RNS Number : 2817G
IQ-AI Limited
25 April 2025
IQ-AI Ltd
("IQ-AI" or "the Company")
Publication of Annual Report
The Board of IQ-AI Ltd is pleased to announce the Company's audited financial statements for the year ended 31 December 2024.
The Annual Report will be available on the Company's corporate website at www.iq-ai.ltd.
--ENDS-
The Directors of the Company accept responsibility for the contents of this announcement.
For further information, please contact:
Peterhouse Capital Limited (Financial Adviser and Broker) Tel: 020 7220 9797
Highlights
· Revenue grew by over 20% in 2024, reaching $959k (£750k), up from - $758k (£609k) in 2023.
· Financial results improved significantly with losses of £327k halved compared to 2023 (£624k). Without the share options' accounting treatment, losses would have reduced further to £140k. Cash burn also improved. We are expecting a modest loss this year, and expect to at least break even, or achieve a profit next year, if current trends continue.
· GE Healthcare is now a sales partner, with training for their sales and marketing teams recently completed. GEH has provided the Company with promising sales projections.
· Post-year end fundraise of £250k.
IB Clinic
IB Clinic, our umbrella product for all IB software platforms, is expanding in both use and application.
IB Neuro is our leading MR DSC perfusion processing platform, featuring unique correction algorithms and image calibration technology for accurate results across scanners, field strengths, patients, and time points. It helps standardize perfusion approaches and supports Fractional Tumour Burden (FTB) mapping. Supported by scientific studies, IB Neuro aids clinicians in diagnosis, biopsy accuracy, treatment response quantification, and planning for surgery and laser ablation.
IB Delta Suite creates Delta T1 maps from routine MR exams, essential for FTB mapping. These maps visualize contrast enhancement accurately, removing confounding factors like post-surgical blood.
While IB Neuro and IB Delta Suite focus on neuro applications, IB DCE and IB Diffusion provide whole-body insights on blood flow and water diffusion.
StoneChecker and Liver Surface Nodularity ("LSN") are advanced computed tomography (CT) processing applications designed to assist clinicians in the non-invasive assessment of kidney stones and liver health. StoneChecker utilizes texture analysis to provide data that aids in determining an optimal treatment plan for patients with kidney stones. LSN employs proprietary algorithms to evaluate the roughness of a liver's surface, which has a direct correlation with liver disease. Both applications enhance clinical decision-making through detailed imaging analysis.
In 2024, we focused on incorporating AI technology for automated segmentation. This AI model will be used across multiple platforms, including FTB maps. Before this feature, we released FTB Express maps, an unsegmented "whole brain" version that aids clinical interpretation and increases productivity.
We launched IB ASL™ to measure cerebral blood flow (CBF) for assessing stroke, dementia, and other neurological conditions. ASL is a non-invasive MRI technique that labels water molecules in the blood to create detailed perfusion maps without a contrast agent, making it suitable for paediatric patients and those with compromised renal function.
ASL's clinical adoption is increasing as its technology becomes more reliable, supported by published research. IB ASL's initial release is being prepared for distribution, with one US site already eager to receive it. It will be sold on an annual subscription basis like other IB Clinic modules.
Marketing efforts for IB Clinic emphasize FTB maps. From March to June 2025, six presentations at global conferences will showcase FTB maps' application in diagnosis, treatment monitoring, surgical guidance, and assessment of surgical resection, aiding clinicians in treating brain tumour patients at every stage.
IB Zero G
IB Zero G, our innovative technology designed to eliminate the need for gadolinium contrast agents in standard imaging, is still in its early development phase. While the potential impact of a commercially viable product is promising, we are currently prioritizing internal resources on projects with more immediate and tangible revenue potential. This includes our non-contrast imaging platforms, such as IB ASL, and IB Neuro's exclusive low flip angle (LFA) approach, which enables a 50% reduction in gadolinium-based contrast administration for MR perfusion image analysis.
IB Nimble
Telemedicine has rapidly grown since the Covid-19 pandemic, with remote consultations becoming routine due to technological advancements. IB Nimble supports healthcare providers by offering vital information at their fingertips, enabling efficient virtual collaboration among clinicians and delivering personalized care promptly.
IB Nimble fills a valuable niche in time-sensitive care settings like emergency rooms, enhancing efficiency through instant collaboration. Dr. Joseph Bovi is the primary spokesperson.
Additional resources have been allocated to expedite IB Nimble's enhancement. Following these improvements, we plan to develop a patient-centric app for symptom reporting, creating a global data repository for AI-based solutions like large language models (LLMs). This repository aims to become a major archive for treatment-specific data, facilitating customized treatment plans with accurate predictions.
IB Nimble will also optimize multi-centre clinical trials, addressing common issues such as errors and delays, leveraging our experience from previous trials and insights from our current Phase 1 trial.
IB003 candidate drug for Glioblastoma (GBM)
In March 2022, our Phase 1 clinical trial for gallium maltolate (IB003) began enrolling participants to determine its maximum tolerated dose. During the course of the trial, we also received FDA designations including Orphan Drug, Rare Paediatric Disease, and Fast Track. Due to the lack of toxicity, higher doses than initially planned were tested, slightly delaying trial completion. Encouragingly, patients tolerated the agent well, with no adverse events reported so far. A few high-dose patients experienced manageable diarrhoea and continued treatment. The trial has now entered the final "expansion" phase with three more patients at the recommended Phase 2 dose, each of whom must complete at least one month of treatment for the trial to conclude.
Though the trial has still to be completed, we present the following interim analysis of the trial data.
The overall survival ("OS") for patients with glioblastoma (GBM) averages approximately 8 months based on extensive data collected in over 168,000 patients (2024 CDC/Central Brain Tumor Registry Report). For patients undergoing standard of care treatment, consisting of surgery, chemotherapy, and radiation therapy, the median OS extends to 14-15 months, which can be prolonged to about 20 months when another surgery can be performed at the time of recurrence.
To date, the trial has 23 patients with evaluable data and, of those, 19 had redo surgeries. The data is showing improved patient outcomes with an OS 14 months from the initiation of GaM treatment and 32 months from the time of initial diagnosis. This represents a positive signal of response, even though a Phase 1 trial is not designed or powered to directly address outcomes.
