The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014, as retained as part of the law of England and Wales. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.
Press release
30 May 2022
Cellular Goods PLC
("Cellular Goods" or "the Company")
Interim results
Cellular Goods (LSE: CBX), a UK-based wellness company providing premium consumer products formulated with lab-produced cannabinoids, announces its half-year results to 28 February 2022.
Highlights
| · | Launched two product ranges on the Company's e-commerce platform on 1 December 2021, less than a year after flotation on the London Stock Exchange
|
| · | Strengthened senior leadership team with the appointment of Anna Chokina as Chief Executive Officer and Director on 6 December 2021
|
| · | Strategic review conducted by new CEO to sharpen focus on three wellness market verticals of skincare, ingestibles and topical after-sports recovery, each based on lab-produced cannabinoids
|
| · | Accelerated marketing strategy and retail partnerships by introducing the skincare 'Look Better' range on Amazon Marketplace, the biggest retailer in the UK, on 21 February
|
| · | Established strong scientific credentials and efficacy for Cellular Goods products through the publication of the Company's first white paper, 'Cannabinoids for the Prevention of Aging', on the anti-aging benefits of cannabinoids, e.g., cannabidiol ("CBD") and cannabigerol ("CBG")
|
| · | Implemented a major brand building and consumer education campaign commencing with online marketing and influencer-led content aimed at upscale audiences |
Post-period highlights
| · | On 1 March, launched Cellular Goods' Rejuvenating Cannabinoid Face Serum, the UK's only CBG-based serum to prevent the signs of aging caused by UV-light exposure and inflammation, as part of the Look Better product range
|
| · | Between March and May 2022, launched broadscale marketing campaign, including marketing, public relations, influencers, and on 14 March launched a two-city outdoor campaign in the UK across London and Manchester
|
| · | Strengthened executive management team with the appointment of Nikhil Vijayan as Chief Supply Chain Officer on 22 March 2022
|
| · | Strengthened Board with appointments of Gill Whitty-Collins and Misha Sher as non-executive directors ("NED"), who have deep experience of the global fast moving consumer goods sector ("FMCG")
|
| · | Published the second of three planned scientific white papers, 'Production of Cannabinoids Using Biotechnology and Synthetic Chemistry as a Path to Sustainability', on the increased sustainability of lab-made cannabinoids compared with traditional agricultural production
|
| · | Filed first patent application related to the use of cannabinoids for skin brightening |
Outlook
| · | The Company faces significant macro-economic and operational headwinds including challenges posed by online advertising bans of cannabinoid-based products by leading online platforms, and the new rules introduced by the UK's Food Standards Authority ("FSA"). This will require the management team to achieve a balance between managing costs while continuing with investment in the business to deliver long term growth
|
| · | Sales volumes and turnover in the second half are expected to ramp up at a slower rate than initially anticipated, though expected to increase from the first half
|
| · | Looking further ahead, the Company anticipates a step-up increase in annual sales next year as the investment and actions being implemented generate strong momentum for the future. With the industry continuing to benefit from strong fundamentals and growing demand, the Company remains cautiously optimistic about its long-term prospects
|
Commenting on the results, Anna Chokina, Chief Executive Officer, said: "I have sharpened and focused Cellular Goods since I joined the business and am satisfied that we now have the right products, strategy and potential to establish the Company as a premium UK wellness brand. However, the Company is still in its infancy and based on my industry experience, establishing a new consumer goods company will require time and investment while managing our cost base.
"We are also facing significant headwinds to building growth momentum but the building blocks to improve our performance have now been laid. As a result, I expect the benefits of our strategy to become evident from next year when we expect trading conditions to normalise and our greater focus on brand-building and marketing to start paying off."
