Sensyne Health Interim Results

Sensyne Health Interim Results

Oxford, UK; 21 January 2020: Sensyne Health plc (LSE: SENS) ("Sensyne" or the "Company" or the "Group"), the British Clinical AI technology company, today announces its Interim Results for the 6 months ended 31 October 2019.

Lord (Paul) Drayson, CEO of Sensyne Health, commented:

"I am pleased to report that Sensyne Health has made excellent commercial and scientific progress in the first six months of the year. The Company has met all of the 24-month objectives set out at the time of the IPO in August 2018 ahead of schedule and we are now very well positioned to progress our strategy. We are making good progress on work with our pharmaceutical partners, Bayer and Roche, as well as our clinical AI software development partners, Cognizant and Agorai. Consequently, we currently have significant visibility of a minimum £2m of revenue being earned in FY20 from our existing contracts. However, the Board believes that the current share price does not reflect either the value of what the business has achieved to date, or the significant growth prospects available to Sensyne Health in future."

OPERATING HIGHLIGHTS

POST-PERIOD EVENTS

FINANCIAL HIGHLIGHTS

Analyst and Investor briefing

Lord Drayson, Chief Executive Officer, and Lorimer Headley, Chief Financial Officer, will present the interim results for analysts and investors today at 12.00 GMT. There will be a simultaneous live conference call and webcast. For more details please contact [email protected] at Consilium Strategic Communications.

A replay of today's webcast of the meeting and the presentation slides will be available on the investor section of Sensyne Health's website after the event at https://www.sensynehealth.com/investors/investor-hub

-ENDS-

For more information please contact:

About Sensyne Health

Sensyne Health plc is a clinical AI company that works in partnership with the NHS to improve patient care and accelerate the discovery and development of new medicines. Sensyne Health is listed on the AIM Market of the London Stock Exchange (SENS.L).

For more information, please visit: www.sensynehealth.com www.sensynehealth.com.

Operating Review

Sensyne Health has made excellent commercial and scientific progress in the first six months of the year, signing agreements with Bayer, Cognizant and Agorai, and since the half-year end with Roche, that prove the value of its capabilities in medical and data science. The Company met all the 24-month objectives set at the time of IPO in August 2018 ahead of schedule and is now very well positioned to benefit from the accelerating adoption of Clinical AI by the global pharmaceutical industry, through its unique partnership model with the UK NHS and its growing roster of collaborations.

During the half-year period we met a major milestone, signing our first major pharmaceutical agreement with Bayer, delivering £5m of revenue across the two-year contract. Not only does this agreement deliver a 4% share of the revenue to our NHS partners, but as it is in the field of cardiovascular disease aligns the priorities of the pharmaceutical scientists we work with and those of our NHS partners. At the beginning of October 2019, we were able to extend our partnership with Bayer with the launch of Bayer's LifeHub UK project where Sensyne Health will work with Bayer to develop AI-enabled radiology to enhance patient outcomes.

We have continued to work with our NHS partners on curation and analysis of data, including historical records, resulting in the number of unique patient records increasing by 12% to 2.4m (FY19: 2.1m) and the number of patient encounters represented by 36% to 27.2m (FY19: 20.1m). The numbers of unique patient records and patient encounters will be further increased once Sensyne receives NHS England approval for the SRAs with Wye Valley NHS Trust and George Eliot Hospital NHS Trust announced on 28 January 2019.

Following on from the success of signing the agreement with Bayer, in December 2019 we announced our second partnership with a major pharmaceutical company, Roche. This collaboration will focus on identifying patient populations in one disease area and assessing and collating anonymised patient data with anonymised electronic patient record information to support clinical trial planning.

Our LAB10x partnership with Evotec SE, Oxford University Innovation Ltd and Oxford Sciences Innovation plc has made its first award to a research project being undertaken at the University of Oxford. LAB10x will lend its support to ParkAI, a clinician-driven tool to manage the symptoms of Parkinson's disease developed by a team led by Michele Hu, Professor at the Nuffield Department of Clinical Neurosciences at the University of Oxford.

These partnerships prove the value of Sensyne Health's capabilities in medical and data science.

