REG - Chill Brands Group - Final Results for the 18 months to 30 Sep 2025
30/01/2026 18:30
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RNS Number : 1868R Chill Brands Group PLC 30 January 2026
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
EU REGULATION 596/2014 (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018), AS AMENDED BY REGULATION 11 OF THE
MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310.
30 January 2026
Chill Brands Group plc
("Chill Brands" or the "Company")
Final Results for the 18 months to 30 September 2025
Chill Brands, the consumer packaged-goods distribution company, announces its
final results and the publication of its audited annual report and accounts
for the extended 18 month period to 30 September 2025 (the 'Annual Report').
The Annual Report will be published today on the Company's website in
compliance with its articles of association and the electronic communications
provisions of the Companies Act 2006.
Please click on the link below for a full text version of the Chill Brands
Group plc audited annual report and accounts for the 18 months to 30 September
2025:
https://chillbrandsgroup.com/wp-content/uploads/2026/01/CBG-FY25-Annual-Report.pdf
Key elements from the Annual Report can also be viewed at the bottom of this
announcement.
Further information on current trading and the Company's ongoing operational
progress will be provided in due course.
-ENDS-
About Chill Brands Group
Chill Brands Group plc (LSE: CHLL, OTCQB: CHBRF) is a distribution-led
consumer packaged goods company focused on bringing novel fast-moving consumer
products (FMCG) to market. The Company specialises in the sale and
distribution of tobacco alternatives, functional beverages, and other
innovative consumer goods, with a particular emphasis on the convenience store
channel. Chill Brands partners with a mix of established FMCG businesses and
emerging high-potential brands to provide comprehensive route-to-market
solutions. Chill Brands also operates the chill.com e-commerce website, on
which it is building a marketplace of products from third-party brands.
Publication on website
A copy of this announcement is also available on the Group's website
at http://www.chillbrandsgroup.com (http://www.chillbrandsgroup.com/)
Media enquiries:
Chill Brands Group plc contact@chillbrandsgroup.com (mailto:contact@chillbrandsgroup.com)
Harry Chathli, Chairman
+44 (0)20 5482 3500
Callum Sommerton, CEO
Allenby Capital Limited (Financial Adviser and Broker) +44 (0) 20 3328 5656
Nick Harriss/Nick Naylor (Corporate Finance)
Kelly Gardiner/Lauren Wright (Equity Sales)
KEY SECTIONS OF CHILL BRANDS' ANNUAL REPORT FOR THE 18 MONTH PERIOD ENDED 30
SEPTEMBER 2025
Chairman's Statement
As we present this annual report for Chill Brands Group Plc, it is essential
to contextualise the unique circumstances of the 18-month period covered.
This timeframe extends beyond the usual financial calendar, marking a period
that has proven exceptional and, at times, challenging for the company. It has
also been a significant transitional phase for our business, requiring
adaptability and strategic recalibration.
During this period, we have experienced governance disruptions that
necessitated a comprehensive reset of our operations and oversight mechanisms.
The current Board has made it our priority to focus on enhancing control and
transparency across all facets of our organization. Despite the considerable
challenges faced, we remain committed to building a resilient and accountable
business that can deliver value to our stakeholders.
We encountered inherited issues that led to a suspension and audit delays,
which had a tangible operational impact. Addressing these legacy challenges
was paramount for us, as resolution was fundamental to moving forward and
enabling our growth aspirations. We took proactive steps to rectify these
matters, ensuring that the foundations of our business were robust enough for
future endeavours.
In line with this reset, we embarked on a strategic repositioning of our
operations. On page 5 of the annual report, our CEO's explains the rationale
behind the launch of Chill Connect which we believe is a near-term value
driver. This strategic pivot allows us to respond to market demands more
effectively, positioning Chill Connect as a more viable and competitive
alternative in our sector. From the legacy business, we view Chill.com as a
long-term strategic asset that has the potential to expand our growth as we
enhance our digital footprint and deliver value to our customers.
Acknowledgements
I would like to thank everyone who has contributed to the Group's success in
the past year, including employees, customers, suppliers, partners, other
stakeholders and the Board. In particular, I want to thank our executive
management team and all of our colleagues for their hard work and dedication
to the Group. Without them, our achievements would not be possible. I would
also like to extend my gratitude to our supportive shareholders.
Looking Forward
We recognise the ongoing funding requirements and the cost burdens associated
with being a publicly listed company. The Board is acutely aware of our
responsibilities to all stakeholders and is committed to maintaining
transparency as we navigate these complexities.
We remain steadfast in our efforts to ensure that Chill Brands Group not only
overcomes current challenges but emerges as a leader within our industry. I
look forward to updating you on our progress.
Harry Chathli
Chairman
Chief Executive's Review
This Annual Report covers an extended 18-month period from 1 April 2024 to 30
September 2025, following the Company's decision to change its accounting
reference date. This period has been highly unusual and should not be viewed
as directly comparable to prior reporting periods for the reasons explained
herein. It spans two very distinct phases in the Company's recent history.
The early part of the period was dominated by significant governance and
operational disruption, which materially constrained the Company's ability to
trade, report, and execute against its strategy. The latter part of the period
has been focused on regaining control, resolving legacy matters, stabilising
the business, and repositioning the Group around a more viable and scalable
commercial model.
While the challenges faced during this period have been considerable, the
Company has emerged with a clearer strategic focus, restored control over its
key assets, and early evidence that its revised distribution-led model can
gain traction in the market.
Governance disruption and operational impact
In April and May 2024, the Company entered a period of significant governance
disruption following the receipt of a shareholder requisition and the
subsequent initiation of connected actions by members of the prior Board.
During this time, an internal investigation was commenced, new external
advisers were engaged, and a number of decisions were taken that had
far-reaching consequences for the Company's operations, finances, and ability
to function as a listed entity.
The speed and nature of events during this period resulted in a breakdown of
effective oversight and a loss of operational continuity. Significant
professional fees were incurred, management focus was diverted away from
trading activity, assets were removed from the business, and the Company's
internal processes were placed under strain. These events culminated in a
General Meeting in June 2024 at which the composition of the Board was
materially changed and the current Board assumed responsibility for the
stewardship of the business.
The operational consequences of this disruption were severe. Following the
governance changes and associated public disclosures, the Company experienced
restrictions on its banking facilities. Access to certain bank accounts was
frozen while financial institutions conducted their own reviews, and the
Company was temporarily unable to make or receive payments in the ordinary
course of business. At the same time, access to complete and up-to-date
financial records was impaired, significantly limiting visibility over cash
positions, liabilities, and historic transactions.
In parallel, the Company lost control of certain key assets during this
period, including both cash and digital and intellectual property assets that
were fundamental to its brand and online strategy. Addressing these issues
required the engagement of specialist legal advisers and the commencement of
formal recovery actions, further increasing costs and consuming management
time. Until control of these assets was restored, the Company's ability to
progress commercial initiatives and support the audit process was materially
constrained.
As a result of these combined factors, the business was unable to operate in a
normal or efficient manner for a prolonged period. Trading activity was
disrupted, supplier and creditor relationships were strained, and management
was forced to prioritise stabilisation, information gathering, and risk
mitigation over growth and execution. The Company's systems, controls, and
reporting infrastructure all required rebuilding in an environment where
liquidity was extremely tight and external scrutiny was heightened.
During this period I was suspended from my role as Chief Executive Officer
while an investigation was undertaken by the prior Board. That investigation
ultimately concluded that the allegations made against me by former Board
colleagues were unsubstantiated, and I was subsequently reinstated. The
suspension occurred at a critical point for the business and materially
disrupted the execution of the growth strategy that had been developed and
delivered up to that point. Prior to April 2024, the Company had successfully
launched and scaled its Chill ZERO nicotine-free disposable vape range,
secured meaningful retail distribution, and built commercial momentum in a
rapidly evolving market. The timing of the suspension was particularly
damaging, as it coincided with a pivotal period for operators in the UK vaping
industry, with regulatory change imminent and consumer behaviour beginning to
shift in anticipation of the ban on disposable vapes. As a result of the
disruption to leadership and decision-making, the Company was unable to
progress new product launches or adapt its range at the pace required to
respond effectively to changing market conditions, which significantly
constrained its ability to build on the progress already achieved.
The current Board inherited these conditions and was required to focus first
on re-establishing basic operational functionality. This included restoring
banking access, reasserting control over assets, reconstructing financial
records, and ensuring that governance and decision-making processes were
properly constituted. Only once these foundational issues were addressed was
it possible to turn attention back to strategy, commercial recovery, and
forward planning.
The impact of this period cannot be overstated. For a company of the Group's
size, the combination of governance disruption, loss of operational control,
and inhibited liquidity created a level of challenge that would have been
existential for many businesses. The fact that the Company remained
operational throughout this period, albeit in a highly constrained form,
reflects the necessity of the stabilisation measures taken and the priority
placed on preserving the business while legacy issues were worked through.
Share suspension and audit delays
On 3 June 2024, trading in the Company's shares was suspended. The suspension
occurred against a backdrop of ongoing investigations and an inability, at
that time, to provide the market with a complete and reliable update on the
Company's financial position and prospects.
The suspension and the subsequent delay in completing the audit for the year
ended 31 March 2024 were closely linked to the loss of access to banking
facilities and financial information following the governance disruption.
Without full access to records and confirmation of asset control, the audit
process could not be completed within the normal timetable.
Throughout the period, the Company worked to restore banking arrangements,
re-establish core finance functions, and support the audit process. This
proved more time-consuming than would ordinarily be expected, particularly
given the Company's involvement in regulated product categories and the
heightened scrutiny applied by financial institutions following the publicised
governance issues.
The audited accounts for the year ended 31 March 2024 were ultimately
published in June 2025, followed by the publication of interim financial
information. With reporting obligations brought back up to date, the Company
was able to progress the process for the lifting of the suspension during
August 2025.
Financial performance and cash flow constraints
The financial results for the period reflect the significant disruption
experienced by the business. Revenues were materially lower than in prior
periods, and gross margins were adversely affected by a combination of reduced
trading activity, regulatory pressures in the UK vaping market, and the
sell-through of inventory in a deteriorating pricing environment.
In addition to the impact on trading, the Company incurred substantial
exceptional costs, primarily in the form of legal, advisory, and professional
fees associated with governance matters, asset recovery, and the restoration
of operational control. These costs, while non-recurring, placed considerable
strain on the Company's cash position.
In the financial year ended 31 March 2024, the Company demonstrated a clear
ability to execute and scale when operating under more stable conditions. Over
that period, revenues increased from less than £100,000 to almost £2
million, driven primarily by the successful launch and rapid distribution of
the Chill ZERO nicotine-free disposable vape range. This growth reflected not
only strong execution by the team, but also the inherent scalability of the
categories in which the Company operates and the strength of its relationships
with UK retailers and wholesalers.
That progress is important context for understanding the subsequent
performance of the business. The decline in revenues and deterioration in
margins during the period under review were not the result of a lack of market
opportunity or execution capability, but rather the consequence of the
governance disruption, operational paralysis, regulatory uncertainty, and loss
of leadership continuity and available capital described elsewhere in this
report. The combination of these factors materially impaired the Company's
ability to build on the momentum established in the prior period, at a time
when speed, decisiveness, and access to capital were particularly critical.
The Group has operated under very tight liquidity conditions throughout the
period in review. As a distributor of fast-moving consumer goods, the business
is inherently working-capital intensive, requiring ongoing investment in
inventory and the ability to bridge payment cycles with retailers and
suppliers. These demands are challenging under normal circumstances and were
exacerbated during this period by legacy liabilities and the fixed costs
associated with maintaining a listed company structure.
Businesses at the Company's stage of development would typically benefit from
several years of compounding growth in order to achieve operational stability,
margin optimisation, and ultimately profitability. In contrast, Chill Brands
has been required to reinvent itself on more than one occasion simply to
remain viable and preserve any form of shareholder value. Each strategic reset
has demanded time, capital, and management focus, often in circumstances where
resources were constrained and external conditions were far from benign.
The current executive management has led this process twice: first through the
creation and scaling of the Chill ZERO brand, and more recently through the
establishment of Chill Connect as a distribution and services-led business.
Both initiatives required upfront investment in people, infrastructure,
inventory, and relationships before meaningful revenues could be realised.
Neither could be bootstrapped into immediate profitability, nor could they
deliver overnight results.
It is also important to recognise the limits imposed by the Company's current
capital position. Progress has been achieved despite a significant proportion
of available cash being absorbed by legacy costs, professional fees, and the
fixed overheads associated with maintaining a listed company structure. While
the Board remains confident in the underlying potential of the distribution
model now being built, its viability and the pace at which it can be scaled is
inevitably constrained by available funding. Rebuilding a business in this
manner takes time and disciplined investment, and while meaningful progress
has been made, expectations must remain grounded in the practical realities of
capital availability and cash flow.
Strategic pivot and establishment of distribution services division
Against this backdrop, the Board undertook a fundamental reassessment of the
Company's strategy. While the Group had previously focused heavily on the
development and commercialisation of its own branded products, particularly in
the vaping category, this approach was recognised as capital intensive,
operationally complex, and increasingly exposed to regulatory risk. While the
Company had intended to launch further products under its own brand, better
capitalised vaping industry competitors had already secured market share with
analogous products and it was determined that it would be difficult for the
Company to contend with them.
The Company therefore made a strategic decision to prioritise the development
of Chill Connect, its sales and distribution services division. This business
leverages the retail relationships, field sales capability, and regulatory
experience built during earlier phases of the Company's development, but
applies them in a way that reduces reliance on the success of any single
proprietary product.
Chill Connect provides route-to-market, sales representation, and
merchandising services to third-party brands operating in regulated and
high-growth consumer categories. While distribution remains a capital-hungry
activity and cannot be scaled or made profitable overnight, it offers a more
diversified and repeatable revenue opportunity than own-brand product launches
alone. As such, the division combines inventory-backed distribution where
required with sales agency and merchandising services that are more
working-capital efficient.
During the latter part of the period, Chill Connect moved from concept to
proof of capability. The Company secured a number of distribution and
partnership agreements, demonstrating both demand for its services and
confidence from highly respected brand partners. These early wins represent
the conversion of a developing pipeline into contracted relationships, rather
than isolated transactions.
Chill.com and long-term prospects
Alongside the development of Chill Connect, the Group continues to own and
operate chill.com, which the Board regards as a long-term strategic digital
asset. To date, no material marketing spend has been allocated to the
platform, and its current revenue performance should be viewed in that
context. Successful e-commerce businesses typically require sustained
investment over time - not only in marketing, but also in data, technology,
content, and customer acquisition - before scale and profitability can be
achieved. Chill.com has not yet benefited from that level of investment, nor
has it been positioned as a short-term driver of group revenues.
Despite this, the Board continues to believe in the underlying model and the
long-term potential of the platform. The chill.com domain itself is a highly
valuable digital asset, and the concept of a curated marketplace focused on
wellness and functional consumer products remains compelling. However,
management recognises that greater clarity of purpose and execution discipline
are required if that potential is to be realised.
Looking ahead, the Company intends to refine and clarify chill.com's value
proposition. This includes a deliberate move to further reduce and, where
appropriate, eliminate exposure to CBD, nicotine, and other tightly regulated
product categories on the platform. By doing so, the Company aims to unlock
greater flexibility across key operational areas, including paid advertising
channels, payment processing, platform tools, and analytics. These changes are
expected to improve the site's ability to scale in a compliant and
commercially efficient manner, while also broadening the range of brands and
partners that can be supported.
In the near term, investment in chill.com will remain measured and aligned
with available resources. The platform is being developed with a focus on
improving fundamentals and optionality rather than forcing near-term growth.
Over time, the Board believes that a clearer proposition, combined with a more
flexible operating environment, will place the platform in a stronger position
to contribute meaningfully to the Group's strategy, whether through organic
growth, partnerships, or alternative commercial outcomes.
Regulation, market conditions and execution risk
The markets in which the Company operates are complex, highly regulated, and
subject to rapid structural change. Nowhere has this been more evident than in
the UK vaping sector, where increasing regulatory intervention, culminating in
the ban on disposable products in June 2025, has materially altered both
consumer behaviour and industry economics. These changes have reinforced the
importance of adaptability, compliance, and operational discipline, while also
increasing execution risk for businesses operating at scale.
The Company continues to see significant opportunity in the independent
convenience retail channel, which represents its strongest and most
established sales network. Independent stores remain highly responsive to new
products and benefit from close, relationship-driven sales engagement, making
them well suited to the Company's field sales and route-to-market
capabilities. However, this channel also presents structural challenges.
Unlike national multiples and large wholesale groups, sales into independent
retailers typically do not attract the support of invoice financing,
factoring, or extended credit facilities that can materially improve liquidity
when supplying larger chains. As a result, growth through this channel can
place greater short-term pressure on working capital, even where underlying
demand is strong.
The Company's operating model is also shaped by the standards it applies as a
UK listed company. As a company operating on a regulated exchange, Chill
Brands operates with a high degree of transparency and integrity in its
dealings with clients, suppliers, regulators, and other stakeholders. The
Company seeks to provide a holistic route-to-market service that is compliant
with applicable regulations and aligned with long-term sustainability rather
than short-term opportunism. In sectors such as vaping, this can present
competitive challenges when operating alongside private incumbents that do not
always adhere to the same standards. Practices such as non-compliance with tax
rules, circumvention of product regulations, or the use of unapproved
marketing and promotional tactics can distort pricing, erode margins, and
place pressure on legitimate operators across the market.
While these dynamics can be challenging in the near term, the Board believes
that increased regulatory scrutiny will ultimately favour compliant
businesses. As nicotine and vaping products continue to face tighter
regulation, enforcement, and oversight, operators that have invested in
compliant infrastructure, transparent reporting, and responsible market
behaviour should be better positioned to compete and consolidate market share
over time. The Company's commitment to operating within the rules is therefore
viewed not as a disadvantage, but as a strategic investment in long-term
credibility and resilience.
In parallel, the Company is taking steps to broaden its commercial horizons by
reducing its overall exposure to nicotine products. While nicotine
alternatives remain an important category, management recognises the benefits
of diversifying into other fast-moving consumer goods with more stable
regulatory profiles. The Chill Connect model is inherently well suited to this
approach, enabling the Company to support a wider range of FMCG staples and
emerging consumer brands through the same distribution infrastructure. By
expanding the catalogue beyond nicotine-adjacent products, the Company aims to
smooth revenue volatility, improve capital efficiency, and access categories
where marketing, financing, and operational tools are more readily available.
Execution risk remains a key consideration. Building a compliant, diversified
distribution business takes time, scale, and capital. Margin pressure, working
capital demands, and competitive behaviour will continue to test the business
as it grows. The Board believes that by focusing on its core strengths -
trusted relationships with independent retailers, a disciplined approach to
compliance, and an expanding multi-category distribution platform - the
Company is positioning itself to navigate these challenges and capitalise on
opportunities as market conditions evolve.
Going concern and outlook
As set out elsewhere in this report, a material uncertainty exists related to
going concern. While the Board believes that the underlying strategy and
operating model now being pursued are credible and capable of delivering
long-term value, the Company continues to operate with limited financial
headroom and remains dependent on access to further funding to support its
activities along with the deferral of some supplier and tax liabilities with
agreed payment plans.
During the period under review, when capital has been available to the
Company, a significant proportion of it has necessarily been allocated to
addressing legacy matters rather than funding growth. These costs have
included substantial legal and professional fees arising from governance
disruption and asset recovery, as well as very significant audit and reporting
costs associated with restoring compliance, re-establishing financial records,
and bringing the Company's reporting timetable back on track. While these
expenditures were non-recurring in nature, they materially constrained the
Company's ability to deploy capital into revenue-generating activities at the
pace that would ordinarily be expected.
The Company's distribution model also places inherent demands on working
capital. Where the Group purchases and resells inventory on behalf of
third-party brands - an essential component of providing a full
route-to-market service - cash is required upfront to secure stock, support
logistics, and bridge payment terms with retailers. In periods of constrained
liquidity, this can limit the Company's ability to accept new opportunities,
even where demand exists and commercial terms are attractive. As a result,
growth has at times been governed not by market appetite or execution
capability, but by the availability of capital to support inventory cycles.
