REG - Trellus Health PLC - Final Results
23/05/2023 07:00
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RNS Number : 2698A Trellus Health PLC 23 May 2023
Trellus Health plc
("Trellus Health", the "Company" or the "Group")
Final Results
LONDON, U.K. AND NEW YORK, U.S. (23 May 2023): Trellus Health plc (AIM: TRLS),
which is commercializing a scientifically validated, personalized
resilience-based condition management solution for chronic health conditions
at their intersection with mental health, announces its audited final results
for the year ended 31 December 2022.
Operational and financial highlights (including post-period end)
· Dr. Marla Dubinsky, Co-Founder of Trellus Health, appointed CEO in
July 2022
· Adopted new coaching-based condition management model, facilitating
rapid rollout of the Trellus Elevate(TM) Program across the US and Canada
· Launched Direct-to-Consumer ("D2C") model in July, focused on early
adopter program to kick-start early patient engagement and support
business-to-business-to-consumer ("B2B2C) engagement, with partnerships
secured with patient advocacy and groups and GI platforms to provide
widespread reach to GI (gastrointestinal) patients.
· Signed two B2B2C contracts with the Mount Sinai Health System
("Mount Sinai") in October 2022, making the Trellus IBD program available to
all Mount Sinai Health System employees; the second contract was to make the
Trellus IBD and IBS programs available to eligible members of a large NY state
labor union that provides health services to its members through Mount Sinai
· Signed an initial demonstration project with a New York-based health
insurance company with more than 1.8 million members to make Trellus IBD
program available as a health plan benefit to certain members under its
Medicaid managed care plan.
· Launched Resilience Program for IBS (irritable bowel syndrome),
· Several key appointments made, including:
o Dr Daniel Mahony, Senior Independent Non-Executive Director, as
Non-Executive Chairman
o Steve Young as Chief Financial Officer
o Aled Stevenson, previously US Executive VP of Sales and Development, as
Chief Operating Officer
o Traci Entel as Non-Executive Director
· Net cash of $19.08m (31 December 2021: $32.0m) - reflecting continued
effective cash management and providing a runway into at least 2025 (on
conservative growth assumptions)
· Adjusted EBITDA* loss of $8.1m, in line with expectations (FY 2021:
$5.7m loss)
* Earnings before interest, tax, depreciation and amortization adjusted for
exceptional items
Dr. Marla Dubinsky, Chief Executive Officer of Trellus Health, said: "I am
very proud of the progress that Trellus Health has made during the year and
the milestones we have achieved. We are now firmly in our commercialization
phase with a market-ready solution, our first B2B2C contracts secured and
seeing increasing momentum with prospective new partners, including major
health plans.
"Our ongoing D2C offering continues to yield important data and learnings
allowing us to prove the scalability and impact of the Trellus Elevate Program
supporting and informing our B2B2C engagement.
"I expect 2023 to be a pivotal year for Trellus Health as we continue our
B2B2C engagement to secure larger pilot agreements and subsequently more
expansive contracts and build the evidence base of the cost savings provided
by our solution, and further our goal of changing the lives of as many people
living with chronic conditions as possible."
A copy of the investor presentation is available here:
https://trellushealth.com/investors/annual-interim-reports/
(https://trellushealth.com/investors/annual-interim-reports/)
The Company will also host a live online presentation at 5pm BST on 23 May
2023 through the digital platform Investor Meet Company. Investors can sign up
for free via:
https://www.investormeetcompany.com/trellus-health-plc/register-investor
(https://www.investormeetcompany.com/trellus-health-plc/register-investor)
A recording of the presentation and responses to the Q&A sessions will
also be available afterwards.
For further information please contact:
Trellus Health plc https://trellushealth.com/ (https://trellushealth.com/)
Dr. Marla Dubinsky, Chief Executive Officer and Co-Founder Via Walbrook PR
Dr. Daniel Mahony, Chairman
Singer Capital Markets (Nominated Adviser and Broker) Tel: +44 (0)20 7496 3000
Aubrey Powell / Jen Boorer
Walbrook PR Tel: +44 (0)20 7933 8780 or trellus@walbrookpr.com
(mailto:trellus@walbrookpr.com)
Paul McManus / Sam Allen / Phillip Marriage Mob: +44 (0)7980 541 893 / 07748 651 727 / 07867 984 082
About Trellus Health plc (www.trellushealth.com (http://www.trellushealth.com)
)
Trellus Health (LSE: TRLS) is the first resilience based digital health
company focused on the intersection of chronic illness and mental health.
Trellus Health integrates its proprietary resilience-based methodology with
the technology, tools, and team to deliver a whole-person technology-enhanced
experience that results in relieving disease burden, building self-management
skills and promoting positive health behaviours that improves outcomes and
enables thriving in the face of a chronic condition. Through its
TrellusElevate™ connected health platform and companion App, the company
addresses both physical and behavioural health together, in context, to
improve outcomes and reduce healthcare costs across the healthcare ecosystem.
