REG - Belluscura PLC - Half-year Report
26/09/2024 07:00
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RNS Number : 6666F Belluscura PLC 26 September 2024
Belluscura plc
("Belluscura" or the "Company" or "Group")
Unaudited Interim Results for the six months to 30 June 2024
LONDON, U.K. AND PLANO, TX, U.S. (26 September 2024). Belluscura plc
(AIM:BELL), a leading medical device developer focused on lightweight and
portable oxygen enrichment technology, announces its Unaudited Interim
Results for the six months to 30 June 2024.
Financial Headlines
· Revenue of $1.35 million up 264% (2023 H1: $0.37m; 2023: $0.83m)
· Product Gross Profit of $0.51m (2023 H1: Loss $0.06m; 2023: Loss
$0.07m)
· Adjusted EBITDA** Loss of $3.5m (2023 H1: $2.9m; 2023: $6.3m)
· Loss before tax of $6.5m (2023 H1: $6.4m; 2023: $18.5m)
· Basic loss per share of $0.041 (2023 H1: $0.052; 2023: $0.142)
· Net Cash as at 30 June 2024 of $0.9m (31 December 2023: $0.9m)
· Convertible Loan Note and Share issues raised £1.92m post 30
June 2024
· Completed the acquisition of TMT Acquisition plc
Current trading and outlook:
· Sales continue to grow and with (unaudited) Q3 sales of $1.6m,
20% up on H1 2024 and 40% up on Q2 2024.
· Strong sales to continue with the broader market acceptance of
the X-PLOR® and the upcoming full release of its new patented DISCOV-R™
device.
· Demand for the new DISCOV-R™ portable oxygen concentrator,
introduced to US market via a soft launch in June 2024, has been strong with
every DISCOV-R™ unit manufactured in Q3 being sold. Full commercial launch
of the DISCOV-R™ remains planned for the middle of Q4.
· Q4 sales target of $4.0m subject to timely receipt of Pricing
Data Analysis and Coding (PDAC) codes to enable Durable Medical Equipment
(DME) distributers to claim reimbursement from Medicare for sales of DISCOV-R
and for the Company to finalise appropriate debt-based funding and invoice
discounting to meet increasing working capital requirement arising from sales
growth.
Robert Rauker, CEO, Belluscura plc, commented:
"We are delighted with the growth in sales and distribution over the past nine
months for both the X-PLOR® and DISCOV-R™ portable oxygen concentrators.
Whilst it has taken time to bring both products to market, and we are grateful
for the patience of our shareholders, we now have two leading lightweight
portable oxygen enrichment concentrators that meet the stringent requirements
of the FDA, with the full commercial launch of DISCOV-R™ coming later in the
year. We look forward to the remainder of 2024 and into 2025 with a real sense
of confidence."
**Adjusted EBITDA excludes; Foreign exchange translation differences along
with unrealised and unrealised foreign exchange movements, depreciation and
amortisation of product development, costs relating to fundraising activities,
surrendered share options and share option taxes, minimum royalties in excess
of sales royalties, share based payments, obsolete 1st generation X-PLOR
inventory adjustments and contract manufacturer capacity costs.
For further information please contact:
Belluscura plc Tel: +44 (0)20 3128 8100
Adam Reynolds, Chairman
Robert Rauker, Chief Executive Officer
Simon Neicheril, Chief Financial Officer
SPARK Advisory Partners Limited - Nominated Adviser Tel: +44 (0)20 3368 3550
Neil Baldwin / Jade Bayat
Dowgate Capital Limited - Broker Tel: +44 (0)20 3903 7715
Russell Cook / Nicholas Chambers
MHP Group - Financial PR & Investor Relations Tel: +44 (0)20 3128 8100
Katie Hunt / Matthew Taylor email: Belluscura@mhpgroup.com
(file:///C%3A/Users/Matthew.Taylor/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/SXDYXY87/Belluscura@mhpgroup.com)
CHAIRMAN & CHIEF EXECTUTIVE'S STATEMENT
We are pleased to present our Interim Results covering a period in which
Belluscura has made significant progress.
Sales continue to grow with Q3 sales of $1.6m, 20% up on H1 2024 and 40% up on
Q2 2024.
The Company expects strong sales to continue with the broader market
acceptance of the X-PLOR® and the upcoming full release of its new patented
DISCOV-R™ device.
Demand for the new DISCOV-R™ portable oxygen concentrator, which was
introduced to the US market via a soft launch in June 2024, has been strong,
with every unit manufactured in Q3 being sold.
The DISCOV-R™ weighs a little over 6 pounds (2.75kg), provides fifty percent
(50%) more oxygen than the leading oxygen concentrator and produces more
oxygen by weight than any portable oxygen concentrator on the market. The full
commercial launch of the DISCOV-R™ remains planned for the middle of Q4.
Financial Review
Revenue for the period was $1.35 m (2023 H1: $0.37m; FY 2023: $0.83m), an
increase of 264% on the same period last year. The Group made a Product Gross
Profit in the period $0.51m (2023 H1: Loss $0.05m; FY 2023: Loss: $0.07m).
