RNS Number : 8921N
DG Innovate PLC
28 September 2023
 

28 September 2023

 

DG Innovate plc 
("DG Innovate ", the "Company", or the "Group")

 

Interim results for the six months ended 30 June 2023

 

DG Innovate (LSE: DGI), the advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and energy storage, announces the Company's unaudited interim results for the six months ended 30 June 2023.

 

Chairman's Report

 

The first half of 2023 saw progress on all fronts, as we continued with the development of our electric mobility and energy storage technologies and progressed our commercial opportunities, both with existing and new partners. Our shareholders again demonstrated their support despite challenging market conditions via a £418,000 subscription in January, which allowed us to continue work on our various projects and efforts to commercialise our ground-breaking IP.

 

Post-period end, we completed a further £517,000 placing on 19 July, which has allowed the team to continue development of our technologies. Testing of our Pareta® high-performance electric vehicle drive is ongoing, and work continues on our Scale up Readiness Validation of Parallel Motor for Automotive Applications' ("SUPAR") project with the UK Government's Advanced Propulsion Centre. As outlined in the technology roadmap in the Company's Strategic Update announced on 11 October 2022 we plan to move into pilot manufacturing and volume supply in due course.

 

Most recently, the team exhibited our integrated Pareta® drives at CENEX-LCV 2023, the UK's premier exhibition and conference devoted to low-carbon vehicle and fuel cell technologies. This marked the unveiling of our innovative e-axle for buses and other heavy vehicles, borne out of our ongoing collaboration with BRIST Axle Systems S.r.l. We also demonstrated our Pareta® fleet monitoring and tracking system for the first time alongside our driving simulation software, and have been extremely enthused by the response of existing and potential new partners.

 

At the beginning of the period, and alongside our fundraising, Sir Stephen Dalton and Andrew Boughtwood stepped down as Non-Executive Directors to reduce the Company's ongoing costs and ensure that the Company's board is of an appropriate size and composition for its current stage of development. We remain extremely grateful for their contributions to the Company.

 

We look forward to updating shareholders further in due course.

 

 

Nick Tulloch

Non-Executive Chairman

 

28 September 2023

 



 

Financial Review

 

For the six months to 30 June 2023, the Group recorded a loss before tax of £1,908,253 (30 June 2022: £6,516,795; 31 December 2022: £7,868,376). There was revenue of £30,240 (30 June 2022: £Nil; 31 December 2022: £4,280) together with £399,641 (30 June 2022: £344,831; 31 December 2022: £433,989) of grant income in the period.

 

Cash flow

 

As at 30 June 2023 the Group held cash of £159,958 (30 June 2022: £1,650,352; 31 December 2022: £234,990) in the bank account. The Company raised £418,000 in January, also as stated above, after the period end the Company raised £517,000 through placing of new shares.

 

R&D repayment of £92,578 was received during the period for the tax credit claim for the year ended 31 March 2023, while an R&D tax credit of £92,697 for the period ended 31 December 2023 was in trade receivables at the period end and was received in August.

 

For further information please contact:

 

DG Innovate plc

Peter Tierney, CEO

Jack Allardyce, CFO

 

C/O IFC

IFC Advisory (Financial PR & IR)

Tim Metcalfe

Zach Cohen

 

020 3934 6630

Grant Thornton UK LLP (Financial Advisor)

Samantha Harrison

Jamie Barklem

Ciara Donnelly

 

020 7383 5100

Peterhouse (Broker)

Rose Greensmith

Duncan Vasey

Lucy Williams

 

020 7469 0930

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

About DG Innovate 

 

DG Innovate is an advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and storage, using abundant materials and the best engineering and scientific practices. DG Innovate is currently developing its products alongside a number of major manufacturers across the transportation and energy sectors, research institutions and the UK Government, and has filed 18 patents worldwide. DG Innovate's current research and development activities are broadly split into two areas, focusing on novel electric motor technologies and energy storage solutions. Its two main products are:

 

· Enhanced Drive Technology (EDT) - High efficiency, cost-effective electric motors + power electronics;

· Enhanced Battery Technology (EBT) - Sodium-ion batteries offering a sustainable energy storage solution at similar/greater energy density to incumbent technologies at a lower cost, increased safety with lower environmental footprint.