The Company was founded by Mount Sinai faculty members Marla C. Dubinsky, MD
and Laurie Keefer, PhD, both with over 50 years of combined clinical and
research experience in IBD, IBS and psychogastroenterology, respectively.
The Company was initially focused on inflammatory bowel disease ("IBD"), which
includes the chronic incurable conditions of Crohn's Disease and ulcerative
colitis but has now added Irritable Bowel Syndrome ("IBS"). Given the common
emotional and mental health struggles often experienced by individuals
suffering from a variety of chronic conditions, Trellus Health considers its
approach to have potential utility and demand across many conditions.
The TrellusElevate™ platform is the Company's proprietary connected health
platform that incorporates the GRITT™ methodology and learnings on
resilience from clinical research and practice conducted at the Mount Sinai
IBD Center for more than five years. This proprietary, resilience-driven
methodology has been scientifically validated to demonstrate meaningful
improvements in patient outcomes, 71% reduction in Emergency Department
(A&E) visits, and 94% reduction in unplanned hospitalisations, which the
directors of the Company believe indicates the potential for significant cost
savings for healthcare payers. Patients with IBD managed with the proprietary
resilience methodology also experienced a 49% reduction in required opioid use
and a 73% reduction in corticosteroid use 12 months following starting the
program which is a major indicator of improved health outcomes(2).
The Trellus IBD program described is based on technology developed by Mount
Sinai faculty and licensed to Trellus Health. Mount Sinai and Mount Sinai
faculty, including Marla Dubinsky, MD, and Laurie Keefer, PhD, have a
financial interest in Trellus Health. Mount Sinai has representation on the
Trellus Health Board of Directors.
Shares in Trellus Health were admitted to trading on AIM in May 2021, under
the ticker TRLS. For more information on Trellus Health, visit:
www.trellushealth.com (http://www.trellushealth.com)
1) Source: https://www.cdc.gov/chronicdisease/about/costs/index.htm
(https://urldefense.proofpoint.com/v2/url?u=https-3A__www.cdc.gov_chronicdisease_about_costs_index.htm&d=DwMFaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=fSst1AtlXyuqcs3cHJXcCRilbI1Qm1WfjNYkVgQfiLE&m=IjQVBqsF0mJCc4cCch3kNewShI3X349VlYSUrh3C5-c&s=lilxcTv-hIGGEbeSix8wsDKl8TOyuP3Vw__GebvZFro&e=)
)
2) Source: https://www.sciencedirect.com/science/article/pii/S1542356521012258
(https://www.sciencedirect.com/science/article/pii/S1542356521012258) )
CHAIRMAN'S STATEMENT
I am pleased to report on my first set of results as Chair of Trellus Health,
following my appointment in February 2023.
Overview
The year saw solid progress for the Company, with the team adapting well to a
strategic shift that has seen traction and delivery of our resilience-based
methodology, with Trellus Health now a commercial-stage business with a
market-ready solution and our first paying customers now coming through. Our
Direct-to-Consumer ("D2C") offering of The Trellus Resilience Training and
Self-Management Solution (the "Trellus Program") was launched during the year,
with the positive initial data received from it helping to secure our first
Business-to-Business-to-Consumer ("B2B2C") pilot and demonstration contracts.
Trellus Health now offers a comprehensive GI (Gastrointestinal) solution for
both inflammatory bowel disease ("IBD") and irritable bowel syndrome ("IBS"),
which significantly increases the number of patients who can be helped by our
program. This was made significantly easier by investment we have made in our
program to enable expansion into new indications in future, as we look to
deliver the Company's vision of a world where every person with a chronic
condition has hope and thrives.
We continue to target further projects with partners including employers,
regional and national health plans, and pharmaceutical companies. Initially
these will be smaller in scale to demonstrate the improvements in patient
outcomes and healthcare economics. The data generated from these is already
proving useful in our continuing push to capture larger B2B2C pilots and
demonstrations, on which discussions are progressing positively, including
with major health plans.
A full summary of our progress and achievements made during the year, as well
as further detail on our expanded strategy, are covered in the Chief Executive
Officer's Review.
Board and Senior Management Team
During the year and post-period end, we announced several changes to the Board
and senior management team.
In July 2022, we appointed Trellus Health Co-Founder, Dr. Marla Dubinsky, to
the position of Chief Executive Officer. Marla is a Professor of Pediatrics
and Medicine at the Icahn School of Medicine at Mount Sinai, New York, and has
been engaged in IBD clinical and translational research for over two decades.