For further information please contact:
| Cellular Goods |
|
| Anna Chokina Chief Executive Neil Thapar Investor Relations | Via Tancredi +44 207 887 7633
+44 787 645 5323 |
| Tennyson Securities |
|
| Corporate Broker Peter Krens |
+44 207 186 9030 |
| Novum Securities |
|
| Corporate Broker Colin Rowbury Jon Belliss |
+44 207 399 9427 |
| Tancredi Intelligent Communication | |
| Media Relations Helen Humphrey Gabriela Amaya Garcia Charlie Hobbs cellulargoods@tancredigroup.com |
+44 744 922 6720 +44 791 503 5274 +44 789 755 7112 |
About Cellular Goods PLC:
Cellular Goods is a UK-based wellness company that provides premium products based on lab-made cannabinoids. It was established in August 2018 to develop efficacy-led and research-backed cannabinoid-powered wellness products. The initial focus is on three product verticals: Function Better, Feel Better and Look Better. These three verticals encompass Cellular Goods' premium CBG skincare and CBD ingestible and topical athletic recovery products, with the first products launched in December 2021 initially through the Company's website. The Company's shares are listed on the main market of the London Stock Exchange. www.cellular-goods.com
Notes:
This document contains forward-looking statements which are subject to known and unknown risks and uncertainties because they relate to future events, many of which are beyond the Company's control. These forward-looking statements include, without limitation, statements in relation to the Company's financial outlook and future performance. No assurance can be given that future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Company.
You are cautioned not to rely on these forward-looking statements, which speak only as of the date of this announcement. The Company undertakes no obligation to update or revise any forward-looking statement to reflect any change in its expectations or any change in events, conditions or circumstances. Nothing in this document is or should be relied upon as a warranty, promise or representation, express or implied, as to the future performance of the Company or the Group or their businesses.
INTERIM MANAGEMENT REPORT
Introduction
In the six months ended 28 February 2022 Cellular Goods achieved a major operational milestone with the soft launch of its first consumer products on its online e-commerce platform on 1 December 2021.
Immediately after the launch, Anna Chokina was appointed as the new chief executive to review the Company's progress and drive long-term growth as Cellular pivoted from the start-up phase of its operations to becoming a revenue generating business with the introduction of its first products to market.
The soft launch, which was devised and implemented before the arrival of the new CEO, came midway through the period under review and less than a year after the Company's flotation on the London Stock Exchange. Bringing the products to market at pace enabled Cellular Goods to establish itself as a first-mover UK brand incorporating only lab-made cannabinoids.
However, the Company is still at an early stage of its development and product sales have been significantly hampered by unexpected factors, as announced previously. A major reason is that some of the world's leading social media and online platforms including Facebook, Instagram and Google have each implemented a policy to prohibit the advertising of cannabis-derived products on their websites. Although Cellular Goods does not produce, source or sell any such products, social media companies' blanket policies have prevented the Company from promoting its ranges to potential customers, affecting sales. The Company is lobbying Google, Facebook and Instagram for a change to their policies.
Other factors that impacted sales in the first half included a delay in the launch of the face serum and a decision to temporarily pause sales of the after-shave moisturiser after some batches did not conform to Cellular Goods' internally set quality controls. These have now been returned to sale.
Notwithstanding the challenges, Cellular Goods is establishing itself as a differentiated premium brand by focusing on offering science-backed, lab-made cannabinoid wellness products. This focus on science and lab-made cannabinoids has enabled the Company to develop formulas that are purer and more sustainable than the plant-derived products in the market. It has also helped position the Company as a leader in innovation in the cannabinoids sector. For instance, Cellular is unique in the UK with its CBG skincare products.
The global market for cannabinoids continues to expand rapidly due to increasing consumer interest in personal health and wellness, together with growing awareness of the benefits of cannabinoids. Vantage Market Research estimates that the global CBD market will reach $47 billion by 2028, up from $4.9 billion in 2021. To take advantage of the growing demand for cannabinoid products, many companies that supply cannabinoid-based products have entered the market with formulas for health and beauty products that vary widely in their quality, efficacy and purity. This has created an opportunity for a supplier of premium wellness products with known and verifiable provenance to differentiate itself in the market.
