Results for the Year ended 31 December 2024

15 April 2025

Futura Medical plc

("Futura" or the "Group")

Results for the Year ended 31 December 2024

Futura Medical plc (AIM: FUM), the consumer healthcare Group behind Eroxon®, that specialises in the development and global commercialisation of innovative and clinically proven sexual health products, is pleased to announce its final results for the year ended 31 December 2024 ("FY24").

Operational highlights

Financial highlights

Post-period end and outlook

James Barder, CEO of Futura, commented:

"FY24 was another year of achievement. We delivered on all of our strategic priorities for the year. With the launch of Eroxon®, a brand-new consumer healthcare product, in over 15 countries across the Americas, Middle East and Europe we took great steps forward and delivered significant revenue growth and our maiden profit.

"As is common with the launch of new products in new categories, there is a need to educate the consumer on how to use the product effectively, and the learnings we have taken so far will enable us, and our partners, to have a more targeted approach for the most recent and future launches of Eroxon®. We, and our partners, remain confident in and committed to the successful launches of Eroxon® around the world."

"The Board remains focused on delivering shareholder value and is cognisant of the impact of the recent Trading Update. Nevertheless, the Board continues to work hard to deliver on its strategic objectives and drive growth over the period ahead and beyond. With feedback from initial launches equipping us and our partners with tools for existing and future rollouts we look ahead with confidence, supported by an exciting new product development pipeline and healthy balance sheet."

1 The Group believes that, immediately prior to this announcement, consensus market expectations for FY24 performance in terms of revenue and profit after tax were £13.4 million and £0.5 million respectively.

2 Blended gross margin across product sales, royalties and milestones.

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014 as amended by the Market Abuse (Amendment) (EU Exit) Regulations 2019.

Contacts:

Notes to Editors:

Futura Medical plc (AIM: FUM) is the developer of innovative sexual health products, including lead product Eroxon® and products WSD4000 and Eroxon® Intense. Our core strength lies in our research, development and commercialisation of topically delivered gel formulations in sexual health products.

Sexual health issues are prevalent in both men and women. ED impacts 1 in 5 men globally across all adult age brackets, with approximately half of all men over 40 experiencing ED and 25% of all new diagnoses being in men under 40. Around 60% of women experience at least one symptom of sexual dysfunction, and only one in four women seek professional help, and remain chronically underserved.

Eroxon®, Futura's clinically proven lead product, has been developed for the treatment of ED. The highly differentiated product, which is the only topical gel treatment for ED available over the counter and helps men get an erection in ten minutes, addresses significant unmet needs in the ED market. Eroxon® has been nominated for and won a number of healthcare industry awards.

Futura has distribution partners in place in a number of major consumer markets including Haleon in the US, the largest market for ED in the world, and Cooper Consumer Health in Europe.

Chairman's Statement

The end of FY24 gives me the opportunity to look back on my first full financial year as Chairman of Futura Medical plc. I am pleased to be able to report on a year of solid strategic progress, as the year saw the Group launch Eroxon® in new markets and deliver its maiden profits. This is a significant achievement and something we are very proud of.

Our progress to date is thanks to the hard work and talent of our team and the quality of the product we have produced, coupled with the close working relationships we have with our distribution partners.

In the FY23 Annual Report, I talked to Futura being on the cusp of tapping a virtually unserved consumer healthcare market, with huge potential. With launches in the Americas, the Middle East and in further European countries, we took great strides this year in starting to address that market opportunity.

The market and unmet need for Eroxon® is clear and the past year has seen the early fruit of this through our significant revenue growth and maiden profits. As a Board we are committed to maximising the value of Futura for our shareholders. We are focused on the ongoing launch of Eroxon® and ensuring its success, while leveraging our expertise in the field of R&D of sexual health products to extend our product range and broaden our addressable markets.

R&D is our strong suit as a Group and in FY24 our focus has been on the exploration of range extensions and new innovative products within the sexual health category to meet further unmet demand whilst managing costs effectively. With the solid progress seen in the development of Eroxon® Intense and WSD4000, the work of our R&D team continues to shine through, and we are excited by the opportunity each product presents.

In January 2024 we were delighted to welcome Roy Davis as a Non-Executive Director. He has brought a wealth of commercial experience in medical devices companies and has a proven track record of successfully scaling companies and delivering substantial value for shareholders. He has made significant contributions throughout the year and we are pleased to be able to leverage his experience for the benefit of the Group. Post-period end we were also pleased to announce the appointment of Harmesh Suniara to the Board. Harmesh has over 17 years' experience of working in investment management, with a particular focus on UK small and mid-cap equities. We look forward to benefitting from his experience and both his understanding of the significant addressable market and our business model.

For the year ahead our focus is on learning from the launches our partners have executed around the world and incorporating this feedback to work with our partners to optimise sales. Our strategy is focused on building on our achievements to date to deliver sustainable growth and profits.

I would like to thank all our shareholders for their continued support and I look forward to 2025 with confidence.

Chief Executive's Review

A strong year of progress and delivery

FY24 was a landmark year for Futura, with the Group successfully delivering its maiden profits from of its lead product, Eroxon®, which has now launched in over 15 countries across the Americas, Middle East and Europe.

We are extremely proud of all that we have achieved to date. With the launch of a brand new product, in a new category for a large and underserved market, a lot of time, effort and resource has gone into getting us to this point and we have built the solid foundations from which we can continue to grow.

We are now entering the next stage in our business lifecycle as we work with our commercial partners as they focus on building brand awareness and customer acquisition for Eroxon®, while the Group continues to focus on expanding our product range. As specialists in the development and commercialisation of topically delivered gel formulations in the sexual health category, we continue to strongly believe in the opportunities Eroxon® and our new product development pipeline represent.

Strong financial performance for FY24, ahead of expectations

Following the further roll out of launches of Eroxon® in Europe, subsequent commercial sales and the availability of Eroxon® in the USA from October 2024, the Group saw significant revenue growth in the year, delivering revenues of £13.9 million (2023: £3.1 million). This was a mix of product sales (including channel fill), royalties and milestone payments.

This mix provided a blended margin of 70% and saw the Group deliver its maiden profit £1.3 million, as we continued to operate a lean model focused on leveraging our own expertise in research and development and partnering with leading consumer healthcare companies to commercialise our products.

With a cash position of £6.6 million at 31 December 2024 (2023: £7.7 million), which provides working capital through to H2 2026, we remain debt free and along with expected revenues are well capitalised with working capital to support our operations and focused investment in R&D on an ongoing basis.

Eroxon® - launching a new consumer product takes time and we continue to take learnings for future growth

Alongside our commercial partners, we are focused on building Eroxon® into a global brand. The need and market for a treatment for ED, available over the counter ("OTC"), is clear. As we have stated previously this is a large market that is expected to continue to grow. ED is an issue that impacts approximately 20% of men1 globally, affecting all age ranges, with approximately 50% of men over 40 experiencing ED2 and around 25% of new diagnoses being in men under 403.