It is important to recognise that a distribution business of this nature
cannot be bootstrapped into scale. Unlike asset-light service models,
distribution requires capital to fund stock, people, systems, and
infrastructure well in advance of cash collection. Scale and profitability are
achieved through volume, repeatability, and operating leverage, all of which
depend on the ability to invest ahead of revenue. Without sufficient
capitalisation, growth becomes episodic and constrained, and the business is
unable to compound its progress in the way required to deliver a sustainable
recovery.
If the Company is to move beyond stabilisation and deliver the level of
recovery - and ultimately returns - that shareholders and the market
reasonably expect, it will need to be appropriately capitalised to do so. This
includes funding not only working capital and inventory, but also the
expansion of sales coverage, operational support, systems, and management
capacity. The Board therefore wishes to make clear the need for additional
funding as the business continues to scale, and will consider a range of
financing options in due course, with a focus on maintaining flexibility and
aligning capital deployment with demonstrable commercial traction.
The Board would like to express its sincere thanks to the Company's
shareholders for their continued support during an exceptionally challenging
period. In particular, the Board recognises the ongoing backing of the
Company's largest shareholder, Jonathan Swann, whose support has been
instrumental in maintaining the Company's operational continuity and providing
the time and stability needed to reset the business.
Looking ahead, despite the financial constraints outlined above, there are
clear signs of progress. The Chill Connect division continues to grow across
all key dimensions, including headcount, operational reach, client base, and
turnover. The sales team has expanded, new distribution relationships have
been secured, and the Company is increasingly being entrusted by third-party
brands to represent and scale their products in the UK market. While the
business remains at an early stage of this transition, the momentum achieved
to date provides the Board with confidence that the strategy is gaining
traction.
The period ahead will remain challenging, and progress will not be linear.
Despite this, with governance stabilised, a clearer strategic focus, and an
expanding distribution platform, the Company believes it is now better
positioned to build a more resilient and scalable business. Continued
discipline, measured investment, and the support of shareholders will be
essential as the Company works toward long-term sustainability and value
creation.
Strategic priorities
Looking ahead, the Company's objective is to build a credible, scalable
route-to-market platform for consumer brands operating in regulated and
competitive categories. Through Chill Connect, the Group aims to establish
itself as a trusted partner for brands that require disciplined sales
execution, regulatory fluency, and access to fragmented retail channels,
particularly within the UK independent convenience sector.
Success for the Company will be defined by the consistency and quality of its
distribution relationships rather than by short-term revenue milestones. Over
time, management expects Chill Connect to develop into a platform that
supports multiple brands across a broader range of FMCG categories, generating
repeatable revenues and operating leverage as scale is achieved. Management is
focused on growth in active stockists, revenue per sales representative, gross
margin discipline, and working capital efficiency. This will not be a rapid
transformation, but a progression toward a more resilient and diversified
business model that is less exposed to single-product risk.
Given the Company's current capital position, management has been clear about
the need for prioritisation and discipline. In the near term, resources are
being directed toward activities that directly support the growth and delivery
of the distribution business, including expanding sales coverage, onboarding
and servicing clients, and strengthening operational processes.
At the same time, certain initiatives are being deprioritised. Large-scale
own-brand product launches and non-core international expansion will not be
pursued unless and until the Company has the financial capacity to do so in a
responsible manner. Investment in chill.com will remain measured and focused
on clarifying its proposition and improving optionality rather than forcing
near-term scale and incurring material costs that are unlikely to be recovered
in the near term.
This disciplined approach reflects the Board's recognition that progress must
be earned through execution, not accelerated through overextension.
The Company's confidence in its strategy is grounded in the capabilities it
has developed through experience, including periods of significant adversity.
The Group has built a field sales infrastructure with direct relationships
across thousands of independent retailers, supported by operational systems
and a team that understands the practical realities of selling, distributing,
and supporting products in tightly regulated markets.
The executive team has demonstrated its ability to identify opportunity, adapt
strategy, and execute under challenging conditions. This includes successfully
scaling the Chill ZERO brand in a highly competitive environment and, more
recently, establishing Chill Connect as a functioning distribution business
with a growing client base. These experiences have sharpened the Company's
understanding of what works, what does not, and where capital and effort must
be concentrated to deliver sustainable progress.
While the Company operates at a smaller scale than many of its competitors, it
increasingly competes on capability, credibility, and trust rather than on
size alone. These attributes are critical in regulated categories and form the
foundation of the Company's value proposition to brand partners.
Outlook
The period covered by this report has been the most complex and demanding in
the Company's history. It has been characterised by governance disruption,
operational constraint, and financial pressure, all of which have required
sustained effort to address. While the impact of these events continues to be
felt, the business now operates from a position of greater clarity, restored
control, and a more realistic understanding of both its opportunities and its
limitations.
The Company enters the next phase of its development with a strategy that is
grounded in experience rather than aspiration. Through Chill Connect, we are
building a distribution platform that reflects the realities of the markets in
which we operate - markets that are competitive, regulated, and capital
intensive, but also capable of supporting long-term, repeatable value creation
when approached with discipline. Progress to date, including growth in
headcount, operational reach, client relationships, and turnover, provides
early evidence that this strategy is gaining traction, albeit from a modest
base.
At the same time, the Board maintains a realistic view of the challenges
ahead. The business continues to operate with limited financial headroom and
remains reliant on further funding to support working capital, inventory
cycles, and operational expansion. The legacy costs incurred during the
earlier part of this period, combined with the fixed obligations of
maintaining a listed company, have constrained the pace at which recovery can
be delivered. These constraints mean that progress will continue to be
incremental rather than transformative in the short term.
Despite these challenges, there is a renewed sense of purpose across the
organisation. Governance has been stabilised, reporting has been brought up to
date, and the Company now has a clearer framework for decision-making and
capital allocation. Management is focused on executing within these
constraints, prioritising opportunities that strengthen the core distribution
platform, deepen retailer and brand relationships, and build operational
resilience over time.
The Board recognises that rebuilding trust with shareholders, partners, and
the market more broadly will be earned through consistent delivery rather than
statements of intent. Expectations must therefore remain realistic. The path
forward will require patience, continued financial support, and disciplined
execution. However, with the foundations now in place, the Company believes it
is better positioned than at any point during the past eighteen months to
progress toward a more stable and sustainable footing.
Our objective is not to promise rapid recovery, but to deliver credible,
measurable progress. If we remain focused, properly capitalised, and aligned
around the strategy we have set out, we believe Chill Brands can continue to
rebuild and, over time, create a business that is both resilient and capable
of delivering long-term value for its shareholders.
The Board also remains open-minded as to how best to maximise value within the
listed company structure. While the immediate focus is on executing the
current strategy and scaling the distribution platform, the Board will
continue to assess a broad range of strategic options as the business evolves.
Where opportunities arise to accelerate growth, strengthen the balance sheet,
or unlock shareholder value more effectively than organic progression alone,
the Board will consider them carefully and act decisively where it believes
doing so is in the best interests of shareholders. This may include changes to
structure, capital allocation, or strategic direction, provided such actions
are consistent with maintaining appropriate governance standards and
protecting the long-term integrity of the Company.
I would like to conclude by expressing my gratitude to those who have once
again continued to support the Company through an exceptionally difficult
period. To our shareholders, partners, clients, and suppliers, your patience
and trust have not been taken for granted. In particular, I want to
acknowledge the commitment shown by those shareholders who have stood by the
business when circumstances were at their most challenging. I am also grateful
to our employees and contractors, who have shown resilience, professionalism,
and determination in the face of uncertainty and constraint. The past eighteen
months have tested this Company in ways few businesses experience, but they
have also reinforced why it is worth rebuilding properly. On behalf of the
Board and the management team, I would like to express my sincere thanks to
all those who have supported the Company and look forward to better times
ahead.
Callum Sommerton
Chief Executive Officer
Overview of Business Model
Chill Brands Group plc now operates as a UK-focused distribution and services
business for third-party consumer brands, supported by a long-term digital
marketplace asset. The Group's activities are organised around two
complementary components:
· Chill Connect, a sales, distribution, and route-to-market
services division, which represents the Group's primary near-term commercial
focus; and
· Chill.com, a digital marketplace platform focused on products
intended to support stress management and wellbeing, which is being developed
as a longer-term strategic asset.
This structure reflects a simplification of the Group's operating model
following a period of disruption and reassessment. The current model
prioritises repeatable revenues, regulatory compliance, and capital
discipline, while retaining optionality for future growth through digital
channels.
Geographic focus on the UK
The Group's activities are now deliberately concentrated on the UK market.
This represents a material change from earlier periods, during which the
Company pursued opportunities across multiple jurisdictions including in the
United States.
The Board considers this UK focus to be both prudent and strategically
appropriate. The UK is a large, sophisticated FMCG market with a dense and
fragmented independent retail sector, particularly within convenience stores.
It is also a jurisdiction in which the Company has established regulatory
understanding, long-standing retail relationships, and an operational
infrastructure capable of supporting national coverage.
By concentrating on a single core market, the Group has reduced complexity,
regulatory risk, and execution strain. This focus enables management to deploy
limited capital more effectively, maintain tighter operational control, and
build depth as well as breadth in its retailer and brand relationships.
Approach to own brand products
Historically, the Group pursued a strategy centred on the development and
commercialisation of its own branded consumer products, most notably the Chill
ZERO nicotine-free disposable vape range. While this approach demonstrated the
Company's ability to identify market opportunity and execute at pace, it also
exposed the business to a number of structural challenges.
Own-brand product development is inherently capital intensive and
operationally complex. It requires upfront investment in product development,
manufacturing, inventory, regulatory approval, marketing, and ongoing working
capital support. In regulated categories such as vaping, it also carries
heightened exposure to regulatory change, pricing pressure, and inventory
obsolescence.
Following the governance disruption and liquidity constraints experienced
during the period under review, the Board concluded that continuing to pursue
own-brand products as a core strategy would not represent the most efficient
or resilient use of capital. While the Company retains the capability to
support own-brand initiatives in the future, this is no longer the primary
focus of the business model.
Creation and rationale of Chill Connect
In response, the Group established Chill Connect, a sales and distribution
services division designed to leverage the Company's existing capabilities
while reducing reliance on the success of any single proprietary product.
Chill Connect provides route-to-market services to third-party brands,
including sales representation, retail onboarding, merchandising, and
distribution support. The business is differentiated by its practical
understanding of the challenges faced by emerging and regulated consumer
brands. Having previously operated as an own-brand business itself, the Group
is able to advise clients not only on sales execution, but also on pricing,
regulatory considerations, product positioning, and retailer expectations.
A core point of differentiation is Chill Connect's focus on the independent
convenience retail channel. This channel is often underserved by larger
distributors, yet remains critical for product discovery and volume in many
FMCG categories. The Company's sales model emphasises direct-to-retail
engagement through a field sales team, enabling brands to achieve rapid
distribution without reliance on national multiples or purely wholesale-led
strategies.
Chill Connect operates a dual revenue model comprising:
· Retainer-based income, where brands engage the Company on a
contracted basis for sales representation, retail access, and ongoing
commercial support; and
· Distribution income, where the Company purchases and resells
inventory on behalf of brand partners, generating margin through distribution
activity.
This blended approach allows the Group to balance recurring service income
with higher-volume distribution revenues, while tailoring its offering to the
needs and maturity of each client. In some cases, the Company acts primarily
as a sales agent; in others, it provides a full inventory-backed distribution
solution. This flexibility is central to the Chill Connect proposition, but
also contributes to the working-capital demands of the business.
Operational infrastructure and plans for expansion
To support the growth of Chill Connect, the Group has invested in core
operational infrastructure. During the period, the Company launched a
dedicated warehouse facility in Hull, enabling greater control over inventory
handling, fulfilment, and logistics. This facility supports both distribution
activity and improved service levels for brand partners and retailers.
The Group also plans to launch a wholesale ordering platform to streamline
retailer ordering and improve operational efficiency. This platform is under
development and subject to the completion of a review of payment processing
arrangements.
Further expansion is expected to come from:
· broadening the range of products represented within Chill
Connect;
· reducing overall exposure to nicotine-only categories; and
· selectively entering adjacent FMCG categories with more stable
regulatory profiles.
Chill.com digital marketplace and long-term vision
Alongside Chill Connect, the Group owns and operates chill.com, a digital
marketplace designed to simplify access to products intended to support stress
management, wellbeing, and everyday mental resilience. The platform exists to
address a growing but fragmented wellness market in which consumers are faced
with an overwhelming volume of products, inconsistent claims, and little
practical guidance on what is credible, appropriate, or effective for their
needs.
The core proposition of chill.com is not to compete on breadth or price, but
to offer a calmer, more curated environment where customers can discover
products that are relevant, understandable, and responsibly presented. This
positioning reflects the belief that wellness and supplements are increasingly
difficult for consumers to navigate, particularly as traditional retail and
online marketplaces place responsibility for due diligence almost entirely on
the individual.
The marketplace is structured around a commission-based revenue model, whereby
chill.com earns a percentage of sales generated through the platform. This
approach aligns the Company's incentives with those of its brand partners and
avoids the capital intensity associated with holding inventory.
Over time, and as scale is achieved, the Company also expects to introduce
brand participation fees for enhanced visibility, content, and partnership
opportunities. These may include featured placements, category sponsorships,
or subscription-style arrangements for brands seeking deeper integration with
the platform. Any such evolution will be implemented carefully and in a way
that preserves trust and avoids compromising the platform's curated nature.
chill.com currently operates on a pure dropship model, with products fulfilled
directly by brand partners. This approach minimises working capital
requirements and reduces operational complexity while the platform remains at
an early stage of development.
In the future, subject to capital availability or the ability to secure
consignment inventory, the Company may adopt a hybrid fulfilment model. This
would allow greater control over customer experience, delivery speed, and
packaging, while still maintaining a disciplined approach to inventory risk.
No such transition will be undertaken unless it can be done responsibly and
without placing undue strain on the Group's resources. For brands operating in
the wellness and functional products space, chill.com offers a number of
differentiated benefits.
Why brands use chill.com
First, the platform provides access to a curated, values-led audience that is
actively seeking support with stress, wellbeing, and lifestyle balance, rather
than browsing passively or purely price shopping. This can result in more
engaged customers and lower customer acquisition costs relative to large-scale
advertising platforms.
Second, the platform emphasises content-led discovery rather than aggressive
promotion. Brands are able to tell their story, explain their formulation and
purpose, and build credibility with customers who are often sceptical of
exaggerated claims and opaque marketing.
Finally, the strength and memorability of the chill.com domain itself provides
brands with a halo effect and a level of credibility that would be difficult
to achieve independently, particularly for emerging businesses.
Brand relationships are non-exclusive by default, although the Company remains
open to exploring deeper partnerships in specific categories where this aligns
with customer benefit and platform integrity.
Why customers use chill.com
The target customer for chill.com is someone who feels overwhelmed, stressed,
or uncertain about how to navigate the modern wellness landscape. In practice,
this includes individuals who may be confronted with hundreds of supplements,
functional products, and lifestyle solutions, each claiming to offer relief,
focus, or balance, but with little clarity on quality, suitability, or
evidence.
Customers increasingly encounter wellness products through social media,
influencer marketing, or algorithm-driven recommendations, often without
meaningful context. chill.com seeks to counter this by providing curation,
explanation, and reassurance, helping customers make informed choices without
requiring specialist knowledge.
The platform aims to be helpful rather than prescriptive. It does not attempt
to replace medical advice, but to offer a more transparent and considered
alternative to impulse-driven or confusing online purchasing. Over time, the
Company expects this approach to foster trust, repeat usage, and long-term
customer relationships.
Customer acquisition and brand building
To date, chill.com has not benefited from material paid customer acquisition.
Traffic and engagement have primarily been driven by organic activity, brand
relationships, and limited pilot campaigns. This has constrained scale, but
has also allowed the Company to observe customer behaviour without incurring
significant marketing spend.
Looking forward, the Company recognises that sustainable growth will require a
broader approach. As the product mix becomes more flexible and advertising
constraints are reduced, management intends to expand into scalable paid
acquisition channels. In parallel, the brand will increasingly be taken into
the real world through activations, partnerships, and out-of-home initiatives,
subject to capital availability. These efforts are expected to reinforce brand
awareness and credibility rather than drive short-term transactional volume.
In the long term, chill.com is intended to serve multiple strategic purposes.
It has the potential to become a standalone, profitable marketplace; a
platform that supports and complements the Chill Connect distribution
business; and a strategic digital asset that offers partnership or alternative
commercial opportunities.
Routes to value creation
The Group's business model has been shaped to balance near-term commercial
execution with longer-term optionality, while operating within the practical
constraints of capital availability and regulatory complexity. At its core,
the model is built around providing services rather than relying on the
success of individual products, and around deploying infrastructure that can
support multiple revenue streams over time.
Chill Connect represents the Group's primary engine for near-term activity,
leveraging existing sales capabilities, retailer relationships, and regulatory
experience to deliver repeatable route-to-market services for third-party
brands. The model is designed to scale through increased coverage, client
depth, and category expansion.
In parallel, chill.com provides a digital platform that reflects longer-term
consumer trends and offers strategic flexibility. While the scope of its brand
development to date has been limited, the platform remains a valuable asset
that can evolve alongside the distribution business, support partnerships, and
create additional routes to value as capital and market conditions allow.
Taken together, these activities form a coherent and complementary operating
framework. Both are underpinned by the same principles: disciplined capital
deployment, regulatory compliance, operational credibility, and a focus on
building sustainable relationships with brands, retailers, and consumers. The
Board believes that this approach provides a more resilient foundation than
the Company's prior operating models and positions the Group to pursue growth
in a controlled and pragmatic manner.
Strategic Report
Principal activities and strategy
Chill Brands Group plc is a UK-based consumer brands and distribution group.
During the period under review, the Group's activities evolved materially
following a reassessment of strategy and operating focus. At the start of the
period, the Company was engaged in a combination of own-brand product
development, primarily through the Chill ZERO nicotine-free disposable vape
range, and exploratory sales and marketing activities in both the UK and the
United States. As the period progressed, the Group refocused its activities
exclusively on the UK market and transitioned toward a services-led
distribution model.
Today, the Group's principal activities comprise the provision of sales,
distribution, and route-to-market services to third-party fast-moving consumer
goods brands in the UK through its Chill Connect division, alongside the
operation and development of a digital marketplace platform, chill.com,
focused on stress management and wellbeing products. The Group no longer
prioritises the development of own-brand consumer products as a core activity,
having determined that this approach was less aligned with its capital
position and long-term risk profile.
The Group's objective is to build a resilient and sustainable business capable
of operating without continual reliance on external fundraising. This is being
pursued through the development of a scalable, compliant distribution platform
that can generate repeatable revenues, improve operating leverage over time,
and progress toward breakeven. In parallel, the Group seeks to preserve
longer-term flexibility through the disciplined development of its digital
marketplace asset. The Board believes that this strategy, focused on capital
discipline, operational credibility, and regulatory compliance, provides the
most appropriate foundation for stabilising the business and supporting
sustainable value creation over the longer term.
Board composition and governance overview
During the period under review, the composition of the Board changed
materially following a period of governance disruption and a subsequent
General Meeting held in June 2024. These changes were implemented to stabilise
governance, restore effective oversight, and support the repositioning of the
Group around its revised strategy.
At the start of the period, the Board included Antonio Russo and Trevor Taylor
as executive directors, alongside Eric Schrader and Scott Thompson as
non-executive directors. Antonio Russo and Trevor Taylor were removed from
office in June 2024, Eric Schrader resigned in June 2024, and Scott Thompson
resigned in September 2024.
Following these changes, the Board was reconstituted and, as at the date of
approval of these financial statements, comprises:
· Callum Sommerton, Chief Executive Officer (appointed April 2022)
· Harry Chathli, Non-Executive Chair (appointed June 2024)
· Graham Duncan, Finance Director (appointed June 2024)
· Nick Tulloch, Non-Executive Director (appointed September 2024)
The Board considers that its current composition provides an appropriate
balance of executive and non-executive experience, taking into account the
size, complexity, and stage of development of the Group. The Board operates as
a lean and highly engaged decision-making body, reflecting both the Company's
capital constraints and the need for close oversight during a period of
recovery and transition.
Governance structure and committees
Given the size of the Board, the Audit Committee, Remuneration Committee, and
Nomination Committee are each comprised of the non-executive directors. These
committees operate on a proportionate basis, with formal terms of reference in
place, and meet as required to discharge their responsibilities. The Board
considers this structure to be appropriate and effective in the context of the
Group's current scale and resources.