Marla's standing in her field was underlined when she was awarded the 2022
Sherman Prize, a prestigious US national award that recognizes individuals
with an extraordinary track record of achievement, who make exceptional and
pioneering contributions to transform IBD care.
At the same time as Marla's appointment as CEO in July 2022, we appointed Aled
Stevenson, previously US Executive VP of Sales and Development, to the
position of Chief Operating Officer. In August 2022, we announced the
appointment of Steve Young, an experienced Chief Financial Officer of
AIM-listed companies, as our new CFO. We also announced the appointment of
Traci Entel, an experienced management consultant and global HR executive, as
a Non-Executive Director in June 2022.
Post-period end, I was appointed Non-Executive Chairman from my previous
position of Senior Independent Non-Executive Director, after Julian Baines
stepped down from the Board following his appointment as Executive Chairman of
EKF Diagnostics Holdings plc ("EKF"). I would like to thank Julian again for
his contribution to Trellus Health, from his early involvement leading to
investment from EKF, through his guidance during our IPO in May 2021, and
beyond to our recent commercial progress.
We believe we have a Board and senior management team in place with the
necessary skills to execute our evolved commercial strategy over the coming
years, and I have been pleased to see the progress made, particularly since
Marla's appointment.
Outlook
I was pleased to see the progress made by the team during the year with
Trellus Health signing its first commercial B2B2C contracts, despite difficult
market conditions. Our evolved strategy should continue to see us enrolling
new D2C members with our partners, who provide great reach into the US
gastroenterological community, while simultaneously scaling to larger and more
material B2B2C projects over time. I am confident that this is the best
strategy to commercialize and drive adoption of the Trellus Program.
We expect our business model to exhibit significant scaling in due course as
we receive monthly recurring membership fees for each user of the platform,
and initial evidence suggests a strong retention on the platform. At this
early stage we expect our smaller B2B2C projects to provide a modest number of
users and revenues. However, we are confident we can demonstrate to our
partners that we can meet or even exceed the cost savings indicated in our
initial projects and illustrate a clear and very substantial return on
investment (ROI). This should lead to the expansion of our partnership
agreements to make the Trellus Program available to all their eligible members
or employees. For this reason, our smaller-scale demonstration projects, and
the data we are already generating, are key for the future of the business.
The ongoing dialogue with larger health plans has been encouraging as we look
to secure new pilot programs throughout North America, and we look forward to
providing updates on these discussions when appropriate. These are expected
to serve as catalysts to faster growth, both from the expansion within the
broader base of eligible members as pilots are expanded, and from using the
data from these projects in discussions with new partners to begin new
demonstration projects with a greater number of patients.
Our management team continues to focus on good cash control and our net cash
position of $19.1 million as of 31 December 2022 is sufficient to provide a
runway into at least 2025 (on conservative growth assumptions), providing the
Company with the resources necessary to demonstrate further commercial
traction and create substantial shareholder value.
Dr. Daniel Mahony
Non-Executive Chairman
23 May 2023
CHIEF EXECUTIVE OFFICER'S REVIEW
Since my appointment as CEO in July 2022, we have made very good progress,
with the Company having successfully entered its commercial phase following a
refining of our strategy to best deliver our resilience-driven connected
health self-management solution. I have been delighted with the various
partnerships that we have secured, with Trellus Health now ready to scale up
into larger B2B2C projects during 2023 and reach many more patients with both
our existing and potential new partners. It's been incredibly fulfilling to
see the feedback received from our early users and seeing the Trellus Method
truly change lives at an increasing scale.
Commercialization strategy and progress
In July 2022, we commenced the rollout of our direct-to-consumer (D2C) model,
with a targeted approach focused on an early adopter program to kick-start
early patient engagement and drive awareness and demand. The D2C model ran
alongside our original business-to-business-to-consumer (B2B2C) model, which
focused on regional and national health plans, employers, health systems, GI
provider networks and pharmaceutical companies.
We are using the data gained from our D2C users to validate the use and
outcomes of the Trellus Method and support B2B2C engagement in larger project
opportunities to enable the wider rollout of the Trellus Program. Our strategy
is to scale these larger projects and demonstrate the cost savings that can be
achieved by our partners when using the Trellus Program, until a point where
they make the Program available to all their eligible members or employees. We
intend to continue our D2C offering for the foreseeable future, to support
those living with chronic gastrointestinal (GI) conditions who may not have
the Trellus Program covered by their employers or health plans.
I have included an outline of our progress in both of our models below.
1) D2C early adopters
We signed two agreements during the year that have expanded our D2C reach to
nationwide consumers. The first is a licensing agreement with the Crohn's and
Colitis Foundation, the largest patient advocacy group for IBD in the US. We
also signed a collaboration agreement with GI OnDemand, a leading GI virtual
integrated care platform, which offers exclusive access to the Trellus Program
to over 16,000 GI professionals. These two channels alone provide the broadest
possible reach into the US gastroenterological community, thus providing the
most direct channels to market via both patients and GI providers nationwide.
