Investors

TruSpine Technologies plc, (AQSE: TSP) the medical device company focused on the development of its pioneering "screwless," spinal (vertebral) stabilisation systems, reports its full year results for the year ended 29 March 2023.

The Company continues to be in a pre-revenue development phase and remains loss making at this stage of its development. The loss before taxation for the year was £853k (2022: £941k) after administrative expenses of £846k (2022: £938k). The R&D tax credit was £199k (2022: £88k) bringing the loss after tax to £654k (2022: £853k). Development spend for the year was £363k (2022: £851k). Consolidated net assets at 29 March 2023 amounted to £2.773 million (2022: £2.642 million) including cash and cash equivalents of £24k (2022: £3k).

The independent audit report draws attention to note 2.4 in the financial statements, which indicates that that the group is reliant upon FDA approval subsequent sales and/or further financing to meet its working capital needs. There is no guarantee that these will be achieved. As stated in note 2.4, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. The auditor's opinion is not modified in respect of this matter. The Independent Auditor's Report is set out in full below.

The Company continues to carefully manage its working capital position.

The Annual Report and Financial Statements for the year ended 29 March 2023 will shortly be available on the Company's website.  Copies of the Annual Report and Financial Statements will be posted to shareholders shortly.

This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company are responsible for the release of this announcement.

Enquiries:

CHIEF EXECUTIVE'S STATEMENT

I am pleased to report that since my involvement with the Company shortly before the financial year end, we have made significant progress.

In May 2022 the Company raised £700,000 before costs through a Fundraise of 14,000,000 new Ordinary shares at a price of 5p per share comprising a Placing and a Subscription. On 27 February 2023 the Company received a funding loan bearing an interest rate of 12% per annum.

I was appointed on 1^st March 2023 as Interim CEO to take control of the Company. At the time of my appointment, the Company had suffered a difficult year, during which its progress had been repeatedly stalled due to external operational reasons, uncovered following a review of the Company's operations.

I am pleased to report that since my appointment, adjustments to the business, management structure, and supply chain have provided the Company with better operational clarity and control. While there is still work to be done, the company is now in a position to progress with confidence and a clear vision for achieving success. 

The lodging of the FDA 510(k) application in July 2023 for Cervi-LOK was a major milestone moment for the Company, and it is pleasing to finally have that process underway. In addition to ongoing plans, the Directors believe these efforts will contribute to the Company's stability and potential for monetization in the future if Cervi-LOK receives clearance from the FDA.

In April 2022 the Company entered into a master agreement with Spartan Medical Inc ("Spartan") to develop a strategic partnership and to provide funding, and an exclusive US Reseller Agreement to market and distribute the Cervi-LOK™ device to US Government healthcare facilities once the Cervi-LOK™ has completed FDA clearance.

During recent discussions with Spartan, the Company has been exploring a closer collaboration with Spartan taking a more active management role in assisting the Company to bring our products to market in the US once approved by the FDA and required processes are completed. This will hopefully accelerate the process with a particular emphasis on the launching of our first product Cervi-Lok given Spartan's wealth of experience and know how in the field.

We have also continued to strengthen our Intellectual Property position in the light of recent ownership misrepresentation and, in order to re-confirm our position, our new IP lawyers are aiming to cause publication of the transfer of the IP into the Company's name.

The Company has been able to source interim funding, and with the FDA submission finally lodged, we now have some interest from other investors. Further funding would assist the Company towards the commercialisation path for its Cervi-LOK product.

At the date of signing of the accounts, the Company is in advanced discussions with a third party lender in relation to potential funding.

Following the financial year end, it is important to mention the extraordinary general meeting held in May 2023 ("EGM") by a group of shareholders, proposing to remove certain directors, including myself, with replacements, shortly after my appointment to steer the Company in a new direction.

This event caused significant distraction and disrupted our efforts to refocus the Company during a crucial period. Despite this, the resolutions voted on EGM to replace the existing Directors were defeated and concluded positively, allowing for a return to normalcy and order within the Company.

The Company continues to be in a pre-revenue development phase and remains loss making at this stage of its development. The loss before taxation for the year was £853k (2022: £941k) after administrative expenses of £846k (2022: £938k). The R&D tax credit was £199k (2022: £88k) bringing the loss after tax to £654k (2022: £853k). Development spend for the year was £363k (2022: £851k). Consolidated net assets at 29 March 2023 amounted to £2.773 million (2022: £2.642 million) including cash and cash equivalents of £24k (2022: £3k).

The Global Spinal Implants and Surgery Devices Market size was estimated at USD 12.3 billion in 2022, and is projected to grow at a compound annual growth rate of 10.21% to reach USD 20.06 billion by 2027 (Source Research and Markets.com). The Company has a phased product development strategy and is planning, subject to FDA regulatory clearance (currently in process), to commence initial product marketing of Cervi-LOK in the USA.

