis, that is outside the Group's original agreement. The terms, product sales and the timings of the related product launches are undisclosed.
Future variants of ScanNav Assist that will support additional scanning protocols are in development.
ScanNav Anatomy PNB (Peripheral Nerve Block)
ScanNav Anatomy PNB uses the latest AI technology to automatically highlight the key nerve block anatomical structures on a live ultrasound image and support the performance of healthcare professionals who are suitably qualified, but who perform ultrasound-guided local anaesthesia procedures on a less frequent basis.
This first version of ScanNav Anatomy PNB received CE approval in April 2021 and supports nine common peripheral nerve blocks. It is sold as a stand-alone screen mounted on a portable stand that is plugged into existing ultrasound machines to provide clinicians with continuous feedback from real-time highlighting of their live ultrasound. Users can also re-familiarise themselves with blocks that are carried out less frequently using the system's integrated 3D animations.
ScanNav Anatomy PNB is also available as a training simulator for medical learning on volunteers, prior to patient contact (see NeedleTrainer below).
Increasingly, ultrasound-guided peripheral nerve blocks are being used as a prudent alternative to general anaesthesia, but not all anaesthetists have the specialist knowledge of ultrasound anatomy to perform them. Through the adoption of ScanNav PNB, it is hoped that hospitals will be able to increase the number of ultrasound-guided nerve blocks that they can perform. The cart-based system is sold in the UK through the Group's direct sales team.
We continue to progress the product's FDA regulatory filing to enable a version of the product to be sold in the US, as well as seeking to license an integrated version of the product to the major ultrasound manufacturers. The need for an additional US-based Human Factors study delayed the regulatory approval and anticipated launch of the PNB clinical system in the US, but the Group still envisages the PNB system will contribute to revenues in 2022.
Our aim is to develop further variants of ScanNav Anatomy that can be added to the existing ScanNav standalone hardware platform and support ultrasound scanning in both interventional radiology and general radiology, as appropriate.
NeedleTrainer
Launched at the end of 2021, NeedleTrainer was developed by the clinical AI software team as a real-time training version of ScanNav Anatomy PNB. Currently the device is a portable, plug-in system that uses a retractable needle and real-time, virtual image overlays to simulate needling non-invasively on a live volunteer, using the live ultrasound scan. This enables medical professionals to develop hand-eye coordination, optimum positioning and accuracy in ultrasound-guided interventional procedures in a safe, realistic, clinical environment. The system is sold with the trainer version of ScanNav Anatomy PNB integrated into the software.
Future ScanNav AI products
Although during 2021 we focused on developing the partnership with GE Healthcare, commercialising ScanNav Assist, ScanNav Anatomy PNB and NeedleTrainer, the following additional AI related products are in various early stages of development.
ScanNav Detect
ScanNav Detect aims to facilitate the automatic recognition of abnormalities within a general medical ultrasound scan, confirming that a clinician has correctly scanned the anatomical area of interest, and then flagging any areas of potential abnormality, so the patient can be triaged to a specialist. This could potentially allow more medical practitioners, such as GPs, midwives, paramedics and doctors to use ultrasound imaging for frontline medical diagnostic sonography.
ScanNav HealthCheck
ScanNav HealthCheck remains a proof-of-concept development area that aims to enable ultrasound scans to be performed at home.
Challenges to the Clinical AI revenue streams
AI-based medical imaging software remains an immensely exciting, and potentially hugely significant global market. However, there is considerable competition from both existing ultrasound manufacturers and well-funded independent AI software vendors. The commercial modelling, although embryonic, is as yet unproven.
To respond to these challenges, we remain focussed on developing AI software that has both a clinical need and a clear economic rationale for its purchase. The ScanNav Assist software is a good example of how our software aims to speed up scanning yet also support the sonographer so that a faster scan is also less stressful, benefiting the operator, the imaging centre and the patient.
As with the simulation market, funds for purchasing departments can be hard to access and revenues difficult to predict, especially during times of government cutbacks, political upheaval or global pandemics.
During 2022 we expect the restrictions on face-to-face contact caused by the pandemic to recede in the majority of our markets, but there may be some exceptions that impact sales in countries such as China, where zero tolerance Covid-19 policies are operated and cities/regions can be locked down at short notice. The easing of these restrictions will also help with any overseas product trials and studies for regulatory clearance, which proved harder to monitor remotely in 2021 and caused delay to our FDA regulatory process.
Royalty payments from sales related to ultrasound machine vendors can be impacted by product launch delays that are outside our control.
The impact of rising inflation may cause medical device costs to rise faster than hospitals budgets and could potentially reduce future health spending.