Importantly, we do not need to employ costly targeted marketing in our D2C
models, as our partners can make their own members aware of the availability
of the Trellus Program.
Our initial sponsorship program with patient advocacy groups, Athletes vs
Crohn's and Colitis and Connecting to Cure to cover the costs of the program
for 100 early adopters has fully enrolled and now concluded. Our initial free
membership offering was an important step for Trellus as we were able to prove
the scalability and impact of our platform and services on engagement and
outcomes. As of February 1(st), all D2C members are now paying a monthly
membership fee. We have over 130 DTC members currently enrolled.
2) B2B2C model
In October 2022, we signed two contracts with the Mount Sinai Health System
("Mount Sinai"). The first contract has seen Mount Sinai make the Trellus IBD
program available to, and paid for, as a wellness benefit, to all Mount Sinai
Health System employees, focusing initially on IBD. The second contract was to
make the Trellus IBD and IBS programs available to eligible patients, again as
a wellness benefit, who are members of a large NY state labor union, which
provides health services to its members through Mount Sinai. These two
agreements became active in the early part of 2023 following the completion of
technology integration and marketing materials, and we are now starting to see
enrollment from these contracts.
Post-period end, we also secured an agreement for a demonstration project of
50 initial patients with IBD with a New York-based health insurer with more
than 1.8 million members. This B2B2C partnership saw the Trellus IBD program
being made available as a health plan benefit to certain members of the health
plan under its Medicaid managed care plan. Running for an initial 12-month
term, the agreement can be extended by mutual agreement, with patient
enrolment having begun.
Our activities to date have provided useful data and insights and served as
the backbone for advanced discussions with a major health plan for a pilot
study at a greater scale than those undertaken to date. As part of the
project scope and design, Trellus Health is undertaking enhancement of its IBD
platform to ensure that it can meet the requirements of the health plan's
members. While there is never certainty as to timing or outcome from such
negotiations, nor as to the speed of implementation following contractual
agreement, there appears to be serious intent by the partner, and we are
similarly motivated to pursue this opportunity so that the Trellus solution
begins to be offered at a greater scale. The pilot study would be expected to
begin to generate meaningful data 6-12 months from implementation, which could
facilitate a faster and more substantive roll-out amongst the health plan's
sizeable volume of IBD members than that seen to date.
User feedback
The initial outcomes of the program among our early adopter DTC members have
been highly positive. Midway through the Trellus IBD Program:
· 57% of members surveyed reported an increase in their self-confidence
in how to manage their condition.
· 65% of members surveyed reported an increase in their self-management
skills and behavior change.
· 74% of members surveyed reported an improvement in their emotional
and mental wellbeing.
Expansion into Irritable Bowel Syndrome (IBS) and beyond
Trellus Health is targeting large, multi-billion-dollar addressable markets
for chronic conditions, where there is a significant unmet need to provide
whole-person, clinical, mental, and behavioral support, empowering members by
teaching them the art of self-management and self-care.
While our initial focus was on IBD, in February 2023, we launched the Trellus
Method for IBS, ahead of schedule, using existing resources. IBS is another
chronic GI condition that has significant similarities with IBD from a symptom
burden and emotional perspective, often having a significant impact on a
person's quality of life. IBS also has a much higher prevalence than IBD,
impacting c. 10% of the US population (c. 30m patients for IBS compared to c.
3m for IBD). The Trellus Method for IBS is now available through our D2C
offering, as well as through the expansion of our Mount Sinai labor union
contract to offer our program to members with IBD and IBS.
I am proud that we now offer a comprehensive GI solution covering both IBD and
IBS and have scope to improve the lives of many more patients. We believe our
solution can be used across many other chronic conditions to deliver
meaningfully improved healthcare outcomes whilst reducing costs, and this
expansion into IBS has represented the first step.
Market Ready Solution
During the year, we continued investment into the TrellusElevate™ platform
to create a fully integrated and seamless workflow. Our team, led by our CTO
Jamey Hancock, has worked incredibly hard to build a proprietary structure
that gives Trellus Health a competitive advantage, with inherent value as a
health management platform, as opposed to simply being a telehealth or
behavioral health mobile app.
Our proprietary platform provides coaching and engagement, delivers digital
health modules, and can identify those patients likely to incur healthcare
costs, with secure channels to manage workflows, provide analytics and support
the healthcare professional's decision-making process. We are unique in this
space by integrating coordination, communication, and analytics in one
end-to-end platform. This provides expandability, flexibility, scalability,
and control for our team, allowing us to integrate new features and adapt much
faster than our peer group, and allows us to scale to other GI and non-GI
conditions.