The Board retains overall responsibility for strategy, risk management,
capital allocation, financial reporting, and compliance with applicable laws
and regulations. Matters reserved for the Board include approval of strategic
initiatives, oversight of funding arrangements, and the monitoring of
operational and financial performance against agreed objectives.
Executive and senior operational management
In addition to the Board, the Group has a small senior operational management
team responsible for day-to-day execution of the business strategy. This
includes a Chief Marketing Officer with responsibility for the development and
operation of the chill.com platform, and a Head of Sales/Sales Director
responsible for managing the Chill Connect distribution business.
The Board works closely with senior management to ensure alignment between
strategic objectives and operational delivery, while maintaining appropriate
separation between governance oversight and executive execution.
Events after the financial period
Since the end of the financial period on 30 September 2025, the Company has
continued to focus on stabilising operations, executing its revised strategy,
and maintaining compliance with its reporting and regulatory obligations.
Following the publication of the Company's audited annual financial statements
for the year ended 31 March 2024 and subsequent interim financial information,
trading in the Company's shares was restored during August 2025. The lifting
of the suspension followed the completion of the audit process, the bringing
up to date of the Company's financial reporting, and the restoration of
operational and governance stability.
In the period following the financial period end, the Company has continued to
develop the Chill Connect distribution business, including the onboarding of
additional brand partners and the expansion of sales coverage within the UK
independent convenience retail channel. These developments are consistent with
the strategy set out elsewhere in this report and reflect the continued
transition toward a services-led distribution model.
The Company has also continued to progress operational infrastructure
initiatives in support of this strategy, including the utilisation of its
warehouse facility in Hull and further work on systems and processes to
support scalable distribution and wholesale activity. Any further expansion of
infrastructure or systems remains subject to capital availability and ongoing
review by the Board.
Subsequent to the financial period end, the Company commenced a claim against
a former professional adviser in connection with matters arising during the
governance dispute that took place in 2024. The Board considered that the
adviser had acted improperly in relation to its billing practices and had
failed to manage conflicts of interest appropriately. The matter was resolved
following a mediation process conducted in October, and a full and final
settlement was announced on 23 October, pursuant to which the adviser agreed
to pay £210,000 to the Company, gross and before costs.
There have been no other material events since the end of the financial period
that require adjustment to, or disclosure in, these financial statements.
Key performance indicators
The Board uses a combination of financial and non-financial key performance
indicators to monitor performance, assess progress against strategy, and
support decision-making. However, given the extraordinary circumstances that
characterised the 18-month reporting period, including significant governance
disruption and operational constraint, the Board's primary focus during this
time was on maintaining business continuity, preserving liquidity, and keeping
the Company operational. As a result, less emphasis was placed on formal KPI
reporting and monitoring than would ordinarily be the case. As stability has
been restored and the business transitions into its next phase, the Board
intends to implement more structured reporting frameworks and enhanced
performance monitoring to support effective oversight and disciplined
execution going forward.
Chill Connect distribution and services business
As Chill Connect represents the Group's primary near-term commercial focus,
the majority of operational KPIs will relate to the performance and
development of this division. In future, indicators are expected to include:
· Retail reach and active stockists: measured by the number of
independent retailers actively serviced by the sales team. This reflects the
breadth of market penetration and the effectiveness of the Group's
direct-to-retail sales model.
· Brand partners onboarded: tracking the number and quality of
third-party brands engaging Chill Connect for sales representation and
distribution services. This provides insight into market demand for the
Group's offering and the strength of its commercial proposition.
· Sales coverage and headcount: monitoring the size and deployment
of the field sales team to ensure coverage expands in line with operational
capacity and capital availability.
· Distribution revenue trends: assessed on a directional basis to
evaluate growth in service and distribution income as the business transitions
away from own-brand activity.
· Gross margin discipline: reviewed qualitatively to ensure
pricing, discounting, and inventory decisions remain aligned with capital
constraints and long-term sustainability.
· Working capital efficiency: monitored through cash utilisation,
inventory cycles, and payment terms to ensure growth does not place undue
strain on liquidity.
These indicators will be reviewed regularly by the Board to ensure that growth
is achieved in a controlled and repeatable manner.
chill.com digital marketplace
chill.com remains at an early stage of development and is not currently a
material contributor to Group revenues. Accordingly, KPIs for the platform are
focused on foundational progress rather than financial scale. Going forward,
key indicators are expected to include:
· Website traffic and reach: recognising that increased awareness
and customer acquisition are prerequisites for commercial performance.
· Customer engagement: measured through basic engagement metrics to
assess the relevance of content and product curation.
· Platform development milestones: including improvements to user
experience, category mix, and operational flexibility.
The Board recognises that meaningful progress across these indicators will
require increased marketing activity and broader brand reach, which will be
pursued as capital availability allows.
Other KPIs relevant to the Group
In addition to divisional KPIs, the Board intends to monitor a number of
overarching indicators relating to financial resilience and sustainability,
including cost control to maintaining discipline over overheads and
discretionary spend; and progress toward breakeven.
Together, it is hoped that these KPIs will provide the Board with a framework
for monitoring progress and maintaining focus on the Group's strategic
objective of building a resilient and sustainable business.
Principal risks and uncertainties
The Board recognises that the Group faces a number of risks and uncertainties
arising from its operating environment, capital position, and stage of
development. These risks are actively monitored and managed, but they remain
material and could have a significant impact on the Group's performance,
financial position, and prospects. The principal risks set out below are
consistent with those disclosed in prior reports, updated to reflect the
Group's revised business model and current circumstances.
The risks described above are not exhaustive, and additional risks and
uncertainties may arise that are not currently known or considered material.
The Board will continue to monitor the Group's risk profile and take
appropriate actions as circumstances evolve.
Funding and going concern risk
The Group continues to operate with limited financial headroom and remains
dependent on access to additional funding to support working capital
requirements and ongoing operations. The Chill Connect distribution model is
inherently capital intensive, particularly where inventory is purchased and
resold on behalf of brand partners. In addition, the Group continues to carry
the fixed cost base associated with being a listed company.
While the Board believes that the underlying business model is viable and
capable of delivering sustainable value over time, there can be no assurance
that further funding will be available on acceptable terms, or at all. A
failure to secure additional funding as required could materially impact the
Group's ability to continue trading and execute its strategy. The Board
manages this risk through active cash management, prioritisation of
expenditure, and ongoing engagement with shareholders and funding providers.
Liquidity and cash flow risk
The Group's operations place significant demands on liquidity. Distribution
activities require upfront investment in inventory, logistics, and sales
infrastructure, while cash receipts from customers are often received over
extended payment cycles. This mismatch can constrain growth and limit the
Group's ability to take advantage of new commercial opportunities, even where
demand exists.
The Board mitigates this risk through careful working capital management,
selective acceptance of distribution opportunities, and a flexible approach to
service versus inventory-backed arrangements with brand partners. However,
liquidity risk remains heightened given the Group's scale and capital
position.
Execution risk in scaling Chill Connect
The success of the Group's strategy depends on its ability to scale the Chill
Connect distribution and services business in a controlled and repeatable
manner. Execution risk arises from the need to recruit, train, and retain
sales personnel; onboard and service brand partners effectively; and manage
operational complexity as volumes increase.
The Board mitigates this risk by prioritising disciplined growth, expanding
sales coverage in line with operational capacity, and leveraging management's
experience in regulated FMCG markets. Notwithstanding these measures,
execution risk remains material as the business continues to develop.
Regulatory risk
The Group operates in regulated consumer categories, including
nicotine-adjacent and wellness products, where regulatory frameworks continue
to evolve. Changes to product regulation, advertising standards, labelling
requirements, or enforcement practices could adversely affect the Group's
operations or those of its brand partners.
Increased regulatory scrutiny may also impact payment processing, marketing
channels, and retailer behaviour. The Board mitigates this risk through a
strong compliance culture, ongoing monitoring of regulatory developments, and
a strategic move to reduce overall exposure to the most tightly regulated
product categories. Nevertheless, regulatory risk remains a key uncertainty.
Market and competitive risk
The markets in which the Group operates are highly competitive and subject to
pricing pressure. In certain categories, competition from private operators
that do not always adhere to the same regulatory or tax standards can distort
pricing and commercial behaviour, placing pressure on compliant businesses.
While the Board believes that increased regulation will ultimately favour
legitimate operators, competitive pressures may persist in the near term and
could impact margins, volumes, or customer retention.
Operational and systems risk
As the Group expands its distribution activities, it becomes increasingly
reliant on operational infrastructure, including warehousing, logistics, and
information systems. Failures or inefficiencies in these areas could disrupt
service delivery, damage relationships with brand partners or retailers, and
increase costs.
The Board mitigates this risk through investment in core infrastructure,
including the Group's warehouse facility, and through ongoing review of
systems and processes. However, operational risk will increase as the business
scales.
Key person risk
The Group is dependent on a small senior management team with specialist
experience. The loss of one or more key individuals could significantly
disrupt operations or delay execution of the Group's strategy.
The Board mitigates this risk by maintaining close oversight of management
activities and by seeking to build depth within the organisation as resources
allow. Nonetheless, key person risk remains material.
Legal and legacy matters
While the majority of legacy legal and governance matters arising earlier in
the period have been substantially resolved, residual risks remain in the form
of ongoing professional costs and the potential for unforeseen issues to
arise. These matters continue to place pressure on cash resources and
management time.
The Board mitigates this risk through careful management of professional
engagements and by seeking to resolve outstanding matters efficiently. Despite
this, the financial impact of legacy issues cannot be entirely eliminated.
Reputational risk
The Group's reputation was adversely affected by the governance disruption and
share suspension earlier in the period. Although significant progress has been
made in restoring compliance and operational stability, reputational risk
remains, particularly with investors, partners, and regulators.
The Board seeks to mitigate this risk through transparent reporting,
consistent delivery, and adherence to appropriate governance standards.
Rebuilding trust will take time and remains an ongoing focus.
Technology, data protection and cyber risk
The Group relies on technology platforms to support its operations, including
the chill.com marketplace. Cyber security breaches, data protection failures,
or system outages could result in financial loss, regulatory sanctions, or
reputational damage.
The Board mitigates this risk through appropriate system controls, third-party
service providers, and compliance with data protection requirements. However,
technology-related risks cannot be entirely eliminated.
Statement of the Directors in Performance of Their Statutory Duties in
Accordance with s172(1) Companies Act 2006
Section 172(1) of the Companies Act 2006 requires directors to act in the way
they consider, in good faith, would be most likely to promote the success of
the Company for the benefit of its members as a whole. In doing so, directors
must have regard to a range of factors, including the long-term consequences
of decisions, the interests of employees, relationships with suppliers and
customers, the impact of operations on the community and environment, and the
desirability of maintaining a reputation for high standards of business
conduct.
During the period under review, the Board was required to discharge its
statutory duties in the context of significant governance disruption,
operational constraint, and financial pressure. In these circumstances, the
Board's decision-making was necessarily focused on preserving the viability of
the business, maintaining compliance with legal and regulatory obligations,
and protecting residual shareholder value while longer-term strategic options
were assessed.
Key decisions taken by the Board during the period included the reconstitution
of the Board and the stabilisation of governance arrangements, the
prioritisation of business continuity and liquidity over growth initiatives,
and the strategic decision to pivot away from capital-intensive own-brand
product development toward a services-led distribution model through Chill
Connect. In making these decisions, the Board considered the long-term
sustainability of the business and concluded that preserving operational
continuity and rebuilding a credible platform for future growth were in the
best interests of shareholders as a whole.
The Board also gave careful consideration to the interests of employees and
contractors. The Group operates with a small team, and during the period the
Board sought to provide continuity of employment, clarity of direction, and
appropriate support in an environment characterised by uncertainty and
constraint. Decisions relating to cost control and prioritisation of
expenditure were taken with regard to maintaining core operational capability
and morale.
Relationships with brand partners, suppliers, retailers, and professional
advisers were a further key consideration. The Board sought to act
transparently and responsibly in its dealings with stakeholders, recognising
the importance of trust and long-term relationships, particularly in regulated
markets. Where difficult decisions were required in relation to payment
timing, contractual commitments, or the sequencing of growth initiatives, the
Board sought to balance competing interests in a manner that supported the
continued operation of the business.
The Board also had regard to the need to maintain high standards of business
conduct and regulatory compliance, particularly given the Company's status as
a UK listed entity operating in regulated consumer categories. Decisions were
taken with an emphasis on transparency, adherence to applicable laws and
regulations, and the restoration of confidence among regulators and the market
more broadly.
Looking forward, while this statement relates primarily to decisions taken
during the period under review, the Board remains mindful of its ongoing
statutory duties. As the business continues to stabilise and execute its
revised strategy, the Board will continue to consider the long-term
implications of its decisions and the interests of stakeholders, with the
objective of building a resilient and sustainable business capable of
delivering value over time.
Employees and gender diversity
During the period under review, the Group operated with a small number of
employees and contractors, reflecting both its stage of development and the
significant operational constraints experienced during the period. The Board
recognises that the success of the business depends on the skills, commitment,
and resilience of its people, particularly in a lean organisation where
individuals often perform multiple roles.
Throughout the period, the Board sought to maintain continuity of employment
where possible, provide clarity of direction during a time of uncertainty, and
prioritise the preservation of core operational capability. Engagement with
employees and contractors has been informal but direct, with senior management
maintaining close day-to-day communication to ensure alignment with the
Company's objectives and to address challenges as they arose.
As the business stabilises and scales, the Board intends to develop more
structured people policies and processes that are appropriate to the Group's
size and resources, including approaches to performance management,
development, and engagement.
Gender diversity
The Board recognises the importance of diversity, including gender diversity,
in promoting effective decision-making and long-term business success. The
composition of the Board and senior management during the period reflects the
exceptional circumstances faced by the Company and the need to prioritise
continuity, relevant experience, and governance stability.
A split of our employees (excluding contractors) and Directors by gender at
the period-end on 30 September 2025 is shown below:
Male Female
Directors 4 None
Employees 4 3
As at the date of approval of these financial statements, the Board comprised
four directors, all of whom are male. The Board acknowledges that this does
not represent gender diversity and considers this to be an outcome of timing,
scale, and circumstance rather than policy. Given the current size of the
Board and the Company's capital constraints, appointments have been made on
the basis of experience and suitability for the immediate needs of the
business.
The Company remains committed to equal opportunity and does not discriminate
on the basis of gender or any other protected characteristic.
Looking ahead, as the Group grows and its governance structures evolve, the
Board intends to consider diversity, including gender diversity, as part of
future succession planning and appointments, consistent with the Company's
scale, resources, and regulatory obligations.
Corporate social responsibility
The Board recognises that corporate social responsibility is an important
consideration for a UK listed company, particularly one operating in regulated
consumer markets. The Group's approach to CSR is grounded in responsible
business conduct, regulatory compliance, and the maintenance of transparent
and constructive relationships with stakeholders, rather than formal
programmes that would be disproportionate to the Company's current scale.
A core element of the Group's CSR approach is its commitment to operating
within applicable legal and regulatory frameworks. This includes adherence to
product regulations, advertising standards, and consumer protection
requirements across the categories in which the Group operates. The Board
considers responsible trading and compliance to be fundamental to the
long-term sustainability of the business and to maintaining trust with
customers, brand partners, retailers, and regulators.
The Group also seeks to act responsibly in its commercial relationships. This
includes engaging openly with brand partners and suppliers, supporting
independent retailers through consistent and compliant route-to-market
services, and seeking to manage creditor relationships transparently during
periods of financial constraint. Where difficult commercial decisions have
been required, the Board has sought to balance competing interests with the
objective of preserving the long-term viability of the business.
In relation to people and workplace practices, the Group operates with a small
team and places emphasis on professionalism, integrity, and mutual respect.
While the Company does not currently have formal CSR programmes, it aims to
foster a working environment that supports ethical behaviour, inclusion, and
personal responsibility.
The Board also recognises its responsibility to the wider community and to the
reputation of the markets in which it operates. In sectors such as vaping and
wellness, where public scrutiny is high, the Company seeks to engage
responsibly, avoid practices that could undermine consumer trust, and
contribute to raising standards through compliant and transparent business
practices.
As the Group grows and its operational footprint expands, the Board intends to
keep its approach to CSR under review and to develop more structured policies
where appropriate, ensuring that responsibility and sustainability remain
embedded in the way the business operates.
Environmental responsibility
The Board recognises the importance of environmental responsibility and the
need to consider the environmental impact of the Group's operations,
proportionate to its size, activities, and resources. The Group's current
operations are relatively limited in environmental intensity, with no
manufacturing activities and a business model primarily focused on sales,
distribution, and digital services.
The Group's environmental footprint arises principally from its distribution
activities, including warehousing, logistics, and transportation, as well as
from office-based operations and the use of third-party service providers. The
Board is mindful of the environmental impact associated with these activities
and seeks to manage them responsibly within the constraints of the Group's
operational and financial position.
Where practicable, the Group seeks to work with suppliers and logistics
partners that demonstrate an awareness of environmental standards and
compliance with applicable regulations. The establishment of the Group's
warehouse facility has also enabled greater oversight of inventory handling
and distribution processes, which can support more efficient logistics and
reduced unnecessary movement of goods.
The Group's digital operations, including the chill.com platform, have a
relatively low direct environmental impact. The Board recognises, however, the
importance of responsible data and infrastructure usage and relies on
established third-party technology providers that operate within recognised
environmental and energy efficiency standards.
Given the Group's current scale, the Board has not adopted formal
environmental targets or reporting frameworks beyond those required by
regulation. However, environmental considerations are taken into account in
operational decision-making where relevant, and the Board intends to keep its
approach under review as the business grows and its activities evolve.
Environmental considerations relating to vape products
The Group particularly recognises the environmental concerns associated with
disposable vaping products, particularly in relation to battery waste,
single-use plastics, and challenges around recycling. These concerns have been
widely acknowledged across the industry and have contributed to increased
regulatory scrutiny and the introduction of measures aimed at reducing
environmental harm.
Historically, disposable vaping products have presented specific environmental
challenges due to their combination of electronic components, lithium-ion
batteries, and consumable materials, which are not easily separated or
recycled through conventional waste streams. Improper disposal of such
products can result in environmental damage and the loss of recoverable
materials.
As consumer behaviour and regulation continue to evolve away from single-use
disposable products, the Board believes that this transition has the potential
to deliver environmental benefits. A shift toward reusable, rechargeable, or
non-disposable alternatives can reduce the volume of battery waste entering
the environment and support more responsible product lifecycles. This trend
aligns with broader sustainability objectives and encourages greater
accountability across the supply chain, from product design through to
end-of-life management.
Within its distribution activities, the Group seeks to engage with brand
partners that demonstrate awareness of these issues and a willingness to
operate within emerging regulatory frameworks. While the Group does not
manufacture products, it recognises its role in influencing responsible market
behaviour through the selection of partners and the categories it supports.
The Board considers the reduction of exposure to disposable products post ban,
alongside broader diversification into non-nicotine and non-electronic FMCG
categories, to be consistent with both regulatory expectations and
environmental responsibility. As the market continues to adjust, the Group
will keep these considerations under review and seek to align its activities
with practices that support a more sustainable operating environment.
Task force on Climate-Related Financial Disclosures (TCFD) Statement
The Company acknowledges its obligations under the Financial Conduct
Authority's Listing Rules in respect of climate-related disclosures consistent
with the recommendations of the Task Force on Climate-Related Financial
Disclosures (TCFD). This statement sets out the Group's current position with
reference to the four TCFD pillars: Governance, Strategy, Risk Management, and
Metrics and Targets.
The Board recognises the growing importance of climate-related considerations
to investors, regulators, and other stakeholders. However, it also considers
the application of the TCFD framework in the context of the Group's size,
activities, and stage of development. During the period under review, the
Company experienced significant governance disruption and financial
constraint, which necessarily limited the extent to which climate-related
matters could be prioritised relative to more immediate operational and
regulatory requirements. Notwithstanding this, the Board remains committed to
progressively enhancing its climate-related governance and disclosure as the
business stabilises and scales.
Governance
The Board of Directors has overall responsibility for overseeing
climate-related risks and opportunities as part of its broader remit for
governance, risk management, and strategic oversight. Given the size of the
Group and the direct involvement of Board members in day-to-day operations,
climate-related matters are considered within existing governance structures
rather than through a dedicated committee or standalone governance process.