Another measure of outcome, which is based on conventional radiologic imaging, is progression free survival ("PFS"). PFS may provide an earlier indication of response. However, both tumour and treatment response can appear the same on the standard MRIs used for this assessment, making it difficult to accurately measure PFS, which is also true of the current trial. To address this limitation, investigators are using IB's FTB maps to gain further insight into treatment response and expect them to provide a more accurate and earlier assessment of response.
In summary, GBM presents significant challenges, with most patients facing a prognosis of less than one year. The preliminary Phase 1 results are encouraging and motivate progression to a Phase 2 trial designed to fully assess efficacy.
For recurrent GBM patients, the study suggests that GaM, as a single therapy or in combination, may offer a survival benefit longer than expected, even if the tumour progresses early. However, further research is required to confirm these findings and to develop more effective strategies for managing this challenging condition. We continue to evaluate potential partners and sponsors to join us in furthering the development of IB003. This includes continuing our conversations with prospective partners, sharing the promising results with respect to signals of efficacy, and keeping them abreast of the trial's progress.
An "end of Phase 1" meeting will be requested with the FDA in Q2, from which we will look forward to receiving the FDA's feedback and guidance as a Fast Track Designated agent.
Valuable and exciting pre-clinical research continues by our scientific collaborators at MCW. These studies unveil promising new opportunities for IB003 including using IB003 in combination with other therapies.
We are monitoring Congressional activity regarding the rare paediatric disease priority review voucher (PRV) program. If not reauthorized, only agents approved by September 30, 2026, will be eligible for a voucher. There is hope Congress will extend the program, which has been crucial for developing treatments for rare paediatric diseases without government costs. If it ends, the impact on rare paediatric disease drug development would be significant.
Expanded Access Program
Due to the poor prognosis for brain tumour patients and the good tolerance of our agent in Phase 1 trials, we decided to start an expanded access program (EAP) at the end of 2023. EAPs provide investigational agents to patients who have no other treatment options and are not part of drug development. Using the FDA's cost recovery mechanism, we can charge patients for the direct costs of the agent.
In May 2024, we received a "study may proceed" notice from the FDA and, shortly thereafter, obtained authorization for the cost recovery component. At the time of this writing, eleven patients have subscribed to the EAP and eight are currently receiving treatment. Of those eight, two have surpassed five months. For patients with this condition, the historical progression-free survival (PFS) is 1.5 - 4.5 months [1].
1. McBain C, Lawrie TA, Rogozińska E, Kernohan A, Robinson T, Jefferies S. Treatment options for progression or recurrence of glioblastoma: a network meta-analysis. Cochrane Database Syst Rev. 2021 May 4;5(1):CD013579. doi: 10.1002/14651858.CD013579.pub2. PMID: 34559423; PMCID: PMC8121043.
The Musella Foundation for Brain Tumor Research and Information, Inc. remains a dedicated advocate for the development of IB003. They supported our sponsorship of the Phase 1 clinical trial and, more recently, the initiation of our Expanded Access Program (EAP). Furthermore, they have provided an efficient platform for generous donors to make tax-deductible contributions to help patients offset expenses associated with participating in the EAP.
Our active EAP sites are strategically located across the United States, accommodating patients who travel across state lines to join. Fortunately, participation in our EAP does not necessitate frequent hospital visits. As IB003 is administered orally, its treatment is convenient and can be undertaken at home. Currently, eight patients are actively enrolled in the EAP, with participation durations ranging from one to seven months.
Orphan diseases, being rare, impact a relatively small number of individuals. Given the limited patient population, pharmaceutical companies may be less inclined to allocate resources to research and development of treatments for these conditions. Leveraging the benefits and tax incentives provided by the Orphan Drug Act of 1983, we are committed to progressing the development of IB003. The results from Phase 1 clinical trials and the real-world data collected from the EAP represent the most expedient pathway towards addressing this significant unmet clinical need.
Change of name
IQ-AI Limited will change its name to Imaging Biometrics Limited to eliminate confusion and reflect that Imaging Biometrics is the sole operating subsidiary. This rebranding simplifies our identity for investors and partners, building upon the excellent service for which we are known. Our ticker (EPIC) symbol will change to IBAI on the London Stock Exchange. Operations, services, and shareholder commitments will continue without disruption.
Outlook
Although there has been considerable product development and innovation over past years, profits have been elusive. Currently our market capitalisation is around £1.8m, one of the lowest it has been, despite obvious value enhancement. The Company currently has no debt, a large bank of IP, and the potential of revenue and further value realisation from the Clinical trial and EAP initiatives and developed products. The directors share the frustration of shareholders with the valuation accorded the Company by the market, not least because we are also significant shareholders. The Company continues to have huge potential in the opinion of the directors, though this does not appear to be a view shared by the market if one takes the current share price as a guide.
By way of example, in 1998 Apple Inc's share price was $0.31 (adjusted for splits). In the ensuing next 8 years, it fluctuated between $0.53 and $6.07. Today, it trades around $236 with one of the largest global market caps. This exemplifies the unpredictability of markets and the difficulty in forecasting long-term investment outcomes.
IQ-AI has now been quoted for 8 years. Many IQAI shareholders, including the major holders, will be painfully aware that investments are a long-term endeavour with unpredictable results. Meanwhile, endurance and patience are the most useful qualities for shareholders to possess until a conclusion is reached.
