Vela Technologies - Final results and notice of AGM
27/09/2024 14:45
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RNS Number : 0786G Vela Technologies PLC 27 September 2024
27 September 2024
Vela Technologies plc
("Vela" or "the Company")
Final results for the year ended 31 March 2024
Notice of AGM
The Board of Vela (AIM:VELA), an AIM-quoted investing company focused on
early-stage and pre-IPO disruptive technology investments, today announces the
Company's final results for the year ended 31 March 2024.
The Company's Annual General Meeting ("AGM") will be held at 12 noon on
Tuesday 11 November 2024 at 15 Victoria Mews, Mill Field Road, Cottingley
Business Park, Bingley, West Yorkshire BD16 1PY.
Vela's Annual Report and Accounts for the year ended 31 March 2024 ("Annual
Report") and the notice of AGM will be sent to shareholders on 30 September
2024.
The Company's Annual Report and notice of AGM will be available shortly on the
Company's website at http://www.velatechplc.com/ (http://www.velatechplc.com/)
.
chairman's statement
for the year ended 31 March 2024
I am pleased to present the Chairman's statement for the year ended 31 March
2024.In my half yearly statement for the period ended 30 September 2023 I made
further reference to the continued war in Ukraine, political issues at home,
rising inflation and rising interest rates. Whilst inflation appears to have
stabilised and interest rates have received their first cut, these continue to
be factors impacting the small-cap marketplace in the UK and on the whole
investors on the public markets in London remain cautious, particularly in
light of the budget at the end of October 2024. We remain cautiously
optimistic regarding the long-term future of the Company's overall investment
portfolio and we remain committed to the Company's stated investing strategy.
The board has carefully monitored the share prices of its investment portfolio
and, where appropriate, have divested in whole or in part a number of investee
companies when those share prices led to a realised profit.
During the financial year the Company invested a further £400,000 in cash
into a put option agreement which gave Vela the right, but not the obligation,
to sell its economic interest in the commercialisation of the Covid-19
application of AZD1656 for a total consideration of £4.0 million. The option
was granted by Conduit Pharmaceuticals Limited and its prospective parent
company, Murphy Canyon Acquisition Corp ("Murphy"), a company listed on
NASDAQ. Conduit Pharmaceuticals completed the business combination with
Murphy and the enlarged group, being Conduit Pharmaceuticals Inc. ("Conduit"),
began trading on NASDAQ on 25 September 2023. In December 2023, the board
exercised the option and received new shares in Conduit Inc. Despite positive
news recently regarding the entering into of an exclusive licence agreement
with AstraZeneca, the share price of Conduit is at an all-time low valuing the
holding at only £100,000. As reported in the latest quarterly update (as at
30 June 2024) this price had fallen to $1.06 and has since sunk to $0.13 as at
the date of this announcement. On 16 August 2024 Conduit announced that it
had become aware that one of its directors had previously entered into certain
collateral pledge agreements that resulted in the disposition of a substantial
number of shares in Conduit and that it had appointed an independent committee
of the Conduit board to establish the facts. Another independent committee of
the Conduit board was formed to investigate and review the trading patterns of
certain of Conduit shareholders and to determine if any action should be
taken. It seems that the irregularities were instrumental in the collapse of
the share price. The Board of Vela is very disappointed with the performance
of the investment in Conduit and shares the frustrations of shareholders on
such performance.
Vela made one further investment in the period under review and invested
£250,000 in Tribe Technology Group plc via an advance subscription agreement
as part of a pre-IPO funding round. The IPO was completed on 5 September
2023 and Vela was issued with shares at a price of 8p per share which was
equivalent to 80% of the IPO issue price.
Turning to the financials, Vela reported a loss for the year of £776,537
compared to a loss of £378,516 in the previous comparable period. Almost all
of this difference, from an accounting perspective, reflects a £356,904
reduction in fair value of investments in the year being reported on, compared
to a much smaller reduction in fair value in the previous financial year. Net
assets decreased to £6,238,388 compared to £7,004,480 at 31 March 2023 and
cash fell from £723,576 at the beginning of the period to £53,597 at the
balance sheet date.
The board will continue to update shareholders, in line with regulatory
guidelines, via its quarterly investment updates and regulatory announcements.
The directors would like to thank shareholders for their continued support.
