TIDMLLAI
RNS Number : 1815L
LungLife AI, INC
09 September 2021
LungLife AI, Inc.
(the "Company" or "LungLife")
Half-year Report
LungLife AI (AIM: LLAI), a developer of clinical diagnostic
solutions for the early detection of lung cancer enhanced by
artificial intelligence, announces its maiden unaudited half-year
report for the six months ended 30 June 2021 following admission to
trading on AIM on 8 July 2021.
LungLife, based in California, USA, is a developer of clinical
diagnostic solutions for the early detection of lung cancer from a
simple blood draw, enhanced by artificial intelligence ("AI"). Lung
cancer is one of the most lethal cancers, accounting for nearly a
quarter of all cancer-related deaths in the US, and its global
incidence has increased by 37% from 2007-2017.
Summary and Highlights:
-- H1 2021 Revenues of $107k which entirely relates to resale of
FISH probes to the licensee of the LungLB technology in China
-- Loss before tax of $4.57m, after charging IPO costs of $2.1m.
Adjusted EBITDA(1) loss of $2.23m.
-- Admission to AIM & successful GBP17m (gross) fundraising
at an issue price of 176p on 8 July 2021
-- Net proceeds to be used to complete its multi-centre pivotal
validation studies and support progress towards regulatory
authorisation and reimbursement
-- Since IPO:
- CRO for clinical studies has been engaged
- Actively seeking our first new hires: Directors of R&D and
Quality and a Clinical Laboratory Scientist
- On track for PLA code application
-- Targeting commercialisation of LungLB(R) in 2023
Commenting on outlook, Paul Pagano, Chief Executive Officer of
LungLife, said : "Early detection is absolutely key to ensure
better outcomes for people with lung cancer and we believe our
LungLB(R) test will give physicians the additional information
needed to identify this disease earlier and reduce its impact.
"The funding provided through our AIM IPO allows us to proceed
to a larger multi-centre pivotal validation study and secure
regulatory authorisation and reimbursement support. We are now
laying the groundwork for successful implementation of our clinical
programmes."
For further information please contact:
LungLife AI, Inc. www.lunglifeai.com
Paul Pagano, CEO Via Walbrook PR
David Anderson, CFO
Investec Bank plc (Nominated Adviser Tel: +44 (0)20 7597 5970
& Broker)
Daniel Adams / Virginia Bull / Cameron
MacRitchie
Walbrook PR Limited Tel: +44 (0)20 7933 8780 or LungLifeAI@walbrookpr.com
Paul McManus / Alice Woodings Mob: 07980 541 893 / 07407 804 654
Notes:
1. Earnings before income tax, depreciation and amortisation,
adjusted to exclude exceptional item and other operating income
About LungLife
LungLife is a developer of clinical diagnostic solutions for
lung cancer enhanced by artificial intelligence. The Company's
diagnostic solutions are designed to make a significant impact in
the early detection of lung cancer.
The Company's technology is a combination of the recovery of
rare cells and blood-based biomarkers shown to be altered in lung
cancer. The Company employs machine learning to improve biomarker
detection, and intends to build a deep, novel pool of lung
cancer-related data for AI-enabled applications designed to improve
its diagnostic solutions over time.
The Company's core technologies are integrated in the LungLB(R)
test, which is intended to be used as a tool to provide physicians
with additional information to help in the decision-making process
for people with indeterminate lung nodules that may be lung cancer
following a CT scan. There are estimated to be over 1.5 million
individuals with indeterminate lung nodules diagnosed each year in
the United States. The LungLB(R) test may have additional
utilities, the most significant of which is likely to be in
monitoring individuals for recurrence following surgical removal of
cancerous lung nodules.
The Company has completed a 149 subject pilot study to evaluate
the LungLB(R) test, which showed a well-balanced performance and a
Positive Predictive Value of 89 per cent. The Company is now
gearing up to proceed to a larger, multi-centre validation study to
garner regulatory and reimbursement support and facilitate
commercialisation.
Chairman's Statement
I am delighted to provide our first shareholder report since our
admission to AIM in July 2021.
Our Admission to AIM, and the securing of the funds needed to
drive our clinical development and commercialisation plans, has
been a key catalyst in our efforts to advance our AI-enabled
LungLB(R) test for early lung cancer detection.