Trevor Brown
Chief Executive Officer
Consolidated Income Statement
For the year ended 31 December 2024
2024
2023
Notes
£
£
Continuing operations
Revenue
750,105
609,390
Cost of sales
(7,766)
(11,636)
Gross profit
742,339
597,754
Administrative expenses
(1,069,857)
(1,004,086)
Other income
5
8
Operating loss
5
(327,513)
(406,324)
Impairment of goodwill and intangible assets
10 & 11
-
(207,627)
Finance costs
4
410
(9,865)
Loss before income tax
(327,103)
(623,816)
Income tax
7
-
-
Loss for the year from continuing operations
(327,103)
(623,816)
Loss for the year attributable to the owners of the Company
(327,103)
(623,816)
Earnings per share attributable to owners of the Company
From continuing operations:
Basic and diluted (pence per share)
8
(0.15)
(0.34)
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2024
2024
2023
£
£
Loss for the period
(327,103)
(623,816)
Other comprehensive income
Items that may be subsequently reclassified as profit or loss
Exchange differences on translation of foreign operations
2,772
(3,100)
2,772
(3,100)
Total comprehensive loss for the year attributable to the owners of the Company
(324,331)
(626,916)
Consolidated Statement of Financial Position
As at 31 December 2024
2024
2023
£
£
Notes
Non-current assets
Property, plant and equipment
9
942
1,677
Goodwill
10
72,640
71,420
Intangible assets
11
604,633
340,870
Total non-current assets
678,215
413,967
Current assets
Trade and other receivables
13
197,954
168,018
Cash and cash equivalents
53,500
138,751
Total current assets
251,454
306,769
Current liabilities
Trade and other payables
14
627,142
625,812
Total current liabilities
627,142
625,812
Net current (liabilities)/assets
(375,688)
(319,043)
NET ASSETS
302,527
94,924
Equity
Share capital
15
2,217,098
1,906,715
Share premium
15
20,705,137
20,555,087
Capital redemption reserve
23,616
23,616
Merger reserve
160,000
160,000
Convertible loan note reserve
18
-
100,953
Share based payment reserve
270,093
81,696
Foreign currency reserve
9,695
22,866
Retained losses
(23,083,112)
(22,756,009)
Equity attributable to owners of the Company
302,527
94,924
TOTAL EQUITY
302,527
94,924
Consolidated Statement of Changes in Equity
For the year ended 31 December 2024
Share capital
Share premium
Capital redemption reserve
Merger reserve
Convertible loan note reserve
Share based payment reserve
Foreign currency reserve
Retained losses
TOTAL EQUITY
£
£
£
£
£
£
£
£
£
Balance at 1 January 2023
1,826,214
20,553,499
23,616
160,000
217,784
81,696
21,064
(22,176,800)
707,073
Loss for the year
-
-
-
-
-
-
-
(623,816)
(623,816)
Exchange differences on translation of foreign operations
-
-
-
-
-
-
(3,100)
-
(3,100)
Total comprehensive loss for the year
-
-
-
-
-
-
(3,100)
(623,816)
(626,916)
Transactions with shareholders:
Loan conversion
84,464
42,232
-
-
(126,696)
-
-
-
-
Shares cancelled
(3,963)
(40,644)
-
-
-
-
-
44,607
-
Movement in the year
-
-
-
-
9,865
-
4,902
-
14,767
Transactions with owners, recognised directly in equity
80,501
1,588
-
-
(116,831)
-
1,802
(579,209)
(612,149)
Balance at 31 December 2023
1,906,715
20,555,087
23,616
160,000
100,953
81,696
22,866
(22,756,009)
94,924
Loss for the year
-
-
-
-
-
-
-
(327,103)
(327,103)
Exchange differences on translation of foreign operations
-
-
-
-
-
-
(13,171)
-
(13,171)
Total comprehensive loss for the year
-
-
-
-
-
-
(13,171)
(327,103)
(340,274)
Transactions with shareholders:
-
-
-
-
-
-
-
-
Loan conversion
63,050
37,493
-
-
(100,543)
-
-
-
-
Shares issued
247,333
123,667
-
-
-
-
-
-
371,000
Cost of shares issued
-
(11,110)
-
-
-
-
-
-
(11,110)
Share based payments
-
-
-
-
-
188,397
-
-
188,397
Movement in the year
-
-
-
-
(410)
-
-
-
(410)
Transactions with owners, recognised directly in equity
310,383
150,050
-
-
(100,953)
188,397
(13,171)
(327,103)
207,603
Balance at 31 December 2024
2,217,098
20,705,137
23,616
160,000
-
270,093
9,695
(23,083,112)
302,527
Consolidated Statement of Cash Flows
For the year ended 31 December 2024
GROUP
2024
2023
£
£
Operating loss
(327,103)
(623,816)
Adjustment for:
Depreciation and amortisation
54,473
115,401
Impairment of intangible assets
-
207,627
Impairment of the investment in a subsidiary
-
-
Fees in exchange for shares
-
-
Share based payment expense
188,397
-
Foreign exchange (loss)/ gain
(22,913)
37,338
Finance costs
(410)
9,865
Decrease/(increase) in receivables
(29,936)
29,254
Increase/(decrease) in payables
1,333
127,502
Net cash used in operating activities
(136,159)
(96,829)
Cash flows used in investing activities:
Purchase of equipment
-
-
Purchase of intangible assets
(308,982)
(78,405)
Net cash used in investing activities
(308,982)
(78,405)
Cash flows from financing activities
Shares issued net of share costs
359,890
-
Net cash from financing activities
359,890
-
Net decrease in cash and cash equivalents
(85,251)
(175,234)
Cash and cash equivalents brought forward
138,751
313,985
Cash and cash equivalents carried forward
53,500
138,751
Material non-cash items
Within operating activities there is a share based payment expense of £188,397 (2023: £nil) which is a non-cash movement. In the previous year there was an impairment of £207,627 which was also a non-cash movement. There are no such impairments in 2024. During the year, the convertible loans totalling £100,953 were converted into shares, this also represents a non-cash movement.
1. Summary of significant accounting policies
IQ-AI Limited (the "Company") is a limited liability company limited by shares incorporated and domiciled in Jersey.
The financial statements are presented in pound sterling ("£"), which is also the functional currency of the company, since that is the currency of the primary environment in which the Group and Company operates. The subsidiary's functional currency is the United States dollar ("$").
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The individual company information has been omitted from the annual accounts this year as these are not required.
Basis of preparation
These financial statements have been prepared and approved by the Directors in accordance with the EU-endorsed international financial reporting standards.
The financial statements have been prepared under the historical cost convention.
The preparation of financial statements in conformity with EU-endorsed IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2.
Going concern
The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chief Executive Officer's Statement. In addition, note 20 to the financial statements includes the Group's and Company's objectives, policies and processes for managing its capital and its financial risk management objectives.
The Group meets its day to day working capital requirements through its revenue generating cashflows, discrete fund raises and the issue of convertible loan notes.