The overall aim is to establish the Company's products as the "go-to solutions" for the spinal stabilisation and fusion market. In addition to the three-flagship products, the Company also has a pipeline of additional and complementary IP and product offerings at an early stage of development.

On behalf of the Board, I would also like to thank shareholders for their support, and TruSpine's staff and valued commercial partners for their hard work and professionalism during the year. I look forward to working with you in the future, and both I and the Board view the future with excitement.

Laurence Strauss
Chief Executive

The Directors present their Strategic Report on the Group for the year ended 29 March 2023.

Review of the business and future developments

TruSpine Technologies Plc was incorporated on 8 December 2014. On 7 May 2020, a resolution was passed approving a reduction of capital whereby the share premium account of the Company was cancelled by an amount of £2,250,000. The Company re-registered as a public limited company on 28 May 2020. On 20 August 2020 the Company was admitted to the Aquis Stock Exchange Growth Market with the issue of 3,700,442 new ordinary shares raising gross proceeds of circa £1.4m. Since then, the Company has raised a further £2,098,500 through the subscription of 47,485,000 new ordinary shares to date.

The Company has reduced its administrative costs by £92k in 2023 (£846k v (2022: £938k) and the loss after tax fell by nearly £200k from £853k to £654k following a R&D Tax credit of £199k. Development spend also fell by £488k as we neared our goal of making the 510(k) submission to the FDA and we had tighter control on our patent spend. Our Net Asset position increased from £2.64m in 2022 to £2.77m in 2023.

The Company is developing disruptive technologies for use in the spinal stabilisation market, commencing with the following three devices:

• Cervi-LOK - for the cervical and upper thoracic spine
• Faci-LOK - for the lumbar and lower thoracic spine, and
• GRASP Laminoplasty - a treatment for decompression of the spinal cord.

These devices represent a potentially significant development in spinal fixation, by providing stabilisation while not altering the bony spinal anatomy of patients through the use of screws, staples or other devices which currently dominate the spinal market.

The Company has completed all testing and validation and verification testing for its Cervi-LOK product. The final testing was completed by Element Materials Technology, implant packaging and sterilisation by Guardian Medical and Instrument packaging and sterilisation by Puracon.

The 510(k) application Cervi-LOK was submitted on 24 July 2023, the FDA's decision to provide clearance normally takes up to 90 days, following which the Company will be able to commence marketing and sales of Cervi-LOK in the US if Cervi-LOK receives FDA clearance. In April 2022, the Company entered into a distribution agreement with Spartan Medical Inc, and negotiations are ongoing with further distributors in the USA. The Company plans to commence further development work on its other two products starting with Faci-LOK followed by GRASP Laminoplasty and will subsequently seek clearance for both products.

The Company acquired the Patents relating to its technologies from Professor Frank Boehm, (the inventor of the Technologies) pursuant to the IP Sale Agreement. Details of the Patents are set out in paragraph 6 of Part I and details of the IP Sale Agreement are set out at paragraph 9.1 of Part IV in the Company's Admission Document. The Company protects the intellectual property in its Technologies and any future application thereof by submitting patent applications in each country in which it intends to operate. This is an active and ongoing process with new applications being filed to cover revised design, usage and application of the Technologies.

The Global Spinal Devices Market is currently estimated to be worth USD$11.2 billion and is expected to grow at a compound annual growth rate of 3.1 per cent to 2026. North America is the single largest and most mature market accounting for around 54(Source per cent of the total global revenues. (Source the Global Spinal Devices Market Report 2020)

It is important to note that the Products have not yet been used on live patients, as they are still subject to regulatory clearance and approvals by the relevant national medical regulators.

Group Strategy and Business Model

Cervi-LOK and Faci-LOK are spine stabilisation devices used in the fusion of the cervical, thoracic and lumbar spine respectively.  They differ from existing methods of vertebrae stabilisation as they are non-intrusive. Cervi-LOK and Faci-LOK clamp onto specific landmarks of the vertebrae bones rather than requiring fixation with screws.

The minimally invasive products represent a potentially significant development in spinal fixation, fusion and laminoplasty techniques, providing stabilisation without altering the bony spinal anatomy by requiring screws, staples or other such attachments which dominate the current technologies and irreversibly alter the anatomy of the spine. The Company's philosophy is one of "preserving nature's design", and as such, the devices have been designed to be safe, fast and easy to implant, as well as being minimally intrusive. The Company aims to be one of the first spinal companies to offer single use sterile packaged implants and instruments, which will position the Company favourably, especially in the ever expanding ambulatory surgical centres in the USA.