 

Further information may be found at: https://www.dgiplc.com

 



 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2023

 


 

 

Notes

Six months ended

30 June

Six months ended

30 June

Year ended 31

December


 

2023

2022

2022



Unaudited

Unaudited

Audited



£

£

£

Revenue


 

 

 

Turnover


30,240

-

4,280






Cost of sales


(24,662)

-

(2,000)






Gross Profit


5,578

-

2,280






Grant income


399,641

344,831

433,989

Other income


802

5,307

2,618



 



Administrative expenses

3

(1,734,306)

(1,457,151)

(2,715,557)

Share based payments


(564,292)

(265,934)

(338,864)

Total administrative expenses


(2,298,598)

(1,723,085)

(3,054,421)











Operating loss


(1,892,577)

(1,372,947)

(2,615,534)






Reverse acquisition expenses


-

(5,094,074)

(5,094,074)

Finance income


50

81

-

Finance cost


(15,726)

(49,855)

(67,873)

Other gains and losses


-

-

(90,895)






Loss on ordinary activities before taxation


(1,908,253)

(6,516,795)

(7,868,376)

 





Income tax


-

3,472

188,864

 





Loss for the period and total comprehensive loss attributable to the equity holders


(1,908,253)

(6,513,323)

(7,679,512)

 





 





Earnings per share (pence)





- Basic & diluted

4

(0.021)

(0.16)

(0.11)
















 

All operating income and operating gains and losses relate to continuing activities.

 

There was no other comprehensive income for the period (30 June 2022: £Nil; 31 December 2022: £Nil).

 

The unaudited comparatives of June 2022 in the interim accounts have been updated following the audited adjustments as at 31 December 2022. The key adjustment is to reclassify £680,321 of intangibles assets from the previous financial year end of 31 March 2022 of Deregallera Holdings Ltd to the new year end 31 December 2021, following the reverse acquisition in April 2022.

 

 


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2023

 

 

 

Share Capital

Share Premium

Capital Redemption Reserve

Reverse Acquisition Reserve

Merger

Reserve

Share

Option Reserve

Retained Earnings

Total


£

£

£

£

£

£

£

£

8,842,715

33,604,986

8,783,824

(66,211,737)

26,987,257

338,864

(6,954,819)

5,391,090

Comprehensive income

Loss for the period

 

-

 

-

 

-

 

-

 

-

 

-

 

(1,908,253)

 

(1,908,253)

Share based payments

-

-

-

-

-

564,292

-

564,292

 

Total comprehensive loss

-

-

-

-

-

564,292

(1,908,253)

(1,343,961)










Transactions with owners









Issue of share capital

 

365,833

187,985

-

-

-

-

-

553,818










As at 30 June 2023

9,208,548

33,792,971

8,783,824

(66,211,737)

26,987,257

903,156

(8,863,072)

4,600,947

 



 

 

 

 

Share Capital

Share Premium

Capital Redemption Reserve

Reverse Acquisition Reserve

Merger

Reserve

Share

Option

Reserve

Retained Earnings

Total


£

£

£

£

£

£

£

£

As at 1 January 2022

 

2,029,464

27,723,274

8,783,824

(36,439,255)

-

-

724,693

2,822,000

Comprehensive income

Loss for the period

-

-

-

-

-

-

(7,679,512)

(7,679,512)

Share based payments

-

-

-

-

-

338,864

-

338,864

Total comprehensive loss

-

-

-

-

-

338,864

(7,679,512)

(7,340,648)     










Reverse acquisition

-

-  

-

(29,772,482)

-

-

-

(29,772,482)

Issue of share capital

 

6,813,251

5,881,712

-

-

26,987,257

-

-

39,682,220










 

As at 31 December 2022

8,842,715

33,604,986

8,783,824

(66,211,737)

26,987,257

338,864

(6,954,819)

5,391,090

 



 

 

 

Share Capital

Share Premium

Capital Redemption Reserve

Reverse Acquisition Reserve

Merger

Reserve

Share

Option

Reserve

Retained Earnings

Total


£

£

£

£

£

£

£

£

As at 1 January 2022

 

2,029,464

27,723,274

8,783,824

(36,439,255)

