Company: BDRX
Filing Date: 2025-01-17
Form Type: F-1
Source: 0001214659-25-000922
Chunk: 378

Company: Biodexa Pharmaceuticals Plc
Filing Date: 2025-01-17
Form: F-1
Chunk 378
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 Economic life of contractual relationship                         |

| F-38 |

| 2 | Critical accounting estimates and judgements |

The preparation of these
consolidated financial statements requires the Group to make estimates, assumptions and judgments that can have a significant impact on
the reported amounts of assets and liabilities, revenue and expenses and related disclosure of contingent assets and liabilities, at the
respective dates of our financial statements. The Group bases its estimates, assumptions and judgments on historical experience and various
other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different
assumptions or conditions. Management evaluates estimates, assumptions and judgments on a regular basis and makes changes accordingly
and discusses critical accounting estimates with the board of Directors.

The following are considered
to be critical accounting estimates:

Impairment of 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. Impairment indications include events causing significant changes in any of the underlying assumptions used in valuing intangibles
not ready for use. The key assumptions are the probability of success, the discount factor, the timing of future revenue flows, market
penetration and peak sales assumptions, and expenditure required to complete development.

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
intangibles not yet ready for use was £2.9million (2022: £Nil; 2021: £Nil) as at 31 December 2023 (note 11).

Management apply a further
20% sensitivity to the probability of success, this resulted in a 18% change in the fair value of the asset.

Share-based payments

The Group accounts 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