Operating review
Following a comprehensive strategic review by the new CEO, significant changes were made to the Company's growth strategy, including a major reset of its marketing and sales plans, product strategy as well as a strengthening of its operational team based in the UK. These changes were implemented towards the end of the first half and are aimed at sharpening Cellular Goods' long-term performance and accelerating growth through better execution.
Accordingly, on 21 February the Look Better skincare product range was launched on Amazon Marketplace, thereby enabling Cellular Goods' skincare products to be sold through the UK's largest retailer for the first time as a pilot study. The pilot remains in the early stages and the Company is closely watching its effect on product sales.
As part of a major strengthening of the Company's brand awareness campaign, a high profile two-city outdoor marketing campaign was launched in mid-March 2022. Cellular Goods' share of voice, a marketing metric that allows companies to compare brand awareness on different marketing channels, increased to 46% in Q1 2022 through the outdoor campaign, a very high score relative to the Company's nascent market share (Source: Ad Intel, 2022).
At the same time, Cellular Goods' content marketing was stepped up significantly through public relations and social media as well as by increasing the number of influencers engaged by the Company. As a result, Cellular Goods' products have received positive coverage in leading media including Marie Claire, Vogue, Men's Health, GQ and Metro.
The Company has to date published two white papers to demonstrate the effectiveness of its premium-grade products and emphasise their validated benefits and robust scientific basis, as well as to strengthen the sustainability credentials of lab-made cannabinoids.
On 26 April, the first UK patent application related to the use of cannabinoids for skin brightening was filed, further demonstrating the Company's commitment to using science to develop innovative and efficacious products.
The greater focus on scientific approach to brand positioning, together with the fresh marketing push, has led to encouraging results with sales of Cellular Goods skincare and ingestibles ranges seeing a significant uplift in the second half, although sales of the latter were suspended following the publication of new rules by the Food Standards Agency on 31 March 2022.
We are also pursuing a more aggressive strategy to expand the channels through which our products are sold. We have recently signed an agreement with a premium local Scottish retailer with three bespoke CBD cannabinoid stores, which now stocks the Cellular skincare range. A new Marketing Director and a new Head of Sales have been appointed to make further inroads in this sector and discussions with several more online and high street retailers are in progress.
In addition, Cellular has invested in advanced software to grow the Company's marketing database to improve understanding and insights into consumer behaviour and deepen direct contact with new and existing customers. The improved database enabled the launch of customer loyalty schemes earlier this month to generate repeat business. Email marketing activity has also been stepped up, leveraging steady subscriber growth. Further to email campaigns timed to coincide with seasonal events such as Mother's Day, Valentine's, or one-off repeat purchase opportunities, the Company has now started an automatic mailer to deliver an organised stream of communication to its growing Cellular database. This electronic customer relationship management ("ECRM") loyalty programme will keep Cellular in touch with subscribers and dovetail with the growing database to drive future sales.
Consumer sampling of products remains healthy. Within the consumer goods sector it is highly important that prospective customers be able to trial product; accordingly, by the end of May, the distribution of more samples will be stepped up to drive future sales.
Appointments
The Company has also strengthened its operational team based in the UK. Nikhil Vijayan was appointed to the newly created post of Chief Supply Chain Officer. He brings more than 15 years' experience in the fast-moving consumer goods sector, with impressive expertise in supply chain management coming from his time working at Procter & Gamble. Earlier this month the Company also announced a new slate of non-executive directors with relevant and senior industry experience to provide insight and support to the executive management. Both new NED appointments, Gill Whitty-Collins and Misha Sher, have a deep understanding of the global fast moving consumer goods sector and are seasoned brand-builders, who have worked across some of the world's top consumer goods companies and know what it takes to launch a new brand and make products successful.