Brent Fitzpatrick MBE
Chairman
strategic report
for the year ended 31 March 2024
Business review
At the period end, the Company held cash of approximately £54,000 (31 March
2023: £724,000). It continues to keep administrative costs to a minimum so
that it has sufficient resources to cover its ongoing running costs while
retaining the maximum funds for further investments.
The Company's loss for the year was approximately £777,000 (2023: loss of
£378,000). This loss has arisen primarily from fair value movements on the
Company's investment portfolio. The valuation of the investment portfolio at
31 March 2024 was approximately £5,487,000 (31 March 2023: £3,193,000), an
increase of £2,294,000 on 2023. This resulted from the investment of
£650,000 in new and 'follow-on' investments, the exercise of the put options
to sell the economic interest in the commercialisation of the covid-19
application of AZD1656 and the subsequent issuance of shares in Conduit, and
disposals generating net proceeds of £349,000, net of a decrease in the
valuation of the portfolio of £357,000.
In addition to these investments, the financial asset held at 31 March 2023
(St George Street Capital) which was valued at £2,350,000 was converted into
shares in Conduit Inc via a put option and as a result is now designated an
investment on the balance sheet.
We update shareholders on investee company performance through, where
appropriate and/or required, the dissemination of investee company regulatory
announcements, together with, when available, information from private
companies which do not have the same disclosure requirements as listed
companies. Additionally, the Board has continued to publish quarterly
investment updates on the performance of the investment portfolio and on
acquisitions and sales. The quarterly investment updates will continue.
Moreover, detailed information on the investment portfolio is maintained on
the Company's website.
During the year, the Company made a £250,000 investment in Tribe Technology
Group PLC and purchased a put option over the financial asset held in St
George Street Capital Limited. Further details and key points of the
investments made and of the performance of the Company's investee companies
are detailed in note 8 to the financial statements.
The Company had two employees during the period (being two of the directors)
and a Board comprising one male Executive Director, one female Executive
Director and one male Non-Executive Director.
Principal risks and uncertainties
The preservation of its cash balances and the management of its capital
resources remain the key concerns for the Company. Further information about
the Company's principal risks, covering credit, liquidity, and capital, is
detailed in note 15 to the financial statements.
The Company remains committed to keeping operational costs to a minimum.
Approved by the Board of Directors on 27 September 2024 and signed on its
behalf by:
Brent Fitzpatrick MBE
Chairman
For further information, please contact:
Vela Technologies plc Tel: +44 (0) 7950 389469
Brent Fitzpatrick, Non-Executive Chairman
James Normand, Executive Director
Allenby Capital Limited (Nominated Adviser) Tel: +44 (0) 20 3328 5656
Nick Athanas / Piers Shimwell
Peterhouse Capital Limited (Broker) Tel: +44 (0) 20 7469 0930
Novus Communications (PR and IR Adviser) Tel: +44 (0) 20 7448 9839
Alan Green / Jacqueline Briscoe
About Vela Technologies
Vela Technologies plc (AIM: VELA) is an investing company focused on early
stage and pre-IPO long term disruptive technology investments. Vela's
investee companies have either developed ways of utilising technology or are
developing technology with a view to disrupting the businesses or sector in
which they operate. Vela will also invest in already-listed companies where
valuations offer additional opportunities.
