Interim Report for the six-months to 30 Septemb...
EDX Medical Group Plc
(“EDX Medical” or the “Company")
Interim Management Report for the six-month period ending 30 September 2022
Background
EDX Medical Group Plc was admitted to the Access Segment of the AQSE Growth Market on 26 October 2022. Admission followed the acquisition by TECC Capital Plc of the issued share capital of EDX Medical Ltd (“EDXM”) - a digital diagnostics business in the healthcare sector with an experienced leadership team.
The acquisition presented the Company and its shareholders with an exciting opportunity to invest in a new and disruptive healthcare diagnostics business with significant potential. The subsequent Reverse Takeover provided the enlarged group with the potential to raise further capital as well as allowing the Company to be renamed as EDX Medical Group plc so reflecting the business of the enlarged group.
EDX Medical develops and validates digitally enabled diagnostic products and services to help health professionals and self-users to predict disease risk, inform clinical decision-making and accelerate the development of new medicines in the areas of cancer, heart disease, neuro-degeneration and infectious diseases. The Company was founded by Professor Sir Christopher Evans OBE, a medical and life sciences entrepreneur with more than 30 years of experience in the sector, specialising in cancer treatments and diagnostics.
In this reporting period, the Company entered into convertible loan notes with EDXM to the value of £600,000 whilst conducting further due diligence on EDXM in preparation for its planned Reverse Takeover.
As a result, the shares of the Company were suspended from trading for the period from 26 July until the Reverse Takeover by EDX Medical Ltd was eventually completed after the reporting period, by a unanimous shareholder resolution at a General Meeting of Shareholders on November 11th.
Financial Summary
During the period the majority of the Company’s administrative expenditure has related to one-off expenses incurred in connection with preparing the Company to complete the Reverse Takeover of EDXM and Admission of the enlarged Group to the Access Segment of the AQUIS Exchange. The loss for the period was £193,659 (2021: £124,187).
Trade and other receivables as at 30 September 2022 were £43,255 (March 2022: £8,068), of which a significant proportion relates to VAT. The cash balance as at 30 September 2022 was £268,138 (March 2022: £1,027,114).
Trade and other payables at 30 September 2022 were £122,593 (March 2022: £52,922).
Overall, at the period-end, net assets were £789,432 (March 2022: £983,092).
The directors expect the acquisition of EDX Medical Limited to be accounted for in the Company’s next published statutory financial statements for the year ended 31 March 2022, as a Reverse Takeover with those financial statements being presented as a continuation of the activities of the Company as the deemed acquirer.
Outlook
Post the reporting period, the Reverse Takeover of EDX Medical Limited and the creation of the enlarged group was completed.
The Directors of the Company resigned, and a new Board consisting of Professor Sir Christopher Evans, Jason Holt, Dr Michael Hudson, CEO of EDX Medical and Dr Trevor Jones were appointed on 14 November 2022 in succession.
EDX Medical has the ambition to build a substantial, high growth international business by focusing on the development, validation, registration and commercialisation of innovative diagnostic tests developed in its own laboratories, in-licensed or acquired from collaborators and the establishment of strategic partnerships with key technology providers and channel distribution partners.
Jason Holt
Chairman
The Directors of the Company accept responsibility for the contents of this announcement.
Enquiries:
|
Company
Dr Michael Hudson, CEO |
+44 (0)207 710 0020 |
|
AQSE Growth Market Corporate Advisor
Peterhouse Capital Limited Guy Miller/Mark Anwyl |
+44 (0)20 220 9795 |
|
Public Relations on behalf of the Company
Ramsay Smith, Media House International Limited |
+44 (0)207 710 0020 +44 (0) 7788 414856 ramsay@mediahouse.co.uk |
EDX Medical Group Plc
Statement of Comprehensive Income
For the six months ended 30 September 2022
|
Note |
Unaudited
Six months to 30 September 2022 £ |
Unaudited
Six months to 30 September 2021 £ |
||
| Continuing operations | ||||
| Administrative expenses | 5 | (193,660) | (124,187) | |
| Operating loss before taxation | (193,660) | (124,187) | ||
| Taxation | - | - | ||
| Total comprehensive loss for the period attributable to the equity owners | (193,660) | (124,187) | ||
| Loss per share | ||||
| Basic and diluted in pence | 6 | (0.006) | (0.013) | |
The above results were derived from continuing operations.