Ingestibles products
As announced on 22 April 2022, Cellular took the decision to suspend sales of its ingestibles range following correspondence from Trading Standards officials and the Food Standards Agency. Cellular Goods is disappointed with the FSA's decision, as its products are identical to some which are allowed to remain on sale. While Cellular Goods believes that ingestibles are an important part of the overall market, the Company's product marketing activity to date has focused on the non-ingestible products in the Company's Look Better skincare range which remains unaffected.
While the ban on the sale and advertisement of cannabinoid products on Google and Meta's platforms remains a considerable hurdle, the Company has implemented work-round solutions including changes to the media mix in order to access its target customer base online. In addition, Cellular continues to lobby these organisations for a change in their policies and is also exploring a joint industry approach for the lifting of the ban.
Product pipeline
The Company is also planning to launch four new products in the second half of the year to broaden its skincare range. New travel sizes will launch in 2022. In addition, a new range of topical after-sport recovery Function Better products is under development for launch in 2023. This distinct category will open up the Company to new consumer segments and potential customers.
Financial Review
Revenue for the half year to 28 February 2022 amounted to approximately £13k (H1 2021: nil), and a loss before tax of £2.389m was incurred in the period (H1 2021: £2.12m loss).
The revenue reflects initial sales of new products launched in December 2021. The loss before tax is principally attributable to operating expenses, product development and launch costs.
Net cash was £5.528m as at 30 May 2022.
Current trading and outlook
Following the appointment of Anna Chokina as the new chief executive, Cellular Goods has significantly strengthened its operational base and refocused its strategy to drive growth and establish itself as a premium UK brand for wellness products over the long term.
While these actions and investment in the business are expected to materially benefit Cellular Goods' prospects next year, the Company is currently being held back by major headwinds including new rules introduced by the UK's Food Standards Authority. The confusion and uncertainty caused by FSA policies is disappointing and we will continue to press our case to be allowed to sell our ingestible products.
These rules have forced the Company to temporarily suspend sales of its ingestibles products even though Cellular Goods' ingestibles product formulations are identical to those produced by an FSA validated supplier Chanelle McCoy Health ("CMH"). CMH is one of a small number of CBD companies to achieve full FSA validation, as the vast majority of the FSA list comprises those merely awaiting evidence (of the 3,536 products on the FSA list, the CMH product formulations used by Cellular are three of only 57 fully validated products). Therefore, the safety of Cellular Goods' products is not being drawn into question.
Separately, the Company has also been affected by a ban on the online advertising of cannabis-based products by leading online platforms. As a result, the Company believes it is being unfairly hampered from providing its high-quality products to the British consumer by policy decisions which do not reflect the robust safety profile of Cellular's products, or its exclusive use of lab-made cannabinoids which do not require the cultivation of the cannabis sativa plant and contain 0% THC, the psychoactive component of cannabis sativa.
In the light of the current challenges, the management team faces the difficult task to strike a balance between managing Company costs while continuing with investment in the business to deliver long term growth.
Sales volumes and turnover in the second half are expected to ramp up at a slower rate than initially expected, though are anticipated to increase from the first half. Looking further ahead, the Company anticipates a step-up increase in annual sales next year as the investment and actions being made in the business this year generate momentum for the future. With the industry continuing to benefit from strong fundamentals and growing demand, the Company remains cautiously optimistic about its long-term prospects.