We saw operating cost increases in staffing, up from $1.6m to $1.8m, marketing
spend, up from $0.3m to $0.8m in Direct to Consumer advertising and other
admin expenses up from $0.9m to $1.1m. This was largely counteracted by a
positive FX benefit of $350k (previously loss $2.2m).
Non-recurring items include restricting costs of $120k and impairment charge
of $1.5m on the TMT acquisition.
Operating Loss for the period was $6.0m (2023 H1: $6.2m; FY2023: $17.7m).
Total Comprehensive Loss was $6.8m (2023 H1: $4.4m; FY 2023: $16.3m).
Adjusted EBITDA Loss of $3.5m (2023 H1: $2.9m; FY 2023: $6.3m), (See note 16).
The Board considers that Adjusted EBITDA to be an important key performance
indicator, reflecting underlying business performance.
The basic and diluted loss per share was $0.041 (2023 H1: $0.052; FY 2023:
$0.142).
The Group net assets at the end of the period were $18.6m (2023 H1: $25.2m; FY
2023: $17.7m). This comprised total assets of $21.2m (2023 H1: $27.2m; FY
2023: $0.8m) and total liabilities of $2.6m (2023 H1: $2.0m; FY 2023: $3.1m).
The total assets included intangible assets (capitalised research and
development costs), property, plant and equipment and right-of-use assets of
$12.0m (2023 H1: $10.6m; FY 2023: $12.3m).
At the end of the period the Group had net cash of $0.9m (2023 H1: $3.8m; FY
2023: $0.9m). Post period end, £1.92m was raised via a CLN/share issue.
During the period:
· Net cash inflow from funds raised in the period was $5.6m (2023
H1: $7.1m; FY 2023: $12.5m).
· Net cash outflow from operating activities was $4.1m (2023 H1:
$4.9m; FY 2023: $9.1m).
· Net cash used in investing activities was $1.6m (2023 H1: $2.2m;
FY 2023: $4.5m).
Outlook
We are delighted with the growth in sales and distribution over the past nine
months for both the X-PLOR® and DISCOV-R™ portable oxygen concentrators.
Furthermore, we are thankful for our shareholders' understanding during the
development process for both products, which has taken time. Following this,
we now have two premier lightweight portable oxygen enrichment concentrators
that satisfy the strict criteria of the FDA and are excited about the
forthcoming full commercial launch of DISCOV-R™ in Q4.
Q4 sales are expected to be not less than $4M. However, delivery of these
sales will be dependent upon two key factors:
· Timely receipt of Pricing Data Analysis and Coding (PDAC) codes
that allow Durable Medical Equipment (DME) distributers to claim reimbursement
from Medicare for sales of DISCOV-R to patients.
· Finalising further funding facilities to meet the significant
increase in working capital requirements resulting from the anticipated strong
Q4 sales demand in order for DISCOV-R. The Company has received several debt
proposals and is evaluating and in discussion with prospective lenders to
arrive at the optimal funding instruments, which are expected to be a
combination of debt and invoice discounting.
We look forward to the remainder of 2024 and into 2025 with a real sense of
confidence."
Adam
Reynolds
Robert Rauker
Chairman
Chief Executive Officer
26 September 2024
CONDENSED CONSOLIDATED STATEMENT OF PROFIT & LOSS AND OTHER COMPREHENSIVE INCOME
Group Unaudited 6 months to 30/06/2024 Unaudited 6 months to 30/06/2023 Audited 12 months to 31/12/2023
Note US $ US $ US $
Continuing Operations
Revenue 5 1,345,757 366,221 825,409
Cost of sales (839,064) (421,994) (890,497)
Product Gross Profit/(Loss) 506,693 (55,773) (65,088)
Inventory Impairments and Adjustments (33,787) (109,185) (4,138,030)
Gross Profit (Loss) 472,906 (164,958) (4,203,118)
Other operating income 6.1 15,335 9,864 33,942
Other direct costs 6.2 (163,188) (66,503) (103,991)
Administrative expenses 6.3 (6,352,277) (5,971,272) (13,418,554)
Operating Loss (6,027,224) (6,192,869) (17,691,721)
Finance income 7 396 28 2,127
Finance Costs (478,827) (226,291) (828,025)
Loss before income tax (6,505,655) (6,419,132) (18,517,619)
Income tax expense 8 - - -
Loss after tax for the period (6,505,655) (6,419,132) (18,517,619)
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss:
Foreign currency translation differences - foreign operations (279,816) 2,040,395 2,248,588
Total other comprehensive income (279,816) 2,040,395 2,248,588
Total comprehensive loss for the period attributable to the equity holders (6,785,471) (4,378,737) (16,269,031)
Earnings per share
Basic: Loss per share 9 (0.041) (0.052) (0.142)
Diluted: Loss per share 9 (0.041) (0.052) (0.142)
Adjusted EBITDA(1)
Group Unaudited 6 months to 30/06/2024 Unaudited 6months to 30/06/2023 Audited 12 months to 31/12/2023
US $ US $ US $
Total comprehensive loss for the period (6,785,471) (4,378,737) (16,269,031)
Add back:
Administrative expenses Realised & unrealised FX movements in (361,575) 2,185,856 2,424,237
Other comprehensive income FX currency translation differences 282,621 (2,040,395) (2,248,588)
Net foreign exchange movement(2) (78,954) 145,461 175,649
Finance Income and Costs 6,624 11,770 19,337
Accrued interest on Convertible Loan Notes 471,808 214,493 806,561
Product development amortisation 798,526 580,142 3,293,232
Impairment of acquisition goodwill 1,478,968 - -
Costs relating to fundraising activities - 13,567 92,536
Former CFO compensation 120,179 - 96,393
Minimum royalties in excess of sales royalties 354,804 250,211 792,818
Contract Manufacturer Capacity Costs - - 86,440
Inventory Impairment and Adjustments 33,787 109,185 4,138,030
Accrued Bonus - - 315,000
Issue of share based payments 104,029 103,948 163,061
Adjusted EBITDA (3,495,700) (2,949,960) (6,289,974)
1 Reconciliation to Adjusted EBITDA measure
Adjusted EBITDA is the Group's key adjusted profit measure. Total
comprehensive loss for the period is adjusted to exclude; Foreign exchange
translation differences along with unrealised and unrealised foreign exchange
movements, depreciation and amortisation of product development, costs
relating to fundraising activities, surrendered share options and share option
taxes, minimum royalties in excess of sales royalties, share based payments,
obsolete 1st generation X-PLOR inventory adjustments and contract manufacturer
capacity costs.
