Intelligent Ultrasound : Audited Final Results 2022

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Intelligent Ultrasound Group plc

("Intelligent Ultrasound" or the "Group" or the "Company")

Audited Results for the Year Ended 31 December 2022

Intelligent Ultrasound Group plc (AIM: IUG), the ultrasound artificial intelligence (AI) software and simulation company, announces its audited results for the year ended 31 December 2022, showing another year of significant progress.

Financial highlights:

• Group revenue grew by 33% to £10.1m (2021: £7.6m)
• Clinical AI-related revenue grew by over 200% to £0.7m (2021: £0.2m)
• Simulation related revenue grew by 28% to £9.4m (2021: £7.4m)
• Loss after tax reduced to £3.0m (2021: £3.6m)
• Year-endcash at £7.2m (31 December 2021: £5.0m) after a £4.8m placing (net of fees) and no debt (excluding IFRS 16 lease liabilities)

Operational highlights:

• GE HealthCare launched the SonoLyst technology, that utilises our ScanNav Assist AI software, on the Voluson Expert 22 ultrasound machine in July
• ScanNav Anatomy Peripheral Nerve Block (PNB), our second AI-driven product, received FDA De Novo clearance for sale in the US in October
• NeedleTrainer 2.0, our third AI-related product, to teach ultrasound-guided needling to medical professionals, was launched in September and now incorporates the GE HealthCare Vscan Air ultrasound device
• We began a charitable partnership with the World Federation for Ultrasound in Medicine and Biology ("WFUMB") to support their mission to bring sustainable ultrasound training programmes to the underserved areas of the world

Commenting on the results, Riccardo Pigliucci, Chairman of Intelligent Ultrasound said:

"This has been another year of significant progress for the Group. We have increased Group revenue by over 30%, achieved the important milestone of FDA clearance for our second AI-driven product and continue to build an excellent partnership with the world's leading ultrasound company - GE HealthCare.

With a positive start in Q1 23, a growing range of AI and simulation related products, an established operational base, and year end cash of £7.2m, we expect to continue this growth during 2023 and remain excited about the long-term potential of our unique 'Classroom to Clinic' model".

For further information, please contact:
Intelligent Ultrasound Group plc	www.intelligentultrasound.com
Stuart Gall, CEO	Tel: [phone]
Helen Jones, CFO

Tel:  [phone]

Cenkos Securities - Nominated Advisor and
Broker
Giles Balleny / Max Gould (Corporate Finance)
Dale Bellis / Julian Morse (Sales)
	Tel: +44	(0)20 7933 8780
Walbrook PR	[e-mail]
Anna Dunphy / Paul McManus	Mob: [phone] / Mob: +44	(0)7980 541 893

ABOUT INTELLIGENT ULTRASOUND GROUP

Intelligent Ultrasound (AIM: IUG) is one of the world's leading 'classroom to clinic' ultrasound companies, specialising in real-timehi-fidelity virtual reality simulation for the ultrasound training market ('classroom') and artificial intelligence- based clinical image analysis software tools for the diagnostic medical ultrasound market ('clinic'). Based in Cardiff in the UK and Atlanta in the USA, the Group has two revenue streams:

Simulation

Real-timehi-fidelity ultrasound education and training through simulation. Our main products are the ScanTrainer obstetrics and gynaecology training simulator, the HeartWorks echocardiography training simulator, the BodyWorks Eve Point of Care and Emergency Medicine training simulator with Covid-19 module and the new BabyWorks Neonate and Paediatric training simulator. To date c. 1500 simulators have been sold to over 750 medical institutions around the world.

Clinical AI software

Deep learning-based algorithms to make ultrasound machines smarter and more accessible using our proprietary ScanNav ultrasound image analysis technology. Current products on the market utilising this technology are GE HealthCare's SonoLyst software that is incorporated in their Voluson Expert 22 and SWIFT ultrasound machines; ScanNav Anatomy PNB that simplifies ultrasound image interpretation by providing the user with real-timeAI-based anatomy highlighting for a range of ultrasound guided regional anaesthesia procedures; and NeedleTrainer that teaches real-timeultrasound-guided needling and incorporates ScanNav Anatomy PNB.

www.intelligentultrasound.com

*Net decrease in cash and cash equivalents less proceeds from new shares and share issue costs

CHAIRMAN'S STATEMENT

This has been another year of significant progress across the business. We have increased Group revenue by 33% to £10.1m (2021: £7.6m), achieved FDA De Novo clearance for our second AI-driven clinical product in the real-time ultrasound image analysis market and, with the launch of SonoLyst on the Voluson Expert 22 ultrasound machine, are building an excellent partnership with GE HealthCare - the world's leading ultrasound company.