We expect to launch GDm-Health, our first product in the U.S. market, in 2020 with our partners Cognizant and Agorai, leveraging on the work by our U.S. Healthcare provider partner Jefferson Health who have been conducting a clinical and economic evaluation of GDm-Health.

Recently, the UK Government has been moving towards a national strategy for the commercial use of anonymised patient data based upon the creation of a sovereign capability at a national level. As we commented on 16 December 2019, the outcome of the UK General Election returning a Conservative government with a significantly increased majority, has now removed a degree of uncertainty from the operating environment for the Company. Sensyne Health, with its attractive and unique NHS partnership model providing a shared financial return back into the NHS, is uniquely positioned.

Our 'double bottom line' business model has attracted interest from a wide variety of parties since we came to market through our IPO in 2018. Whilst the UK and the NHS remain our focus, we have also received interest from overseas on how our model might be adopted elsewhere with key attractions being our approach to making patients the priority and providing a fair return to the healthcare data provider. We are exploring opportunities to deploy our partnership model in new markets outside of the United Kingdom.

Over the past six months, we have made significant progress in building in-house algorithmic expertise to analyse EPR data. We have worked in cardiovascular disease exploring the patient heterogeneity in heart failure to identify patient sub-populations and have developed proprietary algorithms that can be applied to other disease areas. We have also developed algorithms to predict a heart attack based on data contained within the EPR.

We have noticed the strongly increasing interest by the global pharmaceutical industry in partnering with organisations able to use advanced analytical techniques to analyse large sets of anonymised patient data. This is driving demand for ever larger population datasets to undertake this research in drug discovery and clinical development. Our initiatives in the UK and elsewhere are designed to increase the size and scope of datasets we have access to and enable us to remain competitive in this fast-moving area with access to datasets that are sufficiently large and relevant to attract pharmaceutical partner interest.

Our unique strategic position, strengthening the Board and senior management team, provides a platform for the Company to take strategic action in 2020 as the field progresses apace. We are currently exploring a small number of strategic M&A opportunities that have the potential to scale our business more quickly in order to achieve a leadership position in the Clinical AI market and hence create significant value for shareholders.

Financial Review

Income Statement

Revenue for the half year period ending 31 October 2019 is £0.4m (HY19: £0.0m). The increase compared to the prior period was primarily from work taking place on the Bayer contract that commenced towards the end of HY20, and that will contribute more significantly to revenue in the second half of FY20. It also includes income for use of our Quality Assurance and Regulatory Affairs (QARA) department and infrastructure by the LAB10x venture with Evotec, Oxford Sciences Innovation and Oxford University Innovation.

Our total research and development expenditure was £5.2m (HY19: £3.7m) following increases in investment in our scientific programmes.

Our adjusted operating loss was £7.4m (HY19: £5.1m), reflecting further investment on increasing and retaining personnel as we continue to scale our business with expenditure on employment and recruitment costs in HY20 of £4.3m (HY19 £3.7m), which is net of share-based payments, expansion of our R&D and commercial activities in the UK and progress in the US, our new facility in Oxford which we took up at the end of September 2018, and our HY19 results having only included costs for just over two months as a listed business following our IPO on 18 August 2018.

Our operating loss was £9.8m (HY19: £10.3m). In addition to the £2.3m increase in adjusted operating loss, amortisation costs increased by £0.7m reflecting the three SRAs entered into in summer 2018 being in place for the full period. This was offset by a reduction of £0.9m in share-based payment expenditure and having no exceptional costs in HY20 (HY19: £2.7m).

The loss before taxation was £9.9m (HY19: £10.3m).

Balance Sheet

We closed the period with cash and cash equivalents of £40.5m (FY19: £49.3m). At 31 December 2019, cash and cash equivalents were £37.2m. In addition to the operating expenditure described above, we committed £0.6m in capital expenditure on expanding our 'Cold Room' secure data facilities in Oxford.

The investment in joint arrangements balance of £0.5m represents our first payment made to the LAB10x fund of £0.6m, net of a share of loss in the period of less than £0.1m. A further £1.1m is payable in two equal instalments in FY21 and FY22.