2 Net foreign exchange movements
£Sterling to US$ stayed broadly the same during the period (1 January 2024 -
$1.27:£1.00; 30 June 2024 - $1.27:£1.00). Due to the size of the
Intercompany Loan from the PLC to the US subsidiary which is fixed in
£Sterling, this creates an accounting presentational impact between
Administration Expenses and Other Comprehensive Income, which to a large
extent can be netted off against one another.
· Realised FX movements in administrative expenses arise
from the revaluation of £Sterling cash balances into US$
· Unrealised FX movements in administrative expenses arise
from the revaluation of the Intercompany Loan fixed in £Sterling into US$
· Foreign currency translation differences in Other
Comprehensive Income arise from the revaluation of the PLC balance sheet into
US$
CONDENSED CONSOLIDATED BALANCE SHEET
Group Unaudited Unaudited Audited
30/06/2024 30/06/2023 31/12/2023
Note US $ US $ US $
Assets
Non-current assets
Tangible assets 10 180,787 135,593 186,928
Product development 11 10,850,316 10,263,039 9,987,516
Other long-term receivable 976,324 - 1,952,649
Right of use asset 10 79,762 193,550 136,887
Non-current assets 12,087,189 10,592,182 12,263,980
Current assets
Inventory 12 3,365,107 8,803,762 3,320,652
Trade and other receivables 5,166,562 3,957,967 4,306,492
Cash and cash equivalents 875,670 3,825,391 932,926
Current assets 9,407,339 16,587,120 8,560,070
Total assets 21,494,528 27,179,302 20,824,050
Current liabilities
Trade and other payables (2,891,747) (1,866,633) (3,070,621)
Current liabilities (2,891,747) (1,866,633) (3,070,621)
Non-current liabilities
Trade and other payables (34,906) (111,377) (61,267)
Non-current liabilities (34,906) (111,377) (61,267)
Total liabilities (2,926,653) (1,978,010) (3,131,888)
Net assets 18,567,875 25,201,292 17,692,162
Equity attributable to the owners of the parent
Share capital 13 2,205,182 1,809,806 1,845,523
Share premium 13 44,250,622 36,859,049 37,494,672
Other equity instruments 13 9,628,626 5,497,236 9,167,689
Capital contribution 14 165,000 165,000 165,000
Retained earnings 14 (35,081,567) (16,625,857) (28,614,934)
Share option reserve 14 (20,180) - (20,180)
Translation reserve 14 (2,579,808) (2,503,942) (2,345,608)
Total equity 18,567,875 25,201,292 17,692,162
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months to 30 June 2023
(Unaudited)
Attributable to equity holders of the parent company
Ordinary Shares Share Premium Other Equity Instruments Translation Reserve Capital Contribution Retained earnings Total
Group Note US $ US $ US $ US $ US $ US $
US $
Balance at 1 January 2023 1,662,185 33,379,947 - (4,544,337) 165,000 (10,310,673) 20,352,122
Issue of ordinary shares 13 147,621 3,479,102 - - - - 3,626,723
Issue of other equity instruments - - 5,497,236 - - - 5,497,236
Loss for the period 14 - - - - - (6,419,132) (6,419,132)
Other comprehensive income 14 - - - 2,040,395 - - 2,040,395
Total comprehensive income - - - 2,040,395 - (6,419,132) (4,378,737)
Issue of share based payments 14 - - - - - 103,948 103,948
Balance at 30 June 2023 1,809,806 36,859,049 5,497,236 (2,503,942) 165,000 (16,625,857) 25,201,292
Twelve months to 31 December 2023
(Audited)
Balance at 1 January 2023 1,662,185 33,379,947 - (4,544,337) 165,000 (10,310,673) 20,352,122
Issue of ordinary shares 13 183,338 4,114,725 - - - - 4,298,063
Issue of other equity instruments - - 9,167,689 - - - 9,167,689
Loss for the period 14 - - - - - (18,517,619) (18,517,619)
Other comprehensive income 14 - - - 2,198,729 - - 2,198,729
Total comprehensive income - - - 2,198,729 - (18,517,619) (16,318,890)
Issue of share based payments 14 - - - - - 193,178 193,178
Balance at 31 December 2023 1,845,523 37,494,672 9,167,689 (2,345,608) 165,000 (28,635,114) 17,692,162
Six months to 30 June 2024
(Unaudited)
Balance at 1 January 2024 1,845,523 37,494,672 9,167,689 (2,345,608) 165,000 (28,635,114) 17,692,162
Issue of ordinary shares 13 359,659 6,755,950 - - - - 7,115,609
Convertible Loan Note 13 - - 460,937 - - - 460,937
Loss for the period 14 - - - - - (6,477,499) (6,477,499)
Other comprehensive income 14 - - - (234,200) - - (234,200)
Total comprehensive income - - - (234,200) - (6,477,499) (6,711,699)