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
| | Notes | Six months to 28 February 2022 | Six months to 28 February 2021 | Year ended 31 August 2021 (audited) |
| |
| £ | £ | £ |
| Revenue | 4 | 13,058 | - | - |
| Cost of sales |
| (7,529) | - | - |
| Gross profit |
| 5,529 | - | - |
| |
| | | |
| Administrative expenses |
| (2,391,722) | (2,119,043) | (3,334,439) |
| |
| | | |
| Operating loss | 5 | (2,386,193) | (2,119,043) | (3,334,439) |
| |
| | | |
| Finance income |
| 164 | - | 522 |
| |
| | | |
| Loss before taxation |
| (2,386,029) | (2,119,043) | (3,333,917) |
| |
| | | |
| Taxation |
| - | - | - |
| |
| | | |
| Loss after taxation |
| (2,386,029) | (2,119,043) | (3,333,917) |
| |
| | | |
| Other comprehensive loss Translation of foreign operations |
| (3,756) | - | (2,584) |
| |
| | | |
| Total comprehensive loss for the period |
| (2,389,785) | (2,119,043) | (3,336,501) |
| |
| | | |
| Basic and diluted loss per share - pence | 6 | 0.47 | 1.24 | 0.96 |
All transactions arise from continuing operations.
The accompanying accounting policies and notes form an integral part of these unaudited interim financial statements.
CONDENSED STATEMENT OF FINANCIAL POSITION
| |
|
As at 28 |
As at 28 February 2021 | As at 31 August 2021 (audited) |
| | Notes | £ | £ | £ |
|
|
| | | |
| ASSETS |
| | | |
| Current assets |
|
| | |
| Trade and other receivables | 7 | 1,289,360 | 11,309,040 | 368,347 |
| Cash and cash equivalents |
| 7,408,349 | 1,433,055 | 10,322,476 |
| Inventory |
| 579,585 | - | 57,178 |
| |
|
| | |
| TOTAL ASSETS |
| 9,277,294 | 12,742,095 | 10,748,001 |
|
|
|
| | |
| EQUITY AND LIABILITIES |
|
| | |
| |
|
| | |
| Current liabilities |
|
| | |
| Trade and other payables | 8 | (1,007,510) | (657,044) | (200,247) |
| |
|
| | |
| TOTAL LIABILITIES | | (1,007,510) | (657,044) | (200,247) |
|
| |
| | |
| | |
| | |
| NET ASSETS | | 8,269,784 | 12,085,051 | 10,547,754 |
|
| |
| | |
| | |
| | |
| EQUITY ATTRIBUTABLE TO SHAREHOLDERS
| |
| | |
|
| |
| | |
| Share capital | 9 | 504,750 | 504,750 | 504,750 |
| Share premium | | 12,490,601 | 12,879,176 | 12,490,601 |
| Accumulated losses | | (6,126,960) | (1,298,875) | (3,740,931) |
| Share-based payment reserve | | 1,407,733 | - | 1,295,918 |
| Foreign translation reserve | | (6,340) | - | (2,584) |
| | |
| | |
| TOTAL EQUITY | | 8,269,784 | 12,085,051 | 10,547,754 |
The accompanying accounting policies and notes form an integral part of these unaudited interim financial statements.