-

-

724,693

2,822,000

Comprehensive income

Loss for the period

-

-

-

-

-

-

(6,513,323)

(6,513,323)

Share based payments

-

-

-

-

-

265,934

-

265,934

Total comprehensive loss

-

-

-

-

-

265,934

(6,227,231)

(6,247,389)










Reverse acquisition

-

-

-

(29,772,482)

-

-

-

(29,772,482)

Issue of share capital 

 

6,813,251

5,881,712

-

-

26,987,257

-

-

39,682,220










As at 30 June 2022

8,842,715

33,604,986

8,783,824

(66,211,737)

26,987,257

265,934

(5,788,630)

6,484,349

 

The Share Capital represents the nominal value of the equity shares. The Share Premium represents the amount subscribed for share capital, in excess of the nominal amount, less costs directly relating to the issue of shares.

 

The Share Option Reserve represents share-based payments which represents the cumulative fair value of options and warrants granted.

 

Reverse Acquisition Reserve and merger reserve were created due to the reverse acquisition of Deregallera Holdings Ltd.

 

The unaudited comparatives of June 2022 have been restated to match the opening balance of 1 January 2022 in the audited accounts for the financial year ended 31 December 2022.

 

 


CONSOLIDATED STATEMENT OF FINANCIAL POSITION

FOR THE SIX MONTHS ENDED 30 JUNE 2023

 


 

 

Notes

As at

30

June

As at

30

June

As at

31

December


 

2023

2022

2022


 

Unaudited

Unaudited

Audited


 

£

£

£



 

 

 

ASSETS





Non-current assets





Property, plant and equipment

5

748,904

868,540

725,091

Intangible asset

6

4,462,676

4,171,835

4,573,592

 





Current assets





Trade and other receivables

7

418,332

969,736

1,023,552

Cash and cash equivalents


159,958

1,650,352

234,990



578,290

 

2,620,088

1,258,542

LIABILITIES





Current liabilities





Trade and other payables

8

(667,872)

 

(620,032)

(640,229)

Net Current Assets/(Liabilities)


(89,582)

2,000,056

618,313

 





Non-current liabilities

9

(489,481)

(556,082)

(495,860)

 





Provision for liabilities


(31,570)

-

(30,046)

 





NET ASSETS


4,600,947

6,484,349

5,391,090

 

SHAREHOLDERS' EQUITY





Called up share capital

10

9,208,548

8,842,715

8,842,715

Capital redemption reserve


8,783,824

8,783,824

8,783,824

Share premium account


33,792,971

33,604,986

33,604,986

Share option reserve


903,156

265,934

338,864

Merger reserve


26,987,257

26,987,257

26,987,257

Reverse acquisition reserve


(66,211,737)

(66,211,737)

(66,211,737)

Retained earnings


(8,863,072)

(5,788,630)

(6,954,819)

TOTAL EQUITY


4,600,947

6,484,349

5,391,090






 



 

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE 2023

 


 

Six months to 30 June

Six months to 30 June

Year ended 31 December


 

2023

2022

2022


 

Unaudited

Unaudited

Audited



£

£

£

Loss for the period after tax


(1,908,253)

(6,513,323)

(7,679,512)

(Increase)/decrease in debtors


605,220

(805,654)

(992,206)

(Decrease)/increase in creditors within one year


50,912

(319,818)

61,024

Reverse takeover expenses


-

5,094,074

5,094,074

Provisions


(1,524)

-

(23,543)

Taxation


-

-

-

Share based payments


564,292

265,934

338,864

Finance income


(50)

-

-

Finance costs


15,726

-

67,873

Amortisation


170,392

207,328

414,656

Depreciation


63,435

95,170

149,942

Losses on disposal of fixed assets


-

-

90,895

Write-off of share capital


-

-

-

Tax refunded


92,578

-

85,270

Net cash (outflow) / inflow from operating activities


(347,272)

(1,976,289)

(2,392,663)

 


 

 

 

Cash flows from investing activities


 

 

 

Proceeds from disposal of property, plant and equipment


-

-

50,832

Purchase of property, plant and equipment


(87,248)

(104,059)

(76,563)

Purchase of intangible fixed assets


(59,476)