Issue of share based payments 14 - - - - - 10,866 10,866
Balance at 30 June 2024 2,205,182 44,250,622 9,628,626 (2,579,808) 165,000 (35,101,747) 18,567,875
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Group Unaudited 6 months to 30/06/2024 Unaudited 6 months to 30/06/2023 Audited 12 months to 31/12/2023
Note US $ US $ US $
Cash flows from operating activities
Cash generated from operations 15 (5,470,390) (4,889,949) (9,131,571)
Net cash used in operating activities (5,470,390) (4,889,949) (9,131,571)
Cash flows from investing activities
Purchases of property, plant and equipment 10 (28,510) (6,841) (85,409)
Intangible assets under development 11 (1,661,326) (2,174,449) (4,447,282)
Net cash used in investing activities ( (1,689,836) (2,181,290) (4,532,691)
Cash flows from financing activities
Proceeds from issuance of ordinary shares (net) 13 7,501,102 3,536,649 4,236,474
Proceeds from issuance of other equity instruments (net) 13 (318,002) 5,265,184 8,401,168
Lease Payments (75,763) (73,482) (126,347)
Net cash generated from financing activities 7,107,337 8,728,351 12,511,295
Net (decrease)/increase in cash and cash equivalents (52,889) 1,657,112 (1,152,967)
Cash and cash equivalents at beginning of period 932,927 2,044,836 2,044,836
Exchange loss on cash and cash equivalents (4,368) 123,443 41,057
Cash and cash equivalents at end of period 875,670 3,825,391 932,926
( )
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the period ended 30 June 2024.
1. General Information
Belluscura plc is a public company limited by shares incorporated in England
and Wales and domiciled in the UK. Company No. 09910883. On 28 November 2017
the Company changed its name from Belluscura Limited to Belluscura plc.
The principal accounting policies applied in the preparation of these
condensed interim consolidated financial statements are set out below. These
policies have been consistently applied, unless otherwise stated.
2. Electronic communications
Copies of this Interim Report for the six months ended 30 June 2024 will not
be sent to shareholders unless specifically requested by individual
shareholders. The Board believes that by utilising electronic communication it
delivers savings to the Company in terms of administration, printing and
postage, and environmental benefits through reduced consumption of paper and
inks, as well as speeding up the provision of information to shareholders.
News updates, Regulatory News and Financial statements can be viewed and
downloaded from the Group's website, www.belluscura.com
(https://protect.checkpoint.com/v2/___http:/www.belluscura.com___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzo2N2ExMTliYjc5Nzg1NTUxNmRhYWIzNzg0MjE2NDExNzo2OmNiYTM6ZGQ5YmVmOGIzYmQ1NTc1OTgwYTk0MTQ2ZmRiYmFjMzUwNjYwNDFkMjI3Zjk5NjNmYmVlYWMyOTE2YWJmZGJiZDpwOkY6Tg)
. Copies can also be requested from; Company Secretary, Belluscura plc, 15
Fetter Lane, London EC4A 1BW or by email: tony.dyer@belluscura.com.
3. Accounting Policies
These condensed consolidated financial statements are prepared in accordance
with United Kingdom adopted International Financial Reporting Standards (IFRS)
and issued by the International Accounting Standards Board (IASB). The
consolidated financial statements are presented in US Dollars, the Group's
functional currency. The preparation of this financial information in
conformity with IFRS requires the use of certain critical accounting estimates
and consistent with the accounting policies used in the Financial Statements
for the year ended 31 December 2023.
The condensed consolidated interim financial information for the six months
ended 30 June 2024 has been prepared in accordance with International
Accounting Standard No. 34, 'Interim Financial Reporting'. They do not include
all of the information required for full annual financial statements and
should be read in conjunction with the consolidated financial statements of
Belluscura plc "the Company" as at and for the year ended 31 December 2023.
These condensed interim financial statements for the six months ended 30 June
2024 and 30 June 2023 are unaudited and do not constitute full accounts. The
comparative figures for the period ended 31 December 2023 are extracted from
the 2023 audited financial statements.