The current economic conditions continue to create uncertainty, particularly over (a) the level of demand for the group's products; and (b) the availability of finance for the foreseeable future. The Directors are satisfied that the Group has sufficient resources to meet any obligations over the going concern period. At 31 December 2024, the Group had cash balances of £53,500 (2023: £138,751). The company also secured a fundraise of £250,000 in March 2025.
Taking in to account the comments above, the Directors have, at the time of approving the financial statements, a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Therefore, they continue to adopt the going concern basis of accounting in preparing the financial statements. There has been no direct impact to the Company and the Group due to the war in the Ukraine.
New standards, amendments and interpretations adopted by the Group and Company
The Group has adopted all recognition, measurement and disclosure requirements of IFRS, including any new and revised standards and interpretations of IFRS, in effect for annual periods commencing on or after 1 January 2024. The adoption of these standards and amendments did not have any material impact on the financial result of position in the Group.
At the date of authorisation of these financial statements, the following Standards and Interpretation, which have not yet been applied in these financial statements, were in issue, but not yet effective:
Standards /interpretations
Application
IAS 1 amendments
Presentation and Classification of Liabilities as Current or Non current
IAS 16 Amendments
Lease liability in a sale and leaseback
IAS 1 Amendments
Presentation of Financial Statements
There are no IFRS's or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company or Group.
Basis of consolidation
The Group financial statements consolidate the financial statements of the Company and all its subsidiaries ("the Group"). Subsidiaries include all entities over which the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control commences until the date that control ceases. Intra-group balances and any unrealised gains and losses on income or expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.
The acquisition method of accounting is used to account for business combinations. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued, and liabilities incurred or assumed at the date of exchange, and the equity interests issued. Identifiable assets acquired, and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value at the acquisition date. Acquisition related costs are expensed as incurred. Where necessary, amounts reported by subsidiaries have been adjusted to conform with the Group's accounting policies.
Investments in subsidiaries
Investments in subsidiaries are held at cost less any impairment.
Goodwill
Goodwill on acquisition of subsidiaries represents the excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets and contingent liabilities acquired. Identifiable assets are those which can be sold separately, or which arise from legal rights regardless of whether those rights are separable. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill is not amortised but is tested annually, or when trigger events occur, for impairment and is carried at cost less accumulated impairment losses.
Foreign currency translation
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. Foreign exchange gains and losses are presented in the income statement within 'finance income or costs.'
The results and financial position of Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
· assets and liabilities for each Statement of Financial Position presented are translated at the closing rate at the date of that Statement of Financial Position;
· income and expenses for each Income Statement presented are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and
· all resulting exchange differences are recognised in other comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognised in other comprehensive income.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.
Depreciation on other assets is calculated using the straight-line method to allocate their cost or revalued amounts to their residual values over their estimated useful lives, as follows:
Equipment 3 - 8 years
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
Intangible assets - Intellectual property and internally generated software
Separately acquired intellectual property is shown at historic cost. Intellectual property acquired in a business combination is recognised at fair value at the acquisition date. Amortisation is calculated using the straight-line method over the estimated useful life of up to 5 years.
Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets when the following criteria are met:
· it is technically feasible to complete the software product so that it will be available for use;
· management intends to complete the software product and use or sell it;
· there is an ability to use or sell the software product;
· it can be demonstrated how the software product will generate probable future economic benefits;
· adequate technical, financial and other resources to complete the development and use or sell the software product are available; and
· the expenditure attributable to the software product during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the software product include the software development employee costs and an appropriate portion of relevant overheads.
Other development expenditure that does not meet these criteria is recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Software development costs recognised as assets are amortised over their estimated useful lives, which do not exceed 5 years. Amortisation commences when regulatory approval is obtained, and the product is commercially available.
Impairment of non-financial assets
Intangible assets that have an indefinite useful life or intangible assets not ready to use are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). Prior impairments of non-financial assets (other than goodwill) are reviewed for possible reversal at each reporting date.
Financial instruments
Financial assets and financial liabilities are recognised in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.
Financial assets
The Group classifies its financial assets in the following categories financial assets as "at fair value through profit and loss" and "loans and receivables". The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Management determines the classification of its financial assets at initial recognition.
Loans and receivables
Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. Trade receivables are held with the objective of collecting the contractual cash flows. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.
Trade receivables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method, less provision for impairment. The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets.
Due to the short-term nature of the other current receivables, their carrying amount is considered to be the same as their fair value.
A financial asset is assessed at each reporting date to determine whether there is any evidence that it is impaired. A financial asset is considered impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset. Individual significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics. All impairment losses are recognised in the consolidated income statement.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid investments with maturities of three months or less.
Financial liabilities and equity instruments issued by the group
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issued costs.
Convertible loan notes
The convertible loan note ("CLN") is a compound financial instrument that can be converted to share capital at the option of the holder. As the CLN, and the accrued interest, can only be repaid by the issue of shares, it has been recognised in equity only, with no liability component. Interest is accounted for on an accruals basis and charged to the Consolidated Income Statement and added to the carrying amount of the equity component of the CLN.
Trade and other payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.
Trade and other payables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method. The carrying amounts of trade and other payables are considered to be the same as their fair values.
Segment reporting
An operating segment is a component of the Group that engages in business activity from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with and of the Group's other components. All operating segments' operating results, for which discrete financial information is available, are reviewed regularly by the Group's Board to make decisions about resources to be allocated to the segment and assess its performance. The Group reports on a two-segment basis - holding company expenses and medical software.
Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects, from the proceeds.
Share-based payments
The Company operates an equity-settled, share-based compensation plan, under which the entity receives services from employees as consideration for equity instruments (options) of the Company. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted:
· including any market performance conditions (for example, an entity's share price);
· excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and
· including the impact of any non-vesting conditions (for example, the requirement for employees to save or holding shares for a specific period of time).
At the end of each reporting period, the group revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions and service conditions. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity.
In addition, in some circumstances employees may provide services in advance of the grant date and therefore the grant date fair value is estimated for the purposes of recognising the expense during the period between service commencement period and grant date.
When the options are exercised, the company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium.