Summary Outlook

We currently have significant visibility of a minimum £2m of revenue being earned in FY20 from our existing contracts with Bayer, Roche, Cognizant and Agorai. Beyond FY20, the Board is planning for a shift in the Group's anticipated revenue mix with a more visible and significant proportion expected from our work with Cognizant and Agorai in software products. The Group continues to pursue deals with pharmaceutical companies, however, the timing and structure of such deals remains hard to predict. We also recognise it is important that we continue to build larger patient datasets so that we can enhance the value of our offering to the pharmaceutical sector. Finally, the Board remains of the view that the Company continues to be well positioned to grow revenues from UK Government initiatives on patient data and potential new opportunities in overseas markets due to the Company's unique partnership model, strong capabilities in discovery science and practical experience in data curation and analysis over the past 18 months.

Corporate Governance

In October 2019, Charles Swingland resigned as Chairman and Annalisa Jenkins became Acting Chairman. In November 2019 we appointed A&O Consulting to conduct a review of corporate governance. In December 2019, Annalisa Jenkins and Andrew Gilbert stepped down from the Board and Sir Bruce Keogh became Interim Chairman. As a result of these changes, feedback from our shareholders and initial findings from our continuing corporate governance review, we are in the process of strengthening our Board, senior management and some of our corporate governance processes. In December, we announced that we had appointed head-hunters to search for an Independent Non-Executive Chairman and additional Non-Executive Directors. Our Nominations Committee has started to meet with the shortlist of well-qualified candidates for the role of Chairman. We expect to make further announcements on this process in due course.

Independent review report to Sensyne Health plc

Report on the condensed consolidated interim financial statements

We have reviewed Sensyne Health plc's Condensed Consolidated Interim Financial Statements (the "Interim Financial Statements") in the Interim Report of Sensyne Health plc for the 6-month period ended 31 October 2019. Based on our review, nothing has come to our attention that causes us to believe that the Interim Financial Statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the AIM Rules for Companies.

The Interim Financial Statements comprise:

The interim financial statements included in the Interim Report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the AIM Rules for Companies.

As disclosed in note 1 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

Responsibilities for the interim financial statements and the review

The Interim Report, including the interim financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Interim Report in accordance with the AIM Rules for Companies which require that the financial information must be presented and prepared in a form consistent with that which will be adopted in the company's annual financial statements.

Our responsibility is to express a conclusion on the interim financial statements in the Interim Report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the AIM Rules for Companies and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

PricewaterhouseCoopers LLP

Chartered Accountants

London

21 January 2020

The notes on pages 11 to 24 are an integral part of these Condensed Consolidated Interim Financial Statements.

The notes on pages 11 to 24 are an integral part of these Condensed Consolidated Interim Financial Statements.

Share premium represents the excess of the issue price over the par value on shares issued less transaction costs arising on the issue (Note 13).

Other reserves include share option reserve, translation reserve and capital redemption reserve.

The notes on pages 11 to 24 are an integral part of these Condensed Consolidated Interim Financial Statements.

Notes to the Condensed Consolidated Interim Financial Information

For the six-month period ended 31 October 2019

1. Summary of significant accounting policies

General information

Sensyne Health plc (the "Company") is a public company limited by shares, registered in England and Wales, incorporated and domiciled in the United Kingdom, whose shares are publicly traded on the Alternative Investment Market of the London Stock Exchange. The address of its registered office is Schrödinger Building, Heatley Road, Oxford Science Park, Oxford, England OX4 4GE.

The Company and its subsidiary undertakings are referred to in this report as the Group.

The Condensed Consolidated Interim Financial Statements were approved for issue on 21 January 2020.

The financial information for the six months ended 31 October 2019 is unaudited and does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006, but has been reviewed in accordance with ISRE 2410 by the Group's statutory auditors.

Basis of preparation

The Condensed Consolidated Interim Financial Statements for the six months ended 31 October 2019 included in this Interim Report have been prepared in accordance with IAS 34 "Interim Financial Reporting" (IAS 34) as adopted by the European Union and have been prepared on a going concern basis as described further below.