The demand for a product to serve a previously unmet consumer need for men with ED has been supported by the strong sell-in to retailers we have seen during 2024, through our commercial partners.

As with any new product launch in any category, and as noted by our US commercial partner in its recent FY24 results, the launch of a brand-new consumer product, in a brand-new category which requires new consumer behaviour and education, takes time. In the same update, our US commercial partner confirmed its commitment to the product, noting it continues to invest in Advertising & Promotion ("A&P") to educate consumers on the treatment and drive momentum. While early sales levels have been satisfactory, the rate of sales has fallen short of early estimates, which subsequently led the Board to revise management forecasts for FY25.

Each launch and each market is unique, bringing its own opportunities and challenges. Breaking into the right consumer group is a gradual progress. Through the year we, alongside our partners, have been reviewing the data available to us in order to learn from each launch and refine the approach we will take in the future to build awareness, educate our target consumers and gradually increase sales.

Pre-launch Home User Test ("HUT") research conducted by our commercial partners has shown to be remarkably consistent with our current findings in the marketplace following launch. The HUT research showed high levels of satisfaction amongst Eroxon® users in this real use setting in men under 60 years old with mild to moderate ED. This is a large target audience especially mindful that frequency of sexual intercourse tends to be higher in younger men. 

The HUT research also showed much lower levels of satisfaction with Eroxon® for men older than 60 who often have other co-morbidities aside from their ED.

These findings highlight the challenges our commercial partners face in connecting with the optimal target audience, men for whom we know Eroxon® would be an extremely safe and effective treatment whilst managing consumer expectations amongst men for whom Eroxon® is less likely to give satisfactory results in line with the HUT research. This iterative development of a new brand and optimising A&P spend in order to target the correct consumer audience is not new within the OTC market and we continue to work closely with our commercial partners whose commitment to build the Eroxon® brand remains resolute.

Progress against our key priorities

As previously disclosed, we are now reporting against three strategic pillars:

1. Address the growing needs within the OTC sexual health market

2. Broaden the Group's clinically proven product range leveraging its innovative and experienced R&D capability whilst being mindful of costs and focusing on ROI.

3. Commit to delivering strong returns for shareholders, sustained profitability and financial discipline

In our previous Annual Report we set out three priorities for the years ahead. As a reminder, our priorities are:

Address - Address worldwide demand for Eroxon® through strengthening our supply chain and commercial network whilst achieving further regulatory approvals and further launches across the world

Broaden - Explore other range extensions as well as new innovative products within the sexual health category to meet further unmet demand, supported by clinical data whilst remaining mindful of costs

Commit - Deliver further revenue growth and progress on the path towards profitability in the next 12 months

Address

In FY24 we took significant steps towards addressing worldwide demand, with Eroxon® launched and now available in over 15 countries, including the key US launch in October 2024.

The launch in the USA, one of the largest ED markets in the world, was a landmark for Futura. While the pace of uptake has been slower than initially expected, feedback from our commercial partner on the launch has been positive, supported by strong retailer execution.

Work continues to implement the feedback from the initial launch to optimise the next stage of the rollout. This includes mitigating barriers to purchase, such as lockboxes that prevent theft but require the intervention of a shop assistant when purchasing. Many men may find this embarrassing and therefore it may impact sales.

Equally educating consumers about the benefits of Eroxon® whilst managing expectations remains an important focus, men generally do not want to talk about ED and therefore our commercial partners have been using interactive questionnaires and AI to disseminate information about an embarrassing subject and assist the consumer in navigating the challenges of an effective ED treatment and when Eroxon® is right for them.

In Europe, our commercial partner continued to make steady progress with launches of Eroxon® in many major markets across the region including Spain, Italy and Portugal. Nevertheless, our European partner has faced similar challenges in targeting the correct target audience in a number of countries and we continue to work with them to refine their marketing approach to achieve this goal.

It is important to stress these challenges are far from universal and in a number of countries our commercial partners have been delighted with the consumer acceptance of Eroxon® and we are working with our commercial partners to gain greater consumer understanding behind these different purchasing patterns seen, especially within the EU which is culturally diverse across the different member states.

Mexico - a focused digital strategy

The second half of the year saw the launch of Eroxon® in Mexico, in partnership with our Latin American distribution partner, M8. They were able to take the feedback from previous launches in other countries and while still early in the process, the early uptake has been pleasing,

We see this focused digital strategy and the refinement as a potential template for future launches across Latin America. The strategy in Mexico focused on a targeted, digital approach. They created an online test to better understand their audience profile, which allowed them to develop a more focused strategy that resonated with the identified user demographics. This enabled them to create tailored content through effective consumer profiling and segmentation, ensuring marketing efforts were precisely targeted at potential customers, allowing the consumer to understand if Eroxon® was right for them.

Their focus is based on an online digital communication strategy, leveraging social media with digital opinion leaders and influencers to engage their target audience without relying on traditional methods like TV advertising. This approach enables them to create content that reaches the right users more effectively. Based on the shared data, platforms like Meta, Google, and TikTok have proven to be the most cost-effective tools for targeting specific audiences. Online sales are augmented with bricks and mortar pharmacies where pharmacists have been particularly supportive of Eroxon® as it has resulted in incremental sales for them.

This strategic approach has so far led to improved customer satisfaction and higher ratings compared to the UK, a number of European countries, and the USA. This success, following the utilisation of prior learnings, gives the Board confidence in the next phase of the launch process with commercial partners in other regions. We continue to share these learnings with our commercial partners as they build consumer awareness.

In line with this key priority to address worldwide demand for Eroxon®, we continue to assess new markets where there is a potential opportunity for the product. We are focused, however, on working with our partners to get the offering and messaging right where they have already launched to ensure a gradual and sustained improvement in sales and brand awareness.

Broaden

Expanding our portfolio of products and extending product ranges, while being mindful of cost is a key aspect of our strategy. We are specialists in the development and commercialisation of topically delivered gel formulations in sexual health products, and we are proud of the results delivered by our expert R&D team.

We have made good progress against this priority in the year with two new encouraging products advancing through our development pipeline.

Eroxon® Intense

While many men are satisfied with the current sensorial effect of the Eroxon® product, Eroxon® Intense, is designed to help those men who would prefer a stronger sensation.

As reported in November, in a single-blind randomised crossover design study, 16 male subjects blind tested three enhanced formulations compared with Eroxon®. 67% of the men experienced greater sensorial sensitivity on the preferred formulation compared to Eroxon®.

We are now delighted to announce that a pivotal randomised comparator-controlled crossover claims support study conducted on 45 males has recently completed. The results strongly support the previous study with the findings showing significantly stronger sensations being experienced by men within 15 seconds of application of Eroxon® Intense, and up to 10 minutes from application, along with a low side effect profile.