Clinical AI:

• Revenue grew by over 200% to £0.7m in 2022 (2021: £0.2m)
• GE HealthCare launched the SonoLyst technology on the Voluson Expert 22 ultrasound machine in July. SonoLyst utilises our ScanNav Assist AI software technology and is the world's first fully integrated ultrasound AI tool that recognises the 21 views recommended by the International Society of Ultrasound in Obstetrics and Gynaecology (ISUOG) mid-trimester practice guidelines for fetal imaging
• ScanNav Anatomy Peripheral Nerve Block (PNB), our second AI driven product, received FDA De Novo clearance in October for sale in the US
• NeedleTrainer 2.0, our third AI-related product, to teach ultrasound-guided needling to medical professionals, was launched in September and now incorporates the GE HealthCare Vscan Air handheld ultrasound device

Simulation:

• Revenue grew by 28% to £9.4m in 2022 (2021: £7.4m), primarily driven by UK direct sales that grew by 96%
  to £4.9m (2021: £2.5m)
• Direct sales revenue in the North American market was broadly flat due to the tighter than expected market in the second half of the year being positively offset by currency swings
• Sales in Europe and Asia, that are made through our reseller network, declined to £1.7m (2021: £2.1m), largely due to the restrictions of Covid-19 on the Chinese market

Group:

• Loss after tax reduced to £3.0m (2021: loss of £3.6m)
• Cash at bank at 31 December 2022 was £7.2m (2021: £5.0m) after an oversubscribed placing in November raised £4.8m (net of fees) from new and existing shareholders
• Agreed a charitable partnership with the World Federation for Ultrasound in Medicine and Biology ("WFUMB") to help support their mission to bring sustainable ultrasound training programmes to the underserved areas of the world

Strategy

We continue to progress our unique 'Classroom to Clinic' ultrasound strategy based on:

• Growing the Group's 'Classroom' related revenues through increased sales from our existing simulator platforms sold through our direct sales operations in the UK and US, and our global reseller channels; and the continued expansion of our range of ultrasound training simulators into new medical market segments
• Building our 'Clinic' related AI revenues through increased revenue from royalty sales from GE HealthCare, who incorporate our ScanNav AI technology in their Voluson SWIFT and Expert 22 ultrasound systems; increased sales of our proprietary stand-aloneAI-driven ScanNav Anatomy and NeedleTrainer systems, sold through our direct sales and reseller operations; and future new proprietary stand-aloneAI-driven products aimed at new medical markets

We believe that our 'Classroom to Clinic' approach allows us to capture future clinical customers early in their medical careers, aiding brand recognition and product credibility as the ex-trainees progress their careers and increase their purchasing influence.

In the NeedleTrainer/Anatomy PNB example, there is a direct path from first learning basic skills with simulation in the classroom then, under supervision, learning on patients in clinical practice with the AI support tools and finally providing real-timeAI-based support to practitioners' independent clinical practice.

We believe this unique 'classroom to clinic' approach to ultrasound will enable the Group to continue to grow in 2023 and reach profitability by the end of 2024.

People

Our people continue to have a pivotal role in our success and I would like to thank all our staff, in both the UK and the US, for working so hard and performing so well during a record year. Without their invaluable contribution we would not have achieved all the key milestones we set out to shareholders at the beginning of the year.

Shareholders

We are privileged to have such a supportive group of shareholders. During the second half of the year, we raised £5.2m (£4.8m net of fees) from new and existing shareholders and I would like to thank them for their continued support. It was pleasure to meet a number of our shareholders during our two technology open days that were held in London, and we will look to expand these events in 2023. As always, we maintain an open-door policy at our head office in Cardiff and welcome any visitors who wish to experience our cutting edge 'classroom to clinic' technology.

Board and governance

The Board aims to maintain the highest standards of corporate governance and is continuing to appoint new diverse, experienced and independent non-executive Directors, as some of our longest serving Directors retire.