statement of comprehensive income
for the year ended 31 March 2024
Year ended Year ended
31 March 31 March
2024 2023
Notes £'000 £'000
Revenue 1 - -
Administrative expenses 2 (443) (401)
Fair value movements
- on investments 8 (357) (26)
- on derivative instruments 10 - 9
Operating loss 2 (800) (418)
Finance income 4 23 40
Loss before tax (777) (378)
Income tax 6 - -
Loss for the year and total comprehensive income attributable to the equity
holders
(777) (378)
Loss per share
Basic and diluted loss per share (pence) 7 (0.005) (0.002)
statement of financial position
as at 31 March 2024
31 March 31 March
2024 2023
Notes £'000 £'000
Non-current assets
Investments 8 5,487 3,193
Trade and other receivables 9 718 3,054
Total non-current assets 6,205 6,247
Current assets
Derivative financial instruments 10 32 72
Cash and cash equivalents 13 54 724
Total current assets 86 796
Total assets 6,291 7,043
Equity and liabilities
Equity
Called up share capital 12 3,320 3,291
Share premium account 7,615 7,594
Share option reserve 6 46
Retained earnings (4,703) (3,926)
Total equity 6,238 7,005
Current liabilities
Trade and other payables 11 53 38
Total current liabilities 53 38
Total equity and liabilities 6,291 7,043
These financial statements were approved by the Board, authorised for issue
and signed on its behalf on 27 September 2024 by:
Brent Fitzpatrick MBE
Chairman
Company registration number: 03904195
cash flow statement
for the year ended 31 March 2024
Year ended Year ended
31 March 31 March
2024 2023
Notes £'000 £'000
Operating activities
Loss before tax (777) (378)
Share-based payment - 5
Fair value movements on investments 8 357 26
Fair value movement on derivative assets - (9)
Finance income (23) (40)
Decrease in receivables - 1
Increase in payables 15 17
Total cash flow from operating activities (428) (378)
Investing activities
Interest received 14 10
Proceeds from disposal of investments 344 709
Consideration for purchase of investments (650) (575)
Total cash flow from investing activities (292) 144
Financing activities
Proceeds from the issue of ordinary share capital 50 -
Total cash flow from financing activities 50 -
Net (decrease) in cash and cash equivalents (670) (234)
Cash and cash equivalents at start of year 724 958
Cash and cash equivalents at the end of the year 13 54 724
Cash and cash equivalents comprise:
Cash at bank 54 724
Cash and cash equivalents at end of year 13 54 724
statement of changes in equity
for the year ended 31 March 2024
Share
Share Share Retained Option Total
Capital Premium Earnings Reserve Equity
£'000 £'000 £'000 £'000 £'000
Balance at 1 April 2022 3,291 7,594 (3,572) 65 7,378
Transactions with owners
Share-based payment - - - 5 5
Lapse of share options in the period - - 24 (24) -
Transactions with owners - - 24 (19) 5
Total comprehensive income for the year - - (378) - (378)
Balance at 31 March 2023 3,291 7,594 (3,926) 46 7,005
Balance at 1 April 2023 3,291 7,594 (3,926) 46 7,005
Transactions with owners
Issue of share capital 29 21 - - 49
Share-based payment - - - (40) (40)
Transactions with owners 29 21 - (40) 9
Total comprehensive income for the year - - (777) - (777)
Balance at 31 March 2024 3,320 7,615 (4,703) 6 6,237
notes to the financial statements
for the year ended 31 March 2024
1 Revenue and segmental information
The Company is an investing company and as such there is only one identifiable
operating segment, being the purchase, holding and sale of investments.
Similarly, the Company operates in only a single geographic segment, being the
United Kingdom. The results and balances and cash flows of the segment are as
presented in the primary statements.
2 Loss from operations
The loss from operations is stated after charging:
31 March 31 March
2024 2023
£'000 £'000
Auditor's remuneration for the audit 24 24
Auditor's remuneration for corporation tax compliance services 2 2
Fair value movements on investments 357 26
Share-based payment - 5
3 Staff costs
The average number of persons employed or engaged by the Company (including
Directors) during the period was as follows:
31 March 31 March
2024 2023
Directors and senior management 3 3
Total 3 3
The above included two individuals (2023 - two) employed by the Company and
one (2023 - one) engaged under the terms of a letter of appointment.
The aggregate amounts charged by these persons were as follows:
31 March 2024 31 March 2023
£'000 £'000
Wages and salaries 124 124
Social security costs 10 10
Amounts invoiced 62 69
Share-based payment charge - 5
196 208
The amounts noted above relate to the Company's directors. Further details of
directors' remuneration are provided in note 5.
4 Finance income and expense
Finance income
31 March 2024 31 March 2023
£'000 £'000
Other interest receivable 23 40
Total finance income 23 40
Finance income includes £9,000 (2023: £30,000), representing the unwinding
of the discount on the Company's loan receivable from BIXX Tech Limited.
Further details are provided in note 9.
notes to the financial statements
for the year ended 31 March 2024
5 Directors and senior management
Directors' remuneration
Year ended 31 March 2024
Salary Fees Pension Equity Total
£'000 £'000 £'000 £'000 £'000
Brent Fitzpatrick - 62 - - 62
James Normand 62 - - - 62
Emma Wilson 62 - - - 62
124 62 - - 186
Year ended 31 March 2023
Salary Fees Pension Equity Total
£'000 £'000 £'000 £'000 £'000
Brent Fitzpatrick - 62 - - 62
Antony Laiker (appointed 21 July 2022 / resigned 19 October 2022)
- 7 - - 7
James Normand 62 - - - 62
Emma Wilson (appointed 1 September 2021) 62 - - - 62
124 69 - - 193
Directors' and senior management's interests in shares
The Directors who held office at 31 March 2024 held the following shares:
31 March 31 March
2024 2023
Brent Fitzpatrick 1,500,000 1,500,000
James Normand - -
Emma Wilson - -
On 30 July 2024 Brent Fitzpatrick acquired in the market a further 30 million
shares.