We have invested in making Trellus an API (application programming
interface)-first platform; this means that we have full control over the
entire platform, and can seamlessly expand into new indications, as we have
done already with IBS. In contrast, competitors may face issues when trying to
perform similar expansions, including compatibility issues, versioning
problems, and data mapping difficulties, making it a time-consuming and a
costly process.
Consequently, we have built our platform in a way that is adaptable to any
chronic condition, either directly or with partners, giving flexibility and
security to create value for our customers and partners.
During the year, we made several other improvements to our platform, including
optimizing the IBD and IBS user experience features and launching a new
learning management system (LMS), which allows us to receive feedback from
care teams and clinicians. We also increased the scalability of the resilience
team through implementing greater levels of automation, allowing us to handle
a larger volume of patients, and improved our registration process and the
speed of enrollment.
Maintained strong cash position and effective cash management
During 2022, we took important steps to ensure careful cash management and the
reduction of cash burn despite the investments made in our platform. Costs
across staffing and consultancy fees, development costs and other software and
technology related expenses have been reduced without any detriment to our
growth strategy. As a result, as of 31 December 2022, Trellus Health's net
cash position was $19.08 million, ahead of expectations, providing a runway
into 2025 on conservative growth assumptions and giving confidence that we are
well funded to deliver commercial success and cash generation.
Financial Performance
The financial performance of the Company for the year ended 31 December 2022,
continues to reflect the costs incurred with the development phase of the
TrellusElevate™ technology platform. In the latter half of the year initial
revenues have been received from adopters of the platform.
Income Statement
The Company commenced revenue generation in the second half of the year ending
31 December 2022 through paid sponsorships and self-paying members that are
early adopters of the platform. The main components of the administrative
expenses totalling US $8.8m (2021: US $5.9m) were employee related costs of US
$4.7m (2021: US $4.3m) (excluding the share-based payment charge of US $0.06m
(2021: US $0.14m), professional costs of US $1.1m (2021: US $1.3m), and other
operating expenses of US $2.3m (2021: US $0.4). Total depreciation and
amortisation were $0.66m (2021: US $0.03m). Cost savings have been identified
and implemented across all areas of the business.
The Company incurred a share-based payments charge of US $0.06m (2021: US $
0.14m). The full benefit will be spread over the vesting periods, which is a
weighted average of 2.3 years.
Statement of Financial Position and Cash Flow Statement
The principal asset of the Company is the development costs relating to the
TrellusElevate™ technology platform and software purchased for US $6.7m (US
$2.9m in 2022 and US $3.8m in 2021) along with the exclusive licence acquired
from Mount Sinai for the GRITT™ technology, licensed for US $0.5m in 2021,
together with related equipment.
The cash position of the Company as of 31 December of US $19.1m (2021: US
$32.0m) remains strong, with expenditure in the second half of 2022 reducing
significantly compared to the first half as cost control measures were
implemented. Due to the depreciation in the value of sterling against the US
dollar over 2022, and the substantial funds held in sterling at year end, a
foreign exchange loss of US $1.4m (2021: $1.7m) decreased the year end cash
balance.
Summary
I am very proud of the progress made by the Company. During the year we
adopted a new coaching-based condition management model, which has facilitated
rapid rollout of our program across the US and Canada. The early adopter D2C
roll out was a very important step forward, as it allowed us to generate
important data, refine the program and has provided the evidence we needed to
demonstrate that we can replicate and scale the exceptional outcomes that were
seen in the original research conducted at Mount Sinai.
Our first B2B2C contracts in late 2022 with Mount Sinai also represented a
great step forward for Trellus Health, and enrollments have begun to take
place from these post-period end. Our agreement with the New York health plan
is also now active with patient enrollment having begun. We continue to have
multiple meetings with senior level management and are actively developing
project scope with large health plans, employers as well as pharmaceutical
companies and we look forward to providing updates on these discussions when
appropriate.
With the clear progress made in both D2C and B2B2C, as well as our IBS
expansion, investment made in the TrellusElevate™ platform and a healthy
cash runway, we are firmly on the path to deliver further commercial traction
through larger B2B2C pilot agreements and subsequently more expansive
contracts, and ultimately change the lives of more patients living with
chronic conditions. 2023 will be an important year for Trellus Health as we
continue our strategy of securing material revenues via B2B2C agreements and
demonstrating the value of our platform to our existing partners. I would like
to thank our employees, shareholders, and partners for their support during
the year.