Since 2019, the business has focussed on the development of its
LungLB(R) test, an AI-enhanced, blood-based test that uses
circulating tumour cells ("CTC") to stratify cancerous and benign
lung nodules identified by CT scan. The test is designed to support
the physician's decision to biopsy or to monitor non-invasively
using additional imaging. We have completed a 149 subject pilot
study with subjects with indeterminate lung nodules, worked to
reduce reagent and labour costs, and filed multiple patent
applications with a view to protecting additional aspects of the
LungLB(R) test.
Our focus now is to undertake a multi-centre clinical validation
study to support a submission for FDA authorisation, as well as a
clinical utility study programme to measure the LungLB(R) test's
short and long-term impacts on patient health and healthcare costs,
in support of reimbursement. We believe that following Admission we
have the funds required to take the company through to
commercialisation and first revenues targeted for 2023, as well as
to support potential technology in-licensing opportunities. We have
now engaged with the CRO who will be leading on the clinical
validation study.
We are delighted with our collaboration with Mount Sinai, an
international leader in medical and scientific training and
biomedical research. Mount Sinai has recently established its
Center of Excellence for Thoracic Oncology programme, demonstrating
their commitment to building a world-renowned lung cancer programme
with expertise in screening, early detection and biomarker
research. We expect that Mount Sinai will be the lead site for our
validation study. The Mount Sinai Health System has approximately
6,600 associated physicians, eight hospitals, more than 300
community locations throughout the New York metropolitan area and
receives approximately 4 million out-patient visits per year.
Whilst we are at the early stages of our journey towards
commericalisation of our LungLB(R) test, we have a clear path to
regulatory approval and reimbursement over the next two years.
During that time we expect to provide updates to shareholders
covering progress in the following areas:
-- Commencement, progress and conclusion of our clinical validation and clinical utility studies
-- Regulatory submissions for Breakthrough Device designation and FDA approval
-- Updates on reimbursement codes, pricing determination and coverage
We are confident that we have the components required for
LungLife to become a leader in early lung cancer detection, a
significantly unmet medical need. According to the World Health
Organisation, over 2.2 million new cases of lung cancer were
diagnosed in 2020 and approximately 1.8 million deaths from lung
cancer were recorded in 2020 globally. Nearly 80% of all lung
cancers in the United States are diagnosed in later stages when
survival rates are low because the options for curative treatment
are then limited. This is in part due to the lack of effective
early detection solutions and the fact that lung cancer largely
develops asymptomatically.
The methods available to physicians to diagnose cancer from an
indeterminate nodule are inadequate and potentially result in harm
to the patient and significant costs to the healthcare system. We
believe that our LungLB(R) test will provide significant benefit
when added to the clinical care pathway by reducing the number of
unnecessary invasive procedures and reducing delays in treatment
that may otherwise afford cure.
We are hugely grateful to the support received from new
shareholders who participated in our recent fundraise and I would
like to thank all shareholders for their continued support. The
next two years are incredibly exciting for LungLife and we look
forward to updating shareholders as we hit key milestones during
that time.