(239,358)

(848,443)

Finance income


50

81

-

Finance cost


(15,726)

-

(50,241)

Cash payment on acquisition


-

-

(86,062)

Net cash used in investing activities


(162,400)

(343,336)

(1,010,477)






Cash flows from financing activities

 

 

 

 

Issue of share capital


418,000

5,210,661

4,347,125

Repayment of borrowings


(40,620)

(1,298,139)

(735,876)

(Repayment)/increase of lease liabilities


57,260

-

(71,661)

Net cash generated from financing activities


434,640

3,912,522

3,539,588






Net increase/(decrease) in cash and cash equivalents


(75,032)

1,592,897

136,448

Cash and cash equivalents at beginning of period


234,990

57,455

57,455

Cash balance on acquisition


-

-

41,088

Cash and cash equivalents at end of period


159,958

1,650,352

234,990

 





 



 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2023

 

1. GENERAL INFORMATION

 

DG Innovate Plc is a public limited company incorporated in the United Kingdom, registered under company number 04006413. The address of the registered office is 15 Victoria Mews, Millfield Road, Cottingley Business Park, Bingley, West Yorkshire, BD16 1PY. On 8 April 2022, Path Investments Plc changed its name to DG Innovate Plc following the acquisition of Deregallera Holdings Ltd (formerly DG Innovate Limited) ("DHL"), becoming an advanced research and development company pioneering sustainable and environmentally considerate improvements to electric mobility and storage.

 

The consolidated financial information represents the results of DG Innovate Plc and its subsidiaries (together referred to as Group).

 

2. ACCOUNTING POLICIES

 

2.1 Basis of preparation

The condensed consolidated interim financial statements are presented in UK Sterling and all values are rounded to the nearest pound except where indicated otherwise.

 

The condensed consolidated interim financial statements have been prepared under the historical cost convention or fair value where appropriate. 

 

The results for the six months to 30 June 2023 have been prepared on the basis of the accounting policies set out in the Company's 2022 annual report and accounts along with standards which have become effective after 31 December 2022. The interim accounts do not constitute statutory accounts as defined by section 434 of the Companies Act 2006. The auditor has reported on the 2022 accounts of DG Innovate Plc and the report was unqualified and did not contain a statement under section 498(2) of (3) of the Companies Act 2006 and the 2022 report and accounts have been filed with the registrar of companies. Under reverse acquisition accounting the comparatives comprise details of the group prior to the reverse takeover and as a result these figures are not audited.

 

During the period, there have been no changes in the nature of the related party transactions from those described in the Company's 2022 accounts.

 

2.2 Responsibility statement

The directors confirm that these condensed interim financial statements have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting", as adopted by the United Kingdom and as issued by the IASB and that the interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R, namely;

 

a) An indication of the important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

 

b) Material related party transactions in the first six months and any material changes in related party transactions described in the last annual report.

 

2.3 Segmental reporting

The Group has two distinct areas of focus (Enhanced Drive Technology and Enhanced Battery Technology), and management have identified the Group's series of Pareta® electric drives and hard carbon anode materials as its two cash generating units (CGUs). However, as the Group is currently in the development phase and effectively operates as one operating unit under IFRS 8, segmental information is not available or presented within these accounts.

 

The aggregate value in use calculated for the two identified CGUs as at 30 June 2023 was in excess of the carrying value of the intangible assets, and the Directors therefore believe the value of these assets is not impaired at 30 June 2023. This accounting treatment resulted in an impairment loss of £Nil (30 June 2022: £Nil; 31 December 2022: £Nil). The carrying value of the intangible assets of the two identified CGUs as at 30 June 2023 are Enhanced Drive Technology £2,252,887 (30 June 2022: £2,053,313; 31 December 2022: £2,292,986) and Enhanced Battery Technology £2,209,789 (30 June 2022: £2,118,522; 31 December 2022: £2,280,606).

