StoneChecker 510k Update

IQ-AI Ltd

("IQ-AI" or the "Company")

StoneChecker 510k Update

IQ-AI are pleased to provide an update on the status of the StoneChecker software the US Food and Drug Administration ("FDA") application. StoneChecker continues to be reviewed by FDA and IQ-AI are awaiting feedback on testing methodology.

StoneChecker was originally submitted to FDA in May 2018. Under the FDA's 510k guidelines, manufacturers are required to compare the new product to an existing FDA cleared product. This represented a challenge since StoneChecker has some unique features which are not found in other "predicate" products.  A CT machine software was chosen to establish "substantial equivalence" to StoneChecker, but after several discussions with FDA it was mutually agreed that a different comparator device be used. Consequently, the 510k package was resubmitted to them and they formally accepted it on 22 August 2018.

On 5 October 2018, we received correspondence from the FDA that the original package needed supplemental information and we were invited to discuss this with them to seek clarification. A conference call followed on 30 October 2018.

During that call it seemed that the Agency clearly understood the purpose of StoneChecker but asked for additional information to be presented to show how the product might work in situations where suboptimal CT images had been obtained. The FDA wanted to be confident that StoneChecker could still provide reliable data output when attempting to analyse poor input data. The Company has gone back to the original clinical data that was developed to verify that this kind of data exists and has submitted a response to the FDA with a proposed test method outlined that, the Board believes, would satisfy them that StoneChecker will function under these more challenging conditions. This additional testing methodology was submitted to the FDA on 27 November 2018 for their evaluation.

This represents the normal application process with the FDA for a 510k. The manufacturer submits a data package for review. The FDA examines it for completeness, then starts working on it. At any point they can 'stop the clock' to ask questions, and that clock restarts when the manufacturer submits answers. The FDA is evaluated against a standard, and processes 95% of 510k's within 90 days of the FDA review time. Given that the StoneChecker application has now been with them for over half that time it appears that while approval may be forthcoming at the end of the year, it is more likely that the FDA may not complete their review of the package until Q1 2019.

The Directors of the Company accept responsibility for the contents of this announcement.

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