The total share-based payment costs in respect of options granted are:
31 March 31 March
2024 2023
£'000 £'000
Directors - 5
As at 31 March 2024, the total number of outstanding options held by the
Directors over ordinary shares was 270,000,000 (2023: 270,000,000),
representing 1.7 per cent of the Company's issued share capital.
Further details regarding the options issued are provided in note 17.
notes to the financial statements
for the year ended 31 March 2024
6 Tax
There was no charge to current or deferred taxation in the current or prior
period.
A deferred tax asset relating to losses carried forward has not been
recognised due to uncertainty over the existence of future taxable profits
against which the losses can be used. The Company has unused tax losses of
approximately £6.7m (2023: £6.7m).
Tax reconciliation
31 March 31 March
2024 2023
£'000 £'000
Loss before tax (777) (378)
Tax at 25%/19% on loss before tax (194) (72)
Effects of:
Loss relief carried forward but not recognised 194 72
Total tax expense - -
7 Loss per share
Loss per share has been calculated on a loss after tax of £777,000 (2023:
loss after tax of £378,000) and the weighted average number of shares in
issue for the year of 16,546,452,831 (2023: 16,252,335,184).
8 Investments
31 March 31 March
2024 2023
£'000 £'000
Opening fair value 3,193 2,603
Additions during the year at cost 650 1,325
Re-classification on listing of financial asset 2,350 -
Fair value of disposals made during the year (349) (709)
Movement in fair value charged to profit or loss (357) (26)
Closing balance 5,487 3,193
Investments are held at fair value through profit and loss using a three-level
hierarchy for estimating fair value. Note 15 provides details of the
three-level hierarchy used.
Additions during the year:
Investment in Tribe Technology Group Limited ("Tribe Tech")
In May 2023, Vela invested £250,000 in Tribe Tech via an advance subscription
agreement as part of a pre-IPO funding round. The IPO completed on 5
September 2023 and Vela was issued with shares at a price of 8p per share
which was equivalent to 80% of the IPO issue price. Following the investment,
Vela is interested in 3,125,000 ordinary shares representing 1.29 per cent of
Tribe Tech's current issued share capital.
Exercise of put option in Conduit Pharmaceuticals Limited ("Conduit")
On 1 December 2023, Vela exercised the put option to sell its economic
interest for share in Conduit. Under the terms of the agreement, Vela
received 1,015,760 new shares of authorised common stock of par value
$0.001. As a result, the asset has been revalued to £4.0 million at the
balance sheet date and is now held as an investment on the balance sheet and,
in line with other listed investments, will in the future be valued using
market prices. Further details are disclosed in note 9.
notes to the financial statements
for the year ended 31 March 2024
8 Investments (continued)
Disposals during the year:
Part Disposal in EnSilica Plc ("EnSilica")
During the year the Company disposed of a total of 333,000 shares at an
average price of 63p per share, generating gross proceeds of £209,780 for the
Company. Following the disposals, Vela remained interested in 776,707 ordinary
shares after these disposals.
Full disposal in Kanabo Group Plc ("Kanabo")
During the year the Company disposed of a total of 1,157,692 shares at a price
of 2.4p per share, generating gross proceeds of £28,224 for the Company.
Part disposal in Northcoders Group plc ("Northcoders")
In May 2023 the Company disposed of a total of 2,500 shares at a price of
£3.00 per share, generating gross proceeds of £7,189 for the Company.
Following the disposals, Vela remained interested in 347,499 ordinary shares.
Part disposal of investment in Finseta PLC (formerly Cornerstone FS plc
("Finseta")
During the year the Company disposed of a total 195,902 shares in Finseta at a
price of 28.7p per share, generating gross proceeds of £56,285. Following the
disposal, Vela remained interested in 400,000 shares.
