Final Results

RNS Number : 3409C

Belluscura PLC

22 February 2022

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Belluscura plc

("Belluscura" or the "Company" or "Group")

 Unaudited Preliminary Results for the year ended 31 December 2021

Transformational year and positive outlook as the global demand for medical oxygen is forecast to grow from $3.14bn in 2021 to $5.64bn by 2027 representing a CAGR of 10.17%

LONDON, U.K. AND PLANO, TX, U.S. (22 February 2022).   Belluscura plc (AIM:BELL), a leading medical device developer focused on lightweight and portable oxygen enrichment technology, announces its unaudited Preliminary Results for the year ended 31 December 2021, maiden full year results since Admission to AIM in May 2021.

Financial Highlights:

· Group revenue of $0.4 million (2020: $nil)

· Adjusted loss from operations of $4.2 million (2020: $1.3 million)

· Basic loss per share of $0.06 (2020: $0.04)

· Net Cash as at 31 December 2021 of $15.6 million

Operational highlights:

· X-PLO₂R® received 510(k) Clearance from the Food and Drug Administration ("FDA") on 2 March 2021.

· Admission to AIM on 28 May 2021.

· Oversubscribed equity fundraising of £17.5 million ($24.5 million) from new and existing investors.

· Sales of 377 units in the period to 31 December 2021 following the launch of X-PLOR in September 2021, 25% above current consensus forecasts and 150% above initial forecasts for 2021.

Outlook:

· Trading in the first six weeks of 2022 has continued to accelerate and the Group has:

· increased the number of distributors to more than 10

· combined sales and orders for more X-PLOR units than were sold in the prior year

· Production to be increased commensurate with market demand and manufacturing capabilities which are expected to grow significantly.

· The Group continues to satisfactorily progress regulatory clearances in territories outside the United States.

· Development of the next generation follow-on products, the X-PLOR CX and X-PLOR DX, continues to progress well with the expected launch of these products in Q2 2022 and Q3 2022 respectively.

Robert Rauker, Chief Executive Officer, Belluscura plc, commented:

"We are delighted with the progress we made in 2021, having successfully launched our first X-PLOR product into the growing supplemental oxygen market. Alongside this, we have continued to develop our follow-on products which will be launched in 2022. The Company has a strong balance sheet and is well positioned to deliver substantial growth in 2022.  We look forward to the future with confidence."

For further information please contact:

Belluscura plc	www.belluscura.com
Robert Rauker, Chief Executive Officer	via Walbrook PR
Tony Dyer, Chief Financial Officer
SPARK Advisory Partners Limited (NOMAD)	Tel: [phone]
Neil Baldwin
Dowgate Capital Limited (Broker)	Tel: [phone]
James Serjeant / Nicholas Chambers
Walbrook PR Ltd (Media & Investor Relations)	Tel: [phone] or [e-mail]
Paul McManus / Sam Allen	Mob: [phone]

About Belluscura plc ( www.belluscura.com )

Belluscura is a UK medical device company focused on developing oxygen enrichment technology spanning broad industries and therapies. Our innovative oxygen technologies are designed with a global purpose: to create improved health and economic outcomes for the patients, healthcare providers and insurance organisations.

CHAIRMAN'S STATEMENT

I am pleased to report on the performance of Belluscura as my first year as Chairman after listing on AIM in May 2021.

Belluscura is a business founded on the principle of making healthcare both more affordable and more available while returning a strong profit to our shareholders.

In February 2017, the Group entered into a co-exclusive licence and development agreement with Separation Design Group IP Holdings LLC ("SDG") to complete the development of the X-PLOR, a portable oxygen concentrator, used to deliver concentrated oxygen to a patient requiring oxygen therapy.

Belluscura and SDG delivered a working prototype within five months of acquiring the X-PLOR licence. X-PLOR received 510(k) clearance from the Food and Drug Administration ("FDA") on 2 March 2021.

Our products are currently manufactured in the US and the Group is delighted to have commercially launched the X-PLOR in September 2021.

The Group has also developed follow-on products which will target the same oxygen markets and continues to work on other oxygen enrichment technologies in complementary markets

We believe that the X-PLOR range of products will provide significant growth for the Group. The global demand for medical oxygen continues to grow with an estimated 300m people suffering from Chronic Obstructive Pulmonary Disease ("COPD") and the disease expecting to become the leading cause of death worldwide in 15 years. Additionally, even though the COVID-19 pandemic appears to be easing, recent studies reveal that nearly one in five people that contracted COVID-19 showed lung abnormalities, potentially resulting in a future need for supplemental oxygen¹.