Our existing commercial partners have expressed strong interest in new variants beyond the original Eroxon® product, to expand the product range and aid in the enhancement of customer awareness around the brand. Regulatory approval in the EU and USA is expected by the end of 2025, giving us confidence in being able to offer our commercial partners a product extension to Eroxon®.

WSD4000

WSD4000 is a topical treatment designed for the symptoms of sexual dysfunction in women. There is currently no regulatory approved OTC treatment available for sexual dysfunction in women. We therefore see this as an incredibly exciting market opportunity. One we are well placed to serve, with our specialism in developing and bringing to market topically delivered gel formulations in sexual health products.

WSD4000 has the potential to be an effective, breakthrough treatment for the common symptoms associated with sexual dysfunction, such as lack of desire, arousal and lubrication.

In January, post period end, we announced the successful completion and positive results of a WSD4000 Home User study. Since then, a further pre-submission meeting with the FDA has taken place, where good progress was made to clearly define the product's indication for use, the potential marketing claims, and how these should be defined during the clinical phase of development. Following this meeting we are now in a position to start the Early Feasibility Study to be completed in the first half of 2026. We anticipate a further pre-submission meeting with FDA to finalise the detailed clinical trial protocol.

In Q3 2024 we also commissioned Ipsos to conduct market research in the USA to gain greater understanding of sexual dysfunction in women and the commercial opportunity this represents. This involved both quantitative and qualitative research in over 1,000 women ranging from 22 to 75 years old thereby capturing a representative sample of women's different life stages. This research has provided us with considerable insights and is helping us optimise the development of WSD4000. In particular the key findings were:

· 2-in-3 women say their sex lives are important, but women with symptoms of sexual dysfunction are less satisfied

· 60% of women have experienced symptoms in the last twelve months, with nearly all feeling negatively towards their experiences

· 1-in-2 women with symptoms are motivated to treat. The concept of WSD4000 resonated well especially with younger women.

· The commercial opportunity is large and significant with an estimated 34 million women in the USA alone motivated to treat their symptoms of sexual dysfunction4.

Commit

We are proud of the strong financial results we delivered in FY24. While the slower than anticipated sales of Eroxon® post launch led to the Board revising its product sales and royalties forecasts down for FY25 by 50%, the Group remains confident in the opportunities Eroxon® and our new product development pipeline represent and is focused on delivering shareholder returns for its investors. Delivering sustainable revenue growth and profitability remain core factors in the Group's overall strategy. The work being done in conjunction with our partners to continue to build consumer awareness along with our new product development, while being conscious of costs, are integral aspects of our strategy geared at a return to revenue growth and profitability.

Focus for FY25

Our priorities for FY25 are:

· Address - Obtain Eroxon® Intense regulatory approvals to provide our commercial partners a product extension to Eroxon®

· Broaden - Conduct Early Feasibility Study for WSD4000 product to refine the clinical methodology, optimise the efficacy and further inform the consumer experience of the product.

· Commit - Continue to launch Eroxon® in other markets and work with our partners in geographies where we have already launched to build brand awareness, sales and ultimately revenue and profits.

Outlook

Looking ahead, we remain confident in the opportunity for Eroxon®, and alongside this, the opportunities available to us through the new products we have in development. With the launch of Eroxon® Intense, we will successfully have extended our product line, a key step as our commercial partners continue to build out the sexual health category in their own businesses.

There is still a huge opportunity for Eroxon® and our partners are committed to continued investment in the marketing of the product to educate our target consumers and grow sales. Our partners understand that it takes time for a brand new consumer product to build and establish sales and we look forward to providing updates on the steady progress being made across our strategic priorities alongside efforts to improve shareholder returns.

James Barder

Chief Executive Officer

Sources:

1. EMA, Withdrawal assessment report for Viagra, 2008

2. Feldman HA et al. J Urol 1994; 151: 54 - 61

3. Pozzi, J of Sexual Medicine, Volume 20, 2022,

4. Market research conducted by Ipsos showed 60% of women have experienced symptoms of sexual dysfunction over the last twelve months and 49% of women want to treat their symptoms. Current US female population between the ages of 22 and 75 is 113 million, of which 69 million are sexually active and experience symptoms.

Financial Review

Financial highlights

· Revenues £13.9 million (2023: £3.1 million)

· Operating profit £1.2 million (2023: loss £6.9 million)

· Adjusted operating profit* £3.3 million (2023: loss £4.2 million)

· Cash and cash equivalents as at 31 December 2024 £6.6 million (2023:£7.7 million)

As outlined in the Chairman's Statement and Chief Executive's Review, Futura continued to work with its commercial partners to expand the launch of Eroxon® into other geographies, including the USA which launched nationwide across all major retailers in Q4 24. The launch of Eroxon® resulted in Futura reporting its first annual profit before tax of £1.3 million compared to a loss before tax in 2023 of £6.9 million. On an adjusted basis (excluding non cash share-based) payment £3.3 million (2023: loss £4.2 million).

Financial results at a glance

*adjusted for a non-cash share-based payment charge of £2.02 million (2023: £2.72 million). The share-based payment charge predominately relates to the LTIP awards in 2023. 

Revenue

In the year 2024, the Group reported sales of £13.9 million (2023: £3.1 million) which included milestone payments of £7.1 million (2023: £0.06 million) of which £3.2 million was received in 2023 but not recognised in the Statement of Comprehensive Income until 2024 and a further milestone which was received in 2024 and recognised in the period of £3.9 million. The balance of £6.8 million related to Eroxon® product sales and royalties.

Cost of sales

Cost of sales were £4.3 million (2023: £1.3 million) and reflected a gross margin of 70% (2023: 57%) and generating a gross profit of £9.7 million (2023: £1.8 million). With the nature of our different revenue streams, the margin delivered will vary period on period dependent on the revenue mix.

Research and development

Expanding our portfolio of products and extending product ranges, while being mindful of cost is a key pillar of our growth strategy. In line with this, Research and Development ("R&D") costs for the period ended 31 December 2024 were £1.7 million and broadly in line with £2.0 million of R&D costs for the period ended 31 December 2023. The costs incurred were reflective of R&D activities relating to Eroxon® Intense and WSD4000, a topical treatment for the symptoms associated with sexual dysfunction in women.

Administrative expenses

Administrative expenses were £6.8 million for the period ended 31 December 2024 compared to £6.7 million for the period ended 31 December 2023. This expense includes a non-cash share based payment charge of £2.0 million (2023: £2.7 million) predominantly relating to the LTIP awards made in 2023 which vest annually to 2027. The slight increase in administrative expenses relate to the ongoing supply chain set-up costs in the EU and the USA.

Earnings per share

In 2024 the basic profit per share was 0.43 pence compared to basic loss per share in 2023 of 2.21 pence. Details of the profit/loss per share calculations are provided in Note 10 of the consolidated financial statements.

Balance sheet

The cash balance at 31 December 2024 was £6.6 million (2023: £7.7 million). Current cash runway extends through to H2 2026 with the Company continuing to retain a tight control on costs.