The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase in investment in subsidiary undertakings, with a corresponding credit to equity in the parent entity accounts.
The social security contributions payable in connection with the grant of the share options is considered an integral part of the grant itself, and the charge will be treated as a cash-settled transaction.
Revenue recognition
The group derives revenue from the transfer of goods and services at a point in time and over time. Revenue from external customers arise on the sales of software licences, including associated maintenance, and consultancy services.
Revenue from licence sales is measured at the agreed transaction price at a point in time. A receivable is recognised when access to the software is granted, since this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due. Support and maintenance services are provided on the product supplied; this is deemed to be a separately identifiable product and is recognised over time. Revenue from consulting services are recognised in the accounting period in which the services are rendered.
Taxation
The Company is registered in Jersey, Channel Islands and is taxed at the Jersey Company standard rate of 0%. However, the Company's subsidiaries are situated in jurisdictions where taxation may become applicable to local operations.
The major components of income tax on profit or loss include current and deferred tax.
The tax currently payable is based on the taxable profit for the period using the tax rates that have been enacted or substantially enacted by the balance sheet date. Taxable profit differs from the net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Group financial statements. Deferred tax is determined using tax rates that have been enacted or substantially enacted at the balance sheet date and are expected to apply when the related deferred income tax asset is realised of the deferred tax liability is settled.
Deferred tax assets are only recognised to the extent that it is probable that future taxable profit will be available against which the asset can be utilised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited to equity, in which case the deferred tax is also dealt with in equity.
2. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Impairment of intangible assets
Impairment tests on intangible assets are undertaken annually at the financial year end. The directors have reviewed the valuation of all intangibles in the year and concluded that there are no indicators of impairment in 2024 (2023: 125,000). Refer to Note 10 and Note 11.
Goodwill is not amortised but is tested annually, or when trigger events occur, for impairment and is carried at cost less accumulated impairment losses.
Share Based Payments
The directors have estimated the share based payment by using the Black Scholes model, taking into account the terms and conditions upon which the options were granted.
Critical judgments in applying the entity's accounting policies
The following are the critical judgements that the Directors have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.
Capitalisation of internally developed software
Distinguishing the research and development phases of the software suites and determining whether the recognition requirements for the capitalisation of development costs are met requires judgement. After capitalisation, management monitors whether the recognition requirements continue to be met and whether there are any indicators that capitalised costs may be impaired. Refer to Note 11.
3. Segmental analysis
The Directors are of the opinion that under IFRS 8 - "Segmental Information" the Group operated in three primary business segments in 2024: being holding company expenses, medical software and Oral GaM. The secondary segment is geographic. The Group's losses and net assets by primary business segments are shown below.
Segmentation by continuing businesses:
The following is an analysis of the Group's assets and liabilities by reportable segment as at 31 December 2024 and the capital expenditure for the year then ended:
Holding company
Medical Software
Oral GaM
Total
Total assets
20,958
230,496
-
251,454
Total liabilities
(88,010)
103,458
(642,590)
(627,142)
Intangible assets
72,640
604,633
-
677,273
PP&E
-
942
-
942
5,588
939,529
(642,590)
302,527
The following is an analysis of the Group's assets and liabilities by reportable segment as at 31 December 2023 and the capital expenditure for the year then ended:
Holding company
Medical Software
Oral GaM
Total
Total assets
13,936
292,833
-
306,769
Total liabilities
(112,524)
(143,972)
(369,315)
(625,811)
Intangible assets
71,420
340,869
-
412,289
PP&E
-
1,677
-
1,677
(27,168)
491,407
(369,315)
94,924
The following is an analysis of the Group's revenue and results by reportable segment in 2024:
Holding company
Medical software
Oral GaM
Total
Revenue
-
750,105
-
750,105
Cost of sales
-
(7,766)
-
(7,766)
Gross profit
-
742,339
-
742,339
Administration expenses
(381,000)
(331,269)
(120,112)
(832,381)
Depreciation and amortisation
-
(54,457)
-
(54,457)
Share-based payment
(183,019)
-
-
(183,019)
Other income
5
-
-
5
Operating profit
(564,014)
356,613
(120,112)
(327,513)
Impairment of goodwill and intangible assets
-
-
-
-
Finance costs
410
-
-
410
Profit / (loss) before tax
(563,604)
356,613
(120,112)
(327,103)
Tax (charge) / credit for the year
-
-
-
-
Profit / (loss) for the year
(563,604)
356,613
(120,112)
(327,103)
The following is an analysis of the Group's revenue and results by reportable segment in 2023:
Holding company
Medical software
Oral GaM
Total
Revenue
-
609,390
-
609,390
Cost of sales
-
(11,636)
-
(11,636)
Gross profit
-
597,754
-
597,754
Administration expenses
(376,296)
(321,134)
(191,200)
(888,630)
Depreciation and amortisation
-
(115,456)
-
(115,456)
Other income
8
-
-
8
Operating profit
(376,288)
161,164
(191,200)
(406,324)
Impairment of goodwill and intangible assets
(207,627)
-
-
(207,627)
Finance costs
(9,865)
-
-
(9,865)
Profit / (loss) before tax
(593,780)
161,164
(191,200)
(623,816)
Tax (charge) / credit for the year
-
-
-
-
Profit / (loss) for the year
(593,780)
161,164
(191,200)
(623,816)
Segmentation by geographical area:
2024
2023
£
£
Revenue to external customers
United Kingdom
4,350
-
Switzerland
12,837
-
European Union
11,866
-
United States of America
721,052
609,390
750,105
609,390
The following is an analysis of the Group's assets and liabilities by reportable segment as at 31 December 2024 and the capital expenditure for the year then ended:
Jersey
United Kingdom
United States of America
Total
Total assets
20,958
74
230,421
251,453
Total liabilities
(88,010)
-
(539,132)
(627,142)
Intangible assets
72,566
-
460,403
532,969
PP&E
-
-
145,247
145,247
5,514
74
296,939
302,527
The following is an analysis of the Group's assets and liabilities by reportable segment as at 31 December 2023 and the capital expenditure for the year then ended:
Jersey
United Kingdom
United States of America
Total
Total assets
13,936
74
292,759
306,769
Total liabilities
(112,524)
-
(513,287)
(625,811)
Intangible assets
71,346
-
340,943
412,289
PP&E
-
-
1,677
1,677
(27,242)
74
122,092
94,924
The following is an analysis of the Group's revenue and results by reportable segment in 2024:
Jersey
United Kingdom
United States of America
Total
Revenue
-
-
750,105
750,105
Cost of sales
-
-
(7,766)
(7,766)
Gross profit
-
-
742,339
742,339
Administration expenses
(660,924)
-
(500,460)
(1,161,384)
Other income
5
-
-
5
Operating profit
(660,919)
-
241,879
(419,040)
Impairment of goodwill and intangible assets
-
-
-
-
Finance costs
410
-
-
410
Profit / (loss) before tax
(660,509)
-
241,879
(418,630)
Tax (charge) / credit for the year
-
-
-
-
Profit / (loss) for the year
(660,509)
-
241,879
(418,630)
The following is an analysis of the Group's revenue and results by reportable segment in 2023:
Jersey
United Kingdom
United States of America
Total
Revenue
-
-
609,390
609,390
Cost of sales
-
-
(11,636)
(11,636)
Gross profit
-
-
597,754
597,754
Administration expenses
(376,296)
-
(627,790)
(1,004,086)
Other income
8
-
-
8
Operating profit
(376,288)
-
(30,036)
(406,324)
Impairment of goodwill and intangible assets
(207,627)
-
-
(207,627)
Finance costs
(9,865)
-
-
(9,865)
Profit / (loss) before tax
(593,780)
-
(30,036)
(623,816)
Tax (charge) / credit for the year
-
-
-
-
Profit / (loss) for the year
(593,780)
-
(30,036)
(623,816)
Revenue is attributable to the principal activities of the Group. In 2024 and 2023, all revenue arose within the United States of America.