Recruitment of high calibre AI software engineers remains a challenge, however during the year we continued to recruit high quality staff by offering attractive, flexible salary packages and expect this to continue in 2022.
The new UK Conformity Assessed (UKCA) medical device approval is due to come into effect from 30 June 2023. Failure to migrate our CE approvals to UKCA (caused by, for example, bottlenecks from limited UK regulatory body capacity) could impact the Group's ability to sell its medical device products in the UK from that point.
Quality Management System
The Group continues to meet the standards of ISO 13485:2016 to ensure the consistent design, development, production, installation and sale of medical devices that are safe for their intended purpose.
Workplace environment
Our larger, more modern and flexible head office space in the centre of Cardiff significantly improved our ability to operate effectively during the variety of pandemic restrictions that were in place during the year.
With restrictions changing monthly, we supported office, at home and hybrid working throughout the year, by continuing to provide employees with the hardware and software to work from home, where appropriate. All Covid-19 related changes were regularly communicated to staff and we continue to hold our weekly all-staff meeting over the internet, with an attendance of over 90%. Health and safety risk assessments were conducted regularly and our anonymous annual staff survey helped us assess the impact of the pandemic on employee welfare and support staff where appropriate. During the pandemic we were pleased that no staff were furloughed.
When restrictions allowed, we held large hands-on trial study days and shareholder technology open days in Cardiff.
The Group's warehouse and technical support operation in Caerphilly, that opened in 2020, has also enabled us to build and ship more systems than ever before, as well as hold the increased stock levels caused by the current market conditions.
As ever, all our staff have been tremendous in another difficult working year and I would also like to convey my thanks to all our stakeholders for being so supportive.
Looking ahead
After a positive 2021 in which we grew revenues to GBP7.6m and reduced operating losses to GBP4.3m, we are encouraged by the start to 2022.
We are expanding our US sales team and now have four core simulation products that are expected to continue the growth of our simulation revenues in 2022 and beyond.
We have three clinical AI-related software products in the market and hope to obtain FDA clearance for ScanNav Anatomy PNB during the year. We are building an excellent partnership with the world's leading ultrasound company - GE Healthcare, that was recently expanded with a new product extension to the agreement and as with our simulation revenues, expect to see growth in our clinical AI-related revenues in 2022 and beyond.
With the pandemic restrictions around the world easing and enabling a return to face-to face meetings, a growing range of 'classroom to clinic ultrasound' products in the market, new products in the pipeline, an established operational base, and an encouraging start to the year, we expect the strong revenue performance of 2021 to continue in 2022.
There are a number of potential growth opportunities for the Group relating to new AI product development programmes, as well as increases in the machine learning, direct sales and marketing teams and we therefore continue to monitor closely our cash, investment in R&D and overheads against the anticipated sales growth curve.
We remain excited about the potential of our 'Classroom to Clinic' business.
Stuart Gall
Chief Executive Officer
FINANCIAL REVIEW
Summary financial performance
GBPm (unless otherwise stated) 2021 2020 --------------------------------------------- ------- ------- Revenue 7.60 5.17 Gross profit 4.66 3.17 Gross profit margin (%) 61% 61% Total R&D spend (3.25) (2.56) Administrative expenses (excluding expensed R&D) (7.02) (5.87) Operating loss (4.33) (4.48) Loss after taxation (3.61) (3.31) Net cash used in operating activities (1.82) (2.26) Cash and cash equivalents 4.95 8.77 --------------------------------------------- ------- -------
Income statement
Revenue
2021 was a year of strong sales growth despite the continued challenges of Covid-19 ongoing throughout the year. The Group achieved total revenue of GBP7.60m (2020: GBP5.17m) representing an increase of 47% on 2020.
Simulation
Simulation revenue grew 43% year on year with growth across all regions and products compared to 2020 despite pandemic restrictions continuing for a second year. In particular, the UK market achieved its highest revenue to date, benefiting from NHS budgets for ultrasound simulation products. Performance by region has been discussed in more detail in the CEO review.
GBPm 2021 2020 Growth
--------------- ----- ----- -------
UK 2.51 1.42 76%
North America 2.73 2.32 18%
Rest of World 2.15 1.41 53%
--------------- -----
7.39 5.15 43%
--------------- ----- ----- -------
Clinical AI
Clinical AI revenue for 2021 was GBP0.21m (2020: GBP0.02m). Revenue growth was impacted by the pandemic that delayed new product roll-outs, reduced key opinion leader contact and resulted in almost no exhibitions or congress events taking place to demonstrate new products.