Trade and other payables were £6.3 million as at 31 December 2023 and have decreased to £3.6 million as at 31 December 2024. The reduction is partly related to the £3.2 million upfront payment received in 2023 which was recognised and released in 2024, offset by an increase in procuring goods associated with higher trading volumes.

Trade and other receivables increased from £1.2 million at 31 December 2023 to £2.4 million at 31 December 2024 reflecting the increase in sales activities and volumes.

Going concern

The Directors believe that it remains appropriate to prepare the financial statements on a going concern basis. However, they acknowledge that a material uncertainty exists that may cast significant doubt on the Group's ability to generate sufficient net revenues and resulting cash inflows and raise sufficient finance to discharge its liabilities in the normal course of business. The financial statements do not include any adjustments that would result from the basis of preparation being inappropriate.

Further information in relation to going concern can be found in Note 2.2 of the consolidated financial statements.

Angela Hildreth

Finance Director and Chief Operating Officer

This announcement is prepared on the same basis as set out in the audited statutory accounts for the year ended 31 December 2024. The accounts for the years ended 31 December 2024 and 31 December 2023, upon which the auditors issued unqualified opinions, also had no statement under section 498(2) or (3) of the Companies Act 2006. The Auditor's report includes reference to the material uncertainty relating to going concern. See below for more details of the going concern assessment performed by the Board of Directors.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2024

All amounts relate to continuing activities.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2024

The consolidated financial statements were approved by the Board of Directors and authorised for issue on 14 April 2025.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2024

The Merger reserve represents the reserve arising on the acquisition of Futura Medical Developments Limited in 2001 via a share for share exchange accounted for as a group reconstruction previously using merger accounting under UK GAAP.

Retained losses represent all other net gains and losses not recognised elsewhere.

Share premium represents amounts subscribed for share capital in excess of nominal value, less the related costs of share issues.

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2024

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2024

1. Corporate Information

Futura Medical plc (the "Company") is a public limited company incorporated and domiciled in England and Wales and whose shares are publicly traded on the AIM Market of the London Stock Exchange. The registered office is located at Surrey Technology Centre, 40 Occam Road, Guildford, Surrey, GU2 7YG.

The Group is principally engaged in the development and sale of consumer healthcare products.

This announcement is prepared on the same basis as set out in the audited statutory accounts for the year ended 31 December 2024. The accounts for the years ended 31 December 2024 and 31 December 2023, upon which the auditors issued unqualified opinions, also had no statement under section 498(2) or (3) of the Companies Act 2006. The Auditors's report includes reference to the material uncertainty relating to going concern. See below for more details of the going concern assessment performed by the Board of Directors.

While the financial information included in this results announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards in conformity with the Companies Act 2006 (IFRS), this announcement does not in itself contain sufficient information to comply with IFRS.

These consolidated financial statements consolidate those of the Company and its subsidiaries (together referred to as "the Group" and individually as "Group entities") for the year ended 31 December 2024.

The consolidated financial statements of the Company and the Group for the year ended 31 December 2024 were authorised for issue by the Board of Directors on 14 April 2025.

2. Accounting policies

2.1 Basis of preparation

The consolidated financial statements have been prepared on a going concern basis and under the historical cost convention and have been prepared and approved by the Directors in accordance with UK-adopted International accounting standards ("IFRS"). The principal accounting policies applied in the preparation of the consolidated financial information are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.

Monetary amounts in these financial statements are rounded to the nearest pound sterling (£), unless otherwise stated, which is also the functional currency of the Company.

2.2 Going concern

The Board has considered the applicability of the going concern basis in the preparation of the financial statements. The Group generated a profit of £1.3 million and consumed cash of £1.1 million in 2024. The Board considers that, based on the reasons set out below, the preparation of the Group's and Parent Company's financial statements on a going concern basis remains appropriate.

In assessing the appropriateness of adopting the going concern assumption, the Group has prepared a detailed budget ("the budget") for the period ending 31 December 2025 and a further forecast ("the forecast") for the period ending 30 June 2026.

The Board considers that the budget and the forecast represent a reasonable best estimate of the Group's performance over the period to 30 June 2026 and the Directors are satisfied that in the scenario modelled in the budget and the forecast, the Group and Parent Company would be able to continue as a going concern.

However, in preparing the budget and forecast, the Board also noted the existence of a number of factors that increase the difficulty inherent in predicting the Group's performance, in particular its revenue generation and timing of key milestone receipts. These include a lack of any historical information from which to reliably predict sales volume and growth and timing of receipts from customers in respect of Eroxon® as the product has continued to launch in key markets throughout FY24. Forecasts provided by commercial partners continue to be encouraging but are not guaranteed. In addition to the budget and forecast, the Board therefore considered a possible scenario in which Eroxon® revenues were reduced and milestone receipts were delayed compared to the budget and forecast (the "downside scenario"). The Board further considered remedial action within Management's control to delay some discretionary spending. In this downside scenario, despite taking the remedial actions, additional funding may be required within the going concern assessment period.

The Board does not believe that the Group's position at this point in the execution of its strategy is unusual. However, should the forecast revenue (in particular, royalty receipts and milestone receipts) not be achieved, it may require further funding within the going concern assessment period. As such funding is not committed, this indicates the existence of a material uncertainty that may cast significant doubt on the Group and Parent Company's ability to continue as a going concern and, therefore, they may be unable to realise its assets and discharge their liabilities in the normal course of business.

2.3 Standards, amendments and interpretation to existing standards

The Group applied the accounting standards and amendments listed below for the first time in these financial

statements. Unless noted, the standards or amendments had no material impact on the financial statements.

· Amendments to IAS 1 - Presentation of Financial Statements.

· Amendments to IFRS 16 Leases - Lease Liability in a Sale and Leaseback.

· Amendments to IAS 7 Statement of Cash Flows and IFRS Financial Instruments - Supplier Finance Arrangements.

Applicable accounting standards and interpretations issued but not yet adopted

At the date of authorisation of the financial statements, the following Standard and Amendments which have been issued and endorsed by the UK, have not been applied by the Group and Company in preparing the financial statements:

• Amendments to IAS 21 - Lack of exchangeability (effective date: 1 January 2025)

• Amendments to IFRS 9 and IFRS 7 - Classification and measurement of financial instruments (effective date: 1 January 2026)

• IFRS 18 - Presentation of financial statements (effective date: 1 January 2027)

· IFRS 19 - Subsidiaries without public accountability disclosures (effective date: 1 January 2027)

2.4 Basis of consolidation

The Financial Statements of the Group consolidate the Financial Statements of Futura Medical Plc and its subsidiary undertakings (together referred to as the "Group") up to 31 December each year. All subsidiaries have a reporting date of 31 December.

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. All subsidiaries are 100% owned.

The Financial Statements of subsidiaries are included in the Consolidated Financial Statements from the date that control commences until the date that control ceases, in accordance with IFRS 10. Intra group transactions and balances, and any unrealised gains or losses arising from intra group transactions, are eliminated in preparing the Consolidated Financial Statements.