Group
Group
2024, £
2023, £
Grant income
167,586
141,598
Software income
582,519
467,792
750,105
609,390
The Group derives revenue from the transfer of goods and services over time and at a point in time in the following major product lines:
2024
Grant income
Software income
Total
Timing of revenue recognition
At a point in time
167,586
-
167,586
Over time
-
582,519
582,519
167,586
582,519
750,105
2023
Grant income
Software income
Total
Timing of revenue recognition
At a point in time
141,598
626
142,224
Over time
-
467,166
467,166
141,598
467,792
609,390
4. Finance costs
2024
2023
£
£
Interest payable on unsecured convertible loan notes
(410)
9,865
On the 15th January 2024, the remaining convertible loan notes plus accrued interest were converted into 6,304,914 Ordinary Shares. The negative interest is due to an interest difference when working out the final figure.
5. Operating loss
2024
2023
£
£
The following items have been included in arriving at operating loss
Staff costs
316,683
326,632
Amortisation of internally generated intangible assets
53,711
113,068
370,394
439,700
Auditor's remuneration has been included in arriving at operating loss as follows:
Fees payable to the Company's auditor and their associates for the audit of the Group and Company's financial statements
39,500
37,500
Total audit fees payable to the Group auditors
39,500
37,500
6. Employee information
The average monthly number of employees (including Executive Directors) was:
2024
2023
Number
Number
Administration
7
7
£
£
Staff costs (for the above employees)
Wages and salaries
314,382
324,456
Social security costs and pension contributions
2,301
2,176
Share based payment
188,397
-
505,080
326,632
Directors' remuneration and transactions
2024
2023
£
£
Directors' remuneration
Emoluments and fees
161,174
160,000
Share based payment
183,019
-
344,193
160,000
Remuneration of the highest paid director:
Emoluments and fees
100,000
100,000
Share based payment
35,270
35,270
135,270
135,270
7. Income tax expense
2024
2023
The tax assessed for the period is different from the standard rate of income tax, as
£
£
Income tax as explained below:
Loss before tax on continuing operations
(327,103)
(623,816)
Loss before tax multiplied by the standard rate of Jersey income tax of 0%
-
-
Foreign tax rate difference
5,628
(33,315)
Tax losses utilised
(5,628)
-
Tax losses carried forward
-
33,315
Tax (credit)/charge for period
-
-
The Group has potential cumulative unrecognised deferred tax assets in respect of:
· excess trading loss of $876,646 (2023: $1,010,816) arising from Imaging Biometrics LLC.
8. Earnings per share
Basic and diluted
Earnings per share is calculated by dividing the loss attributable to the equity holders of the Company by the weighted average number of Ordinary shares in issue during the period, excluding Ordinary shares purchased by the Company and held as treasury shares.
2024
2023
Group:
Loss attributable to equity holders of the parent (£)
(327,103)
(623,816)
Weighted average number of shares in issue (Number)
217,954,592
183,700,212
Potentially dilutive ordinary shares
25,697,974
6,792,500
For diluted earnings per ordinary share
243,652,566
190,492,712
Basic and diluted loss per share (pence) from continuing operations
(0.15)
(0.34)
The diluted loss per Ordinary Share is calculated by adjusting the weighted average number of Ordinary Shares outstanding to consider the impact of options, warrants and other dilutive securities. As the effect of potential dilutive Ordinary Shares in the current year would be anti-dilutive, they are not included in the above calculation of dilutive earnings per Ordinary Share.
9. Property, plant and equipment
Equipment
Total
Group
£
£
Cost
At 1 January 2023
18,666
18,666
Additions
-
-
Exchange differences
(672)
(672)
At 31 December 2023
17,994
17,994
Additions
-
-
Exchange differences
275
275
At 31 December 2024
18,269
18,269
Depreciation
At 1 January 2023
(14,433)
(14,433)
Charge for the year
(2,333)
(2,333)
Exchange differences
449
449
At 31 December 2023
(16,317)
(16,317)
Charge for the year
(763)
(763)
Exchange differences
(247)
(247)
At 31 December 2024
(17,327)
(17,327)
Carrying amount
At 31 December 2024
942
942
At 31 December 2023
1,677
1,677
10. Goodwill
Group
£
Cost
At 1 January 2023 - as restated
158,026
Exchange differences
(3,979)
Impairment
(82,627)
At 31 December 2023
71,420
Exchange differences
1,220
Impairment
-
At 31 December 2024
72,640
The goodwill at 31 December 2024 represents the goodwill recognised at the purchase of the Company's subsidiary companies Imaging Biometrics and Stone Checker Software Limited. The goodwill is not amortised but is reviewed on an annual basis for impairment, or more frequently if there are indications that goodwill might be impaired. The impairment review comprises a comparison of the carrying amount of the goodwill with its recoverable amount (the higher of fair value less costs to sell and value in use). The goodwill of Stone Checker Software Limited has been fully impaired.