Part disposal of investment in Conduit Pharmaceuticals Inc ("Conduit")
During the year the Company disposed of a total 10,000 shares in Conduit at a
price of 249p per share, generating gross proceeds of £24,909. Following the
disposal, Vela remained interested in 1,005,760 shares.
Part disposal of investment in MTI Wireless Edge Ltd ("MTI")
During the year the Company disposed of a total 50,000 shares in MTI at a
price of 44.8p per share, generating gross proceeds of £22,388. Following the
disposal, Vela remained interested in 200,000 shares.
9 Trade and other receivables - non-current
31 March 31 March
2024 2023
£'000 £'000
Loan due from BIXX Tech Limited 718 704
Other financial asset - 2,350
718 3,054
Loan due from BIXX Tech Limited
The loan represents the consideration receivable for the disposal of certain
investment assets in August 2020, as detailed in previous financial
statements. The total consideration receivable is £855,000, which is
receivable after seven years. The consideration has been discounted at a
market interest rate at the time of the transaction of 4.5% to reflect the
deferred payment term. Income of £9,000 (2023: £30,000), represents the
unwinding of the discount and is recognised within finance income in note 4.
Under the terms of the loan agreement, the Company has provided an undertaking
to distribute a sum equal to any repayment of the loan to the holders of the
Special Deferred Shares (see note 12). This distribution will be by way of a
dividend declared on the Special Deferred Shares ("the Special Dividend"). In
the event that insufficient distributable reserves exist at the end of the
seven-year loan term, the repayment of the loan will be deferred for a further
year. This deferral will continue until such a time as the Company has
sufficient distributable reserves to be able to pay the Special Dividend.
Other financial asset - Investment in St George Street Capital
On 20 October 2020, the Company entered into a contract with St George Street
Capital ("SGSC") for an 8% economic interest in the potential future
commercialisation of SGSC's asset to treat individuals with diabetes who are
suffering with COVID-19 ("the Asset"). The consideration payable under the
terms of the contract was £2.35m which was settled by cash of £1.25m and the
issue of 1,100,000,000 locked-in consideration shares at a price of 0.1 pence
per share. The directors considered that this represented the fair value of
the contract at the date of investment. The contract gave the Company a
right to future economic benefits and was classified as a financial asset
measured at fair value through profit and loss. The contract did not include a
defined exit date and so was classified as non-current at previous reporting
dates, as the Company did not have an unconditional right to require
settlement of the contract within 12 months.
notes to the financial statements
for the year ended 31 March 2024
Other financial asset - Investment in St George Street Capital (continued)
In April 2023, the Company announced that it had entered into a put option
agreement to give the Company the right, but not the obligation, to sell its
economic interest in the commercialisation of the Covid-19 application of
AZD1656 for shares in Conduit Pharmaceuticals Limited ("Conduit"). The Option
was granted by Conduit and its prospective parent company, Murphy Canyon
Acquisition Corp, a Company listed on NASDAQ.
On 1 December 2023, Vela exercised the put option to sell its economic
interest in return for shares in Conduit. Under the terms of the option
agreement Vela received 1,015,760 new shares of authorised common stock of par
value $0.001. In accordance with Vela's accounting policy, these shares have
been revalued using the market price at the balance sheet date and is now
included at this value (£2.9 million) with other listed investments.
10 Derivative financial instruments
31 March 31 March
2024 2023
£'000 £'000
Warrants 32 72
32 72
The Company holds warrants providing it with the right to acquire additional
shares in certain of its investee companies at a fixed price in the future,
should the directors decide to exercise them. The warrants have been
recognised as an asset at fair value, which has been calculated using an
appropriate option pricing model.
11 Trade and other payables
31 March 31 March
2024 2023
£'000 £'000
Trade payables 31 3
Accruals 22 35
53 38
12 Share capital
31 March 31 March
2024 2023
£'000 £'000
Allotted, called up and fully paid capital
16,546,452,831 (2023 - 16,252,335,184) Ordinary Shares of 0.01 pence each 1,654 1,625
1,748,943,717 Deferred Shares of 0.08 pence each 1,399 1,399
2,665,610,370 Special Deferred Shares of 0.01 pence each 267 267
3,320 3,291
notes to the financial statements
for the year ended 31 March 2024
Share issue
During the year the Company issued 294,117,647 ordinary shares of 1p each in
settlement of corporate advisory fees from Peterhouse Capital Limited
totalling £50,000.