The independent auditor's report on page 12 of the 2023 financial statements
noted a Material uncertainty related to going concern:
"We draw attention to note 2.1.1 of the financial statements which notes the
uncertainty in the Group's and Company's level of projected production of
DISCOV-R products and financial returns thereon following the expected launch
of the new product in Summer 2024 and the potential consequential impact on
the Group's ability to secure additional funding. As stated in note 2.1.1,
these conditions are necessarily considered to represent a material
uncertainty that may cast significant doubt over the Group's and 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 Directors use of the going
concern basis of accounting in the preparation of the financial statements is
appropriate."
4. Going concern
Commercial Background
US FDA 510(k) clearance of the Group's X-PLOR was received on 2 March 2021 and
was launched in the US in September 2021. The Group launched the next
generation X-PLOR in October 2022 and released the DISCOV-R for Pre-Market
Evaluation in June 2023.
In March 2022, the Group signed a manufacturing Master Supply Agreement
("MSA") with InnoMax Medical Technology, Ltd ("InnoMax") to manufacture our
devices in China alongside US manufacturing.
In April 2022, the Group took the decision to transfer its US manufacturing
in-house, to increase production output at high quality standards, and achieve
a significant reduction in production costs. This was successfully completed
at the end of July 2022. The decision to bring our US manufacturing
in-house from our contract manufacturer along with the initial support of the
set-up of InnoMax manufacturing in China, resulted in significant investment
in Raw Material Inventory and Deposits which at 31 December 2022 stood at
$10.8m. The Group has transferred Raw Materials to InnoMax for utilisation in
China manufacturing and alongside this, as anticipated, InnoMax is beginning
to directly source most of their own components, which will progressively
result in a significant margin improvement through lower unit cost of sales
and has resulted in a reduction in the Company's inventory levels of
components.
Cash at 30 June 2024 was $0.9m (30 June 2023: $3.8m; 31 December 2023:
$0.9m).
Prospects and Forecasts
The Board is confident the full commercial launch of the award winning
DISCOV-R product in Q4 2024 will be transformational for the Group. Demand
is expected to be very strong because a major competitor has left the market,
the two others have larger, more bulky products, and the small size of our
product is very appealing to the customer base. Additionally, most of the
development and capital costs for DISCOV-R have already been incurred.
At 30 June 2024 the Group had $0.9m in cash (30 June 2023: $3.8m; 31 December
2023: $0.9m), $3.1m in Finished Goods & Raw Material inventory and £5.2m
in Current Debtors and other Receivables.
Strong sales of X-PLOR and the expected significant demand for the DISCOV-R,
alongside the release of working capital through the sale of goods from its
existing inventory, and capital raise in July, indicate that the Group has
sufficient cash reserves to operate within the level of its current facilities
for a period of 12 months from the date of approval of the financial
statements.
Given that projected sales and prices may not materialize as anticipated in
the Group's forecasts, the Board continues to actively consider further
fundraising and other mitigating actions.
These conditions are necessarily considered to represent a material
uncertainty that may cast significant doubt over the Group's and the Company's
ability to continue as a going concern.
The Group's forecasts, taking account of reasonably possible downsides in
trading performance and development costs/timelines, and the risks to these
projections have been considered by the Board in its assessment of these
forecasts.
Based on the above, the Directors believe it remains appropriate to prepare
the financial statements on a going concern basis.
5. Segmental reporting
The chief operating decision makers consider that in the period to 30 June
2024 there is only one operating segment, being the sale of oxygen
concentrators in the United States.
The Group generated gross revenue of $1,345,757 in the period (2023 H1:
$366,221; 2023: $825,409). All sales were in the United States.
6. Other operating income and administrative expenses
6.1 Inventory impairments and adjustments
Group Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30/06/2024 30/06/2023 31/12/2023
US $ US $ US $
Obsolete raw material inventory and inventory adjustments 33,787 109,185 845,827
Impairment of Batteries - - 1,077,626
Impairment of Finished Goods Value - - 1,888,122
Provision for 2024 RMA's ("Return to Manufacturer Authorizations") - - 326,455
Total 33,787 109,185 4,138,030
6.1 Other operating income
Group Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30/06/2024 30/06/2023 31/12/2023
US $ US $ US $
Freight Charged 7,308 9,758 14,795
Rent charged 4,300 - 19,147
Other Direct Income 3,727 106 -
Total 15,335 9,864 33,942
6.2 Other direct costs
Group Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30/06/2024 30/06/2023 31/12/2023
US $ US $ US $
Sales Royalties 56,196 27,690 40,884
Freight Costs 106,992 38,813 63,107
Total 163,188 66,503 103,991
6.3 Expenses by nature
Group Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30/06/2024 30/06/2023 31/12/2023
US $ US $ US $
Operating Expenses
Employee Benefit expense 1,803,228 1,624,637 3,433,042
Sales & Marketing 828,919 274,871 655,229
Other administration expenses 1,122,386 857,207 1,903,776
3,754,533 2,756,715 5,992,047
Depreciation & Amortisation
Depreciation of property plant and equipment 32,933 24,281 49,559
Depreciation of right of use asset 56,745 56,552 113,231
Amortisation of product development 798,526 580,142 3,293,232
Impairment of TMT Goodwill (see Note 19 below) 1,478,968 - -
2,367,172 660,975 3,456,022
Staff Related Exceptional Costs
IFRS2 Share-based Payment Charge 104,029 103,948 163,061
Accrued Bonus - - 315,000
Former CFO Compensation 120,179 - 96,393
224,208 103,948 574,454
Foreign Exchange movements in Administration Expenses
Realised and Unrealised foreign exchange movements (348,440) 2,185,856 2,424,237
Other
Minimum Royalties in excess of Sales Royalties 354,804 250,211 792,818
Costs related to fundraising activities - 13,567 92,536
Contract Manufacturer Capacity Costs - - 86,440
354,804 263,778 971,794
Administration expenses 6,352,277 5,971,272 13,418,554
7. Finance income and costs
Group Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30/06/2024 30/06/2023 31/12/2023
US $ US $ US $
Income: Interest Income (396) (28) (2,127)
Costs: Interest cost on Right of Use Asset 6,033 10,668 19,256
Accrued Interest Other Equity Instruments 471,808 214,493 806,561
Other Interest Income and Costs 986 1,130 2,208
Finance Cost 478,431 226,263 825,898
8. Income tax expense
Due to the Group still being loss making there is no tax charge in the period
or previous periods.