During the period, the Board's primary focus was on stabilising the business,
restoring operational control, and ensuring compliance with legal and
regulatory obligations. As a result, climate-related risks did not form a
material part of formal Board consideration of strategy, budgets, performance
objectives, or capital expenditure. This reflected the exceptional
circumstances faced by the Company rather than a lack of recognition of the
importance of environmental issues.
The Board nevertheless receives updates on environmental and regulatory
developments where relevant and considers climate-related factors when making
strategic and operational decisions, including those relating to product
categories supported, supplier selection, and the evolution of the Group's
distribution model. The Board acknowledges that, as the business matures and
resources allow, more structured oversight mechanisms will be required,
including clearer internal objectives and periodic review of climate-related
considerations.
Strategy
The Group's operations are not materially exposed to acute physical climate
risks. The Company does not operate manufacturing facilities and relies
primarily on third-party logistics providers, warehousing partners, and
digital infrastructure. On this basis, the Board has assessed that physical
climate risks do not currently pose a significant threat to the Group's
business model or short-term strategy.
Transition risks are more relevant to the Group. These include changes in
regulation, consumer behaviour, and market expectations relating to
environmental sustainability, particularly in consumer goods categories
involving electronic components, packaging, and waste management. These
factors have already influenced the Group's strategic direction.
In particular, the Board's decision to reduce exposure to single-use
disposable products and to diversify into non-electronic and non-nicotine FMCG
categories reflects both regulatory developments and environmental
considerations. While these strategic changes were primarily driven by
regulation and commercial sustainability, the Board recognises that they are
also aligned with broader environmental objectives, including the reduction of
battery waste and single-use materials.
Given the Group's current financial position and its focus on recovery and
stabilisation, detailed climate scenario analysis has not been undertaken
during the period. The Board considers such analysis to be disproportionate at
this stage but will keep this under review as the Group's operations expand
and its environmental footprint evolves.
Risk management
The Group does not currently maintain a standalone climate risk register.
Climate-related risks are instead considered as part of the Group's broader
risk management framework, alongside regulatory, operational, financial, and
market risks. This integrated approach reflects the Group's size and the early
stage of development of its formal risk management processes.
The most material environmental risks identified to date have related to
product lifecycle considerations, particularly in relation to disposable
vaping products and battery waste. These risks have informed the Board's
strategic decisions regarding product categories supported by the business and
the gradual reduction of exposure to environmentally contentious formats.
The Board mitigates relevant climate-related and environmental risks through:
· reducing exposure to product categories associated with heightened
environmental and regulatory risk where appropriate;
· engaging with suppliers and logistics partners that operate within
applicable environmental and waste management regulations; and
· maintaining flexibility within the business model to adapt to changes
in regulation, enforcement, and consumer expectations.
Given the nature of the Group's activities, climate-related risks are
currently assessed as secondary to other principal risks, including funding,
liquidity, execution, and regulatory compliance. The Board recognises,
however, that climate-related risks may become more prominent over time and
intends to evolve its risk management approach accordingly.
Metrics and targets
At this stage, the Group has not established climate-specific metrics or
targets. A number of factors have contributed to this position, including:
· the Group's strategic transformation and the resulting lack of
continuity in historical data;
· reliance on third-party providers for logistics and infrastructure,
limiting direct control over emissions;
· resource constraints during a period of operational and governance
disruption; and
· the need to prioritise financial viability and regulatory compliance.
The Board considers the adoption of detailed emissions reporting or formal
climate targets to be disproportionate given the Group's current scale and
limited direct environmental impact. The Company continues to monitor
regulatory developments in relation to climate-related reporting, including
Streamlined Energy and Carbon Reporting (SECR) requirements where applicable.
As the business stabilises and grows, the Board intends to reassess its
approach to climate-related metrics and targets. Over time, this may include
establishing baseline measurements, integrating environmental data into
operational reporting, and developing proportionate performance indicators
aligned with the Group's activities and resources.
Current position and forward approach
The period under review was characterised by significant disruption, which
necessarily limited the Company's ability to advance its climate-related
governance and reporting beyond a foundational level. While climate-related
considerations have not yet formed a central part of strategic planning, the
Board recognises their increasing importance and views this statement as a
foundation for future development.
The Company recognises the UK's net zero target and acknowledges that
alignment with national and international climate objectives will become
increasingly relevant as its operations mature. As capacity and resources
allow, the Board expects climate-related considerations to play a greater role
in strategic planning, risk assessment, and disclosure.
The Board believes this approach represents a realistic and responsible
balance between the Group's current priorities and its longer-term
environmental responsibilities, while remaining consistent with the principles
of the TCFD framework and the expectations of investors and regulators.
Future developments
Looking ahead, the Board's focus is on continuing to stabilise the business,
strengthen operational execution, and progress the Group's strategy within the
constraints of capital availability and regulatory complexity. The immediate
priority is to build on the foundations established during the latter part of
the period under review and to continue developing the Chill Connect
distribution business in a controlled and disciplined manner.
Future developments are expected to include further expansion of Chill
Connect's client base and retail reach within the UK independent convenience
sector, alongside selective broadening of the product categories supported by
the distribution platform.
The Board also intends to continue refining the Group's operating
infrastructure to support scalability where appropriate. This includes the
ongoing utilisation of the Group's warehouse facility, the potential
introduction of systems to support wholesale ordering and improved operational
visibility, and further development of internal reporting and performance
monitoring processes.
In parallel, the Group will continue to assess the development of the
chill.com digital marketplace. Near-term activity will focus on clarifying the
platform's value proposition, reducing regulatory friction, and improving
fundamental performance metrics. Any material increase in investment in the
platform will be considered carefully in the context of capital availability
and competing priorities.
The Board remains open to considering strategic options that could accelerate
progress, strengthen the balance sheet, or unlock value for shareholders,
where such options are consistent with appropriate governance standards and
the long-term interests of the Company. No decisions have been taken in this
regard, and any future action would be subject to regulatory requirements and,
where applicable, shareholder approval.
Overall, the Board believes that the period ahead will continue to present
challenges but, with governance stabilised and early evidence of commercial
traction, the Company is better positioned to pursue sustainable progress than
at any point during the period under review.
Compliance and cross-reference statement
This Strategic Report has been prepared in accordance with the requirements of
the Companies Act 2006 and the Disclosure Guidance and Transparency Rules of
the Financial Conduct Authority.
The Strategic Report is intended to provide a fair review of the development
and performance of the Group's business during the period and of its position
at the end of the period, together with a description of the principal risks
and uncertainties facing the Group. It includes an analysis using key
performance indicators, where appropriate, and considers matters relating to
employees, social and community issues, environmental responsibility, and
climate-related risks, to the extent relevant and proportionate to the Group's
activities.
The Board confirms that the following statutory disclosures are included
within this Strategic Report or elsewhere in this Annual Report, as indicated
below:
· Principal activities and strategy - set out in the section titled
Principal activities and strategy
· Business review - included within the Chief Executive's Review
and Overview of Business Model
· Principal risks and uncertainties - set out in the section titled
Principal risks and uncertainties
· Key performance indicators - set out in the section titled Key
performance indicators
· Section 172(1) statement - set out in the section titled
Statement of the Directors in Performance of Their Statutory Duties in
Accordance with s172(1) Companies Act 2006
· Employee matters and gender diversity - set out in the section
titled Employees and gender diversity
· Social and community matters - set out in the section titled
Corporate social responsibility
· Environmental matters - set out in the sections titled
Environmental responsibility and Environmental impact of vaping products and
batteries
· Climate-related financial disclosures (TCFD) - set out in the
section titled Task Force on Climate-Related Financial Disclosures (TCFD)
Statement
· Future developments - set out in the section titled Future
developments
The Strategic Report does not include non-financial information that is not
considered necessary for an understanding of the development, performance,
position, or future prospects of the Group, taking into account the nature and
scale of the Group's operations.
The Strategic Report was approved by the Board and signed on its behalf by:
Callum Sommerton
Chief Executive Officer
Financial Review
This Financial Review covers an extended 18-month period from 1 April 2024 to
30 September 2025, following the Company's decision to change its accounting
reference date. As such, the results for the period are not directly
comparable with prior 12-month reporting periods and should be read in the
context of the exceptional operational and governance challenges faced by the
Group during this time.
During the prior financial year ended 31 March 2024, the Group delivered a
period of significant revenue growth driven by the successful launch and
distribution of its own branded nicotine-free disposable vape products. That
performance demonstrated both market demand and the Company's ability to
execute at pace when adequately resourced and operationally stable.
Regrettably, that momentum could not be sustained into the current reporting
period due to the governance disruption, leadership interruption, and
operational paralysis experienced during 2024, which materially constrained
the Company's ability to launch new products or respond to rapidly changing
market conditions.
During the period under review, the Group's focus necessarily shifted away
from growth and toward preserving liquidity, maintaining basic trading
operations, and addressing legacy matters. At the same time, the Company began
the transition toward a distribution-led model, building early Chill Connect
revenues to replace the declining contribution from own-brand product sales.
Financial Performance
For the 18-month period, the Group recorded revenue of £555,749, compared
with £1,908,020 in the prior 12-month period. The reduction in revenue
reflects the loss of momentum in own-brand product sales following the
governance disruption, the inability to launch successor products in a timely
manner, and the discontinuation of US trading activities. The prior year's
revenue was heavily weighted toward the Chill ZERO nicotine-free disposable
vape range, which benefitted from a favourable market window that could not be
replicated during the period under review.
Revenue during the period was generated primarily from residual sell-through
of existing Chill ZERO inventory and early Chill Connect distribution and
service activities. Chill Connect revenues have continued to grow since the UK
ban on disposable vapes came into effect on 1 June 2025.
The Group recorded a gross loss of £526,627, compared with a gross profit of
£472,810 in the prior period. This adverse movement reflects a combination of
factors, including lower overall revenues, under-absorption of fixed
distribution and logistics costs, and the write-off of residual Chill ZERO
inventory following regulatory changes and the ban on disposable vaping
products. Pricing pressure in the vaping sector and the need to clear legacy
inventory further impacted gross margins.
The operating loss before exceptional items for the period was £3,778,8787,
compared with £3,523,507 in the prior period. While underlying operating
costs were actively managed, the operating loss was materially impacted by
non-recurring items. These included significant legal and professional costs
associated with governance disputes, asset recovery, and regulatory
compliance, as well as funds extracted from the business during the governance
dispute between April and June 2024. These matters are addressed elsewhere in
this report and represent non-recurring costs that distorted the financial
performance of the period.
The Group recorded an overall loss for the period of £4,327,100, compared
with a loss of £3,370,293 in the prior year. The increase in loss reflects
the combined impact of reduced revenues, gross margin deterioration,
exceptional costs, and finance expenses associated with the Company's funding
arrangements.
Revenue
As noted above, revenue for the period totalled £555,749, a significant
reduction compared with the prior period. The prior period benefited from the
rapid scale-up of Chill ZERO sales into major UK retailers and distributors,
following the successful establishment of UK trading infrastructure. That
growth relied on the ability to launch, support, and iterate products quickly
in a fast-moving market.
During the period under review, governance disruption, suspension of senior
management, loss of banking access, and delays in decision-making prevented
the Company from launching new products or adapting its range ahead of
significant regulatory change. As a result, own-brand revenues declined
materially. US trading activities did not materially contribute to the sales
output of the Group and were formally discontinued during the period as they
no longer represent a focus of the business.
Looking forward, the Group's revenue mix will continue to reflect a
combination of distribution and service income generated through Chill
Connect, supplemented over time by marketplace revenues from chill.com.
Expenditure
Administrative expenses during the period remained elevated, reflecting both
the fixed cost base of operating as a listed company and the exceptional
circumstances faced during the period. Legal, advisory, and professional fees
increased materially as a result of governance disputes, asset recovery
actions, and the delayed audit and reporting process. These costs absorbed a
significant proportion of available capital and constrained the Company's
ability to invest in growth.
As referenced elsewhere in this report, the Group incurred significant legal
and professional costs in connection with governance disputes, asset recovery
actions, and the restoration of operational control. Legal spend alone
exceeded £480,000, representing a material and non-recurring use of capital
that would otherwise have been available to support trading activity and
business development.
In addition, during the period the Group experienced a material cash outflow
of approximately £304,000 arising from payments and transactions that
occurred in connection with the governance dispute involving former directors
between April and June 2024. These amounts were incurred during a period of
disrupted oversight and were not related to the ordinary trading activities of
the business. The loss of these funds further constrained liquidity at a
critical time and had a direct impact on the Company's ability to deploy
capital toward operational recovery and growth.
The cost of sales was impacted by lower volumes, inventory write-downs, and
inefficiencies associated with operating at reduced scale. The write-off of
residual Chill ZERO inventory following regulatory change also contributed to
the gross loss recorded during the period.
The Board has taken steps to reduce the underlying cost base where possible
and to align expenditure more closely with the Group's revised
distribution-led strategy. The Board recognises that meaningful progress
toward breakeven will require both revenue growth and appropriate
capitalisation.
Liquidity, cash and cash equivalents
At the end of the period, the Group held £99,957 at the bank. Liquidity
remained extremely constrained throughout the period, reflecting the combined
impact of trading losses, exceptional costs, and working capital demands.
During and subsequent to the period, the Group has continued to receive funds
from the convertible loan note facility as announced in May 2025.
Cash management was a central focus for the Board, with expenditure
prioritised to support continued trading, compliance obligations, and the
preservation of key relationships with suppliers and partners.
The governance and accounting disruption experienced during the period
resulted in delays to the preparation and submission of certain VAT returns.
Based on current assessments of VAT paid during the period, the Company
expects that, once filings are brought up to date, a material VAT rebate will
be receivable, which is anticipated to provide a positive contribution to
liquidity in due course.
Funding and Going Concern
The Group's activities during the period were supported by funds raised in
January 2024 and by receipts from trading activities undertaken in the prior
financial period. However, the period was characterised by significant cash
outflows relating to legal and professional costs arising from governance
disputes, which materially impacted the Group's financial position.
As set out in more detail elsewhere in this report, the Company has continued
to rely on the support of existing shareholders and creditors, including
through the use of convertible loan notes.
During the period, and in order to support the continued operation of the
business and the execution of its revised strategy, the Company undertook
further fundraising activity during summer 2025, raising £1 million in
additional financing. The fundraising was completed through the issue of
convertible loan notes to existing and new investors, providing the Company
with much-needed working capital at a critical point in its recovery. The
financing was structured to offer flexibility in drawdown and to align
investor support with the staged development of the business. The proceeds
have been used to support ongoing trading, rebuild operational capacity, and
fund the continued development of the Chill Connect distribution business.
Further details of the terms of the fundraising are set out in the notes to
the financial statements and in the Company's regulatory announcements.
The Board recognises that the Group will require additional funding in order
to continue trading and to execute its strategy. The distribution business
being built through Chill Connect is capital intensive and cannot be scaled
without appropriate working capital and operational investment. The Company
therefore remains reliant on its ability to raise further funds as and when
required.
The Company's shareholders have continued to support the Company during an
exceptionally challenging period. In particular, the ongoing backing of the
Company's largest shareholder, whose support has been instrumental in
maintaining the Company's operational continuity and providing the time and
stability needed to reset the business. During January 2026, the Company has
drawn further funds in the sum of £150,000 from existing funding facilities
to support working capital needs.
These conditions give rise to a material uncertainty that may cast significant
doubt on the Group's ability to continue as a going concern. The ability of
the Company to continue in operational existence is dependent on securing
additional funding. Notwithstanding this material uncertainty, after making
appropriate enquiries and considering the options available, the Directors
have a reasonable expectation that the Company will be able to continue in
operational existence for at least 12 months from the date of approval of
these financial statements. Accordingly, the financial statements have been
prepared on a going concern basis.
Financial outlook
The financial performance of the period reflects an extended and highly
disruptive phase in the Company's history. The reversal of prior period
progress was not due to a lack of market opportunity or execution capability,
but rather the interruption of momentum caused by governance issues that have
since been rectified and the diversion of capital and management attention
into non-trading matters. With governance stabilised and a revised business
model in place, the Board believes the focus must now be on rebuilding
revenues through distribution activity, restoring financial discipline, and
securing the capital required to support recovery.
Since the end of the financial period, the Group has continued to make
progress in developing the Chill Connect distribution business. Distribution
revenues and retainer-based service income have continued to grow post-period,
reflecting increased sales coverage, additional brand partnerships, and deeper
engagement across the UK independent convenience retail channel. Importantly,
this progress has been achieved despite ongoing capital constraints and a
challenging market backdrop, providing the Board with confidence that the
underlying proposition is gaining traction. As Chill Connect scales, the mix
of contracted retainer income and repeat distribution revenues is expected to
improve revenue visibility and reduce reliance on one-off transactions.
Consistent with previous guidance, the Board expects this momentum to
translate into a material improvement in sales during the financial period
ending 30 September 2026, subject to the availability of appropriate working
capital and continued execution against the strategy.
DIRECTORS' REPORT
The Directors present their report and the financial statements for the 18
months ended 30 September 2025.
Principal Activities
The principal activities of the Group during the period were the provision of
sales, distribution, and route-to-market services to third-party consumer
brands in the UK, together with the operation and development of a digital
e-commerce marketplace focused on stress management and wellbeing products.
During the earlier part of the period, the Group also engaged in the
development and distribution of its own branded nicotine-free vaping products.
As the period progressed, the Group transitioned away from own-brand product
activity and refocused its operations on a services-led distribution model
through its Chill Connect division, alongside the continued development of the
chill.com marketplace platform
The Group's activities are now concentrated in the UK market. The Group no
longer pursues trading activities in the United States, and own-brand product
development is no longer a core focus of the business.
A detailed review of the Group's activities during the period is set out in
the Chief Executive's Review and Strategic Report.
Results
The Group recorded a loss for the period after taxation from continuing and
discontinued activities of £4,327,100 (2024: loss £3,370,293) and further
details are given in the preceding Financial Review. No dividend has been
paid during the period nor do the Directors recommend the payment of a final
dividend (2024: nil).
Directors
The Directors who served at any time during the period up to the date of
publication were:
C Sommerton
Chief Executive Officer
A Russo Chief Commercial Officer
(Removed 4 June 2024)
T Taylor Chief Operating Office
(Removed 4 June 2024)
E Schrader Non-Executive Director
(Resigned 7 June 2024)
Scott E. Thompson Independent Non-Executive Director
(Resigned 30 September 2024 )
A Chathli Non-Executive Chairman
(Appointed 4 June 2024)
G Duncan Finance Director
(Appointed 4 June 2024)
N Tulloch Non-Executive Director
(Appointed 5 September 2024)
Details of the Directors' interests in the shares and warrants of the Company
are set out in the Directors' Remuneration Report on page 46.
Further details of the interests of the Directors in the share options and
warrants are set out in Note 22 to the financial statements.
Substantial Interests
At 27 January 2026 the Company had been informed of the following substantial
interests in the issued share capital of the Company:
Number of Issued Shares Percentage of Capital
Jonathan Mark Swann 84,710,787 16.20%
Ox Distributing* 42,739,994 8.17%
*Includes shares held personally by members of the Schrader family.
Share Capital
Chill Brands Group PLC is incorporated as a public limited company and is
registered in England and Wales with the registered number 09309241. Details
of the Company's issued share capital, together with the details of the
movements during the period, are shown in Note 21. The Company has one class
of ordinary shares and all shares have equal voting rights and rank pari passu
for the distribution of dividends and repayment of capital.
Corporate Governance Statement
The Board is committed to maintaining appropriate standards of corporate
governance, recognising its responsibility to ensure effective oversight and
management of the Group's affairs in the interests of shareholders and other
stakeholders. The statement below explains how the Company has approached
corporate governance during the period and includes the information required
under section 7 of the Disclosure Guidance and Transparency Rules of the UK
Financial Conduct Authority.
The Company is listed on the Main Market of the London Stock Exchange and is
aware of the provisions of the UK Corporate Governance Code ("the Code").
However, the Company has not formally adopted the Code and does not apply it
in full, given its current size, scale and resources. The Board instead seeks
to observe and apply the principles of good governance contained in the Code
to the extent considered appropriate and proportionate to the Company's
circumstances. The Board continues to review its corporate governance
framework regularly and intends to adopt additional elements of the Code as
the Group grows and its operations mature.
