Completion of sale of Clinical AI Business

1 October 2024

Intelligent Ultrasound Group plc

(the "Group" or the "Company")

Completion of sale of Clinical AI Business

Further to the announcement on 18^th July 2024, Intelligent Ultrasound Group plc (AIM: IUG), the ultrasound AI software and simulation company, is pleased to announce it has completed the sale of its Clinical AI Business (Intelligent Ultrasound Limited and certain other clinical AI related assets) to GE HealthCare for an enterprise value of £40.5 million on a cash free/debt free basis (the "Transaction"). The Transaction excludes the NeedleTrainer products which remain within the Company along with the Simulation Business.

Transaction highlights:

·   Sale of the Clinical AI Business to GE HealthCare for a cash consideration of £40.5 million

·   Disposal excludes the NeedleTrainer product range which is retained within the remaining Simulation Business. This business generated total revenues of £10.0 million in the financial year ended 31 December 2023 (including £0.8m relating to the NeedleTrainer product range)

·   The consideration represents an implied value of 12.4p per Ordinary Share on current issued share capital and values the Clinical AI Business at almost 34 times full year 2023 revenues of that business

The Board has been engaged in a comprehensive review of the Simulation Business that has involved evaluating the growth potential of the medical simulation market and the capital requirements of expanding the existing operations. 

In parallel, the Board has also engaged with a broad mix of institutional shareholders and taken legal and tax advice on structuring a material return of capital. As part of this process the Company has initiated the legal process required to create the distributable reserves needed to undertake this material return of capital. This will be effected through a capital reduction. 

A Circular for the capital reduction has been sent to Shareholders and the General Meeting to approve the resolutions will be held on 15^th October at the Company offices in Cardiff. The capital reduction is expected to be approved by Court Order on 18^th November after which further details on the Company's plans will also be announced.

Trading in H2 2024 is currently broadly in-line with the first half of the year, with the UK still affected by the capital expenditure constraints on the NHS and the North America market still relatively slow compared to expectations. We continue to expect reseller sales in the rest of the world to increase their year-on-year sales.

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

"We are pleased to complete the sale of our Clinical AI Business to GE HealthCare for £40.5 million and I would like to thank our outgoing CTO, Nicholas Sleep, who resigned as a director of the Group on completion and joined GE HealthCare, for his drive and superb contribution to building such a successful Clinical AI operation. He and his excellent team will all be missed. 

The remaining simulation business has tremendous potential with an excellent product range particularly in new areas such as needling. Our mission is to make ultrasound easier to learn and simpler to teach, as we aim to support the rising demand for sonographers worldwide.

Over the last six weeks we have been engaged in a comprehensive review of the remaining Simulation Business that has involved evaluating the potential of expanding both our medical simulation product range, as well as our sales operations in both reach and scale.

On completion of the capital reduction we look forward to communicating the details of the Company's plans."

For further information, please contact:

About Intelligent Ultrasound Group

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

Simulation

Real-time hi-fidelity ultrasound education and training through simulation.  Our main products are the ScanTrainer obstetrics and gynaecology training simulator, the HeartWorks echocardiography training simulator, the BodyWorks Eve Point of Care and Emergency Medicine training simulator with Covid-19 module and the new BabyWorks Neonate and Paediatric training simulator. To date over 1,700 simulators have been sold to over 800 medical institutions around the world.

Clinical AI software

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

www.intelligentultrasound.com

NOTE: ScanNav Anatomy PNB is CE approved and cleared for sale in the US by the FDA but is not available for sale in any other territory requiring government approval for this type of product.