Roy Davis
Non-Executive Chairman
STATEMENT OF COMPREHENSIVE INCOME
For the period ended 30 June 2021
Note 6 months 6 months Year ended
ended 30 ended 30 31 December
June 2021 June 2020 2020
US$ US$ US$
Unaudited Unaudited Audited
Revenue (3) 107,012 101,066 205,180
Cost of sales (91,909) (97,770) (188,178)
------------- ------------- -------------
Gross profit 15,103 3,296 17,002
Administrative expenses (2,247,083) (1,605,462) (3,458,984)
Exceptional costs - IPO
expenses (2,084,274) - (337,201)
Depreciation (139,302) (143,352) (282,654)
------------- ------------- -------------
Operating loss (4,455,556) (1,745,518) (4,061,837)
Other operating income 206,328 - -
Finance charges (317,039) (344,437) (777,186)
------------- ------------- -------------
Loss before taxation (4,566,267) (2,089,955) (4,839,023)
Taxation - - -
------------- ------------- -------------
Loss for the period / year (4,566,267) (2,089,955) (4,839,023)
Other comprehensive income - - -
------------- ------------- -------------
Total comprehensive loss
for the period / year (4,566,267) (2,089,955) (4,839,023)
------------- ------------- -------------
Loss per share from continuing
activities attributable
to the ordinary equity holders
of the Company
Basic and diluted (US Dollars
per share) (4) (0.053) (0.025) (0.057)
------------- ------------- -------------
STATEMENT OF FINANCIAL POSITION
As at 30 June 2021
Note 30 June 30 June 31 December
2021 2020 2020
US$ US$ US$
Unaudited Unaudited Audited
Assets
Non-current assets
Property, plant and
equipment 308,548 597,412 463,437
Other receivables 13,235 13,235 13,235
------------- ------------- -------------
Total non-current assets 321,783 610,647 476,672
------------- ------------- -------------
Current assets
Trade and other receivables (5) 137,656 111,402 169,801
Cash and cash equivalents 120,732 442,300 127,628
------------- ------------- -------------
Total current assets 258,388 553,702 297,429
Total assets 580,171 1,164,349 774,101
Equity and liabilities
Equity
Called up share capital 8,665 8,483 8,665
Share premium 52,194,390 52,104,062 52,194,390
Other equity 942,400 817,326 843,137
Share based payment
reserve 713,607 355,744 550,511
Accumulated losses (69,468,985) (62,153,650) (64,902,718)
------------- ------------- -------------
Total equity (15,609,923) (8,868,035) (11,306,015)
Non-current liabilities
Lease liabilities 74,895 275,610 167,488
Provisions 50,000 50,000 50,000
------------- ------------- -------------
124,895 325,610 217,488
------------- ------------- -------------
Current liabilities
Trade and other payables (7) 3,810,206 698,370 1,225,836
Lease liabilities 171,834 142,332 169,955
Discontinued operations 174,057 174,057 174,057
Convertible notes (9) 11,909,102 8,445,511 10,086,616
Borrowings and loans (8) - 246,504 206,164
------------- ------------- -------------
Total current liabilities 16,065,199 9,706,774 11,862,628
------------- ------------- -------------
Total liabilities 16,190,094 10,032,384 12,080,116
------------- ------------- -------------
Total equity and liabilities 580,171 1,164,349 774,101
------------- ------------- -------------
STATEMENT OF CHANGES IN EQUITY
As at 30 June 2021
Share
based
Share Share Other payment Retained Total equity
capital premium equity reserve deficit US$
US$ US$ US$ US$ US$
Balance at 1
January 2020 8,483 52,104,062 828,318 324,876 (60,063,695) (6,797,956)
Comprehensive
income:
Loss for the
period - - - - (2,089,955) (2,089,955)
Transactions
with owners:
Convertible debt - - (10,992) - - (10,992)
Share based payments - - - 30,868 - 30,868
---------- ------------- ------------- ---------- --------------- ---------------
Balance at 30
June 2020 8,483 52,104,062 817,326 355,744 (62,153,650) (8,868,035)
---------- ------------- ------------- ---------- --------------- ---------------
Balance at 30
June 2020 8,483 52,104,062 817,326 355,744 (62,153,650) (8,868,035)
Comprehensive
income:
Loss for the
period - - - - (2,749,068) (2,749,068)
Transactions
with owners:
Issue of common
stock 182 90,328 - - - 90,510
Convertible debt - - 25,811 - - 25,811
Share based payments - - - 194,767 - 194,767
---------- ------------- ------------- ---------- --------------- ---------------
Balance at 31
December 2020 8,665 52,194,390 843,137 550,511 (64,902,718) (11,306,015)
---------- ------------- ------------- ---------- --------------- ---------------
Balance at 1
January 2021 8,665 52,194,390 843,137 550,511 (64,902,718) (11,306,015)
Comprehensive
income:
Loss for the
period - - - - (4,566,267) (4,566,267)
Transactions
with owners:
Convertible debt - - 99,263 - - 99,263
Share based payments - - - 163,096 - 163,096
---------- ------------- ------------- ---------- --------------- ---------------
Balance at 30
June 2021 8,665 52,194,390 942,400 713,607 (69,468,985) (15,609,923)
---------- ------------- ------------- ---------- --------------- ---------------