The Company looks forward with optimism and will be updating shareholders on a regular basis.

Adam Reynolds

Non-Executive Chairman

¹ The unmet global burden of COPD - UCL Respiratory, University College London, London, UK - https://discovery.ucl.ac.uk/id/eprint/10052604/

 

CHIEF EXECUTIVE'S REVIEW

2021 has been a transformational year for Belluscura. On 2 March 2021 we received 510(k) clearance from the US FDA for the X-PLOR Portable Oxygen Concentrator. This underpinned our successful £17.5 million ($24.5 million) fundraise and IPO listing on AIM on 28 May 2021.

Whilst we had many distributor enquiries, both in the US and internationally, in order to manage the launch and ensure we would have continuity of supply to our customers, we limited the number of initial distributor agreements. We signed our first distribution agreement in June 2021 and now have more than ten in place.

Following a successful Pre-Market Evaluation, where the units were tested with 17 volunteer oxygen users, we launched the X-PLOR in early September and in the four months to 31 December 2021 we sold 377 X-PLOR units, significantly exceeding our initial forecasts. Our device is priced competitively for the B2B market and during 2022 we will expand into the B2C marketplace which allows the Company to retain higher gross margins.

Recognising the current global supply chain challenges, the Company has significantly increased inventory levels of key components and other raw materials to pre-empt any potential disruption on production levels allowing them to be maintained in the current financial year and beyond. Inevitably, whilst these shortages remain, costs are higher, but as we increase volume and the shortages ease, we will start to benefit from economies of scale along with the potential benefits of reducing costs in 2023.

The Group's manufacturing capability has been scaled up significantly to ensure that the Company can continue to meet the increased demand from US distributors, with the Company continuing to broaden its sales network with both online and brick & mortar distributors. The Company also continues to move forward toward launching the product outside the US, having received multiple enquiries from distributors globally.

We continue to strengthen the Belluscura team, increasing headcount from 9 at the time of IPO to 16 at the end of the year. We will continue to invest in our engineering and manufacturing capability along with sales and marketing to build out our B2B sales, B2C sales and the brand. We will also invest in our quality and compliance infrastructure that any fast-growing business requires.

Forecasts of the supplementary oxygen market now expect it to grow from $3.14bn in 2021 to $5.64bn by 2027, representing a CAGR of 10.17%². The longer-term impact on oxygen requirements for recovering COVID-19 patients is yet unknown; however, there has been increased demand for oxygen related devices globally. In addition, supply chain disruption has caused a shortage of devices across the industry, which opens up opportunities for Belluscura.

Outlook 

Trading in the beginning of 2022 has continued to accelerate. In the first six weeks of 2022 we increased the number of distributors to more than 10 and had combined sales and orders for more X-PLOR units than the total number of X-PLOR units we sold in 2021.

We will increase production commensurate with market demand and manufacturing capabilities which we expect to grow significantly. The Group also continues to satisfactorily progress regulatory clearances in territories outside the US.

Development of the follow-on products, the X-PLOR CX and X-PLOR DX, continues to progress well with the expected launch of these next generation products to be in Q2 2022 and Q3 2022 respectively.

The Company has a strong balance sheet and is well positioned to deliver substantial growth in 2022.  We look forward to the future with confidence.

Robert Rauker

Chief Executive Officer

² Medical Oxygen Concentrators & Oxygen Cylinders Market Research Report by Product, by Technology, by End-user, by Region - Global Forecast to 2027 - Cumulative Impact of COVID-19 (yahoo.com)
 

FINANCIAL REVIEW

Income statement 

Revenue for the year to 31 December 2021 was $420,316 (2020: $nil). This revenue was generated in the final four months of the year following the launch of the X-PLOR. All revenue was generated in the US.

There was a small Product Gross Loss in the year of $52,171 (2020: $nil). With X-PLOR being the Group's first product to be launched, pricing was deliberately competitive to establish early B2B sales, with cost of goods sold reflecting the initial small volumes.

Other income of $209,690 (2020: $11,493) was from COVID-19 related grants and forgiven loans.

Operating Loss for the year was $5.19m (2020: $1.95m) and Total Comprehensive Loss was $6.37m (2020: $1.59m).

Adjusted Operating Loss of $4.21m (2020: $1.30m) is calculated before IFRS2 Share Based Payment Charge and Surrendered Share Options (Note 6.2), Depreciation, Amortisation, Interest, Exchange Differences and IPO Costs. Note 15 Alternative Performance Measure reconciles the Total Comprehensive Loss to the Adjusted Operating Loss.