9 Loss per share
Group Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30/06/2024 30/06/2023 31/12/2023
US $ US $ US $
Loss for the period (6,505,655) (6,419,132) (8,152,985)
Weighted Average Shares in Issue 158,709,628 124,216,681 130,395,343
Basic Loss per Share US$ (0.041) (0.052) (0.142)
Weighted Average Shares, Warrants and Options in Issue 171,328,554 136,357,669 131,949,445
Diluted Loss per Share US$ (0.041) (0.052) (0.142)
Potentially dilutive items are disregarded when calculating diluted earnings
per share as they are considered antidilutive.
10. Property, plant and equipment
Group Land & buildings
(Right of Use Asset) Furniture and Equipment
Cost US$ US $ Computer Equipment Production Equipment Leased Units
US $ US $ US$ Vehicles Total
US $ US $
At 1 January 2023 645,788 47,821 84,308 65,025 - 33,173 876,115
Additions during the period - - - 6,841 - - 6,841
FX revaluation - - - - - - -
At 30 June 2023 645,788 47,821 84,308 71,866 - 33,173 882,956
Additions during the period - 7,687 6,393 - 65,104 - 79,184
FX revaluation 3,918 184 353 - - - 4,455
At 31 December 2023 649,706 55,692 91,054 71,866 65,104 33,173 966,595
Additions during the period - 6,523 - - 21,701 - 28,224
FX revaluation (534) - (48) - - - (582)
At 30 June 2024 649,172 62,215 91,006 71,866 86,805 33,173 994,237
Accumulated depreciation
At 1 January 2023 (398,864) (39,385) (26,571) (10,272) - (1,382) (476,474)
Depreciation charge for the period (53,374) (1,073) (13,468) (6,659) - (2,765) (77,339)
At 30 June 2023 (452,238) (40,458) (40,039) (16,931) - (4,147) (553,813)
Depreciation charge for the period (60,581) (2,008) (14,440) (7,230) (1,944) (2,764) (88,967)
At 31 December 2023 (512,819) (42,466) (54,479) (24,161) (1,944) (6,911) (642,780)
Depreciation charge for the period (56,591) (2,626) (14,100) (7,230) (7,596) (2,765) (90,908)
At 30 June 2024 (569,410) (45,092) (68,579) (31,391) (9,540) (9,676) (733,688)
Net book value
At 30 June 2023 193,550 7,363 44,269 54,935 - 29,026 329,143
At 31 December 2023 136,887 13,226 36,575 47,705 63,160 26,262 323,815
At 30 June 2024 79,762 17,123 22,427 40,475 77,265 23,497 260,549
11. Intangible assets
Group Product Development
US$ Total
Cost US$
At 1 January 2023 11,737,503 11,737,503
Additions during the period 2,174,449 2,174,449
At 30 June 2023 13,911,952 13,911,952
Additions during the period 2,272,833 2,272,833
At 31 December 2023 16,184,785 16,184,785
Additions during the period 1,661,326 1,661,326
At 30 June 2024 17,846,111 17,846,111
Accumulated amortisation and impairment
At 1 January 2023 (3,068,771) (3,068,771)
Amortisation during the period (580,142) (580,142)
At 30 June 2023 (3,648,913) (3,648,913)
Amortisation during the period (2,548,356) (2,548,356)
At 31 December 2023 (6,197,269) (6,197,269)
Amortisation during the period (798,526) (798,526)
At 30 June 2024 (6,995,795) (6,995,795)
Net book value
At 30 June 2023 10,263,039 10,263,039
At 31 December 2023 9,987,516 9,987,516
At 30 June 2024 10,850,316 10,850,316
12. Inventory
Group Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30/06/2024 30/06/2023 31/12/2023
US $ US $ US $
Finished goods 1,536,672 1,721,612 1,426,357
Raw Materials 1,828,435 7,082,150 1,894,295
Total inventory 3,365,107 8,803,762 3,320,652
13. Share capital and premium
Share capital
Group No of shares of £0.01 each Total
US $
Issued and fully paid up
At 1 January 2023 123,017,161 1,662,185
Shares issued for cash 12,652,906 147,621
At 30 June 135,670,067 1,809,806
2023
Shares issued for cash 1,862,500 35,717
At 31 December 137,532,567 1,845,523
2023
Shares issued for cash 21,177,061 359,659
At 30 June 158,709,628 2,205,182
2024
Share premium
Group Ordinary Shares US $ Total
US $
Allotted and fully paid up
At 1 January 2023 33,379,947 33,379,947
Premium on shares issued 3,819,878 3,819,878
Cost of issue of shares (340,776) (340,776)
At 30 June 36,859,049 36,859,049
2023
Premium on shares issued 753,746 753,746
Cost of issue of shares (118,123) (118,123)
At 31 December 37,494,672 37,494,672
2023
Premium on shares issued 7,252,330 7,252,330
Cost of issue of shares (496,380) (496,380)
At 30 June 44,250,622 44,250,622
2024
Other equity instruments
Group Total
US $