STATEMENT OF CASH FLOWS
For the period ended 30 June 2021
Note 6 months 6 months Year ended
ended 30 ended 30 31 December
June June 2020
2021 2020 US$
US$ US$ Audited
Unaudited Unaudited
Cash flows from operating
activities
Loss for the year (4,566,267) (2,089,955) (4,839,023)
Adjustments for non-cash/non-operating
items:
Depreciation 139,302 143,351 282,654
Gain on sale of tangible assets (35,752) - -
Other operating income (206,164)
Finance expense 317,039 344,437 777,186
Share based compensation 163,096 30,868 225,635
----------------------- ------------ -------------
(4,188,746) (1,571,299) (3,553,548)
Changes in working capital
(Increase)/ decrease in trade
and other receivables 32,145 140,521 82,127
(Decrease)/increase in trade
and other payables 2,584,370 70,025 597,396
----------------------- ------------ -------------
Cash outflow from operations (1,572,231) (1,360,753) (2,874,025)
Taxation paid - - -
----------------------- ------------ -------------
Net cash outflow from operating
activities (1,572,231) (1,360,753) (2,874,025)
----------------------- ------------ -------------
Cash inflow / (outflows) from
investing activities
Proceeds from sale of tangible 35,752 - -
assets
Landlord improvement contribution 15,587 - -
Purchase of property, plant
and equipment - - (5,328)
Net cash flows from investing
activities 51,339 - (5,328)
Cash flows from financing
activities
Issue of Convertible Notes 1,612,422 1,039,666 2,290,899
Issue of common stock - - 90,510
Interest paid - (12,629) (6,297)
Paycheck Protection Program
loan - 205,822 205,822
Issuance /(repayment) of loans - (80,029) (120,368)
Repayment of lease liabilities (98,426) (76,571) (180,379)
----------------------- ------------ -------------
Net cash inflow from financing
activities 1,513,996 1,076,259 2,280,187
----------------------- ------------ -------------
Net increase/(decrease) in
cash and cash equivalents (6,896) (284,494) (599,166)
Cash and cash equivalents
brought forward 127,628 726,794 726,794
----------------------- ------------ -------------
Cash and cash equivalents
carried forward 120,732 442,300 127,628
1. GENERAL INFORMATION
LungLife AI, Inc, (the "Company") is a company based in Thousand
Oaks, California which is developing a diagnostic test for the
early detection of lung cancer. The Company was incorporated under
the laws of the state of Delaware on 30 December 2009.
(a) Basis of preparation
The accounting policies adopted in the preparation of the
interim consolidated financial information are consistent with
those of the preparation of the Group's annual consolidated
financial statements for the period ended 31 December 2020. No new
IFRS standards, amendments or interpretations became effective in
the six months to 30 June 2021.
Statement of compliance
This interim consolidated financial information for the six
months ended 30 June 2021 has been prepared in accordance with IAS
34, 'Interim financial reporting' as adopted by the European Union
and the AIM Rules of UK companies. This interim consolidated
financial information is not the Group's statutory financial
statements and should be read in conjunction with the annual
financial statements for the period ended 31 December 2020, which
have been prepared in accordance with International Financial
Reporting Standards (IFRS as adopted by the European Union) and
have been delivered to the Registrar of Companies. The auditors
have reported on those accounts; their report was unqualified, did
not include references to any matters to which the auditors drew
attention by way of emphasis of matter without qualifying their
report and did not contain statements under section 498(2) or (3)
of the Companies Act 2006.
The interim consolidated financial information for the six
months ended 30 June 2021 is unaudited. In the opinion of the
Directors, the interim consolidated financial information presents
fairly the financial position, and results from operations and cash
flows for the period. Comparative numbers for the six months ended
30 June 2020 are unaudited.
The principal accounting policies adopted in the preparation of
the historical financial information are set out below. The
policies have been consistently applied to all the years presented,
unless otherwise stated.
(b) Going concern
This historical financial information relating to the Company
has been prepared on the going concern basis.
The directors of LungLife AI, Inc. (the "Directors") have a
reasonable expectation that the Company has adequate resources,
including the proceeds of the Placing and Subscription, to continue
in operational existence for the foreseeable future and for at
least one year from the date of this historical financial
information. For these reasons, they continue to adopt the going
concern basis in preparing the Company's historical financial
information.