Approach to Governance, Strategy and Risk Management
The Group operates as a consumer packaged goods distribution company, focused
on the distribution of wellness products and fast-moving consumer goods
(FMCG), including nicotine pouches, vapes, beverages, supplements and wellness
products through both its e-commerce platform and its Chill Connect
distribution division.
The Board recognises that effective governance plays a central role in
supporting the Group's ability to deliver its strategic objectives and create
long-term shareholder value. The Board maintains oversight of all key matters,
including capital allocation, entry into material contracts and partnerships,
regulatory compliance, and financial reporting. The Board receives regular
updates from the executive team and engages in active oversight of business
performance, strategic direction, key transactions and risk exposure.
The principal strategic risks considered by the Board include:
· The regulatory environment in relation to the sale, marketing and
distribution of regulated consumer products, for which the Group obtains legal
advice as appropriate;
· Cash flow and working capital management, common to all product-based
trading businesses, now addressed through enhanced financial planning under
the oversight of the Group's Chief Financial Officer;
· The viability and market acceptance of product lines, requiring
active management of product mix and commercial partnerships.
The Board actively monitors these risks and oversees management's response to
them as part of its regular cycle of meetings and decision-making.
Sustainability of the Business Model
The Board is focused on building a resilient and scalable operating platform
to support the Group's long-term growth. In prior years, many of the Group's
business functions were outsourced to external partners. The current strategic
focus is on building internal operational capabilities and diversifying the
product offering to adapt to changing consumer preferences and evolving
regulatory requirements. The Board considers that these steps are critical to
the long-term sustainability of the business model.
While the Group does not yet operate formal ESG or sustainability programmes,
the Board recognises the growing importance of such considerations and will
keep its approach to sustainability, governance and stakeholder engagement
under review as the Group grows.
Board Composition and Committees
Since the constitution of the new Board of Directors on 4 June 2024, steps
have been taken to strengthen the Company's corporate governance framework.
The Board currently comprises four directors, including two independent
non-executive directors. Following recent changes, the Audit Committee and the
Remuneration Committee have both been reconstituted, although further
development of their roles and procedures is ongoing. The Board is informed
regularly by the executive team to ensure that non-executive directors are
kept abreast of material developments and operational performance.
The Board remains committed to keeping its governance arrangements under
regular review and will seek to implement further governance measures as
appropriate to the Group's size, complexity and stage of development.
Board of Directors
During the period under review, the composition of the Board changed
materially following governance events and a subsequent reconstitution of the
Board in June 2024.
Mr Callum Sommerton serves as the Group's Chief Executive Officer. In June
2024, Mr Antonio Russo and Mr Trevor Taylor were removed from the Board. At
the same time, Mr Harry Chathli was appointed as Non-Executive Chairman and Mr
Graham Duncan was appointed as Finance Director.
Mr Eric Schrader resigned from his position as a Non-Executive Director on 7
June 2024, and Mr Scott E. Thompson resigned on 30 September 2024. Mr Nick
Tulloch was appointed as a Non-Executive Director on 5 September 2024.
As at the date of approval of these financial statements, the Board comprises
one Executive Director, one Executive Finance Director, and two Non-Executive
Directors. There have been no changes to the composition of the Board since
those appointments.
The Board meets regularly throughout the year to discuss key issues and to
monitor the overall performance of the Company. All corporate and operational
matters are considered by the Board as a whole while consideration of matters
relating to the preparation of financial statements, audit of such statements,
the nomination of directors and their remuneration are deferred to the
relevant committees. More information about the Board can be found on the
Group's corporate website www.chillbrandsgroup.com.
The Board confirms that it has carried out a robust assessment of the
Company's emerging and existing risks, including those that could threaten its
business model, future performance, solvency or liquidity. The principal risks
and uncertainties facing the Group are described elsewhere in this report. The
Board continues to monitor these risks on an ongoing basis and ensures that
appropriate controls and mitigating actions are in place to support the
Company's long-term viability.
As the Company continues to expand its operations and build internal
capabilities, the Board recognises the importance of investing in and
incentivising its growing workforce. In support of this, the Board intends to
establish a range of incentive structures designed to attract, motivate and
retain talent. These will include performance-driven cash incentive schemes,
particularly focused on rewarding the sales teams for commercial success, as
well as the development of a broader equity-based incentive plan that will
allow employees to participate in the long-term growth and value creation of
the Company by receiving a direct stake in its future performance.
The Board is committed to adopting a formal Code of Corporate Governance when
it is appropriate to do so.
Audit Committee
The Board seeks to present a balanced and understandable assessment of the
Group's position and prospects in all interim, final, and price-sensitive
reports, together with any information required to be disclosed by statute or
regulation.
The Audit Committee is comprised of the Company's Non-Executive Directors,
Harry Chathli and Nick Tulloch. The Committee is responsible for overseeing
the integrity of the Group's financial reporting, reviewing the effectiveness
of internal controls and risk management systems, and monitoring the
independence and performance of the external auditor.
For a company of the Group's size, the UK Corporate Governance Code provides
that an audit committee should comprise at least two independent non-executive
directors and that the chair of the Board should not be a member of the
committee. While the current composition does not fully align with these
guidelines, the Board considers the arrangements to be appropriate and
proportionate given the size, complexity, and current stage of development of
the Group.
In particular, the Board presently comprises two executive directors and two
non-executive directors, including the Non-Executive Chairman. Until such time
as the Company is able to appoint additional independent non-executive
directors, the Board considers it appropriate for the existing Non-Executive
Directors to serve on the Audit Committee in order to ensure oversight of
financial reporting and audit matters.
The Audit Committee operates under delegated authority from the Board and is
in the process of continuing to formalise its procedures and practices in line
with the Group's evolving governance framework. The financial statements and
the Annual Report were reviewed and considered by the Board as a whole prior
to approval.
External Independent Auditor
The Audit Committee meets with the external auditor at least twice a year to
consider audit findings, internal procedures and controls, and any matters
raised by the auditor. The Board reviews the independence and objectivity of
the external auditor and the effectiveness of the audit process. It also
considers the nature and extent of any non-audit services provided, reviewing
the ratio of audit to non-audit fees to ensure that an appropriate and
independent relationship is maintained between the Company and its auditor.
The Company has a policy governing the provision of non-audit services by the
external auditor, designed to safeguard auditor objectivity and independence.
Any proposed non-audit services are subject to review and approval by the
Audit Committee.
The audit of the financial year ended 31 March 2024 was subject to significant
delay and complexity, which resulted in substantially higher audit fees than
would ordinarily be expected for a company of the Group's size. These
increased costs reflected the extended duration of the audit process and
additional work required to complete the audit following governance and
operational disruption. At the end of the reporting period, a portion of the
fees relating to the prior period audit remained outstanding and payable to
the Company's former auditors.
In relation to the period under review, the Company undertook a competitive
audit tender process. Following this process, RPG Crouch Chapman LLP was
appointed as the Company's external auditor. In recommending the appointment,
the Board considered a number of factors, including audit quality, relevant
experience, independence, and value, as well as the results of its review of
audit effectiveness.
There are no contractual obligations restricting the Board's choice of
external auditor.
Remuneration Committee
During the period under review, the Company established a Remuneration
Committee. The Remuneration Committee is comprised of the Company's
Non-Executive Directors, Harry Chathli and Nick Tulloch.
The Remuneration Committee meets as required to consider all aspects of
directors' and staff remuneration, including salary, incentives, share-based
payments, and service contracts. The Board considers the composition and
operation of the Remuneration Committee to be appropriate and proportionate
given the size, structure, and stage of development of the Group.
Nominations Committee
During the period under review, the Company established a Nomination
Committee. The Nomination Committee is comprised of the Company's
Non-Executive Directors, Harry Chathli and Nick Tulloch. The Committee meets
as required to consider Board composition, succession planning, and the
appointment of new directors, taking into account the size, structure, and
strategic needs of the Group.
Internal Financial Control
The Company has instituted a range of internal financial controls aimed at
safeguarding its assets and ensuring the maintenance of accurate and reliable
accounting records. The Company is committed to continuous improvement and
enhancement of these measures to protect its assets effectively and the policy
outlined here has been adopted by the current Board as constituted on 4 June
2024.
The maintenance of proper records is a key component of these internal
financial controls. This responsibility is overseen by the Finance Director,
Graham Duncan, and the records are prepared by an independent bookkeeper
appointed specifically for this function in the UK. This separation of duties
ensures that the records are not only accurate but also impartial, providing a
strong foundation for the Company's financial reporting and decision-making
processes.
To further safeguard assets, the Company involves the entire Board and its
advisors in all decisions related to the treatment and potential disposal of
any assets. This collective approach ensures that all perspectives are
considered, and the best possible decisions are made in the interest of the
Company and its stakeholders.
Additionally, a payments policy has been implemented wherein all material
payments require the approval of both the CEO and the Finance Director. This
dual-approval mechanism acts as a critical checkpoint, preventing unauthorised
or potentially detrimental financial transactions.
The Board continues to evaluate procedures to ensure thorough transaction
approval, comprehensive risk assessment, and careful consideration of capital
expenditures. By adopting these strategies, the Board aims to maintain robust
financial controls that are suitable for a business of the Company's size.
This proactive approach is designed to create a secure financial environment
that supports the Company's growth and operational integrity.
The Board is particularly mindful of the need for these measures, and for
additional financial safeguards, in light of the issues that arose at the
start of the period - specifically those relating to the treatment of the
Company's capital and assets. These events have reinforced the Board's
commitment to rigorous internal controls and heightened oversight of all
financial transactions.
While no system of internal financial control can provide absolute assurance
against material misstatement or loss, the Board considers that the controls
currently in place provide reasonable assurance that the Group's assets are
safeguarded and that accounting records are reliable and complete, taking into
account the size, nature, and complexity of the Group's operations.
Shareholder Communications
The Company considers open and transparent communication with shareholders to
be a high priority and seeks to keep shareholders informed of developments in
the business in a timely and responsible manner. The Board is committed to
providing meaningful information to the market while also protecting the
Company's legitimate commercial interests and its obligations to clients,
suppliers, partners, and regulators.
The Group uses its corporate website (www.chillbrandsgroup.com) as a central
source of information for shareholders, including the publication of
regulatory announcements, reports, and other relevant company documentation.
In addition, the Company seeks to provide broader context and insight through
more detailed narrative commentary in its annual and interim reports.
Where appropriate, the Company also engages with other communication channels
to enhance understanding of the business and its operating environment. These
have included webinars, podcasts, and other media formats, which are intended
to provide background and explanation rather than to disclose price-sensitive
information.
The Group also makes use of social media platforms, including accounts
associated with its underlying businesses, to provide non-material updates
regarding operational activity and to support brand and customer engagement.
While such communications are not intended as a forum for the discussion of
corporate or price-sensitive matters, they may nonetheless be of interest to
shareholders as part of a broader picture of the Group's activities.
The Board remains mindful of its obligations under market abuse, regulatory,
and confidentiality requirements. Certain information cannot be disclosed
publicly without the consent of clients or counterparties, and disclosures
relating to regulatory processes, legal matters, or commercially sensitive
arrangements may be restricted. Within these constraints, the Company will
continue to use a range of appropriate channels to communicate with
shareholders and promote transparency as the business evolves.
DIRECTORS' REMUNERATION REPORT
The Directors' Remuneration Report for the period ended 30 September 2025 and
the Directors' Remuneration Policy will be proposed for approval by
shareholders at the Group's reconvened 2024 Annual General Meeting and 2025
Annual General Meeting that will be announced in due course.
The Annual Report for the period ending 31 March 2024 was not published prior
to the AGM held on 30 September 2024, as a result, that AGM was adjourned in
relation to those resolutions connected to the Annual Report (including the
Directors' Remuneration Report for the year ended 31 March 2024 and the
Directors' Remuneration Policy).
During the period, the Board has been required to prioritise the preservation
and survival of the business in the context of significant operational and
financial challenge. In determining directors' remuneration, the Board
therefore seeks to balance any incentivisation for future success with the
Company's current financial performance, liquidity position, and the need for
strict cost control. The Remuneration Policy has been reviewed with regard to
the wider working and pay conditions across the Group, with the objective of
ensuring that remuneration arrangements remain fair, responsible, and closely
aligned with performance and the long-term interests of the Company.
Future policy table
Base Salary Pension Contribution Benefits in kind Bonus or incentive plan
Executive Directors
C Sommerton GBP £85,000 Statutory Minimum Nil Ad hoc basis
see below
G Duncan GBP £36,000 Statutory Minimum Nil Ad hoc basis
see below
Non-Executive Directors
GBP £24,000 Nil Nil Nil
A Chathli
N Tulloch GBP £24,000 Nil Nil Nil
The service contracts are reviewed annually.
Benefits in Kind
At the start of the Period, the Group paid healthcare premiums for its US
staff at the prevailing rates.
Bonus or Incentive Plan
At the date of approval of these financial statements, the Company does not
have an active bonus or long-term incentive plan in operation for the
executive management team. Since their appointment, the current Board,
including the Chief Executive Officer, has not been awarded any bonuses,
incentive payments, or share-based incentive awards.
During the prior period, shareholders approved proposals relating to the
establishment of an Enterprise Management Incentive (EMI) plan in connection
with a potential award to the Company's Chief Executive Officer. While
shareholder approval was obtained, the relevant EMI arrangements were not
formally adopted by the prior Board, and no award documentation was issued or
implemented.
The Board recognises the importance of aligning management incentives with
shareholder interests over the long term. In due course, and once the business
is operating from a more stable financial position, the Board intends to
revisit the introduction of appropriate incentive arrangements under the
guidance of the Remuneration Committee. Any future incentive plans will be
structured to reflect the Company's financial position, strategic priorities,
and the need for responsible capital management, and will be subject to
appropriate governance and, where required, shareholder approval.
Service Contracts
Mr. Sommerton was initially employed from 1 December 2021 in his previous
capacity as International Brand Director. His Director's Service Contract in
relation to his role as Chief Executive Officer commenced on 15 April 2022.
Mr. Sommerton is paid at an annual rate of GBP £85,000 per annum plus
contributions to the Group's statutory workplace pension scheme and the
ability to participate in any bonus awards that the Board may adopt or
implement.
Mr. Russo and Mr. Taylor were employed on an initial fixed term of one year
from 1 April 2019 and their contracts automatically renewed annually for a
further one year period unless either party gave at least 60 days' notice of
termination prior to a renewal date, save in the case of a material breach of
contract when the Executive could be dismissed without notice. Mr. Russo was
paid at a rate of $175,000 per annum. Mr. Taylor was paid at a rate of
US$100,000 per annum with provisions for his salary to increase in line with
revenue and at the confirmation of the Board. Both Mr. Russo and Mr. Taylor
received healthcare benefits and participated in any bonus awards.
Mr. Thompson was appointed as an Independent Non-Executive Director in
accordance with the terms of an appointment letter dated 21 January 2021. For
his service, he was entitled to fees amounting to $15,000 and did not receive
any additional financial benefits. Upon his appointment, he was awarded
100,000 ordinary shares.
Mr. Schrader was appointed as a Non-Executive Directors in accordance with the
terms of an appointment letter dated 27 May 2022. For his service on the Board
he was entitled to fees amounting to $10,000 and was further contracted to
provide sales services at a rate of $2,500 per month. This fee was revised to
$5,000 per month from February 2024.
Mr. Duncan was appointed on 4 June 2024 following a General Meeting of the
Company's shareholders. He is paid at a rate of £36,000 per annum.
Mr. Chathli was appointed on 4 June 2024 following a General Meeting of the
Company's shareholders. He provides his services to the Company in accordance
with a letter of appointment dated 16 July 2024 and is paid at a rate of
£24,000 per annum.
Mr. Tulloch was appointed to the Board on 5 September 2024 and he provides his
services to the Company in accordance with a letter of appointment dated 4
September 2024. He is paid at a rate of £24,000 per annum for his services.
In the event of a termination or loss of office the Director is entitled only
to payment of his basic salary (plus contractual benefits if applicable) in
respect of his notice period. In the event of a termination or loss of office
in the case of a material breach of contract the Director is not entitled to
any further payment. Executive Directors are allowed to accept external
appointments with the consent of the Board, provided that these do not lead to
conflicts of interest. Executive Directors are allowed to retain the fees
paid. The service contracts are available for inspection at the Company's
registered office.
Approval by Members
The Group's remuneration policy will be put before the members for approval at
the next Annual General Meeting to be held on the earliest practical date in
2026. Further information regarding this reconvened meeting will be announced
in due course.
IMPLEMENTATION REPORT
Particulars of Directors' Remuneration (audited)
Particulars of directors' remuneration, including directors' warrants which,
under the Companies Act 2006 are required to be audited, are given in Note 6
and further referenced in the Directors' report.
Remuneration paid to the Directors during the 18 month period ended 30
September 2025 was:
Executive Director Base Salary Benefits in Kind Pension Contributions Total
£ £ £ £
C Sommerton 127,500 - 2,642 130,142
A Russo 21,605 - - 21,605
T Taylor 12,345 - - 12,345
E Schrader 11,753 - - 11,753
S Thompson 16,840 - - 16,840
A Chathli 32,000 - - 32,000
G Duncan 49,000 - - 49,000
N Tulloch 26,000 - - 26,000
Totals 297,043 - 2,642 299,685
Remuneration paid to the Directors during the year ended 31 March 2024 was:
Executive Director Base Salary Benefits in Kind Pension contributions Total
£ £ £ £
C Sommerton* 85,000 - 2,642 87,642
A Russo 140,382 23,998 - 164,380
T Taylor 82,720 25,223 - 107,943
E Schrader 25,986 - - 25,986
S Thompson 13,993 - - 13,993
Totals 348,081 49,221 2,642 399,944
The benefits in kind represents healthcare and pension premiums that the Group
pays for its directors at the prevailing rates.
The benefits in kind represents healthcare and pension premiums that the Group
pays for its directors at the prevailing rates.
Payments to Past Directors (audited)
During the period ended 30 September 2025, no payments were made to former
directors in respect of services rendered following their departure from the
Board.
As disclosed elsewhere in this report, during the period between April and
June 2024, amounts totalling approximately $400,000 were paid out of the
Company in connection with arrangements involving former directors during a
period of governance disruption. These payments did not relate to ongoing
services provided to the Company during the period under review and arose
prior to the reconstitution of the Board. No such payments have been made
since that time.
Payments for Loss of Office (audited)
There were no payments to past directors for loss of office during the period
ended 30 September 2025.
Bonus and Incentive Plan (audited)
On 11 September 2023, the Company announced proposals relating to a Management
Incentive Plan intended to align the interests of executive management with
those of shareholders. The proposed plan involved the grant of share options
to executive directors, subject to shareholder approval and final
authorisation by the Board. Although shareholder approval was obtained at the
Annual General Meeting held on 19 September 2023, the plan was not formally
adopted by the Board and no award certificates or letters were issued. As a
result, no options were granted under the proposed plan.
At the date of approval of these financial statements, the Company does not
have any active bonus, short-term incentive, or long-term incentive
arrangements in place for executive management or the Board. No bonuses,
incentive payments, or share-based awards have been made to the current Board
or executive management team since their appointment.
Percentage Change in the Remuneration of the Chief Executive (audited)
The following table shows the percentage change in the remuneration of the
Chief Executive in 2025 and 2024 compared to that of all employees, except
directors, within the Group.
18 months 12 months Change
2025 2024 %*
£ £
Base Salary Chief Executive 127,500 85,000 0%
All* 263,042 384,359 (54.4%)
Bonuses Chief Executive - - -
All* - - -
Benefits in Kind Chief Executive - - -
All* - 57,281 -
Total Remuneration Chief Executive 127,500 85,000 0%
All* 263,042 441,640 (60.3%)
*: calculated on a pro rata basis
Relative Importance of Expenditure on Remuneration
18 months 12 months Year on Year pro rata
2025 2024
£ £
Total Chief Executive's Remuneration (including share based payments) 127,500 85,000 0%
Distributions to Shareholders - - N/A
Total Shareholder Return
The following graph illustrates the percentage movement in the Company's share
price over the year compared to the percentage movements over the same period
of the FTSE 100 and FTSE-AIM All Share indices.