The Directors believe that the Company's technologies will fill a gap in the market due to its relative health advantages (for example through not altering the patient's anatomy) as well as its overall lower cost per procedure (resulting from the reduced requirement for fluoroscopy, shorter surgery time and faster patient recovery time). The Company's technologies cause minimal tissue disruption allowing the normal spine anatomy to remain intact and therefore aids the spinal stabilisation and fusion process.

The Company has a phased product development strategy and following the submission of the 510(k) to the FDA and subject to regulatory clearance, it plans to commence initial product marketing of Cervi-LOK in 2024. The overall aim is to establish the Company's products as the "go-to solutions" for the spinal stabilisation and fusion market. In addition to the three flagship products, the Company also has a pipeline of additional and complementary IP and product offerings at an early stage of development.

The Company has a number of key commercial partners to develop, design and manufacture its products, and assist it through the regulatory process. Emergo Group ("Emergo"), a regulatory consultant and Medical Device Academy Inc for our FDA application are retained by the Company to provide it with regulatory advice. Greenlight Guru will be providing our document management services. Lincotek Medical LLC ("Lincotek") is retained by the Company to provide product development and manufacturing.

Initially the Company is seeking to obtain clearance for use of its products in the United States. For the products to be lawfully marketed and sold in the United States, they are required to have "clearance" from the FDA. The Company has initially sought FDA clearance for its Cervi-LOK product. The FDA is responsible for protecting the public health in the United States by (amongst other things) ensuring the safety, efficacy, and security of medical devices.

The Company's products are classified as "Class II" Medical Devices under the FDA's device classification system and therefore require FDA 510(k) clearance, which does not require clinical studies prior to clearing the devices for marketing and sales. The FDA 510(k) clearance process compares a product to a "predicate device", measuring safety, function and strength. Under the notion of "substantially equivalent", if a device performs in testing at least as well as the accepted predicate device, FDA 510(k) clearance will be granted.

Major company analysis in the spinal devices market currently identifies a high number of competitors, who are able to benefit from scale economies. However, these existing competitors' technologies still utilise invasive technologies like lateral mass and pedicle screws and therefore TruSpine should be well placed to compete within the spinal stabilisation market because, crucially, its products do not alter the bony anatomy of patients. TruSpine's partnership with

Spartan Medical will also prove to be invaluable, with Spartan handling the logistics and distribution of our products to their existing customer base.

Promotion of the Company for the benefit of the members as a whole

The Directors believe they have acted in the way most likely to promote the success of the Company for the benefit of its members as a whole, as required by s172 of the Companies Act 2006 as detailed below.

The requirements of s172 are for the Directors to:

• Consider the likely consequences of any decision in the long term
• Act fairly between the members of the Company,
• Maintain a reputation for high standards of business conduct,
• Consider the interests of the Company's employees,
• Foster the Company's relationships with suppliers, customers and others, and
• Consider the impact of the Company's operations on the community and the environment.

Our Board of Directors remain aware of their responsibilities both within and outside of the Group. Within the limitations of a Group with so few employees we endeavour to follow these principles and examples of the application of the s172 are summarised and demonstrated below.

The Company operates as a medical device company developing specific innovative products which is inherently speculative in nature and at times may be dependent upon fund-raising for its continued operation. The nature of the business is well understood by the Company's members, employees and suppliers, and the Directors are transparent about the cash position and funding requirements. 

All strategic decisions are properly discussed and evaluated in terms of their impact on the company in both the short and long term. All major decisions are passed by the Board for approval. One example of an important decision made was in April 2022 when the Company entered into a master agreement with Spartan Medical Inc to develop a strategic partnership and to provide funding, and an exclusive US Reseller Agreement to market and distribute the Cervi-LOK™ device to US Government healthcare facilities once the Cervi-LOK™ has completed FDA clearance.

Important decisions had to be made in relation to building the right platform, particularly in relation to supply chain restructuring and choosing the right partners to enable us to prepare and lodge the FDA 510(k) application  in July 2023.

The Company has invested considerable time in developing and fostering its relationships with its key suppliers and entering into a collaborative dialogue with potential distribution partners especially establishing appropriate systems and discovering what is required to build the right understanding of what is required to make the partnership a successful one.

As a medical device company in the spinal fusion market with operations based in the UK and USA, the Board takes seriously its ethical responsibilities to the communities and environment in which it works. As a pre-revenue business there is clearly limited potential at this stage for impact on either the environment or the community, however it is again worth noting that all elements of product production, distribution and sales will be carried out by qualified specialist organisations with the necessary regulatory accreditation and associated processes.

The interests of employees and consultants are a primary consideration for the Board and are planning to introduce an inclusive share-option programme allowing them to share in the future success of the company. Personal development opportunities are encouraged and supported.

Results for the year

The Group's results for the year are included in the Chief Executive's Statement on page 4 and are set out in the primary statements.