Going concern

The Directors have prepared the Condensed Consolidated Interim Financial Information on a going concern basis. In considering the going concern basis, the Directors have considered the principal risks and uncertainties set out in the Group's latest Annual Report. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, support the conclusion that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and a period of not less than 12 months from the date of this report. Accordingly, the going concern basis has been adopted in preparing the interim financial report.

Accounting policies

The accounting policies and methods of computation followed in these Condensed Consolidated Interim Financial Statements are the same as applied in the Group's latest annual audited Financial Statements apart from the additional policy outlined below:

Joint arrangements

The Group applies IFRS 11 to all joint arrangements. Under IFRS 11, investments in joint arrangements are classified as either joint operations or joint ventures, depending on the contractual rights and obligations of each investor. The Group has assessed the nature of its joint arrangement and determined it to be a joint venture. Joint ventures are accounted for using the equity method.

Critical accounting judgements and sources of estimation uncertainty

The preparation of Interim Financial Statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results might differ from these estimates.

In preparing these condensed interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Consolidated Financial Statements for the year ended 30 April 2019.

Notes to the Condensed Consolidated Interim Financial Information continued

For the six-month period ended 31 October 2019

2. Loss per share

Basic loss per share is calculated by dividing the loss attributable to equity owners of the Company by the weighted average number of Ordinary Shares in issue during the period.

As net losses were recorded in the six months ended 31 October 2019 and in each of the comparative periods, the dilutive potential shares are anti-dilutive and therefore were excluded from the loss per share calculation.

3. Revenue

Revenue represents amounts derived from the provision of goods and services which fall within the business's ordinary activities after deduction of trade discounts and value added tax.

All turnover arose from the principal activity of the business which is to develop Clinical AI technology and software products. The origin of the Group's revenue is:

Notes to the Condensed Consolidated Interim Financial Information continued

For the six-month period ended 31 October 2019

4. Exceptional items

Transaction costs totalling £5.5 million were incurred in the six-month period to 31 October 2018 in respect to the application made to the London Stock Exchange for all the issued and to be issued Ordinary Share capital to be admitted to trading on AIM of which £2.7 million was included within the operating loss to 31 October 2018 and £2.9 million was offset against the share premium account in accordance with IAS 32 "Financial Instruments: Presentation". There were no exceptional costs in the six months to 31 October 2019.

5. Employees and staff costs

Staff costs, including Executive Directors, comprised the following:

£197,000 (31 October 2018: £544,000, 30 April 2019: £1,049,000) of the wages and salaries figure above has been capitalised in the period in line with the accounting policy on research and development costs.

Notes to the Condensed Consolidated Interim Financial Information continued

For the six-month period ended 31 October 2019

6. Intangible assets

Notes to the Condensed Consolidated Interim Financial Information continued

For the six-month period ended 31 October 2019

7. Property, plant and equipment

Notes to the Condensed Consolidated Interim Financial Information continued

For the six-month period ended 31 October 2019

8. Right of use assets and lease liabilities

Right of use assets

Leased assets are capitalised at the commencement date of the lease and comprise the initial lease liability amount, initial direct costs incurred when entering into the lease less any lease incentives received. All assets relate to offices leased by the Group.

Notes to the Condensed Consolidated Interim Financial Information continued

For the six-month period ended 31 October 2019

Right of use assets and lease liabilities (continued)

Lease liabilities

The lease liability is measured at the present value of the fixed and variable lease payments net of cash lease incentives that are not paid at the period end date. Lease payments are apportioned between the finance charges and reduction of the lease liability to achieve a constant rate of interest on the remaining balance of the liability. Lease payments for buildings exclude service fees for cleaning and other costs.

The Group had another lease agreement which expired within 12 months from the initial adoption of IFRS 16. In accordance with IFRS 16 the exemption for disclosing further details on that lease has been applied. The cost incurred with respect to this lease for the 6 months to 31 October 2018 was £190,000.

Amounts recognised in the Condensed Consolidated Statement of Comprehensive Income

Notes to the Condensed Consolidated Interim Financial Information continued

For the six-month period ended 31 October 2019

9. Investment in joint venture

On 24 June 2019 the Group entered into a joint venture agreement to form LAB10x, of which it owns 33.33%. LAB10x is a partnership between the Group, Evotec International GmbH and Oxford Sciences Innovation plc to accelerate data-driven drug discovery powered by AI.