Loss per share

The basic and diluted loss per share was $0.055 (2020: $0.036).

Financial position

The Group net assets at 31 December 2021 were $24.67m (2020: $4.67m). This comprised total assets of $26.00m (2020: $5.24m) and total liabilities of $1.34m (2020: $0.57m). The total assets included intangible assets (capitalised research and development costs), property, plant and equipment and right-of-use assets of $7.05m (2020: $4.52m).

Cashflow

The Group had net cash of $15.59m (2020: $0.52m) as at 31 December 2021. The net cash inflow of funds raised in the year was $25.51m (2020: $2.25m).

During the period the net cash outflow from operating activities was $7.33m (2020: $$1.47m).

The Group raised £17.5 million ($24.5 million) from investors in May when its shares were admitted to trading on AIM, before expenses of £1.4 million ($1.9 million); of which £0.5 million ($0.6 million) were charged to the Income Statement and £0.9 million ($1.3 million) were charged to the Share Premium Account.

These funds are being applied in pursuing the Group's strategic objectives.

Dividends

No dividend is recommended (2020: £nil) due to the early stage of the development of the Group.

Events after the reporting period

At the date of these Preliminary Results, there were no events after the reporting period.

Change of auditors

Subsequent to the Annual General Meeting at which shareholders approved the re-appointment of KPMG LLP as the Group's independent auditor, and as requested by the Board, the Audit Committee considered the appointment of a new independent auditor for the year ending 31 December 2021. The Board accepted the Committee's recommendation that Jeffreys Henry LLP be appointed as the Group's independent auditor.

The Board wishes to thank KPMG for their work as the Group's independent auditor since 2017.

Principal Risks and Uncertainties

The Group actively considers and manages its risks. The Directors consider the following areas of business and operational risk and details how this risk is managed or mitigated:

· Generating revenue. The Group's primary source of revenue is from sales of its X-PLOR product. Management performs regular reviews of the sector to ensure it is targeting large markets.

· Successful product development. The Group received FDA 510(k) clearance for X-PLOR on 2 March 2021. The Group's follow-on products are in advanced development and are based upon shared technology with X-PLOR. The Board regularly monitors the carrying value of capitalised product development in the light of plans for future revenue and margin.

·  Credit risk. The Group’s principal financial assets are cash, and trade and other receivables.  The Group monitors receivables and should any be the subject of an identified loss event, allowance is made for impairment if required. At the end of the period the Group had four customers. The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. Further, apart from intercompany consolidated transactions the Group has no current debt outstanding (excluding leases capitalised under IFRS16).

· Liquidity risk. To support expansion plans for future development, the Group regularly reviews its financing arrangements and cash flows to ensure there is sufficient funding in place.

· Foreign exchange risk. As the Group holds Sterling cash deposits and reports its financial performance in US Dollars, this exposes the Group to a potential unrealised currency risk on its Sterling bank balances. This relates to the raising of capital in the United Kingdom. The Directors review this exposure on a regular basis.

Contingent Liabilities

On 24 February 2017, the Company entered into a co-exclusive license and development agreement with Separation Design Group, LLC and SDG (together the "SDG Parties") ("SDG Licence") which was subsequently amended by an amendment agreement dated 19 March 2021. Pursuant to the SDG Licence: if by 3 September 2025, cumulative sales of the X-PLOR have not exceeded $20 million dollars, Belluscura must make a one-time payment of $3 million to the SDG Parties to maintain the exclusive SDG licence.

COVID-19

The Board have reviewed and assessed the impact of the COVID-19 pandemic on the Group. This did result in the FDA clearance process being elongated, however clearance was received on 2 March 2021. We face similar challenges to many businesses due to the disruption caused by COVID-19, however, we believe that we are in a strong position to progress.

Analysis of Financial and non-Financial Key Performance Indicators

The Board continues to monitor performance regularly throughout the year by reviewing a range of key performance indicators.

These include revenue growth, progress towards operational break even, expenditure (both current and investment) control against budget and cash used and remaining. 

The Directors expect further improvement in performance in future periods as it achieves success in the Group's strategy to launch its products and grow through continual investment.