Key performance indicators

Key performance indicators for the Group as a measure of financial control are as follows:

Principal risks and uncertainties

The Group is subject to various risks similar to all medical device companies operating in overseas locations relating to political, economic, legal, industry and financial conditions, not all of which are within its control. The Group identifies and monitors the key risks and uncertainties affecting the Group and runs its business in a way that minimises the impact of such risks where possible.

The following risks factors, which are not exhaustive, are particularly relevant to the Group's business activities:

Risk Relating to Obtaining Regulatory Approvals

There can be no assurance that the Company will receive the regulatory approvals required in order to manufacture and sell its Products, including approval by the FDA in the US and the granting of Conformitè Europëenne (CE) mark in Europe, which affirms conformity with European health, safety and environmental protection standards. If the Products are not approved and cannot be commercialised, the Company will be unable to generate revenue from them, which would materially adversely affect its business, financial condition and the results of its operations. Moreover, any delay or setback in the regulatory approval process could have a material adverse effect on the Company's business and prospects. To mitigate this the Company employs two key commercial partners, Emergo and Lincotek to develop its Products and ensure that they achieve the regulatory approvals necessary for commercialisation.

Acceptance of the Products in clinical settings

If the Company is unable to convince opinion leaders and health professionals of the benefits of its Products, there could be weak penetration of the market, which might have a material adverse effect on the Company, its business, financial situation, growth and prospects. The slow adoption of new methods and technologies could result in timeframes being longer than anticipated by the Company. However the Company has links with a network of professionals and experts operating in these fields who have advised and given positive feedback as to the suitability and acceptability of the products in development.

No Live Patient Testing

Although Cervi-LOK has undergone significant laboratory-based testing, it has not been tested on live patients and there is no certainty that it will be as effective as envisaged, nor that it will receive regulatory clearance for use in humans. Despite this, the feedback from the FDA so far in relation to Cervi-LOK has not highlighted any material issues and the Directors expect that it will successfully achieve regulatory clearance.

Research and development and product obsolescence

Rapidly changing markets, technology, emerging industry standards and frequent introduction of new products will characterise the Company's business. The introduction of new products embodying new technologies, including new manufacturing processes, and the emergence of new industry standards may render the Company's products, less competitive or less marketable.

The process of product development is complex and requires significant continuing costs, development efforts and third-party commitments. The Company's failure to develop new technologies and products and the obsolescence of existing technologies and products could adversely affect the business, financial condition and operating results of the Company.

The Company may be unable to anticipate changes in its potential customer requirements that could make its existing technology obsolete. Its success will depend, in part, on its ability to continue to enhance its existing technologies, develop new technology that addresses the increasing sophistication and varied needs of the market, and respond to technological advances and emerging industry standards and practices on a timely and cost-effective basis. The Company may not be successful in using its new technologies or exploiting its niche markets effectively or adapting its business to evolving customer or medical requirements or preferences or emerging industry standards.

Dependence on key executives, personnel and consultants

The Company's future development and prospects are substantially dependent on the continuing services and performance of the Directors, the Consultants and the Medical Advisory Board.

The Directors cannot give assurances that they, the Consultants or the Medical Advisory Board will remain with the Company, although the Directors believe that the Company's culture and remuneration packages are attractive. If key members of the Company's management team depart, or are affected by illness, such as COVID-19, and the Company is not able to find effective replacements in a timely manner or at all, its business may be disrupted or damaged.

No Current Revenues

The Products remain under development and no revenue has been generated from them as at the date of this Document. As such, there is no historical data on which to base the Company's estimated revenue and costs. Therefore, given the high degree of uncertainty in the economy currently and the dependency of the Company on development milestones being met and regulatory approval being obtained there cannot be certainty regarding the size of the market for the Products following their launch or whether the Company has the capacity to generate sufficient revenues to be profitable. To mitigate this the Company has engaged consultants who have extensive experience in the marketing and distribution of products in this sector. Distribution agreements are also a way in which to help secure future sales and mitigate the risk.

Risk of IP infringement

There is no certainty that the Company can protect its proprietary information or intellectual property which is particularly important considering the Company has developed a number of Products that it regards as unique. There is also a risk that should an employee with knowledge of the Products cease to be employed by the Company they may seek to replicate the Products with a competitor. Although the Company intends to vehemently protect its intellectual property there can be no guarantee that such action will be effective (and will be expensive in any case), there is also a risk that the Company may be pursued by a third party for alleged intellectual property infringement. This risk has been mitigated by the Company engaging specialist patent attorneys to analyse our products and report on the likelihood of the Products infringing the intellectual property subsisting in existing technologies. A Freedom to Operate report produced by Schmeiser, Olsen & Watts has concluded that the likelihood of patent infringement in relation to the Patents is low.