The cost of investment in LAB10X is recognised on the Condensed Consolidated Statement of Financial Position as an investment in joint venture and accounted for under the equity method.

Obligations under joint ventures

The Group is committed to providing one-third of the £5,000,000 LAB10x joint venture fund, of which £555,000 has been paid, with a further £1,111,000 payable in two equal instalments in FY21 and FY22.

Income under joint venture

The Group received £120,000 in the period for services provided to LAB10x.

Notes to the Condensed Consolidated Interim Financial Information continued

For the six-month period ended 31 October 2019

10. Trade and other receivables

11. Trade and other payables

12. Financial instruments

Notes to the Condensed Consolidated Interim Financial Information continued

For the six-month period ended 31 October 2019

Financial instruments (continued)

The business has the following financial liabilities whose carrying amount and fair values were as follows:

Financial risk management and policies

The Group's activities expose it to a variety of financial risks: liquidity risk and credit risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.

Financial risk factors

The Group's simple structure and the lack of external debt financing reduces the range of financial risks to which it is exposed. Monitoring of financial risk is part of the Board's ongoing risk management, the effectiveness of which is reviewed annually.

Foreign currency

As the Group operates primarily in the United Kingdom with very limited overseas operations there is limited exposure to foreign exchange risk. Consequently, there are no material currency exposures to disclose (31 October 2018: £nil; 30 April 2019: £nil). The Group does not currently hedge against translation risk.

Liquidity risk

The business treasury policies are designed to ensure that sufficient cash is available to support current and future business requirements, with funds generally placed on deposit. Cash and working capital management is a core feature of the Board's business model and rolling cash flow forecasts, updated on at least a monthly basis, are reviewed to manage these requirements. The Directors do not consider that there is presently a material cash flow or liquidity risk.

Notes to the Condensed Consolidated Interim Financial Information continued

For the six-month period ended 31 October 2019

Financial instruments (continued)

The table below analyses the Group's financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the undiscounted contracted cash flows:

Credit risk

The business's principal financial assets are cash, trade and other receivables, corporation tax and prepayments and contract assets, the carrying values of which represent the business maximum exposure to credit risk in relation to financial assets, as shown in this note. The business's credit risk is primarily attributable to its cash.

The credit risk on cash is limited because the counterparties are banks with triple-A credit ratings assigned by international credit-rating agencies.

The majority of the Group's trade and other receivables are due from "blue chip" organisations or equivalents (NHS Trusts) where the risk of default is considered low. The Group puts provisions in place for specific known bad debts.

The amounts presented in the Condensed Consolidated Statements of Financial Position are net of any allowances for doubtful trade receivables, estimated by the Group's management based on prior experience and their assessment of the current economic environment.

Interest rate risk

The Group does not have any committed external borrowing facilities, as its cash and cash equivalents and short-term deposit balances are sufficient to finance its current operations. Consequently, there is no material exposure to interest rate risk in respect of interest payable.

Notes to the Condensed Consolidated Interim Financial Information continued

For the six-month period ended 31 October 2019

13. Share Capital

On incorporation on 20 June 2018, the Company issued a single Ordinary Share with a nominal value of £1 per share.

On 24 July 2018, the issued Ordinary Share capital was sub divided into 100 £0.01 Ordinary Shares. On the same day, 5,655 Ordinary Shares with a nominal value of £0.01 per share were issued and then the Company carried out a consolidation of Ordinary Shares to provide one Ordinary Share with a nominal value of £57.55 per share.

On 7 August 2018, the Company issued 433,199 Ordinary Shares, 1,033,560 preferred A1 shares, 93,047 preferred A2 shares, 465,290 preferred B shares and 277,025 preferred C shares, each class with a nominal value of £57.55 per share to the shareholders of Drayson Technologies Limited in exchange for 100% of the share capital of this Company. The total nominal value of share for share exchange was £132,487,064.