Historic Remuneration of the Chief Executive
Year Salary Bonus Benefits in Kind Share Based Payments Total
£ £ £ £ £
2020 193,151 - 39,718 - 232,869
2021* 152,673 - 36,998 1,410,268 1,599,939
2022* 188,829 - 53,831 470,090 712,750
2023 90,000 - - - 90,000
2024 85,000 - - - 85,000
2025 127,500 - - - 127,500
*The role of Chief Executive was fulfilled by two individuals concurrently
during the years ended 31 March 2022 and 2021. The figures for "Chief
Executive" are the combined total payments for the two individuals during the
period. Additionally in the year ended 31 March 2020, the Chief Executive role
was performed by other individuals.
Directors' Interest in Shares (audited)
The Company has no Director shareholding requirement.
The beneficial interest of the Directors in the ordinary share capital of the
Company at both 31 March 2025 and 30 September 2025 was:
Number of Shares Percentage of Issued Shared Capital Percentage Change
Director 31 March 2024 31 March 2025 31 March 2024 31 March 2025
A Russo 6,950,000 6,950,000 2.67% 2.42% (0.25%)
T Taylor 6,950,227 6,950,227 2.67% 2.42% (0.25%)
C Sommerton 266,668 266,668 0.00% 0.00% 0.00%
E Schrader 26,755,416 26,755,416 10.25% 9.41% (0.84%)
S Thompson 100,000 100,000 0.00% 0.00% 0.00%
G Duncan - - - - -
A Chathli - - - - -
N Tulloch - - - - -
No Directors held any options or warrants at the end of the period.
Remuneration Committee
The Remuneration Committee, which was formed after the end of the Period in
review following the appointment of new directors on 4 June 2024, is comprised
of the Company's two non-executive directors, Harry Chathli and Nick Tulloch.
The Committee meets as required to consider all aspects of directors' and
staff remuneration, including share options and service contracts.
Where appropriate, the Committee may consult with the wider Board and external
advisors, but decisions on remuneration are taken independently by the
non-executive members.
Shareholder Voting at the Annual General Meeting
In accordance with applicable regulatory requirements, the Company's
remuneration policy and any proposed changes to it will be submitted to
shareholders for approval at the reconvened 2024 Annual General Meeting and at
subsequent Annual General Meetings.
This is the Company's ninth period of operation. There have been no major
changes during the period either in the policy on directors' remuneration or
its implementation, including terms of service for the Directors.
This Directors' Remuneration Report was approved by the Board and signed on
its behalf by:
Callum Sommerton, Chief Executive Officer
STATEMENT OF DIRECTORS' RESPONSIBILTIES IN RESPECT OF THE ANNUAL REPORT AND
THE FINANCIAL STATEMENTS
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable United Kingdom law and
regulations and UK adopted International Accounting Standards.
Company law requires the Directors to prepare financial statements for each
financial period which give a true and fair view of the state of affairs of
the Group and of the profit or loss and cash flows of the Group for that
period.
In preparing those financial statements, the Directors are required to:
· select suitable accounting policies and apply them consistently;
· make judgements and estimates that are reasonable, relevant, and
prudent;
· present information, including accounting policies, in a manner
that provides relevant, reliable, comparable, and understandable information;
· state whether UK adopted International Accounting Standards have
been followed, subject to any material departures disclosed and explained in
the financial statements;
· assess the Group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless it is inappropriate to presume that
the Group will continue in business; and
· provide additional disclosures where compliance with specific
requirements of UK adopted International Accounting Standards is insufficient
to enable users to understand the impact of particular transactions, events,
and conditions on the Group's financial position and financial performance.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's transactions and disclose with
reasonable accuracy at any time the financial position of the Group, and to
enable them to ensure that the financial statements comply with the Companies
Act 2006 and Article 4 of the IAS Regulation. They are also responsible for
safeguarding the assets of the Group and for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Under applicable law and regulation, the Directors are also responsible for
preparing a Strategic Report, Directors' Report, Directors' Remuneration
Report, and Corporate Governance Statement that comply with the Companies Act
2006, the Disclosure Guidance and Transparency Rules, and the Listing Rules of
the Financial Conduct Authority, and for ensuring that the Annual Report as a
whole is fair, balanced, and understandable.
So far as each of the Directors is aware, there is no relevant audit
information, as defined in Section 418 of the Companies Act 2006, of which the
Group's auditors are unaware, and each Director has taken all the steps that
they ought to have taken as a director to make themselves aware of any
relevant audit information and to establish that the Group's auditors are
aware of that information.
The Annual Report and Consolidated Financial Statements are published on the
Group's website at www.chillbrandsgroup.com (http://www.chillbrandsgroup.com)
. The Directors are responsible for the maintenance and integrity of the
Group's website. Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from legislation in other
jurisdictions.
The Directors confirm that, to the best of their knowledge:
· the Group financial statements, prepared in accordance with UK
adopted International Accounting Standards, give a true and fair view of the
assets, liabilities, financial position, and profit or loss of the Group;
· the Strategic Report includes a fair review of the development
and performance of the business and the position of the Group, together with a
description of the principal risks and uncertainties that it faces; and
· the Annual Report and financial statements, taken as a whole, are
fair, balanced, and understandable and provide the information necessary for
shareholders to assess the Group's performance, business model, and strategy.
ENVIRONMENTAL RESPONSIBILITY AND GREENHOUSE GAS DISCLOSURES
The Directors recognise the importance of assessing and managing the
environmental impact of the Group's activities. During the period under
review, the Company has continued to operate in a state of transition, with
its business model, geographic footprint, and operational structure evolving
materially. In this context, it has not always been appropriate or
proportionate to undertake comprehensive new measurements of emissions and
environmental impact. Nevertheless, the Company remains committed to complying
with all applicable environmental laws and reporting obligations and to
improving its environmental practices as the business stabilises.
The principal environmental risks relevant to the Group include carbon
emissions arising from manufacturing, transportation, and energy consumption;
the management of waste, including packaging and end-of-life products; and the
sourcing of raw materials. Historically, particular attention has been paid to
the environmental impact of vape products, especially in relation to battery
waste and disposal. While the Group has since reduced its exposure to
own-brand vaping products, the Board remains committed to working with
suppliers, partners, and stakeholders to minimise environmental harm
associated with any products distributed by the business.
Streamlined Energy and Carbon Reporting (SECR)
Under the Companies (Directors' Report) and Limited Liability Partnerships
(Energy and Carbon Report) Regulations 2019, the Company is required to
disclose its UK energy use and associated greenhouse gas (GHG) emissions in
accordance with the Streamlined Energy and Carbon Reporting (SECR) framework.
This includes, as a minimum, emissions relating to electricity, gas, and
transport fuel, together with an appropriate intensity ratio, where relevant.
During the period, the Company did not undertake a full recalculation of its
greenhouse gas emissions. The Directors consider this appropriate given the
lack of material change to the nature of the Company's internal operations
that fall within the scope of SECR reporting, together with the significant
operational disruption and restructuring experienced during the year. The
Company has therefore relied on the same methodology and baseline assumptions
used in the prior year, which were developed with reference to external expert
guidance.
During the period the Group discontinued its US operations. The Board expects
that this change will have reduced the Group's overall environmental footprint
although this has not yet been quantified.
Emissions methodology and scope
For reporting purposes, emissions have been classified in accordance with the
Greenhouse Gas Protocol.
· Scope 1 emissions: The Company recorded no Scope 1 emissions
during the period, as it does not own or operate vehicles, combustion
facilities, or refrigeration equipment.
· Scope 2 emissions: Scope 2 emissions arose from the purchase of
electricity associated with office space and home-working arrangements used by
Company staff.
· Scope 3 emissions: Scope 3 emissions, including those associated
with supply chain activity, logistics, and product distribution, have not been
calculated. The majority of these activities are outsourced to third-party
providers, and the Directors consider that reliable data is not currently
available on a consistent basis.
Consistent with the prior year, electricity and natural gas usage were
estimated using industry-standard intensity factors based on occupied space,
and appropriate emissions factors were applied to calculate carbon dioxide
equivalent (CO₂e). The Directors consider this approach to be reasonable and
proportionate given the Company's size, structure, and reliance on third-party
service providers.
Energy consumption and emissions
All reported energy consumption and associated greenhouse gas emissions during
the period related primarily to office-based activity and home-working
arrangements. The Group did not operate energy-intensive facilities.
The principal energy efficiency measure undertaken during the period continued
to be the Group's use of a remote and flexible working model, which reduces
emissions associated with office occupancy, commuting, and business travel.
The table below sets out the Company's estimated energy consumption and
associated greenhouse gas emissions, consistent with the prior reporting
methodology:
Consumption: kWh Consumption: Cubic Feet of Gas Emissions: tC02e
Electricity 65,174 - 30.60
Natural Gas - 109,853 5.99
Total: 36.59
The Company will continue to monitor its environmental footprint and seek to
minimise its carbon emissions, balancing commercial needs with environmentally
responsible choices. In particular, we intend to take proactive steps to
reduce environmental harms associated with the production and distribution of
batteries in our vape products. As part of our broader energy efficiency
strategy, we are planning to reduce reliance on air freight by shifting to sea
and consolidated freight wherever feasible, and to adopt more efficient
packaging and distribution practices across our consumer goods portfolio.
Further reporting, analysis and commentary will be provided in future reports
as the Company's operations mature.
DISCLOSURE AND TRANSPARENCY RULES
Details of the Company's issued share capital, together with information on
share options and warrants, are set out in Notes 21 and 22 to the financial
statements. There are no restrictions on the transfer of the Company's
ordinary shares, and none of the shares carry any special rights with regard
to the control of the Company. There are no known arrangements under which the
financial rights attached to the shares are held by a person other than the
registered holder, and there are no known agreements or restrictions affecting
the transfer of shares or voting rights.
So far as the Directors are aware, there are no persons who hold a significant
direct or indirect interest in the Company's issued share capital other than
the Directors and those shareholders disclosed in the section of this Annual
Report dealing with significant shareholdings.
The rules governing the appointment and replacement of directors are set out
in the Company's articles of association, any amendment to which requires
shareholder approval. There are no significant agreements to which the Company
is a party that take effect, alter, or terminate upon a change of control of
the Company following a takeover bid. In addition, there are no agreements in
place that provide for compensation for loss of office or employment that
would become effective as a result of such a bid.
REQUIREMENTS OF THE LISTING RULES
The following table provides references to where the relevant information
required by listing rule 9.8.4R is disclosed:
Listing Rule requirement
Details of long-term incentive schemes as required by Listing Rule 9.4.3R See Directors' Remuneration Report page 44
Details of any arrangement under which a Director of the Company has waived n/a
emoluments from the Company
Details of any allotment for cash of equity securities made during the period
otherwise than to the holders of such equity shares other than in proportion
to their holdings of such equity shares and which has not been specifically n/a
authorised by the Company's shareholders
Details of any contract of significance subsisting during the period to which
the Company is a party and to which a Director of the Company is or was
materially interested Note 28 on page 96
Details of remaining service contract period for director standing for See service contracts details on page 42
re-election this year
FINANCIAL INSTRUMENTS
The Company has exposure to credit risk, liquidity risk and market risk. Note
27 presents information about the Company's exposure to these risks, along
with the Company's objectives, processes and policies for managing the risks.
EVENTS AFTER THE REPORTING PERIOD
Following the end of the reporting period on 30 September 2025, the Company
continued to execute the strategy described elsewhere in this Annual Report.
There were no changes to the Group's strategic direction or principal
activities during this time.
Subsequent to the period end, the Company completed a competitive audit tender
process and appointed RPG Crouch Chapman LLP as its external auditor.
In addition, the Company reached a settlement with former professional
advisers in relation to historic matters. The settlement resulted in a gross
cash inflow to the Company of approximately £210,000, before associated legal
costs. The Directors consider this settlement to be non-adjusting in nature
for the purposes of these financial statements.
There have been no other events after the reporting period that, in the
opinion of the Directors, require adjustment to, or disclosure in, these
financial statements.
DIRECTORS' INDEMNITY PROVISIONS
The Company is permitted, pursuant to its articles of association and
applicable legislation, to indemnify its directors in respect of liabilities
incurred in connection with the performance of their duties, subject to the
limitations set out in the Companies Act 2006.
The Board keeps the availability and appropriateness of directors' indemnity
arrangements, including insurance, under review as part of its broader
governance framework.
GOING CONCERN
The Directors have carefully considered the Group's financial position,
liquidity forecasts, and funding requirements in assessing the appropriateness
of adopting the going concern basis in preparing these financial statements.
As set out elsewhere in this Annual Report, the Group has experienced a
prolonged period of operational disruption and financial constraint, which has
placed pressure on liquidity and resulted in continued trading losses. The
Group's ability to continue as a going concern is dependent on the successful
execution of its revised strategy, the continued development of its
distribution-led operating model, and access to further funding as required to
support working capital and ongoing operations.
In making their assessment, the Directors have reviewed detailed cash flow
forecasts covering a period of at least twelve months from the date of
approval of these financial statements. These forecasts reflect the Directors'
best estimates of future trading performance, expected receipts and payments,
and the anticipated availability of funding, taking into account the Group's
current cost base and planned activities.
The Directors recognise that the Group will require additional funding during
the forecast period. While there can be no certainty that such funding will be
available when required, the Directors note the Group's recent history of
securing financial support from existing and new investors and the continued
engagement of key stakeholders in supporting the business through its recovery
phase.
These conditions indicate the existence of a material uncertainty that may
cast significant doubt on the Group's ability to continue as a going concern.
Nevertheless, having considered the Group's funding history, the level of
engagement with existing and potential capital providers, and the actions
available to it, the Directors have a reasonable expectation that the Group
will be able to secure appropriate funding as required. In addition, the
Directors remain prepared to take such steps as they consider necessary and
appropriate to preserve liquidity, strengthen the balance sheet, and support
the continued operation of the business. On this basis, the Directors believe
that the Group will have adequate resources to continue in operational
existence for at least twelve months from the date of approval of these
financial statements, and accordingly the financial statements have been
prepared on a going concern basis.
DONATIONS
The Company made no political donations during the period.
These statements of the Directors' Responsibilities were approved by the Board
and signed on its behalf by:
Callum Sommerton, Chief Executive Officer
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHILL BRANDS GROUP PLC
Opinion
We have audited the financial statements of Chill Brands Plc (the 'parent
company') and its subsidiaries (the 'group') for the period ended 30 September
2025 which comprise the Consolidated statement of Comprehensive income, the
Consolidated and Parent Company Statements of financial position, the
Consolidated and Parent Company Statements of Changes in Equity, the
Consolidated and Parent Company Statement of Cashflows and notes to the
financial statements, including material accounting policy information. The
financial reporting framework that has been applied in their preparation is
applicable law and UK adopted international accounting standards.
In our opinion:
· the financial statements give a true and fair view of the state of
the group's affairs and of the parent company's affairs as at 30 September
2025, and of the group's loss for the period then ended;
· the group financial statements have been properly prepared in
accordance with UK adopted international accounting standards;
· the parent company financial statements have been properly prepared
in accordance with UK adopted international reporting standards and
· the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor responsibilities for the audit
of the financial statements section of our report.
We are independent of the group and parent company in accordance with the
ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC's Ethical Standard, and we have
fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to the Going Concern section within the accounting policies,
which explains that the ability of the Group and Company to continue as a
going concern is dependent on continued shareholder financing for at least
the 12 months following the approval of the financial statements. At the date
of signing these financial statements there is no binding written agreement
and therefore no guarantee that the funding will be received and within the
necessary timeframe. These conditions indicate the existence of a material
uncertainty that may cast significant doubt on the Group's and the Parent
Company's ability to continue as a going concern and therefore it may be
unable to realise its assets and discharge its liabilities in the normal
course of business.
Our opinion is not modified in respect of this matter.
For the reason set out above and based on our risk assessment, we determined
going concern to be a key audit matter.
In auditing the financial statements, we have concluded that the Directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the Directors'
assessment of the Group and the Parent Company's ability to continue to adopt
the going concern basis of accounting included (but not limited to):
· Obtaining and challenging the Directors' cash flow forecast for the
period to January 2027 and assessing the key underlying assumptions;
· Evaluating the mathematical accuracy and integrity of the cash flow
model and comparing the forecasts to actuals achieved in the period and
post-period end to assess management's forecasting accuracy;
· Performing sensitivity analysis on the cash flow forecast for changes
in key assumptions and considering impact on headroom;
· Performing audit procedures around the availability, intention and
resources of support offered from key stakeholders, we have also secured a
letter of support from said key stakeholders.
· Reviewing and considering the adequacy of the disclosure within the
financial statements relating to the Directors' assessment of the going
concern basis of preparation; and
· Verifying funds raised post period end.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Key audit matters
Key audit matters are those that, in our professional judgement, were of most
significance in our audit of the Financial Statements of the current period
and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the
greatest effect on: the overall audit strategy, the allocation of resources in
the audit and directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
In addition to the matter described in the Material uncertainty related to
going concern section, we have determined the matters described below to be
the key audit matters to be communicated in our report.
Key audit matter How our work addressed this matter
Governance Issues & Director Disagreement (refer to note 5) Our audit work included, but was not restricted to:
During the year the Group made a payment of £304,867 to previous directors · We increased the level of seniority of team members working on
following the governance issues and Director disagreement. the audit and consulted internally to discuss the issues and appropriateness
of our audit response;
· We made enquiries of management regarding events in the period to
During this period the Group lost access to certain assets which were gain a complete understanding of their investigation and challenged the
recovered following legal proceedings and the Group has since reviewed its conclusions reached;
internal controls and processes and implemented additional controls.
· Vouching management representations using third party documents
such as legal filings and external correspondence with regulators;
This has been determined as a key audit matter due to the significance and · Detailed reviews of bank payments and receipts to ensure the
nature of the incident and the amount of the audit team's time spent transactions disclosed to the audit team are materially complete and not only
addressing this risk and as a proportion of the total audit. a part of the irregular activity;
· Walkthroughs of the new controls in place to ensure deficiencies
have since been rectified;
· Reviewed minutes of board meetings held during the period and any
subsequent to the period end.
· Obtaining legal letters from relevant legal counsel to further
vouch the established series of events;
· Discussions with the audit committee to understand those charged
with governance's understanding of events;
· Verified recovery of assets misappropriated by the US directors
through legal filings and review of Chill's domain host's records;
· Review of the final settlement agreement to confirm there were no
further provisions, contingent liabilities or litigation to consider; and
· Reviewed the appropriateness of the accounting entries made for
the settlement agreement and the adequacy of the disclosures made in the
financial statements.
Key observations: Based on the procedures performed we consider managements
accounting and disclosures to be appropriate.
Intangible Asset (see note 15) · Confirming a successful recovery of the asset by review of the
settlement agreement, deed of assignment back to Chill and reviewing the
GoDaddy ownership documentation.
The group has an intangible asset with a carrying value of £1.1m at the · Management provided a valuation report from Domain valuers Seedo
period-end, pertaining to the domain name "Chill.com" which was acquired by Limited, demonstrating the carrying value was not materially overstated.
the Group in the year ended 31 March 2022.
· We assessed the credentials of Seedo Limited as domain name
valuers by review of their history, number of domains valued and number of
domain sales facilitated. • Review of the amortisation policy used by the
The domain name is considered by management to be critical to the long term Company.
success of the group, with value being attributed to future cash inflows
derived from the intangible fixed asset. · Verification of the existence of the domain asset by review of
GoDaddy documents and a simple internet search
Under IAS 36 Impairment of Assets, the domain name should be assessed at the
end of each reporting period for indicators of impairment. Where indicators of
impairment are subsequently identified in the financial period, an assessment
of the asset's carrying value must be performed by management against its
recoverable amount.
There is the prevailing risk that the carrying value of the domain name
exceeds the recoverable amount as at 30 September 2025, given that the group
has made a significant trading loss for the period ended 30 September 2025 and
historically in successive periods.