Dr. Marla Dubinsky
Chief Executive Officer and Co-Founder
23 May 2023
Consolidated Income Statement and Other Comprehensive Income
for the year ended 31 December 2022
2022 2021
Notes $'000 $'000
Revenue 18 25
Cost of Sales - -
Gross Profit 18 25
Administrative Expenses (8,828) (5,927)
Operating Loss (8,810) (5,902)
Depreciation, amortization and impairment 659 32
Share-based payments 8 62 139
EBITDA before exceptional items and share-based payments (8,089) (5,731)
Finance Income - -
Finance Costs - -
Loss before Income Tax (8,810) (5,902)
Income Tax Charge 3 - -
Loss for the Year (8,810) (5,902)
Loss per share 4
Basic and Diluted (US $ cents) (0.05) (0.04)
The results reflected above relate to continuing operations. The comparative
period reflects the year ended 31 December 2021.
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2022
2022 2021
$'000 $'000
Loss for the year (8,810) (5,902)
Items that may be subsequently reclassified to profit and loss
Currency translation differences (1,434) (1,725)
Total comprehensive loss for the year (10,244) (7,627)
Consolidated Statement of Financial Position
as at 31 December 2022
2022 2021
Notes $'000 $'000
Assets
Non-Current Assets
Property, plant, and equipment 5 58 82
Intangible Assets 6 6,488 4,280
Total Non-Current Assets 6,546 4,362
Current Assets
Trade receivables and prepaid expenses 283 451
Cash and cash equivalents 19,085 31,982
Total Current Assets 19,368 32,433
Total Assets 25,914 36,795
Share Capital and Equity
Share Capital 7 137 137
Share Premium 43,387 43,387
Share-based Payment Reserve 8 201 139
Foreign Currency Reserves (3,159) (1,725)
Retained Earnings (15,474) (6,664)
Total Equity 25,092 35,274
Liabilities
Current Liabilities
Trade and other payables 822 1,521
Total Liabilities 822 1,521
Total Equity and Liabilities 25,914 36,795
Consolidated Statement of Cash Flows
for the year ended 31 December 2022
2022 2021
Notes $'000 $'000
Cash Flow from Operating Activities
Loss for the period (8,810) (5,902)
Adjustments for:
Depreciation and amortisation 5,6 536 32
Impairment of Intangibles 6 123 0
Share-based payment expense 8 62 139
(8,089) (5,731)
Decrease/(Increase) in trade and other receivables 168 (440)
(Decrease)/Increase in trade and other payables (699) 1,401
Net cash outflow from operating activities (8,620) (4,772)
Cash Flow from Investing Activities
Purchases of plant, property and equipment 5 - (81)
Purchases of intangible assets 6 (2,908) (3,640)
Net cash outflow from investing activities (2,908) (3,721)
Cash Flow from Financing Activities
Net proceeds from issue of ordinary shares 7 - 38,516
Net cash Inflow from financing activities - 38,516
Net (Decrease)/Increase in Cash and Cash Equivalents (11,528) 30,023
Cash and Cash Equivalents at the Beginning of the Year 31,982 3,684
Exchange loss on Cash and Cash Equivalents (1,369) (1,725)
Cash and Cash Equivalents at the End of the Year 19,085 31,982
Consolidated Statement of Changes in Equity
Share Capital Share Premium Account Other Reserves Foreign Currency Reserve Retained Earnings Total
Consolidated $'000 $'000 $'000 $'000 $'000 $'000
At 1 January 2021 12 4,996 - - (762) 4,246
Comprehensive Income
Loss for the year (5,902) (5,902)
Currency translation differences - - - (1,725) - (1,725)
Total Comprehensive Loss for the Year - - - (1,725) (5,902) (7,627)
Issue of Share Capital 61 38,455 - - - 38,516
Share capital reconstruction 64 (64) - - - -
Share based payment reserve - - 139 - - 139
Balance at 31 December 2021 and
At 1 January 2022 137 43,387 139 (1,725) (6,664) 35,274
Comprehensive Income
Loss for the year - - - - (8,810) (8,810)
Currency translation differences - - - (1,434) - (1,434)
Total Comprehensive Loss for the Year - - - (1,434) (8,810) (10,244)
Share Based Payment Reserve - - 62 - - 62
Balance at 31 December 2022 137 43,387 201 (3,159) (15,474) 25,092
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2022
1. General information and basis of presentation
Trellus Health plc is a public limited company incorporated in the United
Kingdom (Registration Number 12743489), which is listed on the AIM market of
the London Stock Exchange. The address of the registered office is Avon House,
19 Stanwell Road, Penarth, CF64 2EZ.
The principal activity of the Company is the delivery of resilience-driven
care for complex chronic conditions.
The financial information within this preliminary announcement is extracted
from the Group's consolidated financial statements for the year ended 31
December 2022, which were approved by the Board of Directors on 23 May 2023.