RISKS RELATING TO THE INDUSTRY

Competition in the Market for Spinal Devices

There are a number of companies in the spinal device market offering products that would compete with the Company's Products. These larger, well-funded companies are currently gaining a competitive advantage in the spinal device market by reducing costs through economies of scale. The Company may not currently have the capacity to compete with these existing competitors because the smaller scale of their operation leads to a higher unit cost. Major competitors in the spinal device market include Zimmer Biomet, Medtronic, Johnson & Johnson, NuVasive, Life Spine and Globus Medical. However, TruSpine's devices are novel in their design in that they represent a potentially significant development in spinal fixation, by providing stabilisation while not altering the bony spinal anatomy of patients as compared with the use of screws, staples or other devices which currently dominate the spinal market.

RISKS RELATING TO FINANCIAL MATTERS

Currency and Foreign Exchange Risks

The Company's functional and presentational currency is sterling, and this is the currency of the Company's financial statements. However, a significant proportion of the Company's business is conducted in the United States in $USD and therefore certain amounts will need to be translated into sterling. Due to changes in exchange rates between sterling and $USD this could lead to changes in the Company's reported financial results from period to period. Among the factors that may affect currency values are trade balances, levels of short-term interest rates, difference in relative values of similar assets in different currencies, long term opportunities for investments and capital appreciation and political or regulatory developments.

Financing Risks and Requirements for Further Funds

It is likely that the Company will be required to seek further equity financing. The Company's ability to raise further funds will depend on the success of its strategy and operations. The Company may not be successful in procuring the requisite funds on terms that are acceptable to it, or at all. If such funding is unavailable, the Company may be required to reduce the scope of its operations and investments or anticipated expansion, abandon its strategy, incur financial penalties or miss certain opportunities.

The Directors review the Company's funding requirements on a regular basis, and take such action as may be necessary to either curtail expenditures and / or raise additional funds from available sources including the issuance of debt or equity. Management has successfully raised money to date, but there is no guarantee that adequate funds will be available when needed in the future.

TRUSPINE TECHNOLOGIES PLC DIRECTORS' REPORT

The Directors present their report and the audited financial statements for the year ended 29 March 2023.

General information

The principal activity of TruSpine Technologies Plc (the 'Company') and its subsidiaries (together the 'Group') is the development of products for the spinal fusion market. The Group is incorporated and domiciled in the United Kingdom.

Future developments

The Company continues to progress the development of the company's three pioneering Spinal Stabilization products and has completed the FDA submission for the first product to market, the Cervi-LOK in July 2023. The FDA clearance process normally takes up to 90 days, after which marketing and commercial sales are expected to commence in 2024. For further details please refer to the Chief Executive's Statement and Strategic Report.

Research and development

The Company is developing disruptive technologies for use in the spinal stabilisation market, commencing with the following three devices:

• Cervi-LOK - for the cervical and upper thoracic spine
• Faci-LOK - for the lumbar and lower thoracic spine, and
• GRASP Laminoplasty - a treatment for decompression of the spinal cord.

For further details please refer to the Strategic Report.

The Group's capitalised development spend, including Patent costs, during the year was £363,072 (2022: £851,378)

Dividends

The Directors do not propose a dividend in respect of the year ended 29 March 2023 (2022: Nil).

Directors and directors' interests

The directors who have held office during the year and to the date of this report are as follows:

M C Armstrong - resigned 5 April 2023

I A Roberts - resigned 28 February 2023

L R Strauss - appointed 5 April 2023

N A C Lott

A M Schild - resigned 14 June 2023   

T H D Evans

N K Patel 

The interests (as defined in the Companies Act 2006) of the Directors holding office during the period in the share capital are shown below:

*    Includes shares held by family members

Board of Directors:

Laurence Strauss, Chief Executive Officer

Laurence started his career in 1986 working in the City and built a private client broking business working for, inter alia, Allied Provincial and Elders Finance.  Laurence left the City in 1992, serving as a director of Longbrooke Electrical Ltd, an electrical contracting business and overseeing its expansion, following which he replicated the growth model in another business.  More recently, Laurence has been advising private clients on equity investments and initial public offerings.

Norman Lott, Chief Financial Officer

Mr. Lott is an experienced CFO with significant public company experience, having held multiple roles with AIM companies quoted on the London Stock Exchange. He is a member of the Institute of Chartered Accountants in England and Wales having qualified in 1980 and aside from his experience as a CFO, he has also held positions in business management including that of deputy CEO. He has also been involved in several international corporate transactions and has experience in the healthcare sector.