Gross profit
With higher revenue, gross profit increased to GBP4.66m (2020: GBP3.17m) achieving a stable average gross margin of 61% (2020: 61%).
Other income
Other income in 2020 included an advance of GBP0.12m relating to the US Government's Paycheck Protection Program which allowed US small businesses to apply for forgivable loans to pay for their payroll and certain other costs during the pandemic. This support was not available to the US business in 2021.
R&D expenditure credit (RDEC) of GBP0.08m was received in 2020 in relation to R&D projects which have been previously in receipt of grant funding which cannot be claimed under the R&D SME regime. RDEC was recognised as taxable income within other income. In 2021 there were no grant funded R&D projects and as a result no RDEC was received.
Administrative expenses
GBPm 2021 2020 Movement
-------------------------------------- ----- ----- ---------
Selling and distribution costs 2.44 1.75 0.69
Other general & administrative costs 2.64 2.51 0.13
Insurance 0.22 0.12 0.10
Non-cash costs:
Share based payment charges 0.53 0.15 0.38
Depreciation and amortisation 1.19 1.34 (0.15)
7.02 5.87 1.15
-------------------------------------- ----- ----- ---------
Administrative expenses, excluding expensed R&D costs, increased by 20% to GBP7.02m (2020: GBP5.87m) largely relating to higher performance-based remuneration expenses including sales commissions and bonuses, as well as higher distribution costs. Within other general and administrative expenses, the Group incurred higher IT related costs and recruitment fees as well as spend relating to additional finance support staff. Insurance costs, in particular for Directors' and Officers' liability insurance, also increased in 2021. As a result of companywide LTIP share options issued in December 2020, share based payment charges increased to GBP0.53m in 2021 (2020: GBP0.15m).
Research and development (R&D) costs
GBPm 2021 2020 Movement
-------------------- ----- ----- ---------
R&D
* Expensed 1.96 1.99 (0.03)
* Capitalised 1.27 0.57 1.84
-------------------- -----
3.23 2.56 0.67
-------------------- ----- ----- ---------
Simulation 1.15 0.87 0.28
Clinical AI 2.08 1.69 0.39
-------------------- ----- ----- ---------
Total R&D spend increased in 2021 to GBP3.23m (2020: GBP2.56m). The Simulation R&D team was largely focused on completing the development of the new BabyWorks platform and HeartWorks 3D Echo products as well as the new online E-learning modules. The Clinical AI R&D costs related to the ongoing development of the ScanNav Anatomy PNB product, in particular in relation to progressing the products through US FDA regulatory approval as well as NeedleTrainer and the progression of other variants of ScanNav Assist.
Operating loss
The 47% improvement in gross profit in 2021 from GBP3.17m to GBP4.66m was, in the main, offset by a combination of no covid-19 grants from the US business in 2021 and a 20% increase in administrative expenses (detailed above) resulting in only a small improvement in the operating loss of GBP4.33m (2020: GBP4.48m).
Taxation
The total tax credit in 2021 was GBP0.76m (2020: credit of GBP1.18m). The credit in 2021 relates to the estimated R&D tax credit claim for 2021 R&D investment (2020: GBP0.7m with an additional GBP0.2m in respect of 2019). The Group claims each year for R&D tax credits and, since it is loss-making, elects to surrender these tax credits for a cash rebate.
Included within the tax credit of GBP1.18m in 2020 is a deferred tax credit of GBP0.3m (2021: nil), which represents the movement in the consolidated deferred tax liability as well as the recognition of an equivalent deferred tax asset in relation to the intangible fixed assets acquired on acquisition of IUL and IML representing the view that the intangible fixed assets have value which will lead to the accumulated trading losses being utilised in the future.
As at 31 December 2021, the Group had cumulative gross UK tax losses of approximately GBP18.1m (31 December 2020: GBP15.7m) for which no deferred tax asset has been recognised due to the uncertainty over the timing of future recoverability.
Balance sheet
Net assets reduced to GBP9.72m as at 31 December 2021 (31 December 2020: GBP12.69m) with lower total assets and higher total liabilities compared to the previous period.
The largest movement in current assets in the period related to cash and cash equivalents which decreased by GBP3.82m to GBP4.95m (31 December 2020: GBP8.77m). The Group has no other sources of finance/debt.
Included within trade and other receivables of GBP2.65m are trade receivables of GBP1.89m (31 December 2020: GBP1.64m, increasing with higher trading in the last quarter of the period. Prepayments also increased by GBP0.37m from GBP0.18m to GBP0.50m arising from higher prepaid inventory and insurance balances.
