Company: BDRX
Filing Date: 2025-01-17
Form Type: F-1
Source: 0001214659-25-000922
Chunk: 143

Company: Biodexa Pharmaceuticals Plc
Filing Date: 2025-01-17
Form: F-1
Chunk 143
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accounting firm included an explanatory paragraph in their report on our financial statements as of and for the year ended December 31,
2023 with respect to this uncertainty.

The following are considered
to be critical accounting estimates:

Impairment of Goodwill and Intangible Assets Not Yet Ready for Use

Intangible
assets not yet ready for use are tested for impairment at the cash generating unit level on an annual basis at the year end and between
annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a cash generating unit
below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating
performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.

The
fair value of each cash generating unit or asset is estimated using the income approach, on a discounted cash flow methodology. This analysis
requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, including for revenues
and development costs, estimation of the long-term rate of growth for the business, estimation of the useful life over which cash flows
will occur and determination of our weighted-average cost of capital.

The
carrying value of our goodwill was £0 as of June 30, 2024 and £0 as of June 30, 2022, and intangible assets not yet ready
for use was £6.01 as of June 30, 2024 (2023: £0). The carrying value of our goodwill was £0 as of December 31, 2023
and 2022, and intangible assets not yet ready for use was £2.9 million (2022: £0) as at December 31, 2023.

The
estimates used to calculate the fair value of a cash generating unit change from year to year based on operating results and market conditions.
Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each such
unit.

Share-based payments

We account for share-based
payment transactions for employees in accordance with IFRS 2, Share-based Payment, which requires the measurement of the cost of
employee services received in exchange for the options on our Ordinary Shares, based on the fair value of the award on the grant date.

We selected the Black-Scholes-Merton
option pricing model as the most appropriate method for determining the estimated fair value of our share-based awards without market
conditions.