On 7 August 2018, the Company undertook a share reorganisation such that each existing share class was sub-divided into one FV share with a nominal value of £1.08 per share and one H share with a nominal value of £56.47 per share. The FV shares would entitle the shareholder to a share of the assets of the Freevolt business and H shares would entitle the shareholder to a share of the assets of the Health business. The total nominal value of the FV shares was £2,486,291 and the total nominal value of the H shares was £130,000,773.

On 8 August 2018, the Company entered into a capital reduction to cancel its entire FV share capital of £2,486,291. A capital repayment for a value of £2,486,291 was then made to shareholders that was satisfied by the Company transferring the entire issued FV share capital of Drayson Technologies (Europe) Limited to a separate entity Drayson Holdco 2 Limited, in consideration for Drayson Holdco 2 Limited issuing shares to the shareholders of the Company (at nil gain to Sensyne Health plc).

Notes to the Condensed Consolidated Interim Financial Information continued

For the six-month period ended 31 October 2019

Share Capital (continued)

On 9 August 2018, the Company entered into a capital reduction to reduce the nominal value of H share capital from £56.47 per share down to £0.10 per share reducing the total nominal value of H share capital to £230,212. The capital reduction of £129,770,561 was credited to retained earnings.

On 9 August 2018, the Company issued preferred C shares at £73.77 with a total nominal value of £20,333 and total share premium of £14,979,667 in connection with the acquisition of Strategic Research Agreements with three NHS Trusts in the United Kingdom.

On 17 August 2018, the Company issued 62,114 £0.10 preferred C shares as a result of a performance clause in the Company's articles. The bonus issue was debited to the share premium account.

Immediately prior to Admission, on 17 August 2018, the Company issued bonus share capital of 91,718,231 £0.10 ordinary H shares to its shareholders and on the same date re-designated each class of share in issue at that same date as Ordinary Shares such that the Company had only one class of shares prior to the IPO. This resulted in a total share capital of 94,285,800 £0.10 Ordinary Shares prior to Admission. The bonus shares at IPO were debited to the share premium account.

On 17 August 2018, the Company was admitted to AIM with a placing of 34,285,714 new £0.10 Ordinary Shares at £1.75 per shares fully paid up for a total consideration of £60 million. £56.6 million was credited to the share premium account with expenses of £2.9 million offset against this account.

14. Related parties

Included within trade and other payables (Note 11) is a balance due to Drayson Technologies (Europe) Limited of £165,000 (31 October 2018: £608,000; 30 April 2019: £461,000). This company was demerged from the Group during the period to 31 October 2018 and is a related party by virtue of common control.

The Group received £120,000 in the period (31 October 2018: £nil; 30 April 2019: £nil) for services provided to LAB10x Joint Venture.

Notes to the Condensed Consolidated Interim Financial Information continued

For the six-month period ended 31 October 2019

15. Contingent liabilities and financial commitments

The Group has entered into a commitment to pay a share of revenue from future sales of licensed digital health products. The minimum royalty fee commitments for these agreements are disclosed as licence royalties in the table below:

The Group also has a short-term licence on an office building which is not included in the recognised lease liability. At 31 October 2019 total future minimum payments under non-cancellable operating leases were £8,000 (31 October 2018: £nil; 30 April 2019: £29,000).

The Group has a financial commitment to issue £2.5 million in Ordinary Share capital at £1.75 per share each to George Eliot Hospital NHS Trust and Wye Valley NHS Trust as a result of the Strategic Research Agreements signed on 27 January 2019. The total Ordinary Share capital to issue once all obligations are met is £5 million.

The Group is committed to providing one-third of the £5,000,000 LAB10X joint venture fund, of which £555,000 has been paid, with a further £1,111,000 payable in two equal instalments in FY21 and FY22.

16. Subsequent events

On 9 December 2019 Dr. Annalisa Jenkins and Andrew Gilbert stepped down from the Board of Sensyne Health. Sir Bruce Keogh, Independent Non-Executive Director, was appointed as Interim Non-Executive Chair of the Board, whilst the search continues for an Independent Non-Executive Chair and additional Independent Non-Executive Directors. Spencer Stuart have been appointed to undertake the search for an Independent Non-Executive Chair and additional Independent Non-Executive Directors on behalf of the Company.