Any impairment assessment on the carrying value of the Chill.com domain name
will involve significant judgement and estimation from management due to the
inherent uncertainty and subjectivity around key assumptions incorporated into
the assessment,
Due to the estimation uncertainty on the determination of an appropriate
recoverable amount and the material nature of the carrying value of the domain
name, this was considered to be a key audit matter in the audit for the period
ended 30 September 2025.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit,
and in evaluating the effect of misstatements. We consider materiality to be
the magnitude by which misstatements, including omissions, could influence the
economic decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability that any
misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of identified
misstatements, and the particular circumstances of their occurrence, when
evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the
financial statements as a whole and performance materiality as follows:
Group financial statements Parent company financial statements
£346,200 £285,800
Materiality
Basis for determining materiality 8% on loss before tax 8% on loss before tax
Rationale for the benchmark applied Reasonable for a listed trading group with recurring losses, and of the Reasonable for a listed trading group with recurring losses, and of the
assessed risk profile. assessed risk profile.
Performance materiality £247,200 £203,900
Basis for determining performance materiality Based on 75% of materiality Based on 75% of materiality
Rationale for the percentage applied for performance materiality In determining the performance materiality, we have considered the following
factors:
· The level of significant judgements and estimates;
· The risk assessment and aggregation of risk and the effectiveness
of controls;
· The control environment and the group's financial reporting controls;
and
· The stability of key management personnel.
We agreed with the Audit Committee that we would report on all differences in
excess of £17,300. We also report to the Audit Committee on financial
statement disclosure matters identified when assessing the overall consistency
and presentation of the financial statements.
An overview of the scope of our audit
In designing our audit approach, we determined materiality and assessed risk
of material misstatement in the financial statements. In particular, we looked
at areas involving significant accounting estimates and judgements by the
directors, including the recognition of revenue, the carrying value and
recoverability of intangible assets and going concern. Procedures were then
performed to address the risk identified and for the most significant assessed
risks of misstatement, the procedures performed are outlined below in the key
audit matters section of this report. We re-assessed the risks throughout the
audit process and concluded that the scope remained in line with that
determined at the planning stage of the audit.
We considered the sole component in scope for full audit procedures of the
group to be Chill Brands Group PLC by virtue of the financial significance and
the presence of group risks in that component. Zoetic Corporation LLC was
assessed as in scope for audit for specific balances. Highlands Natural
Resources and it's subsidiary entities were dormant in the period and had no
substantial contribution to the group consolidated financial statements.
We are not engaging with any Component auditors in the course of the group
audit and audits of Trading UK entities, nor are we relying on any work
performed by any Component auditors of subsidiaries within the group.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial period for which the financial statements are
prepared is consistent with the financial statements; and
· the strategic report and the directors' report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and their environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report and the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the Parent Company,
or returns adequate for our audit have not been received from branches not
visited by us; or
· the parent company financial statements and the part of the directors
remuneration report to be audited are not in agreement with the accounting
records and returns; or
· certain disclosures of directors' remuneration specified by law are
not made; or
· we have not received all the information and explanations we require
for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement the
directors are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the group and the parent company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to
liquidate the group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the legal and regulatory frameworks
within which the Company operates focusing on those laws and regulations that
have a direct effect on the determination of material amounts and disclosures
in the financial statements. The laws and regulations we considered in this
context were the Companies Act 2006, Listing Rules, The Proceeds of Crime Act,
relevant taxation legislation, and the Tobacco and Related Products
Regulations 2016.
· We identified the greatest risk of material impact on the financial
statements from irregularities, including fraud, to be the override of
controls by management. Our audit procedures to respond to these risks
included enquiries of management about their own identification and assessment
of the risks of irregularities, sample testing on the posting of journals and
reviewing accounting estimates for biases.
· We designed our audit procedures to ensure the audit team considered
whether there were any indications of non-compliance by the group and parent
company with those laws and regulations.
These procedures included, but were not limited to:
o Enquiries of management;
o Review of Board meeting minutes;
o Review of Regulatory News Announcements;
o Review of legal correspondence; and
o Review of correspondence with the FCA
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial
Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Other matters that we are required to address
We were appointed on 20 November 2025 and this is the first period of our
engagement as auditors for the Group.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the group or the parent company and we remain independent of the
group and the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit
committee.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with our engagement letter. Our audit work has been undertaken so that we
might state to the company's members those matters we are required to state to
them in an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the company and the company's members as a body, for our audit work, for
this report, or for the opinions we have formed.
Paul Randall FCA (Senior Statutory Auditor)
For and on behalf of RPG Crouch Chapman LLP
Chartered Accountants
Statutory Auditors
40 Gracechurch Street
London
EC3V 0BT
Chill Brands Group PLC
Consolidated Statement of Comprehensive Income
For the eighteen month period ended 30 September 2025 and the year ended 31
March 2024
Notes Period ended 30 September 2025 £ Year ended 31 March
2024 £
Revenue 3 555,749 1,908,020
Cost of sales
(1,049,273) (1,040,053)
Obsolete inventory expense 17 (33,103) (395,157)
Gross (loss) / profit (526,627) 472,810
Administrative expenses (3,252,251) (3,523,507)
Operating Loss 5 (3,778,878) (3,050,697)
Exceptional item 5 (304,867) -
Operating loss after exceptional loss (4,083,745) (3,050,697)
Finance income 8 22,571 87,033
Finance cost 5 (336,622) (377,082)
Other income 9 70,696 270
Loss on ordinary activities before taxation (4,327,100) (3,340,476)
Taxation on loss on ordinary activities 10 - -
Loss for the period from continuing activities (4,327,100) (3,340,476)
Loss for the period from discontinued activities 11 - (29,817)
Loss for the period (4,327,100) (3,370,293)
Other comprehensive income
Items that may be re-classified subsequently to profit or loss: 31,689 (32,832)
Foreign exchange adjustment on consolidation
Total comprehensive income for the (4,295,411) (3,403,125)
period attributable to the equity holders
Basic and diluted earnings per share attributed to the equity holders:
Attributable to continuing activities (0.85) p (0.96) p
Attributable to discontinued activities - p (0.01) p
Total 12 (0.85) p (0.97) p
The accompanying notes on pages 66 to 97 form an integral
part of the financial statements.
Chill Brands Group PLC
Registered Number: 09309241
Consolidated Statement of Financial Position
At 30 September 2025 and 31 March 2024
Notes At At
30 September 31 March
2025 2024
£ £
Non-Current Assets
Property, plant, and equipment 13 4,087 28,780
Right of use lease asset 14 46,538 178,118
Intangible assets 15 1,058,216 1,135,497
Total Noncurrent Assets 1,108,841 1,342,395
Current Assets
Inventories, net of provisions 17 461,056 139,838
Trade and other receivables 18 470,025 2,467,704
Cash and cash equivalents 19 99,957 1,315,289
Total Current Assets 1,031.038 3,922,831
Total Assets 2,139,879 5,265,226
Non-Current Liabilities
Long-term debt, excluding current maturities 26 2,154,408 1,411,755
Right of use lease liability, net of current portion 14 32,149 92,243
Total Non-current Liabilities 2,186,557 1,503,998
Current Liabilities
Current maturities of long-term debt 26 460,811 211,017
Trade, other payables and accrued liabilities 20 712,196 886,941
Right of use lease liability, current portion 14 14,389 92,393
Total Current Liabilities 1,187,396 1,190,351
Total Liabilities 3,373,953 2,694,349
Net (Liabilities) / Assets (1,234,074) 2,570,877
Equity
Share capital 21 5,119,527 4,953,169
Share premium account 21 14,804,346 14,755,570
Shared based payment reserve 23 4,516,608 4,516,608
Compound loan note equity component reserve 24 275,326 19,052
Foreign currency translation reserve 235,393 203,704
Other reserve 400,116 400,116
Retained loss (26,585,390) (22,277,342)
Total Equity (1,234,074) 2,570,877
The notes on pages 66 to 97 form an integral part of the financial
statements. The financial Statements were approved by the Board of Directors
on 30 January 2026 and signed on their behalf by:
Callum Sommerton - Chief Executive Officer
Chill Brands Group PLC
Registered Number: 09309241
Company Statement of
Financial Position at 30 September 2025 and 31 March 2024
Notes At 30 September At 31 March
2025 2024
£ £
Non-Current Assets
Property, plant, and equipment 13 4,087 -
Right of use lease asset 14 46,538 -
Intangible assets 15 15 1,058,216 -
Total Noncurrent Assets 1,108,841 -
Current Assets
Inventories, net of provisions 17 461,056 106,735
Trade and other receivables 18 470,025 2,314,002
Cash and cash equivalents 19 99,881 1,225,912
Total Current Assets 1,030,962 3,646,649
Total Assets 2,139,803 3,646,649
Non-Current Liabilities
Long-term debt, excluding current maturities 26 2,154,408 1,411,001
Right of use lease liability, Non-current portion 32,149 -
Total Non-Current Liabilities 2,186,557 1,411,001
Current Liabilities
Current maturities of long-term debt 26 460,811 202,000
Right of use lease liability, current portion 14,389 -
Trade and other payables 18 1,055,193 528,403
Total Current Liabilities 1,530,393 730,403
Total Liabilities 3,716,950 2,141,404
Net Assets / (Liabilities) (1,577,147) 1,505,245
Equity
Share capital 21 5,119,527 4,953,169
Share premium account 21 14,804,346 14,755,570
Shared based payment reserve 23 4,516,608 4,516,608
Compound loan note equity component reserve 24 275,326 19,052
Other reserve 400,116 400,116
Retained loss (26,693,070) (23,139,270)
Total Equity (1,577,147) 1,505,245
The Company has taken advantage of Section 408 of the Companies Act 2006 and
has not included its own profit and loss account in these financial
statements. The loss for the financial period dealt with in the accounts of
the Company amounted to £3,572,852 (2024: loss £2,629,036). The Parent
Company has elected to prepare its financial statements in accordance with
UK-adopted IAS. The notes on pages 66 to 97 form an integral part of the
financial statements. The financial statements were approved by the Board of
Directors on 30 January 2026 and signed on their behalf by:
Chill Brands Group PLC
Registered Number: 09309241
Consolidated Statement of Financial Position
At 30 September 2025 and 31 March 2024
Notes
At
30 September
2025
£
At
31 March
2024
£
Non-Current Assets
Property, plant, and equipment
13
4,087
28,780
Right of use lease asset
14
46,538
178,118
Intangible assets
15
1,058,216
1,135,497
Total Noncurrent Assets
1,108,841
1,342,395
Current Assets
Inventories, net of provisions
17
461,056
139,838
Trade and other receivables
18
470,025
2,467,704
Cash and cash equivalents
19
99,957
1,315,289
Total Current Assets
1,031.038
3,922,831
Total Assets
2,139,879
5,265,226
Non-Current Liabilities
Long-term debt, excluding current maturities
26
2,154,408
1,411,755
Right of use lease liability, net of current portion
14
32,149
92,243
Total Non-current Liabilities
2,186,557
1,503,998
Current Liabilities
Current maturities of long-term debt
26
460,811
211,017
Trade, other payables and accrued liabilities
20
712,196
886,941
Right of use lease liability, current portion
14
14,389
92,393
Total Current Liabilities
1,187,396
1,190,351
Total Liabilities
3,373,953
2,694,349
Net (Liabilities) / Assets
(1,234,074)
2,570,877
Equity
Share capital
21
5,119,527
4,953,169
Share premium account
21
14,804,346
14,755,570
Shared based payment reserve
23
4,516,608
4,516,608
Compound loan note equity component reserve
24
275,326
19,052
Foreign currency translation reserve
235,393
203,704
Other reserve
400,116
400,116
Retained loss
(26,585,390)
(22,277,342)
Total Equity
(1,234,074)
2,570,877
The notes on pages 66 to 97 form an integral part of the financial
statements. The financial Statements were approved by the Board of Directors
on 30 January 2026 and signed on their behalf by:
Callum Sommerton - Chief Executive Officer
Chill Brands Group PLC
Registered Number: 09309241
Company Statement of
Financial Position at 30 September 2025 and 31 March 2024
Notes
At 30 September
2025
£
At 31 March
2024
£
Non-Current Assets
Property, plant, and equipment
13
4,087
-
Right of use lease asset
14
46,538
-
Intangible assets
15 15
1,058,216
-
Total Noncurrent Assets
1,108,841
-
Current Assets
Inventories, net of provisions
17
461,056
106,735
Trade and other receivables
18
470,025
2,314,002
Cash and cash equivalents
19
99,881
1,225,912
Total Current Assets
1,030,962
3,646,649
Total Assets
2,139,803
3,646,649
Non-Current Liabilities
Long-term debt, excluding current maturities
26
2,154,408
1,411,001
Right of use lease liability, Non-current portion
32,149
-
Total Non-Current Liabilities
2,186,557
1,411,001
Current Liabilities
Current maturities of long-term debt
26
460,811
202,000
Right of use lease liability, current portion
14,389
-
Trade and other payables
18
1,055,193
528,403
Total Current Liabilities
1,530,393
730,403
Total Liabilities
3,716,950
2,141,404
Net Assets / (Liabilities)
(1,577,147)
1,505,245
Equity
Share capital
21
5,119,527
4,953,169
Share premium account
21
14,804,346
14,755,570
Shared based payment reserve
23
4,516,608
4,516,608
Compound loan note equity component reserve
24
275,326
19,052
Other reserve
400,116
400,116
Retained loss
(26,693,070)
(23,139,270)
Total Equity
(1,577,147)
1,505,245
The Company has taken advantage of Section 408 of the Companies Act 2006 and
has not included its own profit and loss account in these financial
statements. The loss for the financial period dealt with in the accounts of
the Company amounted to £3,572,852 (2024: loss £2,629,036). The Parent
Company has elected to prepare its financial statements in accordance with
UK-adopted IAS. The notes on pages 66 to 97 form an integral part of the
financial statements. The financial statements were approved by the Board of
Directors on 30 January 2026 and signed on their behalf by:
Callum Sommerton - Chief Executive Officer
Notes to the Financial Statements
1. General Information
1.1 Group
Chill Brands Group, PLC ("the Company") and its subsidiaries (together "the
Group") are involved in the sale and distribution of nicotine-free vape
products and other fast-moving consumer packaged-goods products. The Company,
a public limited company incorporated and domiciled in England and Wales, is
the Group's ultimate parent company. The Company was incorporated on 13
November 2014 with Company Registration Number 09309241 and its registered
officed and principle place of business is 27/28 Eastcastle Street, London W1W
8DH.
1.2 Company Income Statement
The Company has taken advantage of Section 408 of the Companies Act 2006 and
has not included its own profit and loss account in these financial
statements. The loss for the financial period dealt with in the accounts of
the Company amounted to £3,572,852 (2024: loss £2,629,036). The Parent
Company has elected to prepare its financial statements in accordance with
UK-adopted IAS.
2. Basis of Preparation
The Consolidated Financial Statements of the Group have been prepared in
accordance with UK-adopted International Accounting Standards . The
Consolidated Financial Statements have been prepared under the historical cost
convention as adjusted to fair values where applicable. The principal
accounting policies are set out below and have, unless otherwise stated, been
applied consistently for all periods presented in these Consolidated Financial
Statements. The financial statements are prepared in pounds sterling and
presented to the nearest pound.
2.1 Basis of Consolidation
The Group financial information incorporates the financial information of the
Company and its controlled subsidiary undertakings, drawn up to 30 September
2025. Control is achieved where the Company:
· Has power over the investee;
· Is exposed, or has rights, to variable return from its involvement
with the investee; and
· Has the ability to use its power to affect its returns.
Consolidation of a subsidiary begins when the Company obtains control over the
subsidiary and ceases when the Company loses control of the subsidiary.
Where necessary, adjustments are made to the financial information of
subsidiaries to bring accounting policies into line with those used for
reporting the operations of the Group. All intra-group transactions, balances,
income and expenses are eliminated on consolidation.
2.2 Going Concern
The financial statements have been prepared on a going concern basis, which
assumes that the Group will continue in operational existence for the
foreseeable future, being a period of at least twelve months from the date of
approval of these financial statements. In forming their conclusion, the
Directors have undertaken a comprehensive assessment of the Group's current
financial position, cash flow forecasts, available funding arrangements, and
associated risks.
While the Board believes that the underlying strategy and operating model now
being pursued are credible and capable of delivering long-term value, the
Company continues to operate with limited financial headroom and remains
dependent on access to further funding to support its activities along with
the deferral of some supplier and tax liabilities with agreed payment plans.
During the period under review, when capital has been available to the
Company, a significant proportion of it has necessarily been allocated to
addressing legacy matters rather than funding growth. These costs have
included substantial legal and professional fees arising from governance
disruption and asset recovery, as well as very significant audit and reporting
costs associated with restoring compliance, re-establishing financial records,
and bringing the Company's reporting timetable back on track. While these
expenditures were non-recurring in nature, they materially constrained the
Company's ability to deploy capital into revenue-generating activities at the
pace that would ordinarily be expected.
The Company's distribution model also places inherent demands on working
capital. Where the Group purchases and resells inventory on behalf of
third-party brands - an essential component of providing a full
route-to-market service - cash is required upfront to secure stock, support
logistics, and bridge payment terms with retailers. In periods of constrained
liquidity, this can limit the Company's ability to accept new opportunities,
even where demand exists and commercial terms are attractive. As a result,
growth has at times been governed not by market appetite or execution
capability, but by the availability of capital to support inventory cycles.
It is important to recognise that a distribution business of this nature
cannot be bootstrapped into scale. Unlike asset-light service models,
distribution requires capital to fund stock, people, systems, and
infrastructure well in advance of cash collection. Scale and profitability are
achieved through volume, repeatability, and operating leverage, all of which
depend on the ability to invest ahead of revenue. Without sufficient
capitalisation, growth becomes episodic and constrained, and the business is
unable to compound its progress in the way required to deliver a sustainable
recovery.
If the Company is to move beyond stabilisation and deliver the level of
recovery - and ultimately returns - that shareholders and the market
reasonably expect, it will need to be appropriately capitalised to do so. This
includes funding not only working capital and inventory, but also the
expansion of sales coverage, operational support, systems, and management
capacity. The Board therefore wishes to make clear the need for additional
funding as the business continues to scale, and will consider a range of
financing options in due course, with a focus on maintaining flexibility and
aligning capital deployment with demonstrable commercial traction.
The Company's shareholders have continued to support the Company during an
exceptionally challenging period. In particular, the ongoing backing of the
Company's largest shareholder, whose support has been instrumental in
maintaining the Company's operational continuity and providing the time and
stability needed to reset the business.
Nevertheless, it will be necessary for the Company to raise additional funding
in the immediate future in order to remain viable as a going concern,
particularly in the event of unforeseen operational costs or if strategic
growth opportunities are to be pursued.
Looking ahead, despite the financial constraints outlined above, there are
clear signs of progress. The Chill Connect division continues to grow across
all key dimensions, including headcount, operational reach, client base, and
turnover. The sales team has expanded, new distribution relationships have
been secured, and the Company is increasingly being entrusted by third-party
brands to represent and scale their products in the UK market. While the
business remains at an early stage of this transition, the momentum achieved
to date provides the Board with confidence that the strategy is gaining
traction.
The period ahead will remain challenging, and progress will not be linear.
Despite this, with governance stabilised, a clearer strategic focus, and an
expanding distribution platform, the Company believes it is now better
positioned to build a more resilient and scalable business. Continued
discipline, measured investment, and the support of shareholders will be
essential as the Company works toward long-term sustainability and value
creation.
Based on the Company's demonstrated ability to secure financial backing from
both new and existing investors in recent periods, and the continued support
of major shareholders, the Directors are confident in their ability to raise
further funds if and when required.
However, there remains a material uncertainty which may cast significant doubt
on the Company's ability to continue as a going concern. The ability of the
Company to continue its operations is dependent on the successful raising of
additional funding as and when required. These conditions indicate the
existence of a material uncertainty which may cast significant doubt upon the
Company's ability to continue as a going concern and, therefore, it may be
unable to realise its assets and discharge its liabilities in the normal
course of business.
The Directors have reviewed detailed cash flow projections covering the period
to 30 June 2027, which take into account the projected cost base of the Group
under various trading scenarios. These projections indicate that the Group
will have sufficient financial resources to meet its liabilities as they fall
due, subject to successful execution of the fundraising strategy and timely
access to committed capital.
However, the Directors acknowledge that material uncertainty exists in
relation to the Group's ability to raise additional capital beyond the
currently committed facility in the event that revenue growth does not
accelerate in line with management expectations. In such a scenario, it may be
necessary to implement further cost reduction measures to preserve liquidity.