Dr Timothy Evans, Non-executive Director

Dr Evans qualified in 1979 from the Westminster Hospital Medical School, and runs a private, independent general practice in London. He specialises in women's health, and also has an interest in functional and musculoskeletal medicine. Dr Evans has a wealth of experience in his 40-year career, including setting up a specialist practice in the care of women and children, as well as a fully integrated practice in conventional, complementary and alternative healthcare. He has worked extensively in Africa and re-established primary health clinics in rural areas of Zimbabwe after ten years of civil war. In 2003, he was appointed to the position of Apothecary to HM the Queen and The Royal Households of London. In 2016 HM The Queen awarded him as a Lieutenant of the Royal Victorian Order (LVO) for his services.

Mr Nikunj Patel, Non-executive Director

Mr Patel has been a practising Consultant Neurosurgeon and Honorary Senior Clinical Lecturer at the Institute of Clinical Neurosciences (University of Bristol) since his appointment in 2005, where he has developed specialist interests and expertise in surgical treatments for spinal pain, cranial nerve hyperactive disorders and functional brain disorders. His surgical and research interests have focused on developing innovations and advancing less-invasive and stream-lined procedural solutions. He has been recognised for his neurosurgical research excellence with a Medical Research Council fellowship; awards from both the American and the European Associations of Neurological Surgeons; and a Hunterian Professorship from the Royal College of Surgeons of England.

Issues of shares, options and warrants

During the year, 16,198,000 ordinary shares of 0.01p each were issued as detailed in Note 23

During the year, 16,200,000 warrants were granted as detailed in Note 23

Financial instruments

An explanation of the Company's financial risk management objectives, policies and strategies is set out in note 3.

Internal financial control

The Board is responsible for establishing and maintaining the Group's system of internal financial control. Internal financial control systems are designed to meet the particular needs of the Group and the risk to which it is exposed, and by their nature can provide reasonable assurance but not absolute assurance against material misstatement or loss. The Directors are conscious of the need to keep effective internal financial control.

Due to the relatively small size of the Group's operations, the executive Directors are closely involved in the day-to-day running of the business and as such have less need for a detailed formal system of internal financial control. The Board has reviewed the effectiveness of the procedures presently in place and considers that they remain appropriate to the nature and scale of the operations of the Group.

Going concern

The Financial Statements have been prepared on a going concern basis. In assessing whether the going concern assumption is appropriate, the Directors take into account all available information for the foreseeable future, in particular for a period of at least twelve months from the date of approval of the Financial Statements and perform scenario planning thereon. This information includes management prepared cash flows forecasts and available sources of funding.

The Company raised £1.4m at the time of the Company's admission to trading on AQSE Growth Market and an additional £620,500 in the year to March 2021. In the year to March 2022 the Company raised £728,000 by way of share subscriptions. In the year to March 2023, it has raised further funds of £700,000 in May 2022 by way of share subscriptions, the monies being used to further fund the Company's development programme and subsequent to the year end a further £50,000 has been raised. At the date of signing of the accounts, the Company is in advanced discussions with a third party lender in relation to potential funding.

Management have considered a variety of scenarios in reaching their going concern conclusion following their 510(k) -submission including consideration of the potential success of achieving FDA approval and their ability to raise money.  Based on these scenarios and the Board's assessment that the Company will be able to raise additional funds, as and when required, to meet its working capital and development expenditure requirements prior to commercialisation, the Board of Directors have concluded that they have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the Financial Statements.

Events after the balance sheet date

Events after the reporting date have been disclosed in Note 28 to the Financial Statements.

Statement as to the disclosure of information to the auditors

Each of the Directors at the date of approval of this Annual Report confirms that:

• so far as the Director is aware, there is no relevant audit information of which the Company's auditor is unaware; and
• the Director has taken all the steps that he ought to have taken to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Auditors

PKF Littlejohn LLP have expressed their willingness to continue in office as auditors.

A resolution proposing the re-appointment of the auditors PKF Littlejohn LLP will be put to shareholders at the Annual General Meeting.

This report was approved by the board of Directors on 28 September 2023 and signed on its behalf by:

L R Strauss

Corporate governance report

The Directors are committed to maintaining high standards of corporate governance, and propose, so far as is practicable given the Company's size and nature, to comply with the QCA Code. For further details please refer to the Company's website truspine.org for the disclosure of its compliance with the principals of the QCA code.

A statement of the Directors' responsibilities in respect of the financial statements is set out below giving a brief description of the role of the Board and its committees, including a statement regarding the Company's system of internal financial control

The Board has put in place the corporate governance procedures it believes are appropriate for the Company. The Board retains full and effective control over the Company. The Company holds regular Board meetings at which financial, operational and other reports are considered and, where appropriate voted on. Apart from the regular meetings, additional meetings are arranged when necessary to review strategy, planning, operational, financial performance, risk and capital expenditure and human resources and environmental management. The Board is also responsible for monitoring the activities of the executive management. To enable the Board to perform its duties, all Directors have full access to all relevant information and to the service of the Company Secretary. If necessary the Non-Executive Director may take independent professional advice at the Company's expense.