11. Intangible assets - intellectual property, imaging and diagnostic software
Group
£
Cost
At 1 January 2023
1,058,793
Exchange differences
(29,302)
Additions from internal development
78,405
Impairment
(125,000)
At 31 December 2023
982,896
Exchange differences
7,869
Additions from internal development
308,982
Impairment
-
At 31 December 2024
1,299,747
Accumulated Amortisation
At 1 January 2023
526,927
Exchange differences
2,031
Charge for the year
113,068
At 31 December 2023
642,026
Exchange differences
(623)
Charge for the year
53,711
At 31 December 2024
695,114
Net book value
At 31 December 2024
604,633
At 31 December 2023
340,870
The Directors have reviewed the valuation of Stone Checker Software Limited in the year and concluded that the current commercial position is that the asset should be written down to its recoverable amount of £nil.
12. Investments in subsidiaries
At 31 December 2024, the Group consisted of a parent company, IQ-AI Limited, registered in Jersey and its two wholly owned subsidiaries.
Subsidiaries:
Imaging Biometrics LLC
Registered Office: 13406 Watertown Plank Road, Elm Grove, WI 53122, United States of America
Nature of business: develops ready-to-use software applications for the healthcare industry.
Class of share
% Holding
Ordinary shares
Stone Checker Software Limited
Registered Office: Unit 12 Westway Business Centre, Marksbury, Bath, BA2 9HN, United Kingdom
Nature of business: supplier of technology solutions in the field of kidney stone analysis and kidney stone prevention.
Class of share
% Holding
Ordinary shares
The impairment in the previous year of £125,000 as shown above is in relation to the value of the investment in Stone Checker Software Limited, of which the Directors have written down the value to its current recoverable amount as stated within Note 11.
13. Trade and other receivables
Group
2024
2023
£
£
Amounts owed by group undertakings
-
-
Trade receivables
159,712
105,640
Other receivables
5,409
34,458
Prepayments
32,833
27,920
197,954
168,018
In the Directors' opinion, the carrying amounts of receivables is considered a reasonable approximation of fair value. The Group monitors on a monthly basis the receivable balance and makes impairment provisions when debt reaches a certain age. There are no significant known credit risks as at 31 December 2024 (2023: none).
14. Trade and other payables
Group
2024
2023
£
£
Amounts owed to group undertakings
-
-
Other creditors
137,186
136,215
Accruals and deferred income
489,956
489,597
627,142
625,812
In the Directors' opinion, the carrying amount of payables is considered a reasonable approximation of fair value.
15. Share capital
2024
2023
2024
2023
Number
Number
£
£
Allotted, called up and fully paid
Ordinary shares of 1p each
221,709,789
190,671,542
2,217,098
1,906,715
221,709,789
190,671,542
2,217,098
1,906,715
Reconciliation of movements during the year
Share Premium
Share Capital
At 1 January 2024
20,555,087
1,906,715
Loan conversion
37,493
63,050
Issue of fully paid shares
123,667
247,333
Cost of shares issued
(11,110)
-
At 31 December 2024
20,705,137
2,217,098
Reconciliation of share movements during the year
At 1 January 2024
190,671,542
On 15 January 2024, the company converted loans into 5,111,233 shares at £0.015 per share
5,111,233
On 15 January 2024, the company converted loans into 1,193,681 shares at £0.02 per share
1,193,681
On 1 March 2024, the company issues 24,733,333 shares at £0.015 per share
24,733,333
At 31 December 2024
221,709,789
16. Reserves
The Group's reserves are made up as follows:
Share capital: Represents the nominal value of the issued share capital.
Share premium account: Represents amounts received in excess of the nominal value on the issue of share capital less any costs associated with the issue of shares.
Capital redemption reserve: Reserve created on the redemption of the Company's shares
Merger reserve: Represents the difference between the nominal value of the share capital issued by the Company and the fair value of Stone Checker Software Limited at the date of acquisition.
Convertible loan note reserve: Represents the equity portion of the Convertible Loan Notes issued by the Company.
All convertible loans were converted in the year. See note 18 for further details.
Foreign currency translation reserve: Reserve arising from the translation of foreign subsidiaries at consolidation.
Retained earnings: Represents accumulated comprehensive income for the year and prior periods.
17. Share-based payments
On 1 November 2018, 6,017,500 shares in IQ-AI Limited were granted under option to David Smith. The shares are exercisable at 2.60p and the option will vest over 3 years, with 1/3rd vesting on 1 August 2019 and the remainder vesting at a rate of 1/36th per month on the last day of each month, until the shares become fully vested. The option will be exercisable for 10 years and will lapse on 1 August 2028. There are no cash settlement alternatives.
The fair value is estimated as at the date of grant using a Black-Scholes model, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model.
On 20 September 2022, 775,000 shares in IQ-AI Limited were granted under option to employees of Imaging Biometrics LLC. The shares are exercisable at 2.253p and the options are exercisable over 10 years from the date of grant. The fair value is estimated as at the date of grant using a Black-Scholes model, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model.
On 5 March 2024, 18,905,474 shares in IQ-AI Limited were granted under option to employees of Imaging Biometrics LLC and directors of IQ-AI Limited. The shares are exercisable at 1.90p and the options are exercisable over 10 years from the date of grant. The fair value is estimated as at the date of grant using a Black-Scholes model, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model.
2018
Exercise price (pence)
2.60p
Shares under option
6,017,500
Risk free interest (%)
2
Expected volatility (%)
52%
Expected life in years
3
2022
Exercise price (pence)
2.253p
Shares under option
775,000
Risk free interest (%)
3
Expected volatility (%)
65%
Expected life in years
5
2024
Exercise price (pence)
1.9p
Shares under option
18,905,474
Risk free interest (%)
4.04
Expected volatility (%)
85%
Expected life in years
4.5
The total charge for the year relating to share-based payments was £188,397 (2023: £nil).