CONDENSED STATEMENT OF CHANGES IN EQUITY
| |
Ordinary share capital |
Share premium |
Foreign currency translation | Share-based payment reserve |
Retained earnings |
Total | |
|
| £ | £ | £ | £ | £ | £ | |
| Balance at 1 September 2020 | 128,750 | 195,025 | | | (407,014) | (83,239) | |
| Loss for the period | - | - | - | - | (2,119,043) | (2,119,043) | |
| Total comprehensive income for the period | - | - | - | - | (2,119,043) | (2,119,043) | |
| | | | | | | | |
| Shares issued | 376,000 | 13,784,000 | - | - | - | 14,160,000 | |
| Share issue expenses | - | (1,099,849) | - | - | - | (1,099,849) | |
| Share-based payments | - | - | - | 1,227,182 | - | 1,227,182 | |
| Total contributions by owners | 376,000 | 12,684,151 | - | 1,227,182 | - | 14,287,333 | |
| Balance at 28 February 2021 | 504,750 | 12,879,176 | - | 1,227,182 | (2,526,057) | 12,085,051 | |
|
Balance at 1 March 2021 | 504,750 | 12,879,176 | - | 1,227,182 | (2,526,057) | 12,085,051 | |
| Loss for the period | - | - | - | - | (1,214,874) | (1,214,874) | |
| Other comprehensive income | - | - | (2,584) | - | - | (2,584) | |
| Total comprehensive income for the period | - | - | (2,584) | - | (1,214,874) | (1,217,458) | |
|
Share-based payments | - | (388,575) | - | 68,736 | - | (319,839) | |
| Total contributions by owners | - | (388,575) | - | 68,736 | - | (319,839) | |
| Balance at 31 August 2021 | 504,750 | 12,490,601 | (2,584) | 1,295,918 | (3,740,931) | 10,547,754 | |
|
| | | | | |
| |
| Balance at 1 September 2021 | 504,750 | 12,490,601 | (2,584) | 1,295,918 | (3,740,931) | 10.547,754 | |
| Loss for the period | - | - | - | - | (2,386,029) | (2,386,029) | |
| Other comprehensive income | - | - | (3,576) | - | - | (3,576) | |
| Total comprehensive income for the period | - | - | (3,756) | - | (2,386,029) |
(2,389,785) | |
| | | | | | | | |
| Share-based payments | - | - | - | 111,815 | - | 111,185 | |
| Total contribution by owners | - | - | - | 111,815 | - | 111,185 | |
| Balance at 28 February 2022 | 504,750 | 12,490,601 | (6,340) | 1,407,733 | 6,126,960 | 8,269,784 | |
The accompanying accounting policies and notes form an integral part of these unaudited interim financial statements.
CONDENSED STATEMENT OF CASH FLOWS
| |
Six months to 28 February 2022 |
Six months to 28 February 2021 | Year ended 31 August 2021 (audited) |
|
| £ | £ | £ |
| Cashflow from operating activities | | | |
| Loss before income tax | (2,386,029) | (2,119,043) | (3,333,917) |
|
Share-based payment charge | 111,815 | 1,227,182 | 907,343 |
| Increase in inventory | (522,507) | - | (57,178) |
| Increase in trade and other receivables | (921,013) | (247,712) | (278,519) |
| Increase in trade and other payables | 807,263 | 458,186 | 17,956 |
| Foreign exchange differences | (3,756) | - | (2,584) |
| Finance income | (358) | - | (522) |
| | | | |
| Net cash flows used in operating activities | (2,914,485) | (681,387) | (2,747,421) |
|
| | | |
| | | | |
| Cash flows from investing activities
| | | |
| Finance income | 358 | - | 522 |
| Net cash flow from investing activity | 358 | - | 522 |
|
| | | |
| Cash flows from financing activities | | | |
| Proceeds from issue of shares, net of issue costs | - | 2,105,218 |
13,060,151 |
| Net cash inflow from financing activities | - | 2,105,218 | 13,060,151 |
| | | | |
| Net movement in cash and cash equivalents | (2,914,128) | 1,423,831 |
10,313,252 |
| Opening cash and cash equivalents | 10,322,476 | 9,224 |
9,224 |
| Closing cash and cash equivalents | 7,408,349 | 1,433,055 |
10,322,476 |
The accompanying accounting policies and notes form an integral part of these unaudited interim financial statements.
NOTES TO THE FINANCIAL STATEMENTS
1. Information on the Company
The Company is incorporated in England and Wales (registration number 11537452) and has a Standard Listing under Chapter 14 of the Listings Rules, trading on the London Stock Exchange with ticker CBX.
Cellular Goods is a UK-based provider of premium consumer products based on lab-made cannabinoids, independently tested, targeting the expanding but fragmented CBD sector.
2. Basis of preparation and principal accounting policies
This condensed consolidated interim financial information was approved for issue by the Board on 30 May 2022.
The Company's directors are responsible for the preparation of the unaudited interim financial statements.