 

Tony Dyer
Chief Financial Officer

 

CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME

Group	Note		Unaudited Year ended 31 December 2021	Audited Year ended 31 December 2020
			US $	US $
Continuing Operations
Revenue	5		420,316	-
Cost of sales			(472,487)	-
Gross Profit/(Loss)			(52,171)	-
Other operating income	6.1		209,690	11,493
Administrative expenses	6.2		(5,344,176)	(1,956,682)
Operating Loss			(5,186,657)	(1,945,189)
Finance costs			(26,837)	(32,956)
Finance costs - net			(26,837)	(32,956)
Loss before income tax			(5,213,494)	(1,978,145)
Income tax expense	7		-	-
Loss after tax for the year			(5,213,494)	(1,978,145)
Other comprehensive income	6.2
Items that are or may be reclassified subsequently to profit or loss:
Foreign currency translation differences - foreign operations			(1,153,148)	391,737
Total other comprehensive income			(1,153,148)	391,737
Total comprehensive loss for the year attributable to the equity holders			(6,366,642)	(1,586,408)

Earnings per share
Basic: Loss per share	8		(0.055)	(0.036)
Diluted: Loss per share	8		(0.055)	(0.036)

 

CONSOLIDATED BALANCE SHEET

Group	Note		Unaudited As at  31 December 2021	Audited As at  31 December 2020
			US $	US $
Assets
Non-current assets
Tangible assets			47,156	13,818
Product development			6,723,883	4,129,660
Right to use asset			277,803	375,852
			7,048,842	4,519,330
Current assets
Inventory			309,159	-
Trade and other receivables			3,059,363	197,653
Cash and cash equivalents			15,587,552	520,070
			18,956,074	717,723
Total assets			26,004,916	5,237,053
Current liabilities
Trade and other payables			(931,730)	(230,136)
			(931,730)	(230,136)
Non-current liabilities
Trade and other payables			(400,694)	(338,053)
			(400,694)	(338,053)
Total liabilities			(1,332,424)	(568,189)
Net assets			24,672,492	4,668,864
Equity attributable to the owners of the parent
Share capital	9		1,548,227	823,201
Share premium	10		26,025,760	556,683
Capital contribution			165,000	165,000
Retained earnings	11		(2,349,966)	2,687,361
Translation reserve	11		(716,529)	436,619
Total equity			24,672,492	4,668,864

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

			Attributable to equity holders of the parent company
Group			Ordinary Shares US $				Share Premium US $			Translation Reserve US $			Capital Contribution US $			Retained earnings US $								Total US $
Balance as at 31 December 2019				648,298				5,714,678			44,882			165,000			(2,844,929)									3,727,929
Issue of ordinary shares				174,903				2,233,896																		2,408,799
Reduction in capital									(7,391,891)									7,391,891									-
Loss for the period																(1,978,145)								(1,978,145)
Other comprehensive income										391,737						-								391,737
Total comprehensive income										391,737						(1,978,145)								(1,586,408)
Share based payments																118,544								118,544
Balance as at 31 December 2020				823,201					556,683			436,619			165,000			2,687,361									4,668,864
Balance as at 31 December 2020					823,201				556,683			436,619			165,000			2,687,361									4,668,864
Issue of ordinary shares					725,026				25,469,077																		26,194,103
Loss for the period																(5,213,494)								(5,213,494)
Other comprehensive income												(1,153,148)															(1,153,148)
Total comprehensive income												(1,153,148)							(5,213,494)				(6,366,642)
Share based payments																				176,167					176,167
Balance as at 31 December 2021					1,548,227				26,025,760			(716,529)	165,000						(2,349,966)									24,672,492

 

CONSOLIDATED STATEMENT OF CASH FLOWS

Group	Note		Unaudited For the year ended  31 December 2021	Audited For the year ended  31 December 2020
			US $	US $
Cash flows from operating activities
Cash generated from operations	12		(7,332,185)	(1,470,773)
Taxation paid			-	-
				-
Net cash used in operating activities			(7,332,185)	(1,470,773)
Cash flows from investing activities
Purchases of property, plant and equipment			(47,966)	-
Intangible assets under development			(2,750,996)	(1,194,432)
Net cash used in investing activities			(2,798,962)	(1,194,432)
Cash flows from financing activities
Proceeds from issuance of ordinary shares (net)			25,514,694	2,251,774
Lease Payments			(108,392)	(118,859)
Net cash generated from financing activities			25,406,302	2,132,915
Net increase / (decrease) in cash and cash equivalents			15,275,155	(532,290)
Cash and cash equivalents at beginning of period			520,070	1,033,512
Exchange loss on cash and cash equivalents			(207,673)	18,848
Cash and cash equivalents at end of period			15,587,552	520,070

NOTES TO THE PRELIMINARY RESULTS
For the year ended 31 December 2021

1  General Information

Belluscura plc is a company incorporated in England and Wales and domiciled in the UK. Company Registration No. 09910883. On 28 November 2017 the Company changed its name from Belluscura Limited to Belluscura plc. The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied, unless otherwise stated.