Share rights
The Deferred and Special Deferred Shares are not listed on AIM and do not
carry any rights to receive notice of or attend or speak or vote at any
general meeting or class meeting. There are also no dividend rights, other
than the "Special Dividend" on the Special Deferred Shares. As described in
note 9, upon repayment to the Company of any amount(s) owed to it pursuant to
the loan agreement between the Company and BIXX Tech Limited, the Company
shall, in priority to any payment of dividend to the holders of the ordinary
shares or any other class of shares, declare and pay to the holders of the
Special Deferred shares a Special Dividend of an aggregate amount equal to the
amount of such sum repaid, pro rata according to the number of Special
Deferred Shares paid up.
On a return of capital, the holders of the Special Deferred Shares shall be
entitled to receive only the amount paid up on such shares up to a maximum of
0.01 pence per Special Deferred Share after (i) the holders of the Ordinary
Shares have received the sum of £1,000,000 for each Ordinary Share held by
them, and (ii) the holders of the Deferred Shares have received the sum equal
to the amount paid up on such Deferred Shares.
13 Cash and cash equivalents
Cash and cash equivalents comprise the following:
31 March 31 March
2024 2023
£'000 £'000
Cash and cash in bank:
Pounds sterling 54 724
Cash and cash equivalents at end of year 54 724
14 Financial instruments
The Company uses various financial instruments which include cash and cash
equivalents, loans and borrowings and various items such as trade receivables
and trade payables that arise directly from its operations. The main purpose
of these financial instruments is to raise finance for the Company's
operations and manage its working capital requirements.
The fair values of all financial instruments are considered equal to their
book values. The existence of these financial instruments exposes the Company
to a number of financial risks which are described in more detail below.
The main risks arising from the Company's financial instruments are credit
risk and liquidity risk. The Directors review and agree the policies for
managing each of these risks and they are summarised below. The Company does
not have any borrowings on which interest is charged at a variable rate. The
Directors, therefore, do not consider the Company to be exposed to material
interest rate risk.
Credit risk
This section, along with the liquidity risk and capital risk management
sections below, also forms part of the Strategic Report.
The Company's exposure to credit risk is limited to the carrying amount of
financial assets recognised at the balance sheet date, as summarised below:
31 March 31 March
2024 2023
Classes of financial assets - carrying amounts £'000 £'000
Financial assets measured at fair value through profit or loss
5,519 5,615
Financial assets measured at amortised cost 718 704
6,237 6,319
The Company's management considers that all of the above financial assets that
are not impaired for each of the reporting dates under review are of good
credit quality.
notes to the financial statements
for the year ended 31 March 2024
14 Financial instruments (continued)
The Company is required to report the category of fair value measurements used
in determining the value of its financial assets measured at fair value
through profit or loss, to be disclosed by the source of its inputs, using a
three-level hierarchy. There have been no transfers between Levels in the fair
value hierarchy.
Quoted market prices in active markets - "Level 1"
Inputs to Level 1 fair values are quoted prices in active markets for
identical assets. An active market is one in which transactions occur with
sufficient frequency and volume to provide pricing information on an ongoing
basis. The Company has twelve (2023: eleven) investments classified in this
category all of which are listed on a regulated exchange with publicly
available market prices used to determine the year end value.
The aggregate historic cost of the twelve investments is £5,831,316 (2023:
£3,145,110) and their fair value as at 31 March 2024 was £4,658,581 (2023:
£2,364,534).
Valued using models with significant observable market parameters - "Level 2"
Inputs to Level 2 fair values are inputs other than quoted prices included
within Level 1 that are observable for the asset, either directly or
indirectly. The Company has two (2023: two) unquoted investments classified
in this category. The historic cost of these investments is £450,000 (2023:
£450,000) and the fair value as at 31 March 2024 was £828,186 (2023:
£828,186). These investments were valued using the latest transaction prices
for shares in the investee companies which were obtained through either (a)
publicly available information (e.g. registrar), (b) information in respect of
recent transactions which the Company was invited to participate or, where
available, (c) direct liaison with the investee company. The Company also
holds warrants for shares in two investee companies, which have been valued
using an option pricing model with observable inputs. The fair value of these
assets as at 31 March 2024 was £32,273 (2023: £71,827).
Valued using models with significant unobservable market parameters - "Level
3"
Inputs to Level 3 fair values are unobservable inputs for the asset.