The notes on pages 8 to 13 form part of these Interim Financial Statements.
EDX Medical Group Plc
Statement of Financial Position
As at 30 September 2022
| Company Number: 13277385 |
Unaudited
As at 30 September 2022 |
Audited
As at 31 March 2022 |
||
| Note | £ | £ | ||
| ASSETS | ||||
| Non-current assets | ||||
| Property, Plant and Equipment | 632 | 832 | ||
| Total non-current asses | 632 | 832 | ||
| Current assets | ||||
| Trade and other receivables | 7 | 43,255 | 8,068 | |
| Cash and cash equivalents | 8 | 268,138 | 1,027,114 | |
| Convertible Loan | 10 | 600,000 | - | |
| Total current assets | 911,393 | 1,035,182 | ||
| Total assets | 912,025 | 1,036,014 | ||
| LIABILITIES | ||||
| Current liabilities | ||||
| Trade and other payables | 9 | 122,593 | 52,922 | |
| Total current liabilities | 122,593 | 52,922 | ||
| Total liabilities | 122,593 | 52,922 | ||
| NET ASSETS | 789,432 | 983,092 | ||
| EQUITY | ||||
| Share capital | 11 | 300,000 | 300,000 | |
| Share premium | 11 | 918,933 | 918,933 | |
| Warrant reserve | 13 | 17,567 | 17,567 | |
| Accumulated losses | 13 | (447,068) | (253,408) | |
| TOTAL EQUITY | 789,432 | 983,092 | ||
The Interim Report and Financial Statements were approved by the Board of Directors and authorised for issue on 15 December 2022.
The notes on pages 8 to 13 form part of these Interim Financial Statements.
EDX Medical Group Plc
Statement of Changes in Equity
For the six months ending 30 September 2022
| Share Capital | Share Premium | Shares to be issued |
Warrant
Reserve |
Accumulated Losses | Total Equity | |
| £ | £ | £ | £ | £ | £ | |
| Balance as at 1 April 2022 | 300,000 | 918,933 | - | 17,567 | (253,408) | 983,092 |
| Comprehensive income | ||||||
| Loss for the period | - | - | - | - | (193,660) | (193,660) |
| Transactions with owners | - | - | - | - | - | - |
| As at 30 September 2022 | 300,000 | 918,933 | - | 17,567 | (447,068) | 789,432 |
| Share Capital | Share Premium | Shares to be issued |
Warrant
Reserve |
Accumulated Losses | Total Equity | |
| £ | £ | £ | £ | £ | £ | |
| Balance as at 1 April 2021 | 2 | - | 16,499 | - | (11,242) | 5,259 |
| Comprehensive income | ||||||
| Loss for the period | - | - | - | - | (124,187) | (124,187) |
| Transactions with owners | ||||||
| Issue of ordinary shares and subdivision of shares | 299,998 | 1,000,000 | (16,499) | - | - | 1,283,499 |
| Cost to issue shares | - | (65,381) | - | - | - | (65,381) |
| Share based payment | - | - | - | 1,881 | - | 1,881 |
| As at 30 September 2021 | 300,000 | 934,619 | - | 1,881 | (153,429) | 1,101,071 |
The notes on pages 8 to 13 form part of these Interim Financial Statements.