(c) New standards, amendments and interpretations effective from
1 January 2019
New standards impacting the Company that have been adopted in
the preparation of the financial information for the three years
ended 31 December 2019 and reflected in the Company's accounting
policies are:
-- IFRS 16 Leases (IFRS 16); and
-- IFRIC 23 Uncertainty over Income Tax Treatments (IFRIC 23)
Other new and amended standards and Interpretations issued by
the IASB that will apply for the first time in the next annual
financial statements of the Company are not expected to impact the
Company as they are either not relevant to the Company's activities
or require accounting which is consistent with the Company's
current accounting policies.
There are a number of standards, amendments to standards, and
interpretations which have been issued by the IASB that are
effective in future accounting periods that the Company has decided
not to adopt early. The following amendments are effective for the
period beginning 1 January 2020:
-- IAS 1 Presentation of Financial Statements and IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors
(Amendment - Definition of Material)
-- IFRS 3 Business Combinations (Amendment - Definition of Business)
-- Revised Conceptual Framework for Financial Reporting
In January 2020, the IASB issued amendments to IAS 1, which
clarify the criteria used to determine whether liabilities are
classified as current or non-current. These amendments clarify that
current or non-current classification is based on whether an entity
has a right at the end of the reporting period to defer settlement
of the liability for at least twelve months after the reporting
period. The amendments also clarify that 'settlement' includes the
transfer of cash, goods, services, or equity instruments unless the
obligation to transfer equity instruments arises from a conversion
feature classified as an equity instrument separately from the
liability component of a compound financial instrument. The
amendments are effective for annual reporting periods beginning on
or after 1 January 2022. The Company does not believe that the
amendments to IAS 1 will have a significant impact on the
classification of its convertible debt instruments which are
classified within non-current liabilities.
(d) Revenue recognition
Sale of goods
Revenue comprises the fair value of the sale of FISH probes used
to identify the properties of blood samples under the terms of a
sub license agreement with a third party, net of applicable sales
taxes. Revenue is recognised on the sale of goods when the
significant risks and rewards of ownership of the goods have passed
to the buyer and the amount of revenue can be measured reliably.
Revenue on goods delivered is recognised when the customer accepts
delivery and on services when those services have been
rendered.
Rendering of services
Under the terms of a patent and sub license agreement the
company receives a fixed license fee. As the patent and technology
transferred under the agreement is considered to have stand-alone
functionality as any improvements carried out by the sublicensee
are for their benefit, the fee is recognised in full.
Cash is received from revenues recognised according to terms of
trade within the relevant contractual relationship, usually in
accordance with agreed events such as placing of order, fulfilment
of order and delivery.
(e) Property, plant and equipment
Owned assets
Items of property, plant and equipment are stated at cost or
deemed cost less accumulated depreciation and impairment losses.
Cost includes the original purchase price of the asset and the
costs attributable to bringing the asset to its working condition
for its intended use. When parts of an item of property, plant and
equipment have different useful lives, those components are
accounted for as separate items of property, plant and
equipment.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Company and the cost of the item can be measured
reliably.
Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount and are recognised in the income
statement.
Depreciation
Depreciation is charged to profit or loss on a straight-line
basis over the estimated useful lives of each part of an item of
property, plant and equipment. The estimated useful lives are as
follows:
-- computer and IT equipment - 33 per cent. straight line
-- leasehold improvements - 33 per cent. straight line
-- laboratory equipment - 20 per cent. straight line
The residual values, useful lives and depreciation methods are
reviewed, and adjusted if appropriate, or if there is an indication
of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount and are recognised within" other
operating income" in the statement of income.
(f) Impairment of non-financial assets
Non-financial assets are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the amount
by which the asset's carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset's fair
value less costs to sell and value in use. For the purposes of
assessing impairment, assets are considered at the lowest levels
for which there are separately identifiable cash flows
(cash-generating units).
Non-financial assets other than goodwill that suffered
impairment are reviewed for possible reversal of the impairment at
each reporting date.
(g) Financial assets
Classification
The Company classifies its financial assets as loans and
receivables. The classification depends on the purpose for which
the investments were acquired. Management determines the
classification of its investments at initial recognition.
Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments. They are initially recognised at
fair value, and are subsequently stated at amortised cost using the
effective interest method.