 

2  Electronic communications

The Company is not proposing to bulk print and distribute hard copies of the Annual Report for the year ended 31 December 2021, unless specifically requested by individual shareholders. The Board believes that by utilising electronic communication it delivers savings to the Company in terms of administration, printing and postage, and environmental benefits through reduced consumption of paper and inks, as well as speeding up the provision of information to shareholders.

News updates, Regulatory News and Financial statements can be viewed and downloaded from the Group's website, www.belluscura.com . Copies can also be requested from; Company Secretary, Belluscura, 15 Fetter Lane, London EC4A 1BW or by email: [e-mail].  

When the Annual Report is published it will be notified by RNS and available on the Company's website.

3  Accounting Policies

This financial information has been prepared and approved by the Directors in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 (''Adopted IFRSs'').  The preparation of this financial information in conformity with IFRS requires the use of certain critical accounting estimates and consistent with the accounting policies used in the Financial Statements for the year ended 31 December 2020.

4  Going concern

US FDA 510(k) clearance of the Group's X-PLOR was received on 2 March 2021. The subsequent successful IPO on the AIM market of the London Stock Exchange on 28 May 2021, raised £17.5m ($24.5m). The Group has commenced manufacturing of the X-PLOR , launched in September 2021, and the follow-on products, the X-PLOR CX and X-PLOR DX, are expected to be commercialised within the next 12 months. The Group had $15.6 million cash at the period end and the Directors have produced budgets and cashflow forecasts which show sufficient cash resources for the next 12 months. On this basis , the Directors have concluded that the Group will have adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis in preparing these Preliminary Results.

5  Revenue

The Group generated revenue of $420,316 in the year (2020: $nil). All sales were in the United States.

6  Other operating income and administrative expenses

6.1  Other operating income

Group		Unaudited 2021	Audited  2020
		US $	US $
Grants		6,876	6,421
Purchase of option right		-	5,072
SBA Loan forgiveness		202,814	-
Total		209,690	11,493

 

6.2  Expenses by nature 

Group		Unaudited  2021	Audited  2020
		US $	US $
Depreciation of property plant and equipment		14,531	8,544
Depreciation of right of use asset		98,049	98,049
Amortisation of product development		156,774	-
Costs related to fundraising activities		646,042	78,911
Surrendered Share Options		611,947	-
Realised and Unrealised foreign exchange movements		(734,678)	405,370
Employee benefit expense		2,293,205	1,022,677
IFRS2 Share Based Payment Charge		180,091	111,350
Other administration expenses		2,078,215	231,781
Administration expenses		5,344,176	1,956,682
P&L foreign exchange movements in Other Comprehensive Income		1,153,148	(391,737)
Total expenses		6,497,324	1,564,945

As disclosed in the Admission Document, published ahead of admission to trading on AIM in May 2021, Robert Rauker agreed to surrender part of the options over 439,373 ordinary shares granted on 29 October 2019 and over 815,496 ordinary shares granted on 7 May 2020 in exchange for a cash payment. The consideration paid by the Company to Mr Rauker in relation to the surrender of the respective parts of Mr Rauker's options was calculated based on the difference between the Placing Price of 45p per share and the exercise price per Share payable by the Option Holder for the respective option multiplied by the number of Shares that are being surrendered. This amount is included within Employee Benefit Expense.

7  Income tax expense

Group		Unaudited 2021 US$	Audited  2020 US$
Current tax on profits for the period		-	-
Adjustments in respect of prior period		-	-
Total current tax		-	-
Income tax expense		-	-

8  Earnings/(Loss) per share

Group		Unaudited  2021 US$	Audited  2020 US$
Profit/(Loss) for the period US$		(5,213,494)	(1,978,145)
Weighted Average Shares in Issue		94,724,153	55,598,175
Basic Loss per Share US$		(0.055)	(0.036)
Weighted Average Shares, Warrants and Options in Issue		109,794,921	75,534,490
Diluted Loss per Share US$		(0.055)	(0.036)

All potentially dilutive items are disregarded for the purpose of the diluted earnings per share as they are considered antidilutive.