Inventory of GBP1.20m (31 December 2020: GBP1.05m) increased by GBP0.15m due to higher stock holding of certain key components as insurance against potential supply chain disruption, although this has not resulted in any increased obsolescence. Included within current assets is the R&D tax credit receivable of GBP0.96m (31 December 2020: GBP0.67m). This is GBP0.28m higher than as at 31 December 2020 due to increased R&D costs in 2021; and the balance including GBP0.2m of the 2020 receivable, which was received post year end.
The decreases in current assets were offset by an increase in non-current assets of GBP0.68m. During the year GBP1.27m (2020: GBP0.57m) of development costs were capitalised within intangible assets. The criteria for capitalisation of development costs relating to ScanNav Anatomy PNB and NeedleTrainer were met during the period resulting in GBP0.46m of cost being capitalised in 2021.
Current liabilities increased by GBP0.99m to GBP3.21m (31 December 2020: GBP2.22m), with higher trade payables of GBP1.35m (2020: GBP0.84m) and an increase in accruals for sales-based royalties payable, sales commissions and annual bonuses. Lease liabilities of GBP0.67m (31 December 2020: GBP0.77m), relating to offices, the manufacturing facility and company cars, reduced by GBP0.1m in 2021 with ongoing lease payments. The only new lease in the year related to the IUNA office lease renewal.
Total deferred income of GBP0.53m (31 December 2020: GBP0.42m), relating to extended warranties and technical support, increased with higher trading levels in the year.
On 19 July 2021 following a receipt of a notice for the exercise of a share warrant certificate, the Company issued 1,256,693 new ordinary shares with a nominal value of GBP0.01 each at a subscription price of GBP0.01 per ordinary share s. The share warrant liability of GBP0.06m and the share warrant reserve of GBP0.13m were both extinguished directly through equity resulting in a new undistributable reserve of GBP0.17m. The fair value movements since initial recognition of the liability of GBP0.02m were transferred directly to retained earnings.
The share based payment reserve increased by GBP0.53m to GBP1.37m (31 December 2020: GBP0.84m) in line with the share based payment charge for the period.
Cash flow
The Group reported cash and cash equivalents of GBP4.95m at 31 December 2021 (31 December 2020: GBP8.77m).
Operating cash outflows before working capital movements of GBP2.61m (2020: GBP2.94m) improved by GBP0.33m in 2021 due to the higher trading levels in the year offset partly by increases in administrative expenses. Movements in working capital of GBP0.32m (2020: GBP0.31m) and higher R&D tax credits received in the year of GBP0.48m (2020: GBP0.36m) resulted in the net cash used in operating activities reducing to GBP1.82m (2020: GBP2.26m).
The net cash outflow arising from investing activiti es was GBP1.78m (2020: inflow of GBP4.58m) relating to capitalised R&D expenditure of GBP1.28m (2020: 0.57m) and GBP0.50m (2020: GBP0.37m) of purchases of property, plant and equipment. In the prior year, the cash inflow from investing activities was primarily impacted by the maturity of GBP5.50m of cash held on short term deposit.
The net cash outflow from financing activities was GBP0.22m (2020: GBP4.72m inflow), principally relating to lease payments and
the receipt of gross proceeds of GBP0.01m in relation to shares issued as a result of the exercise of the share warrant certificate. The Group did not complete any fund-raises during 2021. In 2020 the Company placed 49,400,000 newly issued shares of 1 pence each in the capital of the Company at a price of 10.5 pence per share resulting in a cash receipt of GBP5.19m with share issue costs of GBP0.39m.
G oing concern
In undertaking a going concern review, the Directors have reviewed three financial projections to 31 December 2024 based on the existing base budget; a flexed, more conservative version of the base budget; and a projection based on latest trading, all of which include estimates and assumptions regarding the product development projects, sales pipeline, future revenues and costs and timing and quantum of investments in the R&D programmes. Although the projection based on latest trading indicates that the Group will not need to raise money within the next 12 months, the flexed more conservative budget projections indicate that the Group would need to raise further funds within the next 12 months to support the Group's growth plans in the absence of mitigating actions to control cash outflows such as deferring development expenditure. The flexed more conservative budget reflects a 20% revenue reduction on the existing base budget and therefore the Directors have concluded that this range of projections represents a material uncertainty related to events or conditions which may cast significant doubt on the Group's ability to continue as a going concern and, therefore, it may be unable to realise its assets or discharge its liabilities in the normal course of business. Although there is no guarantee, the Directors have a reasonable expectation that the Group will be able to raise further financing to support its ongoing development and commercialisation activities and continue in operational existence for the next 12 months. On this basis, the Directors continue to apply the going concern basis in preparing these accounts. Accordingly, these accounts do not include any adjustments that would result from the going concern basis of preparation being inappropriate.