 

2.4 Reverse acquisition

On 8 April 2022, the Company acquired DHL via a reverse takeover which resulted in the Company becoming the ultimate holding company of the Group. The transaction was accounted for in accordance with the principles of reverse acquisition accounting, since it did not meet the definition of a business combination under IFRS 3. In accordance with IFRS 2, a share-based payment expense equal to the deemed cost of the acquisition less the fair value of the net assets of the Company at acquisition was recognised. The comparatives within the consolidated statement of financial position, the consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated cashflow statement represent that of the legal subsidiary and accounting acquirer, DHL. In the consolidated statement of financial position, the share capital and premium as at 31 December 2021 is that of the Company (DG Innovate Plc) with the reverse acquisition reserve representing the difference between the deemed cost of the acquisition and the net assets of the Company as at 7 April 2022. The consolidated statement of comprehensive income for the period represents the results of both DG Innovate Plc and DHL.

 

3. ADMINISTRATIVE EXPENSES

 


Six months to 30 June 2023

Six months to 30 June 2022

Year ended 31 December

2022


Unaudited

Unaudited

Audited


£

£

£

Directors remuneration

393,292

486,241

845,381

Other administrative expenses

1,341,014

970,910

1,870,176


1,734,306

1,457,151

2,715,557

 

4. LOSS PER SHARE

 

The calculation of the basic and diluted loss per share is based on the loss on ordinary activities after taxation of and on the weighted average number of ordinary shares in issue.

 

There was no dilutive effect from the share options or convertible loan notes outstanding during the period.

 

In order to calculate the diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares according to IAS33. Dilutive potential ordinary shares include convertible loan notes and share options granted to Directors and consultants where the exercise price (adjusted according to IAS33) is less than the average market price of the Company's ordinary shares during the period.

 

The weighted average number of shares is calculated using the number of DG Innovate Plc shares owned by the accounting acquirer DHL pre and post the reverse takeover on 8 April 2022.

 


Six months to 30 June 2023

Six months to 30 June 2022

Year ended 31 December

2022


Unaudited

Unaudited

Audited


£

£

£

Net loss for the period

(1,908,253)

(6,513,323)

(7,679,512)





The weighted average number of shares in the period were:








Basic and dilutive ordinary shares

9,147,913,081

4,105,884,193

7,032,070,240





Basic and dilutive earnings/(loss) per share (pence)

(0.021)

(0.16)

(0.11)

 

5. PROPERTY, PLANT AND EQUIPMENT

 

 

Improvements to leasehold property

Plant & equipment

Right of use asset

Total

 

£

£

£

£






Cost





At 1 January 2023

314,294

1,368,095  

373,453

 2,055,842

Additions

-

8,723

 78,525

 87,248


                

                

                

                

 At 30 June 2023

 314,294

 1,376,818

 451,978

 2,143,090


                

                

                

                






Depreciation





Depreciation at 1 January 2023

314,294

 974,848  

 41,609

 1,330,751

Charge in the period

-

 42,419

 21,016

 63,435


                

                

                

                

Depreciation at 30 June 2023

 314,294

 1,017,267

 62,625

 1,394,186


                

                

                

                






Carrying value





At 30 June 2023

 -

 359,551

 389,353

748,904

At 31 December 2022

 -

 393,247  

 331,844

725,091

At 30 June 2022

 -

 519,952  

 348,588

868,540






 

 



 

6. INTANGIBLE ASSETS

 

 

IPR &

Patents

Total

 

£

£




Cost



At 1 January 2023

 7,068,754

 7,068,754

Additions

 59,476

 59,476


                

                

 At 30 June 2023

7,128,230

7,128,230


                

                




Amortisation



Amortisation at 1 January 2023

 2,495,162

 2,495,162

Charge in the period

 170,392

 170,392


                

                

Amortisation at 30 June 2023

2,665,554

2,665,554


                

                




Carrying value



At 30 June 2023

4,462,676

4,462,676

At 31 December 2022

4,573,592

4,573,592

At 30 June 2022

4,171,835

4,171,835

 

7. TRADE AND OTHER RECEIVABLES

 

 

As at 30

June

2023

As at 30

June

2022

As at 31 December 2022

 

Unaudited

Unaudited

Audited

 

£

£

£





Prepayments

 69,811

 30,518

129,159

Other taxes and social security

260,889

 429,096

 706,222

Other debtors

 87,632

 510,122

 188,171


418,332

969,736

1,023,552

 

Also included in other debtors are amounts repayable of £87,369 (30 June 2022: £355,610; 31 December 2022 £188,036) by certain Directors in respect of incorrectly awarded bonuses.