The preparation of unaudited interim financial statements in conformity with IFRSs requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited interim financial statements and the reported amounts of expenses during the period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.
The Directors consider that in the proper preparation of the unaudited interim financial statements there were no critical or significant areas which required the use of accounting estimates and exercise of judgement by management while applying the Company's accounting policies.
This condensed consolidated interim financial information has not been audited and does not include all of the information required for full annual financial statements. The financial figures included within this interim report have been computed in accordance with IFRS applicable to interim periods, and this report constitutes an interim financial report as set out in International Accounting Standard 34: Interim Financial Reporting.
There is no material difference between the fair value of financial assets and liabilities and their carrying amount.
The functional and presentational currency is UK Sterling.
3. Going concern
The Directors have assessed the current financial position of the Company, along with future cash flow requirements, to determine if the Company has the financial resources to continue as a going concern for the foreseeable future.
The conclusion of this assessment is that it is appropriate that the Company be considered a going concern. For this reason, the Directors continue to adopt the going concern basis in preparing the unaudited interim financial statements.
4. Revenue
The Company generated revenue from the sales of its products during the period of £13,058 (28 February 2021 and 31 August 2021: nil).
5. Operating loss
Total administrative expenses include share-based payments of £111,815 (28 February 2021: £1,227,182). The related credit to equity is taken to retained earnings.
6. Earnings per share
Basic earnings per share is calculated by dividing the loss attributable to equity holders of the company by the weighted average number of Ordinary Shares in issue during the period.
|
| 28 February 2022 | 28 February 2021 | 31 August 2021 |
|
| £ | £ | £ |
| | | | |
| Loss used to calculate basic and diluted earnings per share | (2,386,029) | (2,119,043) | (3,333,917) |
| |
| | |
| Weighted average number of shares used in calculating basic earnings per share | 504,750,000 | 171,448,611 |
346,475,342 |
| |
| | |
| Weighted average number of shares used in calculating diluted earnings per share | 504,750,000 | 171,448,611 |
346,475,342 |
| | | | |
| Basic loss per share (pence) | (0.47) | (1.24) | (0.96) |
| | | | |
| Diluted loss per share (pence) | (0.47) | (1.24) | (0.96) |
7. Trade and other receivables
| | 28 February 2022 | 28 February 2021 | 31 August 2021 |
| | £ | £ | £ |
| VAT debtor | 313,429 | 128,084 | 206,890 |
| Prepayments | 974,708 | 134,456 | 160,552 |
| Share capital unpaid | - | 11,045,500 | - |
| Other debtors | 1,223 | 1,000 | 905 |
| | 1,289,360 | 11,309,040 | 368,347 |
There were no receivables that were past due or considered to be impaired. There is no significant difference between the fair value of the other receivables and the values stated above.
8. Trade and other payables
| | 28 February 2022 | 28 February 2021 | 31 August 2021 | |
| | £ | £ | £ | |
| Trade creditors | 920,512 | 511,283 | 176,747 | |
| Accruals | 86,998 | 145,761 | 23,500 | |
| | 1,007,510 | 657,044 | 200,247 | |
All liabilities are payable on demand or have payment terms of less than 90 days.
9. Share capital
|
| 28 February 2022 | 28 February 2021 | 31 August 2021 |
|
| |||
|
| £ | £ | £ |
| | | | |
|
504,750,000 Ordinary shares of £0.001 each | 504,750 | 504,750 |
504,750 |
The Ordinary Shares have been classified as Equity. The Ordinary Shares have attached to them full voting and capital distribution rights.
On 4 March 2022, 2,500,000 Ordinary shares of £0.001 each were issued, on conversion of warrants over 2,500,000 shares at 1p each, increasing the number of Ordinary shares to 507,250,000.
10. Capital and reserves
Share capital represents issued Ordinary shares of £0.001 each, all of which are fully paid.