The Company has established an Audit Committee, a Remuneration Committee and an Aquis Rules Compliance Committee. Details of these committees are set out below:

Audit Committee

The Audit Committee is comprised of Nikunj Patel who chairs the committee and Dr Tim Evans. The Audit Committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Company is properly measured and reported. It receives reports from the executive management and auditors relating to the annual accounts. The Audit Committee meets not less than twice in each financial year and has unrestricted access to the Company's auditors.

Remuneration Committee

The Remuneration Committee comprises Dr Tim Evans who chairs the committee and Nikunj Patel. The Remuneration Committee reviews the performance of the executive directors and employees and makes recommendations to the Board on matters relating to their remuneration and terms of employment. The Remuneration Committee considers and approves the granting of any Options pursuant to the Option Plans and the award of shares in lieu of bonuses pursuant to the Company's remuneration policy. The Remuneration Committee is expected to meet formally at least twice a year and otherwise as required.

Aquis Rules Compliance Committee

The Aquis Rules Compliance Committee is responsible for ensuring that the Company has sufficient procedures, resources and controls to enable it to comply with the Aquis Rules. The Aquis Rules Compliance Committee comprises of at least two members  and meets not less than four times a year. The members of the Aquis Rules Compliance Committee are Laurence Strauss (who chairs the committee) and Nikunj Patel.

Nominations Committee

The Board has agreed that appointments to the Board will be made by the Board as a whole and so has not created a Nominations Committee.

Share Dealing

The Company has adopted a share dealing code in relation to dealings in securities of the Company by the Directors and Persons Discharging Managerial Responsibility which is appropriate for a company whose shares are traded on the Aquis Stock Exchange Growth Market. This constitutes the Company's share dealing policy for the purpose of compliance with UK Legislation including the Market Abuse Regulation. It should be noted that the insider dealing legislation set out in the UK Criminal Justice Act 1993, as well as provisions relating to market abuse apply to the Company and dealings in Ordinary Shares.

Internal Controls

The Company has implemented an anti-bribery and corruption policy and also implemented appropriate procedures to ensure that the Board, employees and consultants comply with the UK Bribery Act 2010. The Directors have established financial controls and reporting procedures, which are considered appropriate given the size of and structure of the Company. 

Report of the Remuneration Committee

The Remuneration Committee is currently chaired by Tim Evans and also includes Nikunj Patel. Remuneration packages are determined with reference to market remuneration levels, individual performance and the financial position of the Company. All remuneration was short term in nature.

The remuneration of the individual Directors during the year ended 29 March 2023 was as follows:

No share options were granted to the directors during the year.

On behalf of the Remuneration Committee

T H D Evans

Committee Chairman

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The Directors are responsible for preparing the strategic report, the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year.  Under that law the Directors have elected to prepare the Group and Parent Company financial statements in accordance with UK adopted International Accounting Standards. Under Company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for that period.

In preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;
• make judgments and accounting estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with UK adopted International Accounting Standards, subject to any material departures disclosed and explained in the financial statements; and
• prepare the financial statements on a going concern basis unless it is inappropriate to presume that the company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the TruSpine Technologies Plc website: www.truspine.org. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF TRUSPINE TECHNOLOGIES PLC

Opinion

We have audited the financial statements of TruSpine Technologies Plc (the 'parent company') and its subsidiaries (the 'group') for the year ended 29 March 2023 which comprise the Group Statement of Comprehensive Income, the Group and Company Statement of Financial Position, the Group and Company Statements of Changes in Equity, the Consolidated and Company Statements of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards and as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

In our opinion:

• The financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 29 March 2023 and of the group's loss for the year then ended;
• the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
• the parent company financial statements have been properly prepared in accordance with UK-adopted international accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

We draw attention to note 2.4 in the financial statements, which indicates that that the group is reliant upon FDA approval subsequent sales and/or further financing to meet its working capital needs. There is no guarantee that these will be achieved. As stated in note 2.4, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the company's ability to continue to adopt the going concern basis of accounting included:

• Obtaining cash flow forecasts, management accounts, and budgets from management for a period of at least 12 months from the date of signing the financial statements to give an indication of the expected financial returns in future months;
• Reviewing supporting documentation to assess the reasonableness of management's cash flow forecasts and comparing previous forecasts to actual results;
• Reviewing future plans for fund raises and the dependence of the group on these to continue as a going concern;
• Challenging management's assumptions for going concern assessment to supporting documents and alternative evidence;
• Reviewing meeting minutes for any references to financial difficulties; and
• Continued review of RNS releases and discussing subsequent events and future plans with management.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Our application of materiality

The key driver in the business is the intangibles assets that relates to the development of the product lines and their patents and this will be the driver of future revenues. The intangible assets are the foundation and core of the business. We therefore have considered net assets to be the most significant determinant of the group's financial position and performance used by shareholders and the most appropriate benchmark of materiality. The going concern of the group is dependent on its ability to fund operations going forward, as well as on the valuation of its assets, which represent the underlying value of the group.