 

Other taxes and social security comprise the R&D tax credit, tax suffered on the bonuses noted above and VAT repayable.

 

8. TRADE AND OTHER PAYABLES

 

 

As at 30

June

2023

As at 30

June

2022

As at 31 December 2022

 

Unaudited

Unaudited

Audited

 

£

£

£





Trade payables

190,961

 412,954

 204,356

Accruals and deferred income

188,241

 46,134

231,290

Loans and other borrowings

87,679

 79,233

 83,349

Lease liabilities

74,548

 49,600

 59,839

Other creditors

126,443

 32,111

 61,395  


667,872

620,032

640,229

 

9. NON-CURRENT LIABILITIES

 

 

As at 30

June

2023

As at 30

June

2022

As at 31 December 2022

 

Unaudited

Unaudited

Audited

 

£

£

£





Loans and other borrowings

140,442

228,121

185,393

Lease liabilities

328,994

247,235

286,443

Other creditors

20,045

80,726

24,024

 

 

489,481

556,082

495,860

 

10. SHARE CAPITAL

 

 




 

 

Unaudited

Unaudited

Allotted, called up and fully paid


No

£

 


Ordinary Shares of 0.1p each

Ordinary Shares of 0.1p each





At 1 January 2022 (Audited)


 

2,029,463,802

 

2,029,464

Issued in period


6,813,251,305

6,813,251

 

At 31 December 2022 (Audited)

 

 

8,842,715,107

 

8,842,715

 

 

 

 

At 1 January 2023


8,842,715,107

8,842,715

Issued in period


365,833,333

365,833

 

At 30 June 2023 (unaudited)

 

 

9,208,548,440

 

9,208,548

 



 

11. SHARE OPTIONS AND WARRENTS

 

Movement in the number of options and warrants outstanding and their related weighted average exercise price, since 31 December 2022 are as follows:

 


At 30 June 2023

At 30 June 2022

At 31 December 2022

 

 

Number of

Options &

Warrants

 

Weighted average exercise price per share

Number of

Options &

Warrants

 

Weighted average exercise price per share

Number of

Options &

Warrants

 

Weighted average exercise price per share

 

At 1 January

 

3,937,526,910

 

0.33p

 

2,983,297,500

 

2.50p

 

2,983,297,500

 

0.25p

Granted

368,333,333

0.18p

1,109,783,754

0.10p

1,900,233,137

0.26p

Exercised

-

-

(830,800,000)

0.10p

(830,800,000)

0.25p

Expired or waived

(3,975,633)

0.10p

(40,000,000)

0.10p

(115,203,727)

0.10p

At period end

4,301,884,610

0.16p

3,222,281,254

0.10p

3,937,526,910

0.33p

 

The following share options have been granted by the Company and are outstanding as at the period end of 30 June 2023:

 

Date of grant

Number of ordinary shares under option at 1 January 2023

Granted during period

Exercised during period

Lapsed/ waived during period

Number of ordinary shares under option at 30 June 2023

Weighted average exercise price

Expiry date

30/03/2017

4,000,000

-

-

-

4,000,000

0.1p

29/03/2027

30/03/2017

5,875,000

-

-

-

5,875,000

1p

29/03/2027

30/03/2017

2,937,500

-

-

-

2,937,500

2p

29/03/2027

08/10/2020

60,375,000

-

-

-

60,375,000

0.1p

07/10/2030

18/03/2021

1,289,310,000

-

-

-

1,249,310,000

0.1p

18/03/2031

08/04/2022

488,598,296

-

-

(3,975,633)

484,622,663

0.1p

13/04/2032

12/10/2022

690,790,814

-

-

-

690,790,814

0.1p

12/10/2032

Total

2,501,886,610

-

-

(3,975,633)

2,497,910,977

0.1p

 

 

The following warrants have been granted by the Company:

 