Share Options
The current year movement in Share Options is summarised below:
Date of Grant
At 1 January 2024
No of Options granted in year
No of Options exercised in year
No of Options lapsed in year
At 31 December 2024
Exercise Price
Date first exercisable
Expiry date
Employment Options granted
01 Nov 2018
6,017,500
-
-
-
6,017,500
£0.026
01 Aug 2019
01 Aug 2028
20 Sep 2022
775,000
-
-
-
775,000
£0.02253
20 Sep 2022
20 Sep 2032
05 Mar 2024
-
18,905,474
-
-
18,905,474
£0.019
05 Mar 2024
05 Mar 2034
6,792,500
18,905,474
-
-
25,697,974
The weighted average price was £0.021 (2023: £0.0259). At the year end, the number of exercisable shares were 20,678,312 (2023: 6,792,500) with a weighted life of 8.73 years (2023: 5.06 years).
18. Convertible loan note reserve
2024
2023
£
£
At the beginning of the year
100,953
217,784
Interest charge for the year
(410)
9,865
Conversion
(100,543)
(126,696)
At the end of the year
-
100,953
The above reserve was created on the issue and conversions of the Convertible Loan Notes ("CLNs"). The above amount relates to the equity portion of the CLNs. The capital and accrued interest are wholly repayable by the issue of shares in the Company. Interest is charged to the company at 6%.
On the 15th January 2024, the remaining convertible loan notes plus accrued interest were converted into 6,304,914 Ordinary Shares. The negative interest is due to an interest difference when working out the final figure.
19. Commitments
Financial commitments
The Group had no contracts in respect of lessee arrangements. The registered office is provided by the Company Secretary as part of their services. The contract has a cancellation policy of 3 months.
20. Financial instruments
Financial risk management
The Group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.
The Group has exposure to the following risks from its use of financial instruments:
(a) Credit risk
(b) Liquidity risk
(c) Market risk
(d) Currency risk
(e) Interest rate risk
(f) Capital risk management
This note presents information about the Group's exposure to each of the above risks, the Group's objectives, policies and processes for measuring and managing risks and the Group's management of capital. Further quantitative disclosures are included throughout these consolidated financial statements.
The Group's risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities.
The Group Audit Committee oversees how management monitors compliance with the Group's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.
The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework.
(a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer fails to meet its contractual obligations. Each local entity is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered.
Trade and other receivables
The Group's exposure to credit risk is influenced by the type of customer the Group contracts with. The Group has minimal trade receivables.
The immediate credit exposure of financial instruments is represented by those financial instruments that have a net positive fair value by counterparty at 31 December 2024. The Group considers its maximum exposure to be:
2024
2023
£
£
Financial instrument
Cash and cash equivalents
53,500
138,751
Trade and other receivables
159,712
105,640
213,212
244,391
All cash balances and short-term deposits are held with an investment grade bank who is our principal banker (Barclays Bank PLC). Although the Group has seen no direct evidence of changes to the credit risk of its counterparties, the current focus on financial liquidity in all markets has introduced increased financial volatility. The Group continues to monitor the changes to its counterparties' credit risk.
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Board are jointly responsible for monitoring and managing liquidity and ensures that the Group has sufficient liquid resources to meet unforeseen and abnormal requirements. The current forecast suggests that the Group has sufficient liquid resources.
The following are the contractual maturities of financial liabilities:
Carrying
Contractual
6 months
6 to 12
1 to 2
2 to 5
31 December 2024
Amount
cash flows
or less
months
years
years
£
£
£
£
£
£
Trade and other payables
627,142
-
627,142
-
-
-
Borrowings
-
-
-
-
-
-
627,142
-
627,142
-
-
-
Carrying
Contractual
6 months
6 to 12
1 to 2
2 to 5
31 December 2023
Amount
cash flows
or less
months
years
years
£
£
£
£
£
£
Trade and other payables
625,812
-
625,812
-
-
-
Borrowings
-
-
-
-
-
-
625,812
-
625,812
-
-
-
Available liquid resources and cash requirements are monitored using detailed cash flow and profit forecasts which are reviewed at least quarterly, or more often as required. The Directors decision to prepare these accounts on a going concern basis is based on assumptions which are discussed in the going concern paragraph in note 1.
(c) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. Given the Group began revenue generating operations in the year, the risk for the year was minimal.
(d) Currency risk
The Group is exposed to currency risk as the assets of its subsidiary, Imaging Biometrics LLC, are denominated in US Dollars. At 31 December 2024, the net foreign liabilities were £539,132 (2023: £513,287). Differences that arise from the translation of these assets from US Dollar to Pound Sterling are recognised in other comprehensive income and the cumulative effect as a separate component in equity.
(e) Interest rate risk
The Group has no floating rate loans. Therefore, the Group has no exposure to interest rate risk.
(f) Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders as well as sustaining the future development of the business. In order to maintain or adjust the capital structure, the Group may adjust dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The capital structure of the Group consists of net debt, which includes loans, cash and cash equivalents, and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings.
Fair value of financial assets and liabilities
Book value
Fair value
Book value
Fair value
2024
2024
2023
2023
£
£
£
£
Financial assets
Cash and cash equivalents
53,500
53,500
62,378
62,378
Trade and other receivables
159,712
159,712
105,640
105,640
Total at amortised cost
213,212
213,212
168,018
168,018
Financial liabilities
Trade and other payables
627,142
627,142
625,812
625,812
Borrowings
-
-
-
-
Total at amortised cost
627,142
627,142
625,812
625,812
21. Related party transactions
Non-Executive Chairman, Brett Skelly, is also an employee of GBAC Limited. During the year GBAC Limited charged the Company a total of £30,000 (2023: £30,000) in respect of services provided by Mr Skelly. The balance outstanding at year end was £nil (2023: £nil).
22. Post balance sheet events
In March 2025, the Company placed 25,000,000 new ordinary shares at a price of 1p per share to raise £250,000 before expenses.
23. Ultimate Controlling Party
There is no ultimate controlling party.
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