Impairment of financial assets
Impairment provisions are recognised when there is objective
evidence (such as significant financial difficulties on the part of
the counterparty or default or significant delay in payment) that
the Company will be unable to collect all of the amounts due under
the terms receivable, the amount of such a provision being the
difference between the net carrying amount and the present value of
the future expected cash flows associated with the impaired
asset.
(h) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits with an original maturity of three months or less.
(i) Financial liabilities
Trade and other payables
Trade and other payables are initially recognised at fair value
and subsequently measured at amortised cost. Accounts payable are
classified as current liabilities if payment is due within one year
or less. If not, they are presented as non-current liabilities.
Convertible debt
The proceeds received on issue of the Company's convertible debt
are allocated into their liability and equity components. The
amount initially attributed to the debt component equals the
discounted cash flows using a market rate of interest that would be
payable on a similar debt instrument that does not include an
option to convert. Subsequently, the debt component is accounted
for as a financial liability measured at amortised cost until
extinguished on conversion or maturity of the bond. The remainder
of the proceeds is allocated to the conversion option and is
recognised in the "Other equity" within shareholders' equity, net
of income tax effects.
(j) Borrowings
Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are subsequently carried at
amortised cost; any difference between the proceeds (net of
transaction costs) and the redemption value is recognised in the
income statement over the period of the borrowings using the
effective interest method.
Borrowings are de-recognised from the statement of financial
position when the obligation specified in the contract is
discharged, is cancelled or expires. The difference between the
carrying amount of a financial liability that has been extinguished
or transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities assumed,
is recognised in the income statement as other operating income or
finance costs.
Borrowings are classified as current liabilities unless the
Company has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period.
(k) Provisions
A provision is recognised in the statement of financial position
when the Company has a present legal or constructive obligation as
a result of a past event, and it is probable that an outflow of
economic benefits will be required to settle the obligation. If the
effect is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and, when
appropriate, the risks specific to the liability. The increase in
the provision due to the passage of time is recognised in finance
costs.
(l) Share capital
Ordinary shares are classified as equity. There are various
classes of ordinary shares in issue, as detailed in note 14.
Incremental costs directly attributable to the issue of new shares
are shown in share premium as a deduction from the proceeds.
(m) Net finance costs
Finance costs
Finance costs comprise interest payable on borrowings, direct
issue costs, dividends on preference shares and foreign exchange
losses, and are expensed in the period in which they are
incurred.
Finance income
Finance income comprises interest receivable on funds invested,
and foreign exchange gains.
Interest income is recognised in the income statement as it
accrues using the effective interest method
(n) Leases
All leases are accounted for by recognising a right-of-use asset
and a lease liability except for:
-- Leases of low value assets; and
-- Leases with a duration of 12 months or less.
Lease liabilities are measured at the present value of the
contractual payments due to the lessor over the lease term, with
the discount rate determined by reference to the rate inherent in
the lease unless (as is typically the case) this is not readily
determinable, in which case the group's incremental borrowing rate
on commencement of the lease is used. Variable lease payments are
only included in the measurement of the lease liability if they
depend on an index or rate. In such cases, the initial measurement
of the lease liability assumes the variable element will remain
unchanged throughout the lease term. Other variable lease payments
are expensed in the period to which they relate.
On initial recognition, the carrying value of the lease
liability also includes:
-- amounts expected to be payable under any residual value guarantee;
-- the exercise price of any purchase option granted in favour
of the company if it is reasonably certain to assess that
option;
-- any penalties payable for terminating the lease, if the term
of the lease has been estimated on the basis of termination option
being exercised.
Right of use assets are initially measured at the amount of the
lease liability, reduced for any lease incentives received, and
increased for:
-- lease payments made at or before commencement of the lease;
-- initial direct costs incurred; and
-- the amount of any provision recognised where the group is
contractually required to dismantle, remove or restore the leased
asset (typically leasehold dilapidations - see note 21).
Subsequent to initial measurement lease liabilities increase as
a result of interest charged at a constant rate on the balance
outstanding and are reduced for lease payments made. Right-of-use
assets are amortised on a straight-line basis over the remaining
term of the lease or over the remaining economic life of the asset
if, rarely, this is judged to be shorter than the lease term.