EDX Medical Group Plc
Statement of Cash Flows
For the six months ending 30 September 2022
|
Unaudited
Six months to 30 September 2022 |
Unaudited
Incorporation to 30 September 2021 |
|||
| Note | £ | £ | ||
| Cash flow from operating activities | ||||
| Operating loss | (193,660) | (124,187) | ||
| Adjustments for non-cash/non-operating items: | ||||
| Depreciation | 566 | 167 | ||
| Share based payments | - | 1,881 | ||
| Cash outflow from operating activities | (193,094) | (122,139) | ||
| Changes in working capital | ||||
| (Increase)/ Decrease in trade and other receivables | 7 | (35,187) | 3,983 | |
| Increase in trade and other payables | 9 | 69,671 | 784 | |
| Net cash used in operating activities | (158,610) | (117,372) | ||
| Cash flows from investing activities | ||||
| Purchase of property, plant and equipment | (366) | (1,198) | ||
| Net cash used in investing activities | (366) | (1,198) | ||
| Cash flows from financing activities | ||||
| Payments for Convertible Loan Notes | 10 | (600,000) | - | |
| Proceeds from issue of shares, net of issue costs | - | 1,283,499 | ||
| Cost of share issue | - | (65,381) | ||
| Net cash generated from financing activities | (600,000) | 1,218,118 | ||
| Net increase in cash and cash equivalents | (758,976) | 1,099,548 | ||
| Cash and cash equivalents at the beginning of the period | 1,027,114 | 2 | ||
| Cash and cash equivalents at the end of the period | 8 | 268,138 | 1,099,550 | |
The notes on pages 8 to 13 form part of these Interim Financial Statements.
EDX Medical Group Plc
Notes to the Interim Financial Statements
For the six months ended 30 September 2022
1. Company information
EDX Medical Group Plc (the “Company”) (formally TECC Capital Plc) is a public company incorporated in England and Wales and admitted to trading on the AQSE Growth Market. The Company is domiciled in England and its registered office is 210-211 Milton Road, Cambridge, England, CB4 0WA.
The principal activity of the Company is the development of digital diagnostic products and services for use in testing for cancer, heart disease, neurology and infectious diseases.
On 11 November 2022 the Company completed the acquisition of EDX Medical Limited and was renamed EDX Medical Group Plc.
2. Accounting policies
2.1 Basis of preparation
These interim financial statements of the Company have been prepared on a going concern basis in accordance with UK-adopted International Accounting Standards (“IFRS”) in accordance with the Companies Act 2006.
Measurement bases
The financial statements have been prepared under the historical cost convention. Historical cost is generally based on the fair value of the consideration given in exchange for assets.
The preparation of the financial statements in compliance with adopted IFRS requires the use of certain critical accounting estimates and management judgements in applying the accounting policies. The significant estimates and judgements that have been made and their effect is disclosed in note 3.
2.2 Going concern
During the period ended 30 September 2022 the Company made a loss of £193,659 (2021: £124,187) and as at 30 September 2022 had net assets of £789,432 (2021: £983,092). The operations of the Company are financed from funds raised from investors as it does not currently generate revenue.
The interim financial statements have been prepared on a going concern basis. The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. The Company has not yet commenced a trade from which to generate revenue. Future capital resources are expected to come from the issue of shares to institutional and private investors.
The Directors have assessed the ongoing impact of the COVID-19 virus on the Company and the current economic conditions which includes a high rate of inflation in the UK. Whilst they acknowledge that COVID-19 and the UK economic climate could have long lasting and significant impacts on the global economy, the Directors believe that the Company has sufficient financial resources to meet its obligations as they fall due for a period of at least 12 months from the date of approval of the financial statements.
2.3 Financial instruments
Financial instruments are recognised in the statements of financial position when the Company has become a party to the contractual provisions of the instruments. Financial instruments are classified as assets, liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.
2.4 Financial assets
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss. Subsequent measurement of debt instruments depends on the group's business model for managing the asset and the cash flow characteristics of the asset. There are two measurement categories into which the group classifies its debt instruments:
2. Accounting policies (continued)
Amortised cost
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses.
Fair value through profit and loss
Assets that do not meet the criteria for amortised cost or fair value through OCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net within other gains/(losses) in the period in which it arises. The Company's financial assets held at fair value through profit and loss comprise solely of convertible loan receivable in the statement of financial position
2.4 Significant accounting policies
The accounting policies applied by the Company in this interim financial report are the same as those applied by the Company in its financial statements as at and for the year ended 31 March 2022.