The Directors continue to explore additional sources of income and finance available to the Group to continue the development of its 'classroom to clinic' business.
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME
for the year ended 31 December 2021
Unaudited Audited
Note 2021 2020
GBP'000 GBP'000
Continuing operations
REVENUE 2 7,596 5,170
Cost of sales (2,937) (1,999)
--------- ---------
GROSS PROFIT 4,659 3,171
Other income 3 2 207
Administrative expenses (8,993) (7,859)
OPERATING LOSS (4,332) (4,481)
Finance income 1 17
Finance costs (37) (17)
--------- ---------
LOSS BEFORE TAXATION (4,368) (4,481)
Taxation 4 758 1,175
LOSS ATTRIBUTABLE TO THE EQUITY SHAREHOLDERS
OF THE PARENT (3,610) (3,306)
--------- ---------
OTHER COMPREHENSIVE INCOME
Items that may be reclassified to profit
or loss:
Exchange gain/(loss) arising on translation
of foreign operations 33 (77)
--------- ---------
OTHER COMPREHENSIVE INCOME/(LOSS) FOR
THE PERIOD 33 (77)
TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE
TO THE EQUITY SHAREHOLDERS OF THE PARENT (3,577) (3,383)
========= =========
LOSS PER ORDINARY SHARE ATTRIBUTABLE
TO THE EQUITY SHAREHOLDERS OF THE PARENT
Basic and diluted (pence) 5 (1.34 ) (1.30)
--------- ---------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2021
Unaudited Audited
2021 2020
Note GBP'000 GBP'000
NON-CURRENT ASSETS
Intangible assets 2,558 1,963
Property, plant and equipment 1,400 1,313
Trade and other receivables 61 61
------------ -----------------
4,019 3,337
------------ -----------------
CURRENT ASSETS
Inventories 1,196 1,048
Trade and other receivables 2,650 2,025
Current tax assets 954 671
Cash and cash equivalents 4,950 8,774
------------ -----------------
9,750 12,518
------------ -----------------
TOTAL ASSETS 13,769 15,855
------------ -----------------
CURRENT LIABILITIES
Trade and other payables 6 (2,767) (1,901)
Deferred income (206) (142)
Lease liabilities (213) (170)
Provisions (22) (10)
------------ -----------------
(3,208) (2,223)
------------ -----------------
NON-CURRENT LIABILITIES
Deferred income (320) (275)
Lease liabilities (457) (603)
Other payables (65) (65)
------------ -----------------
(842) (943)
------------ -----------------
TOTAL LIABILITIES (4,050) (3,166)
------------ -----------------
NET ASSETS 9,719 12,689
------------ -----------------
EQUITY
Share capital 7 2,707 2,694
Share premium 25,959 25,959
Share warrants - 126
Accumulated losses (26,967) (23,381)
Share-based payment reserve 1,373 842
Merger reserve 6,538 6,538
Foreign exchange reserve (56) (89)
Other reserves 165 -
------------ -----------------
TOTAL EQUITY 9,719 12,689
------------ -----------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2021
Share Share Share Accumulated Share-based Merger Foreign Other Total
capital premium warrants losses payment reserve exchange reserves equity
reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
AS AT 31
DECEMBER
2019 2,200 21,653 126 (20,075) 688 6,538 (12) - 11,118
-------- -------- --------- ------------ ------------ -------- --------- --------- --------
Loss for the
year - - - (3,306) - - - - (3,306)
Other
comprehensive
loss - - - - - - (77) - (77)
-------- -------- --------- ------------ ------------ -------- --------- --------- --------
Total
comprehensive
loss for the
period - - - (3,306) - - (77) - (3,383)
TRANSACTIONS
WITH
OWNERS, RECORDED
DIRECTLY IN
EQUITY
Issue of share
capital 494 4,693 - - - - - - 5,187
Cost of raising
finance - (387) - - - - - - (387)
Cost of
share-based
awards - - - - 154 - - - 154
-------- -------- --------- ------------ ------------ -------- --------- --------- --------
AS AT 31
DECEMBER
2020 2,694 25,959 126 (23,381) 842 6,538 (89) - 12,689
Loss for the
year - - - (3,610) - - - - (3,610)
Other
comprehensive
income - - - - - - 33 - 33
-------- -------- --------- ------------ ------------ -------- --------- --------- --------
Total
comprehensive
loss for the
period - - - (3,610) - - 33 - (3,577)
TRANSACTIONS
WITH
OWNERS, RECORDED
DIRECTLY IN
EQUITY
Issue of share
capital 13 - - - - - - - 13
Exercise of
share
warrants - - (126) 24 - - - 165 63
Cost of
share-based
awards - - - - 531 - - - 531
-------- -------- --------- ------------ ------------ -------- --------- --------- --------
AS AT 31
DECEMBER
2021
(unaudited) 2,707 25,959 - (26,967) 1,373 6,538 (56) 165 9,719
======== ======== ========= ============ ============ ======== ========= ========= ============
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2021
Unaudited Audited
2021 2020
GBP'000 GBP'000
Cash flows from operating
activities
Loss before tax (4,368) (4,481)
Depreciation 508 406
Amortisation of intangible assets 680 937
Fair value adjustment on share warrants 3 21