2.5 Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenue and expenses that relate to transactions with any of the Group's other components. The Board of Directors consider that it is appropriate to report results as one single business segment. This is consistent with management accounting information reported regularly to the Board. The Group's Chief Operating Decision Maker ("CODM") is considered to be the Board.

2.6 Revenue

To determine whether to recognise revenue, the Group follows a five-step process:

1. Identifying the contract with a customer

2. Identifying the performance obligations

3. Determining the transaction price

4. Allocating the transaction price to the performance obligations

5. Recognising revenue when/as performance obligation(s) are satisfied.

In accordance with IFRS 15, revenue is calculated based on the consideration to which the Group expects to be entitled and is recognised over the length of services provided under the contract and once performance obligations have been met. The transaction fee is allocated over the length of the service being provided in accordance with the project plan. It is recognised as a contract liability at the time of the initial transaction and is recognised on a straight-line basis over the lifetime of the contracts. The progress is re-evaluated by Management at each reporting date and the revenue recognised is re-measured accordingly. 

Product revenue

The Group enters into contracts for supply of goods to external customers against orders received. The majority of contracts that the Company enters into relate to sales orders containing single performance obligation for the delivery of consumer healthcare products. Revenue is recognised when control of the goods is passed to the customer. The point at which control passes is determined by each customer arrangement, but generally occurs when title passes to the customer, on receipt of the goods on an ex-works basis.

Product revenue represents net invoice less estimated volume discounts, which are considered to be variable consideration and include significant estimates. Other variable considerations such as milestone receipts and royalties are not recognised in full until it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. In Management's opinion, that will be when the Group's customer confirms that the milestone has been met or that a royalty is due. Estimates associated with variable consideration are revisited at each reporting date or when the related uncertainty is resolved and revenue is adjusted accordingly.

Contracts with customers carry no obligations relating to returns or refunds of the product. As such, no provision has been made in respect of returns or refunds.

Commercialisation and licensing revenue

The Group entered into commercialisation agreements to license the Group's products to other parties. These contracts give rise to fixed and variable consideration from upfront payments, development milestones, sales-based milestones and royalties.

The licenses that the Group grant are typically rights to use intellectual property which do not change significantly during the period of the license and therefore related non-conditional licensing revenue is recognised at the point where the license is granted and variable consideration as soon as recognition criteria are met. Where control of a right to use license for an intangible asset passes at the outset of a contract, revenue is recognised at the point in time when control is transferred.

Income dependent on the achievement of a development milestone is recognised when it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur, which is usually when the related event occurs. In general, when triggering of a milestone is subject to the decisions of third parties (e.g. the acceptance or approval of a filing by a regulatory authority), the Group does not consider that the threshold for recognition is met until that decision is made.

Sales-based milestone income is recognised when it is highly probable that the sales threshold will be reached. Sales-based royalties on a license of intellectual property are not recognised until the relevant product sale occurs.

Upfront milestone receipts

In accordance with IFRS 15, revenue is calculated based on the consideration to which the Group expects to be entitled and is recognised over the length of services provided under the contract and once performance obligations have been met. The transaction fee is allocated over the length of the service being provided in accordance with the project plan. It is recognised as a contract liability at the time of the initial transaction and is recognised on a straight-line basis over the lifetime of the contracts. The progress is re-evaluated by Management at each reporting date and the revenue recognised is re-measured accordingly. 

2.7 Leased assets

For any new contracts entered into, the Group considers whether a contract is, or contains a lease. A lease is defined as a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration. To apply this definition, the Group assesses whether the contract meets three key evaluations which are whether:

· The contract contains an identified asset, which is either explicitly in the contract or implicitly specified by being identified at the time the asset is made available to the Group.

· The Group has the right to obtain substantially all of the economic benefits from the use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract.

· The Group has the right to direct the use of the identified asset throughout the period of use. The Group assesses whether it has the right to direct "how and for what purpose" the asset is used throughout the period of use.

The Group makes use of leasing arrangements principally for the provision of the main office space and IT equipment. The rental contracts for offices are typically negotiated on a short-term rolling basis with one month's notice. Lease terms for IT equipment have lease terms of three years without any extension terms. The Group does not enter into sale and leaseback arrangements. All the leases are negotiated on an individual basis and contain a wide variety of different terms and conditions such as purchase options and escalation clauses.

The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. These leases relate to items of certain low value IT equipment and short-term office leases. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term. 

2.8 Intangible assets

Research and development ("R&D")

Expenditure incurred on the development of internally generated products is capitalised if it can be demonstrated that:

● it is technically feasible to develop the product for it to be sold;

● adequate resources are available to complete the development;

● there is an intention to complete and sell the product;

● the Group is able to out-license or sell the product;

● sale of the product will generate future economic benefits; and

● expenditure on the project can be measured reliably.

Capitalised development costs, including patents and trademarks, are amortised over the periods in which the Group expects to benefit from selling the products developed. The amortisation expense is included in R&D costs recognised in the Consolidated Statement of Comprehensive Income. The useful life and the value of the capitalised development cost are assessed for indicators of impairment at least annually. The value is written down immediately if impairment has occurred and the unimpaired cost amortised over the remaining useful life.

Although Eroxon® has been now launched in major markets, the development phase has been completed, and as such, development expenditure is no longer applicable for this product.

The Directors consider that the criteria for capitalising development expenditure are not yet met for any of its other products under development.

Development expenditure, not satisfying the above criteria, and expenditure on the research phase of internal projects are included in R&D costs recognised in the Consolidated Statement of Comprehensive Income as incurred.

2.9 Property, plant and equipment

Plant and equipment is initially recognised at cost, and subsequently at cost less accumulated depreciation and any accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation is charged to the Consolidated Statement of Comprehensive Income at rates calculated to write off the cost, less estimated residual value, of each asset on a straight-line basis over their estimated useful lives.

Plant and Equipment 2 - 5 years straight-line

Furniture and fittings 3 - 10 years straight-line

The assets' residual values and useful lives are determined by the Directors and reviewed and adjusted, if appropriate, at each reporting date.

2.10 Impairment of non-financial assets

Assets are assessed for indicators of impairment at each reporting date. Where indicators are identified, an impairment review is carried out for assets being amortised or depreciated when a change in market conditions and other circumstances indicate that the carrying value may not be recoverable. The recoverable amount is the higher of an asset's value in use less costs to sell and value-in-use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows.

2.11 Classification of financial instruments issued by the Group

In accordance with the requirements of IAS 32, financial instruments issued by the Group are treated as equity only to the extent that they meet the following two conditions:

• they include no contractual obligations upon the Company to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Company; and

• where the instrument will or may be settled in the Company's own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the Company's own equity instruments or is a derivative that will be settled by the Company's exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.