Unobservable inputs may have been used to measure fair value to the extent
that observable inputs are not available, thereby allowing for situations in
which there is little, if any, market activity for the asset at the
measurement date (or market information for the inputs to any valuation
models). As such, unobservable inputs reflect the assumptions the Company
considers that market participants would use in pricing the asset. The
Company has two (2023: two) unquoted investments classified in this category.
The historic cost of these investments is £300,000 (2023: £300,000) and the
fair value as at 31 March 2024 was £nil (2023: £nil). The nature of some of
the investments that the Company holds, i.e. minority shareholdings in private
companies with limited publicly available information, means that significant
judgement is required in estimating the value to be applied in the year end
accounts. Management uses knowledge of the sector and any specific company
information available to determine a valuation estimate.
Liquidity risk
The Company maintains sufficient cash to meet its liquidity requirements.
Management monitors rolling forecasts of the Company's liquidity on the basis
of expected cash flow in accordance with practice and limits set by the
Company. In addition, the Company's liquidity management policy involves
projecting cash flows and considering the level of liquid assets necessary to
meet these.
Maturity analysis for financial liabilities
31 March 2024 31 March 2023
Within Later than Within Later than
1 year 1 year 1 year 1 year
£'000 £'000 £'000 £'000
At amortised cost 53 - 38 -
Capital risk management
The Company's objectives when managing capital are to safeguard the Company's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. This is achieved by making
investments commensurate with the level of risk. The Company is performing in
line with the expectations of the Directors.
The Company monitors capital on the basis of the carrying amount of equity.
The Company policy is to set the amount of capital in proportion to its
overall financing structure, i.e. equity and long-term loans. The Company
manages the capital structure and makes adjustments to it in the light of
changes in economic conditions and the risk characteristics of the underlying
assets. In order to maintain or adjust the capital structure, the Company may
adjust the amount of dividends paid to shareholders, issue new shares or loan
notes, or sell assets to reduce debt.
notes to the financial statements
for the year ended 31 March 2024
15 Reconciliation of net funds
As at 1 April 2023 Non-cash movement As at 31 March 2024
Cash
flow
£'000 £'000 £'000 £'000
Cash and cash equivalents 724 (670) - 54
724 (670) - 54
16 Share-based payments
On 26 August 2020 two of the Directors were granted equity settled share-based
payments. The principal terms of these grants are as follows:
James Normand was granted 180,000,000 options to subscribe for ordinary shares
of 0.01p each in the Company. The options have an exercise price of 0.024p and
are exercisable for a period of ten years from the date of the grant. Half the
options became exercisable 12 months after grant, subject to the Company's
closing mid-market share price being at least 0.048p per Ordinary Share for 30
consecutive business days, and the remaining half become exercisable 24 months
after grant, subject to the Company's closing mid-market share price being at
least 0.072p per Ordinary Share for 30 consecutive business days.
In addition, on the same date, Brent Fitzpatrick, Non-Executive Chairman of
the Company, was granted 90,000,000 options to subscribe for Ordinary Shares
in the Company. The options have an exercise price of 0.024p and are
exercisable for a period of ten years from the date of the grant. Half the
options became exercisable 12 months after grant, subject to the Company's
closing mid-market share price being at least 0.048p per Ordinary Share for 30
consecutive business days, and the remaining half become exercisable 24 months
after grant, subject to the Company's closing mid-market share price being at
least 0.072p per Ordinary Share for 30 consecutive business days. Following
this grant of options, Brent Fitzpatrick held a total of 104,562,427 share
options equivalent to 1.46 per cent. of the issued share capital of the
Company at the time.
None of the options granted have been exercised.
The options issued in August 2020 have been valued using the Monte Carlo
option pricing model. The amount of remuneration expense in respect of the
share options granted amounts to £nil (2023: £5,000).
Details of the options outstanding at the year end and the inputs to the
option pricing model are as follows:
Options granted
26 August
2020
Share price at grant date (pence) 0.05
Exercise price (pence) 0.024
Expected life (years) 10
Annualised volatility (%) 86.9
Risk-free interest rate (%) 2.0
Fair value determined (pence) 0.03
Number of options granted 270,000,000
Options exercisable at 31 March 2024 270,000,000
The expected future annualised volatility was calculated using historic
volatility data for the Company's share price.