Loss on disposal of property, plant and
equipment - 26
Net finance costs 36 -
Share-based payment charge 530 154
--------- --------
Operating cash flows before movements in
working capital (2,611) (2,937)
Movement in inventories (149) (389)
Movement in trade and other receivables (592) 590
Movement in trade and other payables (including
deferred income) 1,045 199
Movement in provisions 12 (85)
--------- --------
Cash used in operations (2,295) (2,622)
Income taxes received 476 362
--------- --------
NET CASH USED IN OPERATING ACTIVITIES (1,819) (2,260)
--------- --------
Cash flows from investing activities
Purchase of property, plant and equipment (503) (371)
Increase in short term deposits - 5,500
Internally generated intangible assets (1,275) (568)
Interest received 1 17
NET CASH (USED IN)/GENERATED FROM INVESTING
ACTIVITIES (1,777) 4,578
--------- --------
Cash flows from financing activities
Issue of new shares 13 5,187
Share issue costs - (387)
Principal elements of lease payments (195) (62)
Finance costs paid (37) (17)
NET CASH (USED IN)/GENERATED FROM FINANCING
ACTIVITIES (219) 4,721
--------- --------
NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS (3,815) 7,039
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 8,774 1,790
Exchange losses on cash and cash equivalents (9) (55)
CASH AND CASH EQUIVALENTS AT OF YEAR 4,950 8,774
========= ========
1. GENERAL INFORMATION
Intelligent Ultrasound Group plc ("the Company") is a publicly limited liability company incorporated and domiciled in the United Kingdom whose shares are traded on AIM, a market operated by the London Stock Exchange. The Company's registration number is 09028611 and its registered office address is Floor 6A Hodge House, 114-116 St Mary Street, Cardiff, CF10 1DY.
These results do not constitute the Group's statutory accounts for the year ended 31 December 2021 but are derived from those accounts. Statutory accounts for 2020 have been delivered to the Registrar of Companies and those for 2021 will be delivered following the Company's Annual General Meeting. The external auditors have reported on those accounts; its report was unqualified and did not contain any statements under section 498 of the Companies Act 2006.
On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became UK adopted international accounting standards, with future changes being subject to endorsement by the UK Endorsement Board. The Group transitioned to UK adopted international accounting standards in its consolidated financial statements on 1 January 2021. There was no impact or changes in accounting policies from the transition. The statutory accounts have been prepared based on the accounting policies and method of computations consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2020.
Going concern
In undertaking a going concern review, the Directors have reviewed three financial projections to 31 December 2024 based on the existing base budget; a flexed, more conservative version of the base budget; and a projection based on latest trading, all of which include estimates and assumptions regarding the product development projects, sales pipeline, future revenues and costs and timing and quantum of investments in the R&D programmes. Although the projection based on latest trading indicates that the Group will not need to raise money within the next 12 months, the flexed more conservative budget projections indicate that the Group would need to raise further funds within the next 12 months to support the Group's growth plans in the absence of mitigating actions to control cash outflows such as deferring development expenditure. The flexed more conservative budget reflects a 20% revenue reduction on the existing base budget and therefore the Directors have concluded that this range of projections represents a material uncertainty related to events or conditions which may cast significant doubt on the Group's ability to continue as a going concern and, therefore, it may be unable to realise its assets or discharge its liabilities in the normal course of business. Although there is no guarantee, the Directors have a reasonable expectation that the Group will be able to raise further financing to support its ongoing development and commercialisation activities and continue in operational existence for the next 12 months. On this basis, the Directors continue to apply the going concern basis in preparing these accounts. Accordingly, these accounts do not include any adjustments that would result from the going concern basis of preparation being inappropriate.
The Directors continue to explore additional sources of income and finance available to the Group to continue the development of its 'classroom to clinic' business.