2.12 Financial instruments

i) Recognition and initial measurement

At the year-end, the Group had no financial assets or liabilities designated at fair value through the profit and loss (2023: £nil). Trade receivables are initially recognised when they are originated. All other financial assets and liabilities are initially recognised when the Group becomes a party to the contractual provisions in the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or a financial liability is initially measured at fair value plus, for items not measured at fair value through profit and loss ("FVTPL"), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is measured at the transaction price.

ii) Classification and subsequent measurement

Financial assets

On initial recognition a financial instrument is classified as measured at amortised cost, fair value through other comprehensive income ("FVOCI") or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets.

A financial asset is measured at amortised cost if it meets both the following conditions and is not designated as FVTPL:

• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• its contractual terms give rise on a specified date to cash flows that are solely the payment of principal and interest on the principal outstanding.

Financial liabilities

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as FVTPL if it is held for trading, it is a derivative or it is designated as such on initial recognition. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense is recognised in profit or loss. At the year-end, the Group had no financial assets or liabilities designated at FVOCI (2023: £nil).

iii) Derecognition

Financial assets

The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

An impairment loss is recognised for the expected credit losses on financial assets when there is an increased probability that the counterparty will be unable to settle an instrument's contractual cash flows on the contractual due dates, a reduction in the amounts expected to be recovered, or both. 

The Group applies a simplified approach in calculating expected credit losses. The probability of default and expected amounts recoverable are assessed using reasonable and supportable past and forward-looking information that is available without undue cost or effort. In calculating, the Group uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses on a customer by customer basis.

Financial liabilities

The Group derecognises a financial liability when the contractual obligations are discharged, cancelled or expire. The Group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value. On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid is recognised in profit or loss.

2.13 Taxation

Income tax is recognised or provided at amounts expected to be recovered or to be paid using the tax rates and tax laws that have been enacted or substantively enacted at the Consolidated Statement of Financial Position date. R&D tax credits are recognised on an accruals basis and are included as an income tax credit under current assets.

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability on the Consolidated Statement of Financial Position date differs from its tax base, except for differences arising on:

• the initial recognition of an asset or liability in a transaction which is not a business combination and which at the time of the transaction affects neither accounting profit nor taxable profit; and

• investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profits will be available against which the difference can be utilised.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the Consolidated Statement of Financial Position date and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered). Deferred tax balances are not discounted.

Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:

• the same taxable group company; or

• different group entities which intend to settle current tax assets and liabilities on a net basis, or to realise the assets and settle the liabilities simultaneously, on each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled or recovered.

2.14 Foreign currency translation

Foreign currency transactions are translated into the functional currency at the exchange rates prevailing on the transaction dates. For the purpose of profit and loss, foreign exchange gains and losses are translated using the average exchange rate from the preceding month. Foreign exchange gains and losses arising from the settlement of these transactions, as well as from the translation of monetary assets and liabilities denominated in foreign currencies at period-end exchange rates, are recognised in the Consolidated Statement of Comprehensive Income in the period in which they occur.

2.15 Employee benefits

Defined contribution plans

The Group provides retirement benefits to all employees who wish to participate in defined contribution pension schemes. The assets of these schemes are held separately from those of the Group in independently administered funds. Contributions made by the Group are charged to the Consolidated Statement of Comprehensive Income in the period in which they become payable.

Accrued holiday pay

A liability is recorded at each reporting date for holidays accrued but not taken, at applicable rates of salary. The expected cost of compensated short-term absence (holidays) is charged to the Consolidated Statement of Comprehensive Income on an accruals basis.

Share-based payment transactions

The Group operates an annual equity-settled share-based compensation plan. For all share options awarded to employees, and others providing similar services, the fair value of the share options at the date of grant is charged to the Consolidated Statement of Comprehensive Income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each Consolidated Statement of Financial Position date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of share options that eventually vest. There are no market-based vesting conditions. If the terms and conditions of share options are modified before they vest, any incremental increase in the fair value of the share options, measured immediately before and after the modification, is also charged to the Consolidated Statement of Comprehensive Income over the remaining vesting period. The proceeds received when share options are exercised, net of any directly attributable transaction costs, are credited to share capital (nominal value) and the remaining balance to share premium. All employee share option holders enter into an HM Revenue & Customs joint election to transfer the employers' National Insurance contribution potential liability to the employee, therefore no Group asset or liability arises.

Long-term incentive plan

The Group operates a long-term incentive plan ("LTIP") for all staff and Directors. The quantum of any awards receivable will depend on the Group achieving set milestones and the share price at the time relative to targets set in advance. The Group plan is intended to be settled in equity with cash settlement possible at the discretion of the Board. For all LTIP share options awarded to employees, and others providing similar services, the fair value of the share options at the date of grant is charged to the Consolidated Statement of Comprehensive Income over the vesting period. Non-market vesting conditions are taken into account by adjusting the estimate of the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of share options that eventually vest. If the terms and conditions of share options are modified before they vest, the change in the fair value of the share options, measured immediately before and after the modification, is also charged to the Consolidated Statement of Comprehensive Income over the remaining vesting period. The proceeds received when share options are exercised, net of any directly attributable transaction costs, are credited to share capital (nominal value) and any remaining balance to share premium. All employee share option holders enter into an HM Revenue & Customs joint election to transfer the employer's National Insurance contribution potential liability to the employee, therefore no Group asset or liability arises.

2.16 Finance income

Interest income is recognised as interest accrues.

2.17 Cash and cash equivalents

Cash and cash equivalents are basic financial assets and comprise of cash at bank and in hand, and short-term deposits with original maturity of three months or less.

2.18 Inventories

Inventories are valued at the lower of cost and net realisable value (NRV). The cost of inventory includes the purchase price of finished goods. The company applies the "FIFO" (First-In, First-Out) method for determining the cost of finished goods. Under this method, finished goods that are produced or purchased first are assumed to be sold first, and the remaining finished goods are carried at the most recent cost.

At each reporting date, the company assesses whether the carrying value of its finished goods inventory exceeds the expected net realisable value ("NRV"). If the NRV of finished goods is lower than cost, the inventory is written down to its NRV.

2.19 Provisions

The company recognises provisions for obligations arising from penalties related to minimum order quantities in its contracts with suppliers. A provision is made when the company is unable to meet the minimum order requirements and expects to incur penalties. These penalties are recognised as provisions when it is probable that the penalties will be incurred and the amount can be reliably estimated.

2.20 Prior year adjustment

During the current year, the Group identified an error in the prior year's financial statements where a long-term liability was incorrectly classified as a current liability. This error has been corrected by reclassifying this amount to non-current liabilities in the current year's Consolidated Statement of Financial Position. The effect of this adjustment has not been reflected in the 2023 comparable figures as the impact is not material and there is no impact on the current period  Consolidated Statement of Comprehensive Income.

3. Estimates and judgements

In the application of the Group's accounting policies, which are described in Note 2, Management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources.