9  Share capital

Group	No of shares of £0.01 each	Total US $
Issued and fully paid up
At 1 January 2020	49,132,482	648,298
Shares issued for cash	12,887,361	163,653
Shares issued for cash received post year end	885,918	11,250
At 31 December 2020	62,905,761	823,201
At 1 January 2021	62,905,761	823,201
Shares issued for cash	50,929,683	725,026
At 31 December 2021	113,835,444	1,548,227

10   Share premium

Group		Ordinary Shares US $	Total US $
Allotted and fully paid up
At 1 January 2020		5,714,678	5,714,678
Premium on shares issued (net of cost of issue of shares) Reduction in Capital		2,233,896 (7,391,891)	2,233,896 (7,391,891)
At 31 December 2020		556,683	556,683
At 1 January 2021		556,683	556,683
Premium on shares issued		26,795,879	26,795,879
Cost of issue of shares		(1,326,802)	(1,326,802)
At 31 December 2021		26,025,760	26,025,760

11  Reserves

Retained earnings				Group US $
At 1 January 2020				(2,844,929)
Loss for the period				(1,978,145)
Reduction in Capital				7,391,891
Share based payments charge				118,544
At 31 December 2020				2,687,361
Loss for the period				(5,213,494)
Share based payments charge				176,167
At 31 December 2021				(2,349,966)

Translation reserve				Group US $
At 1 January 2020				44,882
Foreign exchange (loss)/gain				391,737
At 31 December 2020				436,619
Foreign exchange (loss)/gain				(1,153,148)
At 31 December 2021				(716,529)

The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations, primarily relating to the statement of financial position at the reporting dates.

12.  Cash generated from operating activities

Group		2021 US $			2020 US $
Loss before income tax		(5,213,494)		(1,978,145)
Adjustments for
-  Depreciation		14,546		8,544
-  Amortisation and impairment		254,821		98,049
-  No cash interest expense		26,837		32,956
-  Movement in foreign exchange		290,716		(68,056)
-  Share based payments		180,091		111,350
Movement in trade and other receivables		(2,179,894)		81,268
Inventory movement		(309,159)		-
Movement in trade and other payables		(396,649)		243,261
Cash generated from operating activities		(7,332,185)		(1,470,773)

13. Related Party Transaction  

As disclosed in the Admission Document, prior to Robert Rauker joining the Company, he undertook independent patent work for Separation Design Group IP Holdings LLC ("SDG"). Pursuant to a Patent Broker Agreement dated 22 October 2015 SDG entered into an agreement with Medicinus IP LLC ("Medicinus"), of which Robert Rauker is the sole shareholder, under which Medicinus has agreed to facilitate the sale and/or license of intellectual property owned by SDG which includes soliciting potential buyers and licensees of such intellectual property. In consideration for the provision of these services, Medicinus receives a fee of 12.5 per cent. of the licence fees, sales price and/or royalties received by SDG which will include 12.5 per cent. of the royalties the Company will pay to SDG in relation to sales of the X-PLOR, pursuant to the agreement entered into between SDG and the Company. The agreement can be terminated by either party by written notice.

14. Contingent Liability

On 24 February 2017, the Company entered into a co-exclusive license and development agreement with Separation Design Group, LLC and SDG (together the "SDG Parties") ("SDG Licence") which was subsequently amended by an amendment agreement dated 19 March 2021. Pursuant to the SDG Licence: if by 3 September 2025, cumulative sales of the X-PLOR have not exceeded $20 million dollars, Belluscura must make a one-time payment of $3 million to the SDG Parties to maintain the exclusive SDG licence.

15.  Alternative Performance Measures

Operating Loss is reconciled to Adjusted Operating Loss as follows:

Group		2021 US $		2020 US $
Total Comprehensive Loss for the year		(6,366,642)			(1,586,408)
Adjustments for
-  IFRS2 Share Based Payment Charge		180,091			111,350
-  Surrendered Share Options		611,947			-
-  Depreciation		112,580			106,593
-  Amortisation		156,774	-
-  Non-cash interest expense		26,837	32,956
-  Costs of raising funds charge to P&L		646,062	-
-  Exchange differences		418,470	33,633
Total Adjustments		2,152,761	284,532
Adjusted Operating Loss		(4,213,881)	(1,301,876)

16.  Events after the reporting period

At the date of these Preliminary Results there have been no events that require disclosure in accordance with IAS10, 'Events after the balance sheet date'.

 

 

END

 

 

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