Intangible assets - impact of possible changes in key assumptions
For the intangible assets that have a finite life, the Directors considered the need to impair the carrying value of intangible assets by performing an assessment of indicators of impairment. The Group intangible assets include intellectual property acquired as part of the Intelligent Ultrasound Limited (IUL) acquisition in 2017 of GBP0.8m. These intangible assets were required to be tested for impairment following a review of impairment indicators. The recoverable amount of the asset was determined based on value-in-use calculations which require the use of assumptions. The calculations use five year cash flow projections based on financial budgets approved by management covering a two year period. Cashflows for periods three to five are extrapolated using estimated growth rates and growth rates beyond five years are consistent with forecasts specific to the sector in which the CGU operates.
The recoverable amount of the asset is estimated to exceed the carrying amount of the CGU at 31 December 2021 by GBP2.4m. The recoverable amount would equal its carrying amount if the key assumptions were to change as follows:
From To
Long term growth rate 2.00% -6.75%
Pre-tax discount rate 12.98% 18.50%
Also, if the budgeted revenue used in the value in use calculation for the IUL acquired intangible assets had been 9% lower than management estimates in all years the Group would have had to recognise an impairment against the full carrying value of the asset.
2. SEGMENTAL OPERATIONS
The Group identifies reportable operating segments based on internal management reporting that is regularly reviewed by the chief operating decision maker (CODM). The CODM is the Board of Directors.
The format of revenue reporting is based on the Group's management and internal reporting (including reports to the CODM) of the segments below which carry different risks and rewards and are used to make strategic decisions. The Group has two operating segments; Simulation and Clinical AI. Other group costs, assets and liabilities that cannot be allocated to an operating segment are shown within 'Central' below, including head office costs
-- Simulation: sales of ultrasound simulation systems and related services.
-- Clinical AI: sales of AI-based ultrasound image analysis software products.
2021 Simulation Clinical Central Total
AI
GBP'000 GBP'000 GBP'000 GBP'000
REVENUE 7,390 206 - 7,596
Cost of sales (2,883) (54) - (2,937)
---------- -------- ------- -------
GROSS PROFIT 4,507 152 - 4,659
Other income 2 - - 2
Administrative expenses (5,125) (2,433) (1,435) (8,993)
OPERATING LOSS (616) (2,281) (1,435) (4,332)
Finance income 1 - - 1
Finance costs (8) - (29) (37)
---------- -------- ------- -------
LOSS BEFORE TAXATION (623) (2,281) (1,464) (4,368)
Taxation 222 536 - 758
---------- -------- ------- -------
LOSS ATTRIBUTABLE TO THE EQUITY
SHAREHOLDERS OF THE PARENT (401) (1,745) (1,464) (3,610)
---------- -------- ------- -------
2020 Simulation Clinical Central Total
AI
GBP'000 GBP'000 GBP'000 GBP'000
REVENUE 5,153 17 - 5,170
Cost of sales (1,999) - - (1,999)
---------- -------- ------- ---------
GROSS PROFIT 3,154 17 - 3,171
Other income 207 - - 207
Administrative expenses (4,703) (2,239) (917) (7,859)
OPERATING LOSS (1,342) (2,222) (917) (4,481)
Finance income - - 17 17
Finance costs (6) - (11) (17)
---------- -------- ------- ---------
LOSS BEFORE TAXATION (1,348) (2,222) (911) (4,481)
Taxation 488 687 - 1,175
---------- -------- ------- ---------
LOSS ATTRIBUTABLE TO THE EQUITY
SHAREHOLDERS OF THE PARENT (860) (1,535) (911) (3,306)
---------- -------- ------- ---------
Revenue by destination of external customer
Year ended 31 December Simulation Clinical Total
2021 AI
GBP'000 GBP'000 GBP'000
United Kingdom 2,503 50 2,553
North America (USA & Canada) 2,733 - 2,733
Rest of World 2,154 156 2,310
---------- ---------- ----------
7,390 206 7,596
---------- ---------- ----------
Timing of revenue recognition
:
At a point in time 7,078 206 7,284
Over time 312 - 312
---------- ---------- ----------
Year ended 31 December Simulation Clinical Total
2020 AI
GBP'000 GBP'000 GBP'000
United Kingdom 1,419 - 1,419
North America (USA & Canada) 2,324 - 2,324
Rest of World 1,410 17 1,427
------------------ ---------- ----------
5,153 17 5,170
------------------ ---------- ----------
Timing of revenue recognition
:
At a point in time 4,907 17 4,924
Over time 246 - 246
------------------ ---------- ----------
Included within non-UK revenues are sales to the following country which accounted for more than 10% of the Group's total revenue for the year:
2021 2020
GBP'000 GBP'000
USA 2,426 2,036
------- -------
The Group had no customers who accounted for more than 10% of the Group revenue for the year ended 31 December 2021 or 2020.