At 1 January 2023 -
Convertible loan notes issued 5,854,754
Costs related to issuance (578,590)
10% coupon accrual 221,072
At 30 June 5,497,236
2023
Convertible loan notes issued 3,334,773
Costs related to issuance (249,809)
10% coupon accrual 585,489
At 31 December 9,167,689
2023
10% coupon accrual 460,937
At 30 June 9,628,626
2024
14. Reserves
Retained earnings Group
US $
At 1 January 2023 (10,310,673)
Loss for the period (6,419,132)
Share based payments charge 103,948
At 30 June 2023 (16,625,857)
Loss for the period (12,078,307)
Share based payments charge 89,230
At 31 December 2023 (28,614,934)
Loss for the period (6,477,499)
Share based payments charge 10,866
At 30 June 2024 (35,081,567)
Capital Contribution Group
US $
At 1 January 2023 165,000
Capital contribution received -
At 30 June 2023 165,000
Capital contribution received -
At 31 December 2023 165,000
Capital contribution received -
At 30 June 2024 165,000
The Capital Contribution relates to the acquisition of intangible product
licences.
Share option reserve Company
US $
At 1 January 2023 -
Lapsed share options -
At 30 June 2023 -
Lapsed share options (20,180)
At 31 December 2023 (20,180)
Lapsed share options -
At 30 June 2024 (20,180)
Translation reserve Company
US $
At 1 January 2023 (4,544,337)
Foreign exchange gain/(loss) 2,040,395
At 30 June 2023 (2,503,942)
Foreign exchange gain/(loss) 158,334
At 31 December 2023 (2,345,608)
Foreign exchange (loss)/gain (234,200)
At 30 June 2024 (2,579,808)
The translation reserve comprises all foreign exchange differences arising
from the translation of the financial statements of foreign operations,
primarily relating to the statement of financial position at the reporting
dates.
15. Cash generated from operating activities
Group Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30/06/2024 30/06/2023 31/12/2023
US $ US $ US $
Loss before income tax (6,505,655) (6,419,132) (18,497,540)
Adjustments for
- Depreciation 34,389 24,282 51,503
- ROU Depreciation 56,745 56,552 122,517
- Amortisation and impairment 798,526 580,142 3,128,499
- No cash interest expense 475,493 222,941 813,041
- Movement in foreign exchange 370,513 602,454 (620,714)
- Issue of share based payments 35,998 103,948 142,981
Movement in trade and other receivables (471,512) 48,079 (1,502,346)
Inventory movement (44,460) (372,731) 5,109,920
Movement in trade and other payables (220,427) 263,516 2,120,568
Cash generated from operating activities (5,470,390) (4,889,949) (9,131,571)
( )
16. Alternative Performance Measures
Adjusted EBITDA Unaudited 6 months to 30/06/2024 Unaudited 6months to 30/06/2023 Audited 12 months to 31/12/2023
US $ US $ US $
Total comprehensive loss for the period (6,785,471) (4,378,737) (16,269,031)
Add back:
Administrative expenses: Realised & unrealised FX movements (361,575) 2,185,856 2,424,237
Other comprehensive income: FX translation differences 282,621 (2,040,395) (2,248,588)
Net foreign exchange movement(2) (78,954) 145,461 175,649
Finance Income and Costs 6,624 11,770 19,337
Accrued interest on Convertible Loan Notes 471,808 214,493 806,561
Product development amortisation 798,526 580,142 3,293,232
Impairment of acquisition goodwill 1,478,968 - -
Costs relating to fundraising activities - 13,567 92,536
Former CFO compensation 120,179 - 96,393
Minimum royalties in excess of sales royalties 354,804 250,211 792,818
Contract Manufacturer Capacity Costs - - 86,440
Inventory Impairment and Adjustments 33,787 109,185 4,138,030
Accrued Bonus - - 315,000
Issue of share based payments 104,029 103,948 163,061
Adjusted EBITDA (3,495,700) (2,949,960) (6,289,974)
1 Reconciliation to Adjusted EBITDA measure
Adjusted EBITDA is the Group's key adjusted profit measure. Total
comprehensive loss for the period is adjusted to exclude; Foreign exchange
translation differences along with unrealised and unrealised foreign exchange
movements, depreciation and amortisation of product development, costs
relating to fundraising activities, surrendered share options and share option
taxes, minimum royalties in excess of sales royalties, share based payments,
obsolete 1st generation X-PLOR inventory adjustments and contract manufacturer
capacity costs.
