Biodexa says requirement for financing represents ‘material uncertainty’

The company said, “Biodexa has experienced net losses and significant cash outflows from cash used in operating activities over the past years as it develops its portfolio. For the six months to June 30, 2025, the Group incurred a consolidated loss from operations of GBP 3.81M and negative cash flows from operating activities of GBP 3.30M. As of June 30, 2025, the Group had accumulated deficit of GBP 154.1M. The Group’s future viability is dependent on its ability to raise cash from financing activities to finance its development plans until commercialisation, generate cash from operating activities and to successfully obtain regulatory approval to allow marketing of its development products. The Group’s failure to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies. The Directors believe there are adequate options and time available to secure additional financing for the Group and after considering the uncertainties, the Directors consider it is appropriate to continue to adopt the going concern basis in preparing these financial statements. The Group’s consolidated financial statements have therefore been presented on a going concern basis, which contemplates the realisation of assets and the satisfaction of liabilities in the normal course of business. As at June 30, 2025, the Group had cash and cash equivalents of GBP 4.03M. The Directors have prepared cash flow forecasts and considered the cash flow requirement for the Group for the next three years including the period 12 months from the date of approval of this interim financial information. These forecasts show that further financing will be required before the second quarter of 2026 assuming, inter alia, that certain development programs and other operating activities continue as currently planned. Provided certain conditions are met, including the price of the Company’s ADSs quoted on NASDAQ being above $1.00, the Company may direct C/M to purchase ADSs and receive proceeds in accordance with a formula price for up to 36 months from January 2025. There is no guarantee that the Company will be able to use the ELOC to the extent necessary to finance the Company’s operations. In the Directors’ opinion, the environment for financing of small and micro-cap biotech companies remains challenging. While this may present acquisition and/or merger opportunities with other companies with limited or no access to financing, as noted above, any attendant financings by Biodexa are likely to be dilutive. The Directors continue to evaluate financing options, including those connected to acquisitions and/or mergers, potentially available to the Group. Any alternatives considered are contingent upon the agreement of counterparties and accordingly, there can be no assurance that any of alternative courses of action to finance the Group would be successful. This requirement for additional financing in the short term represents a material uncertainty that may cast significant doubt upon the Group’s ability to continue as a going concern. Should it become evident in the future that there are no realistic financing options available to the Group which are actionable before its cash resources run out then the Group will no longer be a going concern. In such circumstances, we would no longer be able to prepare financial statements under paragraph 25 of IAS 1. Instead, the financial statements would be prepared on a liquidation basis and assets would be stated at net realizable value and all liabilities would be accelerated to current liabilities.”