The main judgements and estimates made in relation to the financial statements are:

Share-based payments

The Group operates an equity-settled share-based compensation plan for employee (and others providing similar services) services to be received and the corresponding increases in equity are measured by reference to the fair value of the equity instruments as at the date of grant. The fair value determination is based on the principles of the Black-Scholes model which uses an input of volatility based on historical data. Historical volatility may not be indicative of future volatility, yet the Directors judge this to be the most appropriate method of calculation. Given the share-based payment expense of £2,022,091 (2023: £2,720,297), the volatility methodology used is not expected to have a material impact on these financial statements. Details of the fair value calculation for options granted during the year, including other inputs into the Black-Scholes model, are disclosed in Note 19.

There are no significant estimates which are expected to lead to material adjustments in the next accounting period.

4 Financial Risk

4.1 Financial risk factors

The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange rate risk, cash flow interest rate risk and fair value interest rate risk); credit risk and liquidity risk. It is Group policy not to enter into speculative positions using complex financial instruments.

(i) Market risk

Foreign exchange rate risk

The majority of operating costs are denominated in Sterling although certain expenditures were payable in Euros and US Dollars. At 31 December 2024 the Group had trade payables denominated in a foreign currency totalling £1,073,303 (31 December 2023: £115,071) and trade receivables denominated in foreign currency totalling £1,356,139 (31 December 2023: £1,147,709). The Group may use forward exchange contracts as an economic hedge against currency risk, where cash flow can be judged with reasonable certainty. There were no open forward contracts as at 31 December 2024 or at 31 December 2023.

At 31 December 2024, the Group held balances of the following denominated currencies:

Cash flow interest rate risk and fair value interest rate risk

The Group's interest rate risk arises from short-term money market deposits.

(ii) Credit risk

Credit risk arises from cash and cash equivalents and money market deposits as well as credit exposure in relation to outstanding receivables and accrued income. Trade receivables have been reviewed and there are no historical cases of default or material balances which are past due. Management considers that the financial assets below are of good credit quality. 

The carrying value of the financial assets recorded in the Consolidated Statement of Financial Position represents the Group's maximum exposure to credit risk.

The credit risk for liquid funds and short-term financial assets relates to banking institutions holding such funds or assets on behalf of the Group. The counterparties are considered to be reputable banks with high quality external risk ratings.

The exposure relating to outstanding receivables, accrued income and the carrying amount of cash balances is as follows:

The Directors consider the Group's exposure to credit risk to be acceptable and normal for a similar entity at its stage in development.

(iii) Liquidity risk

In the normal course of business the Group is exposed to liquidity risk. The Group's objective is to ensure that sufficient resources are available to fund short-term working capital and longer-term strategic requirements. The Group manages its liquidity needs by monitoring cash outflows due in day-to-day business. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis. Long-term liquidity needs are monitored regularly.

At 31 December 2024 and 31 December 2023, the Group's liabilities had contractual maturities which are summarised as follows:

The Group manages all of its external bank accounts centrally and in accordance with defined treasury policies. The policies include a minimum acceptable credit rating of relationship bank accounts and financial transaction authority limits. Any material change to the Group's principal bank facility requires Board approval. 

4.2 Capital risk management

The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders. The Group does not yet have significant recurring revenues and has mainly financed its operations through the issue of new shares and management of working capital. The Group's capital resources are managed to ensure it has resources available to invest in operational activities designed to generate future income. These resources were represented by £6,596,201 of cash at bank as at 31 December 2024 (31 December 2023: £7,714,182).

5  Revenue and segmental analysis

The Group is focused on the development and commercialisation of Eroxon® and other treatments within sexual health therefore operates as one segment. The Group derives revenue from the transfer of goods and services over time and at a point in time in the following geographical split:

In the current year, two customers represented more than 10% (2023: 10%) of revenue.

All revenue reported by the Group is from contracts with customers.

The relationship between the timing of the satisfaction of the Group's performance obligations and the typical timing of payments from contracts with customers is as follows:

· Revenue for sale of goods is recognised at the point in time when the goods are delivered or collected under ex-works arrangements, which completes our performance obligation. At this point in time the consideration is unconditional because only the passage of time is required before payment is due. Payment is typically due between 30 and 60 days following delivery of the goods.

· For revenue recognised over time, payment is typically received in the form of upfront payments. The performance obligations are met over the duration of the contract. A contract liability is recognised and adjusted at each reporting period to reflect unsatisfied performance obligations based on a straight-lined apportioned basis over the term of the customer contract. Included in revenue for the year is £138,829 (2023: £24,832) which was included in the contract liability at the beginning of the period. See Note 16 on contract liabilities.

6  Operating profit/(loss)

The fees of the Group's Auditor Grant Thornton UK LLP for services provided are analysed below:

7  Staff numbers and costs

The average number of persons (including all Executive and excluding Non-Executive Directors) employed by the Group during the year, analysed by category, was as follows:

The aggregate payroll costs of these persons were as follows:

All employees of the Group are employed by Futura Medical Developments Limited.

In 2024 there were two Directors (2023: nil) who exercised share options under the Group share option schemes and a gain of £45,333 was realised (2023: £nil). In respect of the highest paid Director there was a £25,185 gain realised (2023: £nil).

In 2024 there were no Directors (2023: no Directors) who participated in a private money purchase defined contribution pension scheme. Emoluments for individual Directors are disclosed within the Remuneration Committee Report.

The Directors consider that there are no Key Management Personnel other than the Directors.

Remuneration above includes the following amounts in respect of the highest paid Director:

8. Pension costs

The pension charge represents contributions payable by the Group to independently administered funds which during the year ended 31 December 2024 amounted to £282,934 (2023: £196,532). Pension contributions payable in arrears at 31 December 2024, included in accrued expenses at the relevant Consolidated Statement of Financial Position date, totalled £6,473.72 (2023: £5,258).

9. Taxation

9.1 Current tax

The tax assessed for the year was lower than the UK corporation tax rate (2023: lower). The differences are explained below:

An increase in the main rate of UK corporation tax from 19% to 25% came into force on 1 April 2023. As a result, the current tax charge is calculated using the average tax rate of 25% for the year ended 31 December 2024.

The corporation tax credit for the year represents research and development tax credits is £nil (2023: £379,074) arising from the surrender of losses for R&D credit as the company is profit making (2023: £3,323,097).

The Group has tax losses of approximately £40,907,007 (2023: £42,242,997) available for offset against future taxable profits.

9.2 Deferred tax

Deferred tax assets amounting to £11,245,236 (2023: £11,577,733*) have not been recognised due to it not being probable that taxable profits will be available against which these deductible temporary differences can be utilised.

The unrecognised asset comprises of:

\* The prior year unrecognised tax asset has been updated due to an error made in the calculation on deferred tax arising on share based payments.

10. Earnings per share

The basic earnings per share is calculated by dividing the profit for the period attributable to equity holders of the company by the weighted average number of ordinary shares outstanding during the period. The diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to reflect the potential dilution from share options that could result in the issuance of ordinary shares.