Date of grant

Number of warrants at

1 January 2023

Granted during period

Exercised during period

Lapsed during

 period

Number of warrants at 30 June 2023

Weighted average exercise price

Expiry date

18/03/2021

790,000,000

-

-

-

790,000,000

0.25p

07/04/2024

08/04/2022

645,640,300

-

-

-

645,640,300

0.25p

07/04/2024

30/01/2023

-

368,333,333

-

-

368,333,333

0.18p

29/01/2025

Total

1,435,640,300

368,333,333

-

-

1,803,973,633

0.24p

 

 

In January 2023 the Company raised (before expenses) £418,000 through a subscription and broker option for 348,333,333 new ordinary shares at a price of 0.12 pence each. Participants in the fundraise were also issued one warrant with an exercise of 0.18 pence for every subscription share, with an expiry date of two years from admission. The Company also agreed to issue 17,500,000 ordinary shares and 20,000,000 warrants with the same terms to an adviser for services provided in connection with the fundraise.

 

The fair value of equity settled share options and warrants granted is estimated at the date of grant using a Black-Scholes option pricing model, taking into account the terms and conditions upon which the options were granted.  The following table lists the inputs to the model:

 


Warrants

Warrants

Options

Options

Options

Options

Date of grant/variation

Expected volatility

Expected life

Risk-free interest rate

Expected dividend yield

Possibility of ceasing employment before vesting

Fair value per option/warrant

23 Jan 2023

87%

19 months

3.40%

-

-

 

 

0.03p

23 Jan 2023

87%

10 months

3.40%

-

-

 

 

0.01p

12 Oct 2022

62%

8 years

4.40%

-

-

 

 

0.12p

8 Apr 2022

62%

8 years

1.76%

   -

   -

           

 

0.22p

 

18 Mar 2021

31%

10 years

2.00%

-

-

 

 

0.15p

 

18 Oct 2020

50%

10 years

2.50%

-

-

 

 

0.6p







 

 

The expense recognised by the Group for share based payments during the period ended 30 June 2023 was £564,292 (30 June 2022: £265,934; 31 December 2022: £338,864).

 

The average volatility is used in determining the share based payment expense to be recognised in the period. This was calculated by reference to the standard deviation of the share price over the preceding 6-month period.

 

12. RELATED PARTY TRANSACTIONS

 

Share Options

The following share options were held by the directors during the period:

 

Director

Date of grant

Held at 1 January 2023

Surrendered during the period

Granted during the period

Held at 30 June 2023

Exercise price

J Allardyce

18/03/2021

62,500,000

-

-

62,500,000

£0.001


08/04/2022

156,105,002

-

-

156,105,002

£0.001

M Boughtwood

08/04/2022

156,105,002

-

-

156,105,002

£0.001

P Tierney

12/10/2022

690,790,814

-

-

690,790,814

£0.001

Total

 

1,065,500,818

-

-

1,065,500,818

 

 

Transaction with related party

During the period Gareth Boughtwood (son of Martin Boughtwood, a director in the Group) was paid £Nil (30 June 2022: £5,000; 31 December 2022: £Nil) in respect of IT services.

 

Other debtors

Included in other debtors are balances due from the following Directors, and former Directors, in respect of bonuses incorrectly awarded in 2022 and deemed to be held in trust. Chris Theis £87,369 (30 June 2022: £137,369; 31 December 2022: £137,369), Brent Fitzpatrick £Nil (30 June 2022: £83,005; 31 December 2022 £50,667), Jack Allardyce £Nil (30 June 2022: £96,268; 31 December 2022 £Nil), Nicholas Tulloch £Nil (30 June 2022: £38,968; 31 December 2022 £Nil).  

 

13. POST PERIOD EVENT

 

In June 2023 the Company raised (before expenses) £517,000 through a placing of 1,034,000,000 new ordinary shares at a price of 0.05 pence each. Given the placing price was below the nominal value of 0.1 pence per ordinary share, the placing was conditional on the passing of capital reorganisation resolutions, including the subdivision of the each existing ordinary share into one new ordinary share of 0.01p and one deferred share of 0.09p. These resolutions were duly passed at the Company's AGM on 19 July 2023, with the shares subsequently issued and admitted to trading. The Company also agreed to issue 51,700,000 warrants to Peterhouse Capital Limited and other advisers to the Company for services provided in connection with the Placing. The warrants have an exercise price of 0.05 pence, and expire one year from admission.

 

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