When the group revises its estimate of the term of any lease
(because, for example, it re-assesses the probability of a lessee
extension or termination option being exercised), it adjusts the
carrying amount of the lease liability to reflect the payments to
make over the revised term, which are discounted using a revised
discount rate. The carrying value of lease liabilities is similarly
revised when the variable element of future lease payments
dependent on a rate or index is revised, except the discount rate
remains unchanged. In both cases an equivalent adjustment is made
to the carrying value of the right-of-use asset, with the revised
carrying amount being amortised over the remaining (revised) lease
term. If the carrying amount of the right-of-use asset is adjusted
to zero, any further reduction is recognised in profit or loss.
(o) Income tax
Income tax for the years presented comprises current and
deferred tax. Income tax is recognised in the income statement
except to the extent that it relates to items recognised directly
in equity, in which case it is recognised in equity. Current tax is
the expected tax payable on the taxable income for the year, using
tax rates enacted or substantively enacted at the statement of
financial position date, and any adjustment to tax payable in
respect of previous years.
Deferred tax is recognised on temporary differences arising
between the tax bases of assets and liabilities and their carrying
amounts.
The following temporary differences are not recognised if they
arise from (a) the initial recognition of goodwill; and (b) for the
initial recognition of other assets or liabilities in a transaction
other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss.
The amount of deferred tax provided is based on the expected manner
of realisation or settlement of the carrying amount of assets and
liabilities, using tax rates enacted or substantively enacted at
the statement of financial position date.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the asset can be utilised. Deferred tax assets are reduced to
the extent that it is no longer probable that the related tax
benefit will be realised.
Deferred income tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income taxes assets
and liabilities relate to income taxes levied by the same taxation
authority on either the taxable entity or different taxable
entities where there is an intention to settle the balances on a
net basis.
2. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Company's historical financial
information under IFRS as endorsed by the EU requires the directors
to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets
and liabilities. Estimates and judgements are continually evaluated
and are based on historical experience and other factors including
expectations of future events that are believed to be reasonable
under the circumstances. Actual results may differ from these
estimates.
The directors consider that the following estimates and
judgements are likely to have the most significant effect on the
amounts recognised in the financial information.
Carrying value of intangible assets, property, plant and
equipment
In determining whether there are indicators of impairment of the
Company's intangible assets, the directors take into consideration
various factors including the economic viability and expected
future financial performance of the asset and when it relates to
the intangible assets arising on a business combination, the
expected future performance of the business acquired.
3. SEGMENT ANALYSIS
IFRS 8 requires operating segments to be identified on the basis
of internal reports about components of the Company that are
regularly reviewed by the chief operating decision maker (which
takes the form of the Board of Directors) as defined in IFRS 8, in
order to allocate resources to the segment and to assess its
performance.
The chief operating decision maker has determined that LungLife
AI, Inc has one operating segment, the development and
commercialisation of its lung cancer early detection test. Revenues
are reviewed based on the products and services provided.
The Company operates in the United States of America. Revenue by
origin of geographical segment is as follows:
Revenue 6 months 6 months Year ended
ended 30 ended 30 31 December
June June 2020 2020
2021 US$ US$
US$ Unaudited Audited
Unaudited
People's Republic of China 107,012 101,066 205,180
107,012 101,066 205,180
----------- ----------- -------------
Non-current assets 30 June 30 June 31 December
2021 2020 2020
US$ US$ US$
Unaudited Unaudited Audited
United States of America 321,783 610,647 476,672
321,783 610,647 476,672
----------- ----------- ------------
Product and service revenue 6 months 6 months Year ended
ended 30 ended 30 31 December
June 2021 June 2020 2020
US$ US$ US$
Unaudited Unaudited Audited
Consumable items 107,012 101,066 205,180
107,012 101,066 205,180
----------- ----------- -------------
4. LOSS PER SHARE
The basic loss per share from continuing activities is based on
a loss for the year attributable to equity holders of the Parent
Company of $4,566,267 for the 6 months ended 30 June 2021 (6 months
ended 30 June 2020 loss $2,089,955; year ended 31 December 2020:
loss $4,839,023) and the weighted average number of shares in issue
for the 6 months to 30 June 2021 of 86,651,806 (6 months to 30 June
2020: 84,831,399, and year to 31 December 2020: 84,988,201).
For diluted loss per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
potential dilutive warrants and convertible loans over ordinary
shares. Potential ordinary shares resulting from the exercise of
warrants and the conversion of convertible loans have an
anti-dilutive effect due to the Company being in a loss position.