17 Contingent liabilities
Under the terms of the Company's loan receivable from BIXX Tech Limited,
described in note 9, the Company has provided an undertaking to distribute a
sum equal to any repayment of the loan to the holders of the Special Deferred
Shares (see note 12). This distribution will be by way of a dividend declared
on the Special Deferred Shares ("the Special Dividend"). In the event that
insufficient distributable reserves exist at the end of the seven-year loan
term, the repayment of the loan will be deferred for a further year. This
deferral will continue until such a time as the Company has sufficient
distributable reserves to be able to pay the Special Dividend. As at 31 March
2024, the carrying value of the loan receivable was £718,000 (2023:
£704,000) and, at the scheduled maturity date, the final settlement value
will be £855,000.
18 Related party transactions
During the period the Company entered into the following related party
transactions. All transactions were made on an arm's length basis.
Ocean Park Developments Limited
Brent Fitzpatrick, Non-Executive Director, is also a Director of Ocean Park
Developments Limited. During the year, the Company paid £62,000 (2023:
£62,000) in respect of his Director's fees to the Company. The balance due to
Ocean Park Developments Limited at the year-end was £nil (2023: £nil).
19 Events after the balance sheet date
Issue of share capital
In July 2024 the Company announced that Brent Fitzpatrick, Non-Executive
Chairman, bought 30,000,000 ordinary shares of 0.01 pence each in the Company
at 0.0085p per Share. Following the above purchase, Mr Fitzpatrick now has a
total beneficial interest in 31,500,000 Ordinary Shares, equivalent to
approximately 0.17 per cent. of the Company's issued share capital.
Investment in Hamak Gold Limited and issuance of Share Capital
In July 2024 the Company announced that it had entered into an unsecured
convertible loan note instrument with Hamak Gold Limited ("Hamak"), the
Liberia-based gold exploration and development company.
As part of the Agreement, Vela issued 2,424,242,424 new ordinary shares of
0.01 pence each to Hamak at a deemed issue price of 0.012375 pence per share
in consideration of the issue to Vela by Hamak of £300,000 of unsecured
convertible loan notes of £1. The deemed issue price represented a premium of
7.61 per cent. to Vela's closing mid-market price of 0.0115p on 16 July 2024.
The investment in the Loan Notes has been made by Vela in line with the
opportunistic investments category of the Company's stated investing policy.
The investment does not meet the core criteria of the Company's investment
policy, which is focused on the disruptive technology sector, but, in
accordance with the constraints of this investment category, it comprises less
than 5% of the Company's net asset value and is intended to be held for the
short term only.
Part disposal of shares in EnSilica plc
After the year end the Company disposed of an aggregate of 160,000 shares at
an average price of 59p per share, generating gross proceeds of £94,029 for
the Company. Following the disposals Vela remained interested in 616,707
ordinary shares.
Part disposal of shares in Skillcast Group plc
After the year end the Company disposed of a total of 50,000 shares at a price
of 37p per share, generating gross proceeds of £18,485 for the Company.
Following the disposals Vela remained interested in 625,676 ordinary shares.
Disposal of holding in MTI Wireless Edge Ltd
After the year end the Company disposed of its entire holding of 200,000
shares at a price of 46p per share, generating gross proceeds of £92,000 for
the Company.
Update on Conduit Pharmaceuticals Inc
Vela holds 1,005,760 common shares in Conduit representing 0.46% of Conduit's
issued share capital. As described in the Chairman's statement the market
value has collapsed since the year end. At the closing mid-market price of
$0.13 per share on 19 September 2024, Vela's holding in Conduit is valued at
approximately £100,000 which compared to the carrying value in these accounts
of approximately £2,924,000 at which this investment is held in these
financial statements.
Extraction of information in this announcement
The financial information, which comprises the statement of comprehensive
income, balance sheet, cashflow statement, statement of changes in equity, and
related notes to the financial statements, is derived from the full Company
financial statements for the year ended 31 March 2024, which have been
prepared under UK endorsed International Financial Report Standards (IFRS) and
those parts of the Companies Act 2006 applicable to companies reporting under
IFRS. It does not constitute full financial statements within the meaning of
section 434 of the Companies Act 2006. This financial information has been
agreed with the auditor for release.
The full annual report and financial statements for the year ended 31 March
2024, on which the auditor has given an unqualified report, and which does not
contain a statement under section 498 of the Companies Act 2006, will be
delivered to the Registrar of Companies in due course.
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