We applied the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.

We agreed with the audit committee that we would report to the committee all audit differences identified during the course of our audit in excess of £7,000 (2022: £6,600) for the group and £6,950 (2022: £6,550) for the parent company.

Our approach to the audit

In designing our audit, we determined materiality and assessed the risk of material misstatement in the financial statements. In particular, we looked at areas requiring the directors to make subjective judgements, for example in respect of assessing the carrying value of intangible assets comprising of the development assets and patent; the accounting treatment with respect to the capitalisation of development cost and patent related costs and the consideration of future events that are inherently uncertain, such as FDA approval. We also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud and the risk of inadequate disclosures of related parties in the financial statement. An audit was performed on the financial information of the group's only significant operating component TruSpine Technologies Plc ("Parent Company"), which for the year ended 29 March 2023, which was carried out by the group audit team located in the United Kingdom. Analytical procedures were performed on components that were not considered significant nor material to the users of these financial statements.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.  

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
• the financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors' remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

• We obtained an understanding of the group and company and the sector in which it operates to identify laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this regard through discussion with management, industry research, application of cumulative audit knowledge and experience of the sector.
• We determined the principal laws and regulations relevant to the group and parent company in this regard to be those arising from Companies Act 2006, AQUIS Listing Rules, Bribery Act 2011, UK employment laws, UK tax legislation and QCA Code.
• We designed our audit procedures to ensure the audit team considered whether there were any indications of non-compliance by the company with those laws and regulations. These procedures included, but were not limited to:
  • Enquires of management;
  • Review of board minutes and RNS announcements; and 
  • Review of legal and professional fees incurred in the year.
• We also identified the risks of material misstatement of the financial statements due to fraud. We considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls the carrying value of intangible assets. We addressed this by challenging the estimates made by management as referred to in the key audit matter section above.
• As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit procedures which included, but were not limited to: the testing of journals;  reviewing accounting estimates for evidence of bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. In this context we view the significant estimates as being the key assumptions underlying the value in use calculations in the assessment of the intangible assets impairment.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.  Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 29 MARCH 2023

All operations are continuing.

GROUP STATEMENT OF FINANCIAL POSITION
AS AT 29 MARCH 2023

The financial statements were approved by the Board of Directors and authorised for issue on 28 September 2023 and were signed on its behalf by

L R Strauss
Director

The notes are an integral part of these Financial Statements.

GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 29 MARCH 2023

Share Capital - Amount subscribed for share capital at nominal value.

Share Premium - Amount subscribed for share capital in excess of nominal value.

Retained earnings - The retained earnings reserve includes all current and prior periods retained profits and losses.

Other reserves comprise of 666,667 shares that were acquired from a third party in exchange for monies paid out by the Company on the third party's behalf during the year to 29 March 2019.

Share based payment reserve - amount arising on the issue of warrants and share options which are exercisable at the statement of financial position date.

Translation reserve - The translation reserves includes foreign exchange movements on translating the overseas subsidiaries records, denominated in USD, to the presentational currency, GBP.

The notes are an integral part of these Financial Statements.

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 29 MARCH 2023

The following non-cash transactions took place during the year:

• third party creditors amounting to £77,500 were settled in shares

The notes are an integral part of these Financial Statements.

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 29 MARCH 2023

The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the Parent Company Statement of Comprehensive Income.

The loss for the Parent Company for the year was £654,149 (2022: £852,512).

The financial statements were approved by the Board of Directors and authorised for issue on 28 September 2023 and were signed on its behalf by

L R Strauss
Director

The notes are an integral part of these Financial Statements.

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 29 MARCH 2023

Share Capital - Amount subscribed for share capital at nominal value.

Share Premium - Amount subscribed for share capital in excess of nominal value.

Retained earnings - The retained earnings reserve includes all current and prior periods retained profits and losses.

Other reserves comprise of 666,667 shares that were acquired from a third party in exchange for monies paid out by the Company on the third party's behalf during the year to 29 March 2019.

Share based payment reserve - amount arising on the issue of warrants and share options which are exercisable at the statement of financial position date.

Translation reserve - The translation reserves includes foreign exchange movements on translating the overseas subsidiaries records, denominated in USD, to the presentational currency, GBP.

The notes are an integral part of these Financial Statements.

COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 29 MARCH 2023

The notes are an integral part of these Financial Statements