This financial information does not constitute statutory accounts within the
meaning of sections 434(3) and 435(3) of the Companies Act 2006 or contain
sufficient information to comply with the disclosure requirements of UK
adopted International Accounting Standards (IFRS).
The Group's consolidated financial statements for the year ended 31 December
2022 have been prepared in accordance with UK adopted International Accounting
Standards (IFRS) and with the requirements of the Companies Act 2006 as
applicable to companies reporting under those standards. The Company's
auditor, Crowe U.K. LLP, has given an unqualified report on the consolidated
financial statements for the year ended 31 December 2022. The auditor's report
did not include reference to any matters to which the auditor drew attention
without qualifying its report and did not contain any statement under section
498 of the Companies Act 2006. The consolidated financial statements will be
filed with the Registrar of Companies, subject to their approval by the
Company's shareholders at the Company's next Annual General Meeting in June
2023.
Statutory accounts for the year to 31 December 2021 have been delivered to the
Registrar of Companies.
Certain statements in this announcement constitute forward-looking statements.
Any statement in this announcement that is not a statement of historical fact
including, without limitation, those regarding the Company's future
expectations, operations, financial performance, financial condition and
business is a forward-looking statement. Such forward-looking statements are
subject to risks and uncertainties that may cause actual results to differ
materially. These risks and uncertainties include, amongst other factors,
changing economic, financial, business or other market conditions. These and
other factors could adversely affect the outcome and financial effects of the
plans and events described in this announcement and the Company undertakes no
obligation to update its view of such risks and uncertainties or to update the
forward-looking statements contained herein. Nothing in this announcement
should be construed as a profit forecast.
2. Significant accounting policies
Going concern
The Group is in the development phase of its business and has only generated
revenues related to implementation services and early patients in pilot
scheme. At December 2022 the Group has available cash resources of $19m.
The Board has considered the impact of the ongoing Russia/Ukraine war and
rising inflation. There has been minimal impact on the Company to date and the
Board anticipates minimal on-going impact, due to the nature of the business.
The Directors have prepared cash flow forecasts for the Group for a review
period of over 12 months from the date of approval of this historical
financial information. These forecasts reflect an assessment of current and
future market conditions and their impact on the Group's future cash flow
performance.
The forecasts have been sensitised for additional costs which may be incurred
in the review period. In the sensitised scenario, the forecasts indicate the
Group would still have sufficient cash to continue as a going concern.
Having considered the points above, the Directors remain confident in the
long-term future prospects for the Group, and their ability to continue as a
going concern for the foreseeable future. They therefore adopt the going
concern basis in preparing the historical financial information of the Group.
While the financial information included in this preliminary announcement has
been prepared in accordance with the recognition and measurement criteria of
IFRS, this announcement does not itself contain sufficient information to
comply with IFRSs. The Company will publish its full annual report containing
financial statements for the year ended 31 December 2022 before the end of May
2023, together with a notice to shareholders of the Company's Annual General
Meeting ("AGM") which will be available on the Company's website at
www.trellushealth.com (http://www.trellushealth.com) and at the Company's
registered office at Avon House, 19 Stanwell Road Penarth CF64 2EZ. The AGM
will be held in June 2023, with further information to be notified at the time
of the availability of the full annual report.
3. Tax expenses
2022 2021
$'000 $'000
Current tax expense
Current tax on loss for the year - -
Total Current Tax - -
Deferred Tax Asset
On losses generated in the year - -
Total Deferred Tax - -
The reasons for the difference between the actual tax charge for the year and
the standard rate of corporation tax in the United Kingdom applied to profits
for the year are as follows:
2022 2021
$'000 $'000
Loss for the period (8,810) (5,902)
Tax using the Company's domestic tax rate of 19% (1,674) (1,121)
Expenses not deductible for tax purposes 31 76
Depreciation, amortisation and impairment that are not deductible for tax 117 6
purposes
Unrecognised deferred tax assets 1,526 1,039
Total tax expense - -
The unrecognised deferred tax relates to two elements: the unrecognised
deferred tax arising on share-based payments of US $201,000 and unrecognised
deferred tax on taxable losses of US $4 million (2021 - US $1.9m), based on
total taxable losses carried forward of US $19m (2021 - US $10m). No deferred
tax asset is recognised for these losses due to early stage in the development
of the Group's activities. The losses do not expire but can only be used
against trading profits from the same trade.
4. Loss per share
2022 2021
Numerator $'000 $'000
Loss for the period (8,810) (5,902)
Denominator Number Number
Weighted average # of shares 161,508,333 131,734,028
Resulting Loss per Share ($) (0.05) (0.04)
The Company has one category of potential ordinary share, being share options
(see Note 8). The potential shares were not dilutive in the period as the
Group made a loss per share in line with IAS 33.