2 Net foreign exchange movements
£Sterling to US$ stayed broadly the same during the period (1 January 2024 -
$1.27:£1.00; 30 June 2024 - $1.27:£1.00). Due to the size of the
Intercompany Loan from the PLC to the US subsidiary which is fixed in
£Sterling, this creates an accounting presentational impact between
Administration Expenses and Other Comprehensive Income, which to a large
extent can be netted off against one another.
o Realised FX movements in administrative expenses arise from the
revaluation of £Sterling cash balances into US$
o Unrealised FX movements in administrative expenses arise from the
revaluation of the Intercompany Loan fixed in £Sterling into US$
o Foreign currency translation differences in Other Comprehensive Income
arise from the revaluation of the PLC balance sheet into US$
17. Related party transactions
As disclosed in the Admission Document, prior to Robert Rauker joining the
Company, he undertook independent patent work for Separation Design Group IP
Holdings LLC ("SDG"). Pursuant to a Patent Broker Agreement dated 22 October
2015 SDG entered into an agreement with Medicinus IP LLC ("Medicinus"), of
which Robert Rauker is the sole shareholder, under which Medicinus has agreed
to facilitate the sale and/or licence of intellectual property owned by SDG
which includes soliciting potential buyers and licencees of such intellectual
property. In consideration for the provision of these services, Medicinus
receives a fee of 12.5 per cent. of the licence fees, sales price and/or
royalties received by SDG which will include 12.5 per cent. of the royalties
the Company will pay to SDG in relation to sales of the X-PLOR and DISCOV-R,
pursuant to the agreement entered into between SDG and the Company. The
agreement can be terminated by either party by written notice.
The non-executive fees paid to Adam Reynolds were paid through his company
Reyco Limited.
In the period the Company paid $0.31m (2023 H1: $0.58m; FY 2023: $0.44m) to
Dowgate Capital Limited in relation to brokerage fees, research and
fundraising activities. David Poutney is the Chief Executive Officer of
Dowgate Capital Limited
In 2023, Robert Rauker was awarded a bonus program worth $625,000 based on
milestones on commercial progress with InnoMax. To date $312,000 has been
earned, although payment of $157,000 of the earned amount has been deferred
until 2025 at the Company's election.
18. Contingent Liability
SDG Licence
On 24 February 2017, the Company entered into a co-exclusive licence and
development agreement with Separation Design Group, LLC and SDG (together the
"SDG Parties") ("SDG Licence") which was subsequently amended by an amendment
agreement dated 19 March 2023. Pursuant to the SDG Licence: if by 3 September
2025, cumulative sales of the X-PLOR and DISCOV-R have not exceeded $20
million dollars, Belluscura must make a one-time payment of $3 million to the
SDG Parties to maintain the exclusive SDG licence. By 30 June 2024 cumulative
sales of X-PLOR were $3.2 million.
The Directors assess that the Group will meet the minimum obligations and
therefore no provision has been made in these Financial Statements.
Supplier Claim 1
During 2023 the Company received a claim from a supplier regarding alleged
default by the Company under an ongoing contract. The Company has subsequently
counter-claimed against the supplier for alleged poor service The supplier has
subsequently filed a lawsuit in the United States.
The Company has received an independent legal opinion and believes that any
claim against the Company is lower than the claim made by the Company.
Accordingly, no provision has been made as at 30 June 2024. The Directors
believe that based on their current assessment of the facts the current $nil
provision is appropriate. However, the final amount is dependent upon the
outcome of the agreements between the two parties and/or the lawsuit.
Supplier Claim 2
During 2024 the Company received a claim from a supplier regarding alleged
default by the Company under an ongoing contract. The Company has subsequently
counter-claimed against the supplier for alleged poor service The supplier has
subsequently filed a lawsuit in the United States.
The Company has received an independent legal opinion and believes that any
claim against the Company is lower than the claim made by the Company.
Accordingly, no provision has been made as at 30 June 2024. The Directors
believe that based on their current assessment of the facts the current $nil
provision is appropriate. However, the final amount is dependent upon the
outcome of the agreements between the two parties and/or the lawsuit.
19. Acquisition of TMT Acquisition plc
On 31 October 2023, Belluscura announced a recommended all share offer for TMT
Acquisition plc, which operated as a cash shell. The offer became wholly
unconditional on 9 February 2024 and the acquisition completed in March 2024.
TMT Acquisition plc held assets of approximately $5.8m in cash. Based on the
Closing Price per Belluscura Share of 21.0 pence on 9 February 2024 (being the
latest practicable date prior to the Offer going unconditional), the value of
TMT Acquisition plc was approximately $7.3m. Due to the Company's working
capital needs, the directors believed that the premium represented reasonable
value. The $1.5m of goodwill this created has been fully impaired in the
period.
20. Events after the reporting period
The Group announced on 2 July 2024 that it has raised gross proceeds of £1.9
million (before expenses) through (i) the conditional issue of £1.7
million of 7% unsecured convertible loan notes 2029 and (ii) the issue of
1,375,665 new ordinary shares of 1 penny each at the price of 15 pence per
share.
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