Other segment information
Depreciation and Additions to non-current
amortisation assets
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Simulation 843 1,156 1,334 1,049
Clinical AI 202 145 535 -
Central 143 42 - 717
-------- -------- ------------ ------------
1,188 1,343 1,869 1,766
-------- -------- ------------ ------------
Assets and liabilities by segment
Assets Liabilities
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Simulation 9,296 7,324 (2,743) (1,906)
Clinical AI 2,133 1,578 (392) (258)
Central 2,340 6,953 (915) (1,002)
------- ------- ------- -------
13,769 15,855 (4,050) (3,166)
------- ------- ------- -------
Non-current assets based outside the UK
Right of use assets include leased offices for Intelligent Ultrasound North America, Inc based in Georgia. The net book value as of 31 December 2021 was GBP0.07m (2020: GBP0.02m).
3. OTHER INCOME
2021 2020
GBP'000 GBP'000
US Government grant income - 124
UK grant income 2 -
R&D expenditure credit (RDEC) - 83
------- -------
2 207
======= =======
4. TAXATION
2021 2020
GBP'000 GBP'000
Current tax
R&D tax credit (769) (673)
R&D tax credit relating to prior periods 11 (214)
------- ---------------
(758) (887)
Deferred tax
Origination and reversal of timing differences - (300)
Effect of tax rate change on opening balance - 12
------- ---------------
- (288)
======= ===============
Income tax credit (758) (1,175)
======= ===============
5. LOSS PER ORDINARY SHARE
The loss per ordinary share has been calculated using the loss for the year and the weighted average number of ordinary shares in issue during the year as follows:
2021 2020
GBP'000 GBP'000
Loss for the year after taxation (3,610) (3,306)
----------- -----------------
2021 2020
Number Number
Number of ordinary shares of 1p each
Basic and diluted weighted average number
of ordinary shares 269,964,886 254,915,148
Basic and diluted loss per share (pence) (1.34) (1.30)
=========== =================
At 31 December 2021 there were 23,836,323 (2020: 23,699,323) share options outstanding which could potentially have a dilutive impact but were anti-dilutive in both years due to the reported losses.
6. TRADE AND OTHER PAYABLES
2021 2020
GBP'000 GBP'000
Current liabilities
Trade payables 1,353 842
Taxation and social security 179 169
Accruals 1,235 829
Share warrants - 61
2,767 1,901
Non-current liabilities
Other payables 65 65
------- -------
2,832 1,966
------- -------
7. SHARE CAPITAL
2021 2020
Number GBP'000 Number GBP'000
Authorised, allotted, issued
and fully paid
Ordinary shares of 1p each
Balance at 1 January 269,396,792 2,694 219,996,792 2,200
Shares issued 1,256,693 13 49,400,000 494
Balance at 31 December 270,653,485 2,707 269,396,792 2,694
=================== ============= ================================= =======
The nominal values and the premium arising on shares issued in 2021 and 2020 are as follows:
Date
Number of shares Nominal value Premium
No. GBP'000 GBP'000
------------- ------------------ --------------- ---------
4 May 2020 49,400,000 494 4,693
19 July 2021 1,256,693 13 -
------------- ------------------ --------------- ---------
On 4 May 2020 the Company placed 49,400,000 newly issued shares of 1 pence each in the capital of the Company at a price of 10.5 pence per share. Share issue costs of GBP0.38m have been netted off against the share premium arising on the new share issue.
On 19 July 2021 pursuant to a receipt of notice for the exercise of warrants, the Company issued 1,256,693 new ordinary shares with a nominal value of GBP0.01 each at a subscription price of GBP0.01 per ordinary share. The Company received gross proceeds of GBP12,567.
Ordinary shares have a par value of 1 pence. They entitle the holder to participate in dividends, and to share in the proceeds of winding up the company in proportion to the number of and amounts paid on the shares held. On a show of hands, every holder of ordinary shares present at a meeting, in person or by proxy, is entitled to one vote; and, on a poll, each share is entitled to one vote. Ordinary shares have equal rights, preferences and no restrictions on distributions of dividends nor the repayment of capital.
The Company does not have a limited amount of authorised capital
8. PUBLICATION OF FINANCIAL STATEMENTS
It is anticipated that the full Annual Report will be published in May 2022. Copies will be available at the Company's head office; Floor 6A Hodge House, 114-116 St Mary Street, Cardiff, CF10 1DY and on the Company's website ( www.intelligentultrasound.com ).
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END
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May 03, 2022 02:01 ET (06:01 GMT)
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