• In August 2022 we were delighted to welcome Dr Christian Guttmann as a Non-executive Director to the Board. Christian is a recognised leader in shaping the global agenda on AI regulation and standards, as well as having outstanding AI research, development and commercialisation experience. He has edited and authored seven books, over 50 publications and has three patents in the field of AI
• At the 2022 AGM Prof Nazar Amso, one of the original founders of the company and David Baynes, representing the largest pre-listing investor, did not seek re-election and retired from the Board
• On 31 December 2022 Andrew Barker, who joined the Board after the acquisition in 2017 of Intelligent Ultrasound

Ltd, retired.

I would like to thank all three retiring Directors for their outstanding contribution to the business. They have all worked tirelessly to support the Group and their input to the Board will be missed.

ESG

This is our second full year of ESG reporting and we have continued to make significant progress in all aspects of our reporting. For the first time we have provided a full calculation of our Scope 3 emissions and are delighted to be working with the World Federation for Ultrasound in Medicine and Biology ("WFUMB") in their mission to bring sustainable ultrasound training programmes to the underserved areas of the world. We continue to instigate new initiatives to promote better employee and local engagement and believe we continue to have a positive impact locally, nationally and globally. We look forward to continuing our ESG journey.

Outlook

This has been another year of significant progress for the Group. We have increased Group revenue by over 30%, achieved the important milestone of FDA clearance for our second AI-driven product and continue to build an excellent partnership with the world's leading ultrasound company - GE HealthCare. With a positive start in Q1 2023, a growing range of both AI and simulation related products, an established operational base, and year end cash of £7.2m, we expect to continue this growth during 2023 and remain excited about the long-term potential of our unique 'Classroom to Clinic' model.

Riccardo Pigliucci

Non-executive Chairman

CEO REVIEW

Our vision is to make clinical diagnostic ultrasound easier to learn and simpler to use by providing clinicians around the world with real-time support from the classroom to the clinic. With the global market for artificial intelligence (AI) based ultrasound software expected to be $1.3bn by 2028, AI remains a key element of our approach, as we expand both our simulation and clinical sales operations.

Based in Cardiff (UK), Alpharetta (US) and with representation in Beijing (China), the report below details the progress made in 2022 and the key challenges faced during the year.

SIMULATION (Classroom)

Training medical professionals in the specialist skills required to competently scan a patient using the diagnostic capabilities of ultrasound remains a key foundation stone of our business. We design, develop and sell some of the world's leading hi- fidelity ultrasound training systems and consider ourselves one of the world's leading companies in this growing market.

In 2022 simulation revenue increased by 28% to £9.4m (2021: £7.4m) and we now have four ultrasound simulation-only platform technologies focussed on the following markets:

• ScanTrainer - obstetrics and gynaecology (OBGYN)
• HeartWorks - echocardiography and anaesthesiology (ECHO)
• BodyWorks - emergency medicine, critical care and point-of-care (PoCUS)
• BabyWorks (officially launched in the US in January 2022) - neonate and paediatrics

During 2022, the majority of the simulation revenues came from our ScanTrainer, HeartWorks and BodyWorks platforms. In 2023 it is anticipated that BabyWorks will materially contribute to the simulation revenue stream, as we open up this new market.

The four ultrasound training platforms are, in the main, high value, capital equipment sold to the global medical institution market, through our direct sales forces in the US and UK and a network of 23 resellers covering 33 countries in the rest of the world. To date we have sold c. 1,500 simulators into over 750 medical institutions around the world.

Research & Development

During the year, the simulation R&D team focussed on four developments:

Launch of BodyWorks 4.0

In October we launched the latest version of our BodyWorks ultra-realistic female patient simulator for PoCUS scenario training with updated and enhanced images and an expanded range of modules to teach novice users how to develop ultrasound skills and competence in a non-clinical environment.

The first set of cardiac pathologies for the BabyWorks simulator

In November we launched the first suite of cardiac pathologies for the new BabyWorks augmented reality simulator which aims to aid medical trainees in the diagnosis and understanding of three important cardiac pathologies in the neonatal and paediatric intensive care settings. Further suites of pathologies are expected to be developed and launched during 2023.

Range of e-learning modules

With medical professionals needing to continually build their learning and confidence, during the year we collaborated with a number of experts in their field to create five distance learning courses that provide high quality continuous education and improvement within ultrasound and healthcare. Sold as an integrated package or as an individual license, we expect to continue to roll out these modules on our simulator platforms during 2023.