As a result, diluted loss per share is disclosed as the same value
as basic loss per share.
5. TRADE AND OTHER RECEIVABLES
Amounts falling due within 30 June 30 June 31 December
one year 2021 2020 2020
US$ US$ US$
Unaudited Unaudited Audited
Trade receivables 67,456 - -
Other receivables - - -
Prepayments 70,200 111,402 169,801
127,656 111,402 169,801
----------- ----------- ------------
Amounts falling due after
one year
Rent deposit 13,235 13,235 13,235
13,235 13,235 13,235
------- ------- -------
All receivables are denominated in US dollars
6. SHARE BASED PAYMENTS
The following is an analysis of movement in options issued and
outstanding to purchase shares in the Company:
Total Weighted
options average
Number exercise
price US$
At 1 January 2020 12,230,198 0.025
Modified (2,993,540) 0.025
------------- ----------------------
At 30 June 2020 9,236,658 0.025
Exercised (51,561) 0.025
Cancelled (25,000) 0.025
2,678,825 0.004
------------- ----------------------
At 31 December 2020 11,838,922 0.020
Granted 2,660,560 0.004
At 31 June 2021 14,499,482 0.020
------------- ----------------------
7. TRADE AND OTHER PAYABLES
30 June 30 June 31 December
2021 2020 2020
US$ US$ US$
Unaudited Unaudited Audited
Trade payables 1,224,741 585,624 786,018
Accruals and other payables 2,585,465 112,746 439,818
3,810,206 698,370 1,225,836
----------- ----------- ------------
Trade and other payables comprise amounts outstanding for trade
purchases and on-going costs. All trade and other payables are due
in less than a year. All balances are denominated in US Dollars.
Included within accruals and other payables is an accrual for IPO
costs of $2,421,475.
8. BORROWINGS AND LOANS
30 June 30 June 31 December
2021 2020 2020
US$ US$ US$
Unaudited Unaudited Audited
Payroll Protection Loan - 206,164 206,164
Loans payable - 40,340 -
- 246,504 206,164
------------------------------------------- ----------- ------------
In May 2020 the Company applied for and received a loan of
$205,822 under the US Government Paycheck Protection Program. An
application for forgiveness of the entire principal balance as
permitted under the Program was successfully made in the six months
to 30 June 2021.
9. CONVERTIBLE NOTES
30 June 30 June 31 December
2021 US$ 2020 US$ 2020 US$
Unaudited Unaudited Audited
Due within one year:
Convertible Secured Promissory Notes 11,909,102 8,445,511 10,086,616
11,909,102 8,445,511 10,086,616
------------ ------------ -------------
On 26 October 2017 the Company issued a Convertible Secured
Promissory Note Purchase Agreement ('the Notes") that provided for
the issuance of up to a principal amount US$3m on which interest of
8% accrued. Unless converted into shares the principal and accrued
interest are payable in full at the earlier of the maturity date of
26 January 2020 or the occurrence of a defined corporate
transaction.
On 31 December 2018 the total principal amount of Notes that
could be issued increased to US$6m and on 20 August 2019 the total
principal amounts of Notes that could be issued increased to
US$7.5m. On 20 August 2019 the Company determined that the Notes
issued before that date should be classified as Series A-1 Notes
and those issued after that date Series A-2 Notes. The Series A-2
Notes have a different conversion term and are repayable in
preference to the Series A-1 Notes.
As the conversion feature results in the conversion of a fixed
amount of stated principal into a fixed number of shares, it
satisfies the 'fixed for fixed' criterion and, therefore, it is
classified as an equity instrument.
The value of the liability component and the equity conversion
component were determined at the date the instrument was
issued.
The fair value of the liability component, included above, at
inception was calculated using a market interest rate for an
equivalent instrument without conversion option. The discount rate
applied was 8%.
10. SUBSEQUENT EVENTS
On 8 July 2021 the common shares of the Company were admitted to
AIM.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR DKFBPABKDQCK
(END) Dow Jones Newswires
September 09, 2021 02:00 ET (06:00 GMT)
Lunglife Ai (LSE:LLAI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Lunglife Ai (LSE:LLAI)
Historical Stock Chart
From Jul 2023 to Jul 2024