The calculation of basic and diluted earnings per share ("EPS") is based on the following data:

In 2023, the diluted loss per share is identical to the basic loss per share, as potential dilutive shares are not treated as dilutive since they would reduce the loss per share.

11. Plant and equipment

All fixed assets of the Group are held in Futura Medical Developments Limited. At 31 December 2024, the Group was committed to purchase property, plant and equipment totalling £335,300 (31 December 2023: £2,200,218) and had paid advances on property, plant and equipment assets under construction of £3,220,862 (2023: £1,363,215).

12. Financial instruments by category

The accounting policies for financial instruments have been applied to the line items below:

The Directors consider that there is no material difference between the carrying values of financial assets and liabilities and their fair value.

13. Inventories

Inventory is carried at cost and the balance of £455,906 (2023: £339) relates to finished goods and some product samples held for testing and marketing purposes.

14. Trade and other receivables

Trade and other receivables do not contain any impaired assets. The Group does not hold any collateral as security and the maximum exposure to credit risk at the Consolidated Statement of Financial Position date is the fair value of each class of receivable.

Trade receivables are measured initially at fair value and subsequently held at amortised cost less an allowance for expected credit losses. The Group has applied the simplified approach to measuring credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue. Standard credit terms are between 30 and 90 days from the date the invoice was issued. 

The allowance for expected credit losses assessment requires a degree of judgement and estimation based on a combination of factors, including the Group's historical loss experience and any anticipated effects related to current economic conditions, as well as Management knowledge of the current composition of trade receivables. Trade receivables that Management believe to be ultimately not collectible are written off upon such determination. The Group defines default of customer balances as any amounts outside of the contractual repayment terms.

Trade receivables are regularly reviewed for impairment loss. The Group has assessed the credit risk of its financial assets measured at amortised cost and has determined that the loss allowance for expected credit losses of those assets is immaterial to the financial statements. As the Group has no material expected credit losses the disclosure of the ageing and credit risk relating to trade receivables is not required and therefore not presented.

The Group's trade receivables are denominated in GBP. The carrying value of trade and other receivables in the Group is consistent with fair value in the current and prior year.

The other classes of assets within trade and other receivables are denominated in GBP and do not contain impaired assets.

Contracts with customers

No impairment losses (2023: £nil) were recognised on receivables arising from contracts with customers.

15. Trade and other payables

16. Contract liabilities

Contract liabilities comprise of payments from commercial partners where performance obligations remain outstanding at the period end and revenue is recognised over time. The revenue recognition policy is explained in Note 2.6.

The significant changes in contract liabilities are presented below:

The maturities of the contract liabilities are presented below:

During the year ended 31 December 2024, the Group identified an error in its financial statements for the year ended 31 December 2023. The error related to the misclassification of certain liabilities between current liabilities and long-term liabilities. Specifically, the Group had incorrectly classified a portion of its contract liabilities as current liabilities. As a result, the Group had overstated its current liabilities and understated its long-term liabilities for the year ended 31 December 2023.

The Group has chosen not to restate the prior year financial statements on the basis the adjustment is not material by nature. Instead, the adjustment is reflected in the current year's financial statements. The error did not impact the Group's net income or cash flows for the prior year, but the balance sheet has been adjusted to reflect the corrected classification between current and long-term liabilities. No prior period adjustment has been made in the financial statements.

17. Provisions

At the reporting date, the Group has recognised a provision of £726,948 (2023: £nil) for minimum order penalties under its supply contracts. The provision represents penalties expected to be incurred due to not meeting the agreed-upon minimum order quantities during the financial year. The Group estimates that £286,948 of this provision will be paid within the next 12 months, with the remainder expected to be paid over the following 12 to 24 months.

18. Share capital

The number of issued ordinary shares as at 1 January 2023 was 288,046,527. Each ordinary share carries the right to one vote and receive dividends from time to time. During the year ended 31 December 2023, the Company issued shares of 0.2 pence per share, as follows:

The number of issued ordinary shares as at 1 January 2024 was 301,405,950. During the year ended 31 December 2024, the Company issued shares of 0.2 pence with each ordinary share carrying the right to one vote and receive dividends from time to time as follows:

Directors exercised the following share options in 2024 (2023: nil):

19. Share options

At 31 December 2024, the number of ordinary shares of 0.2 pence each subject to share options granted under the Company's Approved and Unapproved Share Option Schemes were:

On 6 April 2024 share options over 2,176,000 new ordinary shares were granted to employees (including Executive Directors) at a price of 35.5p. The options have a three-year vesting period and vesting is subject to satisfaction of a non-market performance condition. The exercise period for these options is 1 April 2027 to 31 March 2034.

On 9 October 2023 share options over 10,570,832 new ordinary shares were granted to employees (including Executive and Non-Executive Directors) at a price of 0.2p per share. 25% of the options granted vested immediately with a further 25% vesting annually following the date of grant.

The share options outstanding at 31 December 2024 represented 6.13% of the issued share capital as at that date (2023: 6.81%) and would generate additional funds of £2,821,033 (2023: £2,481,113) if fully exercised. The weighted average remaining life of the share options outstanding at 31 December 2024 was 88 months (2023: 98 months) with a weighted average remaining exercise price of 15.16 pence (2023: 11.96 pence).

The share options exercisable at 31 December 2024 totalled 7,934,841 (2023: 8,430,027) with an average exercise price of 12.16 pence (2023: 13.98 pence) and would have generated additional funds of £964,727 (2023: £1,202,739) if fully exercised.

The Group's share option scheme rules apply to all of the share options outstanding at 31 December 2024 (31 December 2023: 20,518,841) and include a rule regarding forfeiture of unexercised share options upon the cessation of employment (except in specific circumstances). 

Options have historically been issued to advisers under the unapproved scheme. There were 765,598 share options outstanding to advisers at 31 December 2024 (31 December 2023: 910,506).

There were no market vesting conditions within the terms of the grant of the share options.

The Black-Scholes formula is the option pricing model applied to the grants of all share options made in respect of calculating the fair value of the share options.

An amount of £2,022,091 (2023: £2,720,297) has been recognised as a charge within administrative expenses in the Consolidated Statement of Comprehensive Income and a credit to retained earnings within equity. There were no cash settled share-based payment transactions.

Share-based payments

20. Commitments

At 31 December 2024 the Group had operating short-term lease commitments in respect of property leases cancellable on one month's notice of £10,916 (2023: £10,916).

21. Related party transactions

Related parties, as defined by IAS 24 'Related Party Disclosures', are the wholly owned subsidiary companies, Futura Medical Developments Limited, Futura Consumer Healthcare Limited and the Board. Transactions between the Company and the wholly owned subsidiary companies have been eliminated on consolidation and are not disclosed.

Details of share awards made to Non-Executive Directors and share options exercised by Directors can be found in Note 18.

Key management compensation

The Directors represent the key management personnel. Details of their compensation and share options are given in Note 7 and within the Remuneration Committee Report.