5. Property, Plant and equipment
All assets are equipments
US $'000
Cost
At 1 January 2021 12
Additions 81
At 31 December 2021 93
Depreciation
At 1 January 2021 (1)
Charge for the year (10)
At 31 December 2021 (11)
Net Book value at 31 December 2021 82
Cost
At 1 January 2022 and 31 December 2022 93
Depreciation
At 1 January 2022 (11)
Charge for the year (24)
At 31 December 2022 (35)
Net Book value at 31 December 2022 58
6. Intangible assets
Group Group Group
Software Development Licence Total
US $'000 US $'000 US $'000
Cost
At 1 January 2021 662 - 662
Additions 3,140 500 3,640
At 31 December 2021 3,802 500 4,302
Depreciation
At 31 January 2021 - - -
Charge for the year (22) - (22)
At 31 December 2021 (22) - (22)
Net Book Value at 31 December 2021 3,780 500 4,280
Cost
At 1 January 2022 3,802 500 4,302
Additions 2,908 - 2,908
Foreign currency difference - (65) (65)
At 31 December 2022 6,710 435 7,145
Depreciation
At 31 January 2021 (22) - (22)
Charge for the year (471) (42) (513)
Impairment charge (122) - (122)
At 31 December 2022 (615) (42) (657)
Net Book Value at 31 December 2022 6,095 393 6,488
The licence was acquired from Icahn School of Medicine at Mount Sinai on 19
August 2021 for rights to intellectual property and data to support the GRITT
technology.
Capitalised development costs in relation to the Group's software platform has
been reviewed for indicators of impairment. No indicators of impairment were
identified although an impairment charge of $122,000 was recognised in the
period in relation to specific aspects of capitalised expenditure considered
to have no value in use.
7. Share capital
2022 2022 2021
Number $'000 $'000
Ordinary Shares of £0.0006 each 161,508,333 137 137
8. Share-based payment
On 1 January 2021, the Board adopted the Share Option Plan to incentivise
certain of the Group's employees and Directors. The Share Option Plan provides
for the grant of both EMI Options and non-tax favoured options. Options
granted under the Share Option Plan are subject to exercise conditions as
summarised below.
The Share Option Plan has a non-employee sub-plan for the grant of Options to
the Company's advisors, consultants, non-executive directors, and entities
providing, through an individual, such advisory, consultancy, or office holder
services and a US sub-plan for the grant of Options to eligible participants
in the Share Option Plan and the Non-Employee Sub-Plan who are US residents
and US taxpayers.
The options vest equally over twelve quarters from the grant date or 25% after
twelve months and over eight quarters equally thereafter. If options remain
unexercised after the date one day before the tenth anniversary of grant such
options expire. The options are subject to exercise conditions such that they
shall, subject to certain exceptions, vest in instalments over the three years
immediately following the date of grant, which vesting shall accelerate in
full in the event of a change of control of the Company.
2022 2021
Weighted Weighted
Average average
Exercise 2022 exercise 2021
price ($) Number price ($) Number
Outstanding at 1 January 0.35 3,580,000 - -
Granted during the period 0.48 1,640,000 0.35 3,730,000
Exercised during the period - - 0.20 (33,333)
Expired during the period 0.44 (1,965,000) 0.20 (116,667)
Outstanding at 31 December 0.39 3,255,000 0.35 3,580,000
Exercisable at 31 December 0.25 1,973,125 0.23 665,833
The exercise price of options outstanding at 31 December 2022 ranged
between 20 US cents and 68 cents and their weighted average contractual life
was 2.3 years.
The weighted average fair value of each option granted during the year was
$0.38 (2021: $0.32).
The fair value of each share option granted in 2022 has been estimated using a
Black-Scholes model and ranges from 1 US cent to 10 US cent. The inputs into
the model are a share prices of 17 US cent, 23 US cent, 26 US cent and 43 US
cent, exercise prices of 48 US cent, expected volatility of 50%, no expected
dividend yield, contractual life of between 2.9 and 1.9 years and a risk-free
interest rate of 1.25% and 2.25%.
9. Related Party Transactions
Outside of the remuneration previously disclosed in the report of the
remuneration committee on page 23, the Group received a $10k reimbursement
from Mount Sinai Hospital during 2022 for member set up in connection with the
related party contracts announced in October 2022. There has been no revenue
received in 2022 in connection with these two related party contracts, with or
via Mount Sinai Hospital. The amount owed as at 31 December 2022 is $0 (2021:
$0). The Group also paid a $100k management fee to Mount Sinai Hospital during
2022, the amount outstanding at 31 December 2022 is $0 (2021:
$0).
10. Events after the reporting date
There have been no events subsequent to the period end that require disclosure
in these financial statements.
11. Dividends
There were no dividends paid or proposed by the Company in either year.
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