2.5 Financial assets
Convertible Loan recognised at amortised cost
The group classifies its financial assets as at amortised cost only if both of the following criteria are met:
· The asset is held within a business model whole objective is to collect contractual cash flows, and
· the contractual terms give rise to cash flows that are solely payments of principal and interest.
The convertible loan is recognised initially at the amount of consideration that is unconditional, when they are recognised at fair value. The group holds the convertible loan note with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost.
2.6 Dividends
No dividend has been declared or paid by the Company during the period ended 30 September 2022 (2021: Nil).
3. Significant judgments and estimates
The preparation of the Company’s financial statements under IFRS, as applied in the United Kingdom, requires the Directors to make estimates and assumptions that affect the reported amounts of assets and liabilities at the statement of financial position date, amounts reported for revenues and expenses during the period, and the disclosure of contingent liabilities, at the reporting date.
Estimates and judgements are continually evaluated and are based on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Directors consider that there are no critical accounting judgements or estimates relating to the financial information of the Company, this is in line with the audited annual financial statements for the year ended 31 March 2022.
4. Loss before income tax
The loss before income tax is stated after charging:
|
Unaudited
Six months to 30 September 2022 |
Unaudited
Six months to 30 September 2021 |
|
| £ | £ | |
| Legal and professional fees | 71,905 | 44,905 |
| Corporate advisory fees | 41,750 | 10,000 |
| Accountancy fees | 17,992 | 10,013 |
| Audit fees – fees payable for other services | 2,500 | - |
5. Analysis of expenses by nature
The breakdown by nature of administrative expenses is as follows:
|
Unaudited
Six months to 30 September 2022 |
Unaudited Six months to 30 September 2021 |
||
| £ | £ | ||
| Staff costs | 45,634 | 47,902 | |
| Audit fees – fees payable for other services | 2,500 | - | |
| Accountancy fees | 17,992 | 10,014 | |
| Legal and Professional fees | 71,905 | 44,905 | |
| Rent | 9,000 | 4,500 | |
| Corporate Finance fees | 41,750 | 10,000 | |
| Other costs, including IT costs, subscriptions, and other fees | 4,878 | 6,866 | |
| Total administrative expenses | 193,659 | 124,187 |
6. Loss per share
The loss per share has been calculated using the loss for the period and the weighted average number of ordinary shares entitled to dividend rights which were outstanding during the period, as follows:
|
Unaudited
30 September 2022 |
Unaudited
30 September 2021 |
|
| £ | £ | |
| Loss for the period attributable to equity holders of the Company | (193,659) | (124,187) |
| Weighted average number of ordinary shares | 30,000,000 | 9,778,481 |
| Loss per share | (0.006) | (0.013) |
7. Trade and other receivables
|
Unaudited
30 September 2022 |
Audited 31 March 2022 |
|
| £ | £ | |
| Amounts falling due within one year: | ||
| Prepayments | 14,768 | 4,990 |
| Other receivables | 28,487 | 3,078 |
| 43,255 | 8,068 |
The Directors consider that the carrying amount of trade and other receivables is approximately equal to their value.
Other receivables comprise VAT due on expenses.
8. Cash and cash equivalents
|
Unaudited 30 September 2022 |
Audited 31 March 2022 |
|
| £ | £ | |
| Cash at bank | 268,138 | 1,027,114 |
| 268,138 | 1,027,114 |
9. Trade and other payables
|
Unaudited 30 September 2022 |
Audited 31 March 2022 |
|
| £ | £ | |
| Amounts falling due in one year: | ||
| Other taxation and social security | 3,337 | 12,825 |
| Trade payables | 83,901 | 6,855 |
| Other payables | 14,855 | 242 |
| Accruals | 20,500 | 33,000 |
| 122,593 | 52,922 |
10. Convertible Loan
|
Unaudited
30 September 2022 |
Audited 31 March 2022 |
|
| £ | £ | |
| Amounts falling due within one year: | ||
| Denominated in GBP | 600,000 | - |
| 600,000 | - |
10. Convertible Loan (continued)
On 26 July 2022, the Company subscribed for £300,000 of Convertible Loan Notes (“CLNs”) of £1 each in EDX Medical Limited.