Share premium is the amount subscribed for share capital in excess of nominal value less attributable share issue expenses.
Retained earnings is the cumulative loss of the Company attributable to equity shareholders.
11. Share-based payments
The Company has a total of 52,960,000 warrants to subscribe for additional share capital of the Company. Each warrant entitles the holder to subscribe for one ordinary equity share in the Company. The right to convert each warrant is unconditional.
The right to subscribe for ordinary shares in the Company is subject to minimum vesting periods of up to three years. 500,000 warrants were subject to a lock-in period of 12 months from 5 May 2021. These restrictions apply to all warrants, exercised or otherwise.
No new warrants were issued in the period.
| Warrants issued | Weighted average exercise price (pence) | 28 February 2022 | 28 February 2021 | 31 August 2021 |
|
|
| Number | Number | Number |
| |
|
|
|
|
| At the beginning of the period | 2.953 | 52,960,000 | - | - |
| Issued in the period | - | - | 52,460,000 | 52,960,000 |
| At the end of the period | 2.953 | 52,960,000 | 52,460,000 | 52,960,000 |
The weighted average exercise price for outstanding warrants at the end of the period was £0.02953 (28 February 2021: £0.02953, 31 August 2021 £0.02953).
In the period, the Company issued share options to employees as follows:
| Share options issued | Weighted average exercise price (pence) | 28 February 2022 | 28 February 2021 | 31 August 2021 |
|
|
| Number | Number | Number |
|
|
|
|
|
|
| At the beginning of the period | - | - | - | - |
| Issued on 28 October 2021 | 7.06 | 700,000 | - | - |
| Issued on 6 December 2021 | 7.64 | 20,000,000 | - | - |
| Lapsed in the period | 7.06 | (500,000) | - | - |
| At the end of period | 7.63 | 20,200,000 | - | - |
Equity-settled share-based payments are measured at fair-value (excluding the effect of non-market-based vesting conditions) as determined through use of the Black-Scholes technique, at the date of issue.
Volatility for the calculation of the share-based payment charge in respect of the options issued was determined by reference to movements in the relative share prices of a selected peer-group of companies listed on the London Stock Exchange up to the date of admission and also proportionately on post admission share-price movements of the Company where relevant.
The inputs into the Black-Scholes model for the share options issued in the period are as follows:
| Issued on: | 28 October 2021 | 6 December 2021 |
|
|
|
|
| Weighted average share price at grant date - pence | 7.00 | 7.25 |
| Weighted average exercise price - pence | 7.06 | 7.64 |
| Weighted average volatility | 48.2% | 69.2% |
| Weighted average expected life in years | 1.25 | 1.67 |
| Weighted average contractual life in years | 10.00 | 10.00 |
| Risk-free interest rate | 1.5% | 1.5% |
| Expected dividend yield | 0% | 0% |
| Weighted average fair-value of warrants granted (pence) | 1.34 | 0.02 |
The share price at the date of grant for 700,000 share options issued on 28 October 2021 was £0.07. The share price at the date of grant of the 20,000,000 share options issued on 6 December 2021 was £0.0725.
The total share-based payment charge in the period was £111,815, which has been charged to administrative expenses (six months to 28 February 2021: £1,227,182, all of which was charged to administrative expenses; year to 31 August 2021: £1,295,918, of which £907,343 was charged to administrative expenses and £388,575 against share premium). The share-based payment charge was calculated using the Black-Scholes model. All warrants and options have an exercise period between one and three years from the date of issue.
The total of the share-based payment charge has been simultaneously credited to retained earnings.
The total number of warrants issued to directors (including former directors) is 24,000,000 and the total number of share options issued to directors is 20,000,000.
| Share-based payment charge for the period | 28 February 2022 | 28 February 2021 | 31 August 2021 |
|
| £ | £ | £ |
|
|
|
|
|
| Administrative expenses | 111,815 | 1,227,182 | 1,295,918 |
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