On 1 September 2022, the Company subscribed for £200,000 of CLNs of £1 each in EDX Medical Limited on
On 30 September 2022, the Company subscribed for £100,000 of CLNS of £1 each in EDX Medical Limited.
All subscriptions were made on the same terms and conditions. The terms and conditions note that should the CLNs convert, they will do so following the acquisition of the entire issued share capital of EDX Medical Limited the Company by way of a reverse takeover at a subscription price at a discount to the price per EDX ordinary share to be paid on completion of a reverse takeover, the repayment of the CLN’s was guaranteed by the founder and majority shareholder of EDX Medical Limited Professional Christopher Evans.
Due to the short-term nature of the CLNs, their carrying amount is considered to be the same as their fair value.
11. Share capital
| Shares | Share Capital | Share Premium | Total | |
| Number | £ | £ | £ | |
| Issued and fully paid Ordinary shares of £0.01 pence each | ||||
| At 01 April 2022 | 30,000,000 | 300,000 | 918,933 | 1,218,933 |
| At 30 September 2021 | 30,000,000 | 300,000 | 918,933 | 1,218,933 |
The holders of ordinary shares are entitled to one voting right per share and, subject to the provisions of the Companies Act 2006, are entitled to dividends out of the profits of the Company available for distribution.
12. Reserves
Share Capital
Amount subscribed for shares at nominal value.
Share premium
Amount subscribed for share capital in excess of nominal value, less costs of share issue.
Accumulated losses
Cumulative realised profits less cumulative realised losses and distributions made, attributable to the equity shareholders of the Company.
Warrant reserve
The warrant reserve comprises the cumulative expense representing the extent to which the vesting period of warrants has passed and management’s best estimate of the achievement or otherwise of non-market conditions and the number of equity instruments that will ultimately vest.
13. Related party transactions
The related parties are considered to be the Directors who each have shares on the Company. Their remuneration is as follows:
|
Unaudited
Six months to 30 September 2022 |
Unaudited Six months to 30 September 2021 |
||
| Directors’ emoluments, including salary and fees: | £ | £ | |
| J Taylor | 15,000 | 16,048 | |
| D Stewart | 15,000 | 15,806 | |
| A Barblett | 15,000 | 16,048 | |
| 45,000 | 47,902 | ||
As at 30 September 2022, an amount was due to Donald Stewart of £nil (31 March 2022: £242) relating to reimbursement of business expenses.
14. Ultimate controlling party
The Company has no ultimate controlling party.
15. Events after the reporting date
On 26 October 2022, the Company published a prospectus containing, inter alia, proposals concerning
· Proposed all share acquisition of EDX Medical Limited for £12,000,000
· Placing to raised £1,200,000 at 6 pence per share
· Application to be made for Admission of the enlarged ordinary share capital to trading on the Access Segment of the AQSE Growth Market
· Change of name to EDX Medical Group Plc
· Notice of General Meeting.
The transactions obtained shareholder approval and completed on 11 November 2022, and trading in the Company’s share re-commenced on 14 November 2022. Full details of these transactions and a copy of the prospectus can be found at: https://edxmedical.co.uk/documents/
The directors expect the acquisition of EDX Medical Limited to be accounted for in the Company’s next published statutory financial statements, for the year ending 31 March 2023, as a reserve acquisition with those financial statements being presented as a continuation of the activities of the deemed acquirer, EDX Medical Limited.
In the period ended 31 March 2022, EDX Medical Limited recorded a loss after tax of £88,048. The total assets and net assets at 31 March 2022 were £730,211 and £38,048 respectively.
As part of the transaction, the existing Board resigned, and a new Board was appointed which consisted of Professor Christopher Evans, Jason Holt, Dr Michael Hudson and Dr Trevor Jones.
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