These may include the deferral or reduction of Directors' remuneration, the
scaling back of commercial operations to a core cost base, the renegotiation
or termination of supplier agreements, and a reduction in personnel. While
these actions could have an adverse impact on commercial performance, they are
expected to materially reduce operating expenses and thereby extend the
Group's cash runway.
The Company's shareholders have continued to support the Company during an
exceptionally challenging period. In particular, the ongoing backing of the
Company's largest shareholder, whose support has been instrumental in
maintaining the Company's operational continuity and providing the time and
stability needed to reset the business. During January 2026, the Company has
drawn further funds in the sum of £150,000 from existing funding facilities
to support working capital needs.
Notwithstanding this material uncertainty, after making enquiries and
considering the options available to the Company, the Directors have a
reasonable expectation that the Company has adequate resources to continue in
operational existence for at least 12 months from the date of approval of
these financial statements. Accordingly, the Directors continue to adopt the
going concern basis of accounting in preparing these financial statements.
2.3 Business Combinations
There were no Business Combinations as defined by IFRS 3 (revised) during the
period.
The acquisition of subsidiaries is accounted for using the acquisition method
of accounting. The cost of acquisition is measured at the aggregate of the
fair values, at the date of exchange, of assets given, liabilities incurred or
assumed, and equity instruments issued by the Group in exchange for control of
the acquiree, plus any costs directly attributable to the business
combination. The acquiree's identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3 are
recognised at their fair values at the acquisition date.
2.4 Revenue Recognition
The Group has received revenue during the period from the sale of vape and
other consumer products and other related products and from the provision of
services to third party brands. The Group has both online sales of these
products and retail sales through distribution channels in the United States
and United Kingdom.
Online sales; the Group recognises revenues from the sales of products as
the performance obligations are met. These performance obligations are met
once the product has been invoiced and shipped to the purchaser under the
terms of the contract and the significant risks and rewards of ownership have
been transferred to the customer.
Retail sales; the Group has distribution agreements with wholesale
distributors who distribute the products to retail stores throughout the
United States and United Kingdom. Revenue on distributor sales is recognised
as the performance obligation is satisfied when the distributor initiates a
purchase order and the product has shipped. For retail customer revenue, the
performance obligation is satisfied when all contractual terms are met and
ownership has been transferred to the customer.
Market Place Arrangement Sales; the Group has marketplace agreements with
vendors who sell products on the Chill.com domain and pay Chill a commission
fee. Revenue on Market Place Arrangement sales is recognised as the
performance obligation is satisfied once the product owned by the vendor has
been delivered to the purchaser under the terms of the contract and the
significant risks and rewards of ownership have been transferred to the
customer.
All revenues have been recognised at a point in time under IFRS 15 Revenue
from Contracts with Customers.
2.5 Segmental Reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker ("CODM"). The CODM,
who is responsible for allocating resources and assessing performance of the
operating segments, is Callum Sommerton, CEO.
A business segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are different
from those of other operating segments.
The Board of Directors assess the performance of the operating segments (by
geographical location, being the UK and US) based on the measures of revenue,
gross profit, operating profit and assets employed.
2.6 Foreign Currency Translation
The Company's consolidated financial statements are presented in Sterling
(£), which is also the functional currency of the parent company. The
individual financial statements of each group entity are presented in the
currency of the primary economic environment in which the entity operates (its
functional currency). For UK based companies the functional currency is
Sterling and for all USA based companies the functional currency is US
Dollars.
In preparing the financial statements of the individual entities, transactions
in currencies other than the entity's functional currency (foreign currencies)
are recorded at the rates of exchange prevailing on the dates of the
transactions. At each balance sheet date, monetary items denominated in
foreign currencies are retranslated at the rates prevailing on the balance
sheet date. Non-monetary items carried at fair value that are denominated in
foreign currencies are retranslated at the rates prevailing on the date when
the fair value was determined.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in the income statement for the
period. When a gain or loss on a non-monetary item is recognised directly in
equity, any exchange component of that gain or loss is also recognised
directly in equity. When a gain or loss on a non-monetary item is recognised
in the income statement, any exchange component of that gain or loss is also
recognised in the income statement.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations (including comparatives) are expressed in Sterling using exchange rates prevailing on the balance sheet date. Income and expense items (including comparative) are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognised in equity. Cumulative translation differences are recognised in profit or loss in the period in which the foreign operation is disposed of.
2.7 Defined Contribution Pension Funds
The Group pays contributions related to salary to certain UK employees'
individual pension schemes. The pension cost charged against profits
represents the amount of the contributions payable to the schemes in
respect of the accounting period. No separate provision is made in respect of
non-UK employees.
2.8 Investment In Subsidiaries
Investment in subsidiaries comprises shares in the subsidiaries stated at cost
less provisions for impairment.
2.9 Property, Plant, and Equipment
All plant and machinery is stated in the financial statements at cost of
acquisition less a provision for depreciation and impairment.
Depreciation is charged to write off the cost less estimated residual values
of plant and equipment on a straight line basis over their estimated useful
lives and included in administrative expenses in the statement of
comprehensive income. Estimated useful lives and residual values are reviewed
each year and amended if necessary.
Fixed Assets Useful lives
Office and field equipment and furniture 3-7 years
Right of Use Lease Assets
The Group determines if an arrangement is a lease at inception if the contact
conveys the right to control the use and obtain substantially all the economic
benefits from the use of an identified asset for a period of time in exchange
for consideration.
The Group identifies a lease as a finance lease if the agreement includes any
of the following criteria: transfer of ownership by the end of the lease term;
an option to purchase the underlying asset that the lessee is reasonably
certain to exercise; a lease term that represents 75 percent or more of the
remaining economic life of the underlying asset; a present value of lease
payments and any residual value guaranteed by the lessee that equals or
exceeds 90 percent of the fair value of the underlying asset; or an underlying
asset that is so specialised in nature that there is no expected alternative
use to the lessor at the end of the lease term. A lease that does not meet any
of these criteria is considered an operating lease.
Lease right-of-use assets represent the Group's right to use an underlying
asset for the lease term and lease liabilities represent the Group's
obligation to make lease payments arising from the lease. Right-of-use assets
and liabilities are recognised at the commencement date of a lease based on
the present value of lease payments over the lease term. The Group's lease
terms may include options to extend or terminate the lease. The Group includes
these extension or termination options in the determination of the lease term
when it is reasonably certain that the Group will exercise that option. The
Group does not recognise leases having a term of less than one year in our
consolidated statement of financial position.
Lease modifications are accounted for as a separate lease if the modification
increases the scope of the lease by adding the right to use one or more
underlying assets, and the consideration for the lease increases by an amount
commensurate with the stand-alone price for the increase in scope. Other
modifications are remeasured by adjusting the lease liability and the
right-of-use asset using a revised discount rate at the effective date of the
modification.
2.10 Intangible Fixed Assets
The Group purchased the domain name Chill.com in June 2021. This domain name
is the only intangible asset held by the Group.
This domain name is stated in the financial statements at its cost of
acquisition less accumulated amortisation. The domain name is amortised over
25 years using the straight line method. The amortisation expense is included
in administrative expenses in the statement of comprehensive income. The
balance as at 30 September 2025 is £1,058,216 (31 March 2024: £1,135,497).
The amortisation expense for the period ended 30 September was £77,281 (year
ended 31 March 2024: £51,521). The net impact of translation adjustments on
the intangible asset in the period ended 30 September 2025 was £nil (year
ended 31 March 2024: £22,406) .
In accordance with IAS 36 Impairment of Assets, the Group assesses impairment
of the intangible asset if internal or external factors or events cause the
discounted fair value to be below the carrying value of the intangible asset.
Assessment is performed as to whether indicators are met; at which point if
they are an impairment assessment is performed whereby the Company assesses
the carrying value versus the recoverable amount. Any impairment is recognised
within administrative expenses in the statement of comprehensive income.
Management has deemed the recoverable amount to be the value in use, which is
determined via discounting future cash flows using an appropriate discount
rate.
2.11 Impairment Testing of Property, Plant and Equipment
At each balance sheet date, the Group assesses whether there is any indication
that the carrying value of any asset may be impaired. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Where it is not possible to
estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the cash-generating unit to which the asset belongs.
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating
units).
Individual assets or cash-generating units are tested for impairment whenever
events or changes in circumstances indicate that the carrying amount may not
be recoverable.
An impairment loss is recognised for the amount by which the asset's or
cash-generating unit's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of fair value, reflecting market conditions
less costs to sell, and value in use, based on in internal discounted cash
flow evaluation. Any remaining impairment loss is charged pro rate to the
other assets in the cash generating unit.
2.12 Inventories
Inventories are stated at lower of cost and net realisable value. Costs of
inventories are determined on a first-in-first-out basis. Net realisable value
represents the estimated selling price for inventories less all estimated
costs of competition and costs necessary to make the sale.
Given the shelf‐life of the Company's products, along with their relative
saleability depending on remaining useful life, the following inventory
provisioning policies shall apply. Exceptions may be applied at the discretion
of the Board.
Label Life Remaining Recognised Value (%)
Receipt of Product 100%
Six Months 75%
Four Months 50%
Two Months 25%
One Month 10%
Post-Expiry Date 0%
2.13 Convertible loan notes
The convertible loan note agreements entered into by the Company have been
classified as compound financial instruments under IAS 32 Financial
Instruments: Presentation. The fair value of the liability component is valued
at the net present value of the contracted future cash flows, discounted at
the Group's estimated cost of borrowing and is reported within loans and
current maturity of loans. Interest imputed on the liability component is
amortised to the statement of comprehensive income on a straight-line basis
over the life of the instrument. The equity component represents the
residual amount after deducting the amount for the liability from the value of
the loan note principal. Further details of the loan note can be found in
Note 26.
2.14 Equity
Share capital is determined using the nominal value of shares that have been
issued.
The Share premium account includes any premiums received on the initial
issuing of the share capital. Any transaction costs associated with the
issuing of shares are deducted from the Share premium account, net of any
related income tax benefits. Equity-settled share-based payments are credited
to a Share-based payment reserve as a component of equity until related
options or warrants are exercised.
Shares to be issued are credited to the shares to be issued reserve as a
component of equity until related shares are issued.
Retained loss includes all current and prior period results as disclosed in
the income statement.
2.15 Share-based payments
The Group has in previous years issued warrants to investors and certain
counterparties and advisors as well as share options to its Directors and US
based staff.
Equity-settled share-based payments are measured at fair value (excluding the
effect of non-market based vesting conditions) at the date of grant. The fair
value so determined is expensed on a straight-line basis over the vesting
period, based on the Group's estimate of the number of shares that will
eventually vest and adjusted for the effect of non-market based vesting
conditions.
Fair value is measured using either a Black Scholes or Monte
Carlo pricing model, depending upon which methodology is most appropriate in
relation to the terms and conditions of the options or warrants granted. The
key assumptions used in the models have been adjusted, based on management's
best estimate, for the effects of non-transferability, exercise restrictions
and behavioral considerations.
The Group has issued shares as compensation to its US based staff and
Directors. Upon vesting date, the shares are valued at the stated par value
and share premium and recorded as compensation expense and share premium in
the financial statements.
2.16 Taxation
Tax currently payable is based on taxable profit for the period. Taxable
profit differs from profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax
bases used in the computation of taxable profit and is accounted for using the
balance sheet liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilized. Such
assets and liabilities are not recognised if the temporary difference arises
from initial recognition of goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit not the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset realised. Deferred tax is
charged or credited to profit or loss, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and
the Group intends to settle its current tax assets and liabilities on a net
basis.
2.17 Financial Assets and Liabilities Financial Assets
(a) Classification
The Group classifies its financial assets at amortised cost. The
classification depends on the purpose for which the financial assets were
acquired. Management determines the classification of its financial assets at
initial recognition.
(b) Recognition and measurement
Amortised cost
Regular purchases and sales of financial assets are recognised at cost on the
trade date, the date on which the Group commits to purchasing or selling the
asset. Financial assets are derecognised when the rights to receive cash flows
from the assets have expired or have been transferred, and the Group has
transferred substantially all of the risks and rewards of ownership.
(c) Impairment of Financial Assets
The Group recognises an allowance for expected credit losses ("ECLs") for all
debt instruments not held at fair value through profit or loss. ECLs are based
on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original expected interest rate ("EIR").
The expected cash flows will include cash flows from the sale of collateral
held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has
not been a significant increase in credit risk since initial recognition. ECLs
are provided for credit losses that result from default events that are
possible within the next 12-months (a 12-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the
default (a lifetime ECL).
For trade receivables (not subject to provisional pricing) and other
receivables due in less than 12 months, the Group applied the simplified
approach in calculation ECLs, as permitted by IFRS 9. Therefore, the Group
does not track changes in credit risk, but instead, recognised a loss
allowance based on the financial asset's lifetime ECL at each reporting date.
The Group considers a financial asset to be in default when internal or
external information indicates that the Group is unlikely to receive the
outstanding contractual amounts in full before taking into account any credit
enhancements held by the Group. A financial assets is written off when there
is no reasonable expectation of recovering the contractual cash flows and
usually occurs when past due for more than one year and not subject to ongoing
negotiations or enforcement activity.
Additionally, the Group will also take into account any circumstances relating
to trade debtors when determining whether an asset is in default or not. Where
the Group considers there to be a reasonable prospect of recovery, especially
where there is an ongoing trading relationship with the debtor, the Group may
consider it appropriate not to deem an asset in default.
(d) Derecognition
The Group derecognises a financial asset only when the contractual rights to
the cash flows from the asset expire, or when it transfers the
financial asset and substantially all the risks and rewards of ownership
of the asset to another entity.
On derecognition of a financial asset measured at amortised cost, the
difference between the asset's carrying amount and the sum of the
consideration received and receivable is recognised in profit or loss.
Financial liabilities
(a) Classification
Financial liabilities are classified, at initial recognition, as financial
liabilities at fair value through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging instruments in an effective
hedge, as appropriate. All financial liabilities are recognised initially at
fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs. The Group's financial liabilities
include trade and other payables and loans.
(b) Subsequent measurement
The measurement of financial liabilities depends on their classification, as
described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial
liabilities designated upon initial recognition as at fair value through
profit or loss. Financial liabilities are classified as held for trading if
they are incurred for the purpose of repurchasing in the near term. This
category also includes derivative financial instruments entered into by the
Group that are not designated as hedging instruments in hedge relationships as
defined by IFRS 9. Separated embedded derivatives are also classified as held
for trading unless they are designated as effective hedging instruments. Gains
or losses on liabilities held for trading are recognised in the statement of
profit or loss and other comprehensive income.
Trade and other payables
After initial recognition, trade and other payables are subsequently measured
at amortised cost using the EIR method. Gains and losses are recognised in the
statement of profit or loss and other comprehensive income when the
liabilities are derecognised, as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included as finance costs in the statement of profit or loss
and other comprehensive income.
(c) Derecognition
A financial liability is derecognised when the associated obligation is
discharged or cancelled or expires. When an existing financial liability is
replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in the
respective carrying amounts is recognised in profit or loss and other
comprehensive income.
Liabilities within the scope of IFRS 9 are classified as financial liabilities
at fair value through profit and loss or other liabilities, as appropriate. A
financial liability is derecognised when the obligation under the liability is
discharged or cancelled or expires. Financial liabilities included in trade
and other payables are recognized initially at fair value and subsequently at
amortised cost.
2.18 Significant estimates and judgements
In the process of applying the entity's accounting policies, management makes
estimates and assumptions that have an effect on the amounts recognised in the
financial information. Although these estimates are based on management's best
knowledge of current events and actions, actual results may ultimately differ
from those estimates. The key assumptions concerning the future, and other key
sources of estimation uncertainty at the balance sheet date, that have a
significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial period, are those relating
to:
· the carrying value and recoverability of investments in, and
loan to, subsidiary companies (Note 16)
· Useful life, lifespan and carrying value of the domain name
Chill.com (Note 15)
· the provisions for inventory assets (Note 17)
· the calculation of the debt and equity component of the
convertible loan notes (Note 26)
Carrying Value and recoverability of Investment in, and Loan to, Subsidiary
Companies
The Company has invested in the subsidiary companies which, whilst generating
revenues, are not yet profitable or providing cash flows. The estimates used
in forecasting the potential future cash generation by the own-branded product
operations focus on business sensitive factors such as distribution
agreements, sales volume, pricing and cost of sales. The Directors considered
the recoverability of the loans to subsidiaries and do not expect to recover
the loans in the near future. Due to this the Group has considered it
necessary to impair the entirety of the loans to subsidiary companies.
Fair Value of Options and Warrants Granted
Fair value is measured using either a Black Scholes or Monte Carlo pricing
model, depending upon which methodology is most appropriate in relation to the
terms and conditions of the options or warrants granted. The key assumptions
used in the models have been adjusted, based on management's best estimate,
for the effects of non-transferability, exercise restrictions and behavioral
considerations.
Useful life and Recoverability of the Carrying Value of the Domain Name
The domain name is amortised over 25 years using the straight line method,
which was determined to be the estimated useful life of the domain name asset
by the Group based on industry analysis. The Group analyses impairment of
the domain name if internal or external factors or events cause the
recoverable amount to be below the carrying value of the intangible asset. An
impairment loss is recognised within administrative costs within the statement
of comprehensive income for the amount by which the asset's carrying amount
exceeds its estimated recoverable amount less costs to sell.
Provisions for Inventory Assets
Given the shelf‐life of the Company's products, along with their relative
salability depending on remaining useful life, the Group provides inventory
provisions based on estimated shelf live, discussed above in note 2.12.
Provisions for inventory are recorded when events or changes in circumstances
indicate the carrying cost of inventories will not be fully realised.
Convertible Loan Note Classification
The convertible loan note agreements, entered into by the Company have been
classified as compound financial instruments under IAS 32. The fair value of
the liability component is valued at the net present value of the contracted
future cash flows, discounted at the Group's estimated cost of borrowing of
15%. The equity component represents the residual amount after deducting the
amount for the liability from the value of the funds received.
Measurement of expected credit losses
The measurement of both the initial and ongoing ECL allowance for trade
receivables measured at amortised cost is an area that requires the use of
significant assumptions about credit behaviour such as likelihood of customers
defaulting and the resulting losses. In assessing the probability of default,
the Board has taken note of the experience and loss history of its customers
which may not be indicative of future losses. The default probabilities are
based on a number of factors including customer and sectoral trends which the
Board believes to be a good predictor of the probability of default. The Group
has applied the simplified approach to recognise lifetime expected credit
losses for its trade receivables as required or permitted by IFRS 9.
Management has performed a calculation to ascertain the expected credit loss
provision, which for the year ended 30 September 2025 amounted to £28,508
(year ended 31 March 2024: £180,000). The movement has been recognised in the
statement of comprehensive income.
2.18 Standards, Amendments and Interpretations to Existing Standards that
are not yet Effective and Have not been Early Adopted by the Group
(a) New and amended Standards and Interpretations adopted by the Group
and Company
No standards or Interpretations that came into effect for the first time for
the financial year beginning 1 April 2024 have had an impact on the Group.
(b) New and amended Standards and Interpretations issued but not
effective for the financial year beginning 1 October 2025
At the date of approval of these financial statements, the following standards
and interpretations which have not been applied in these financial statements
were in issue but not yet effective (and in some cases had not been adopted by
the UK):
- Amendments to IAS 21: Lack of exchangeability - effective 1 January
2025*
- Amendments to IFRS 18: Presentation and Disclosures in Financial
Statements - effective 1 January 2027*
- Amendments to IFRS 19: Subsidiaries without Public Accountability:
Disclosures - effective 1 January 2027*
*subject to UK endorsement
The new and amended Standards and Interpretations which are in issue but not
yet mandatorily effective are not expected to be material.
3. Revenue
2025 2024
£ £
Sales of consumer packaged goods products 555,479 1,908,020
The geographical split of revenues which all related to nicotine-free vapes or
sales of third party branded products can be seen in note 4 below.
4. Segment Reporting
Under IFRS 8, there is a requirement to show profit or loss for each
reportable segment and total assets and total liabilities for each reportable
segment if such amounts are regularly provided to the CODM, being the Chief
Executive Officer. The Company considers there is only one business segment
and the Group has analysed the Group's activity based on geographical
location. Results by geographical location:
US Operations UK Operations Intra-Group Eliminations Total
Period ended 30 September 2025 £ £ £ £
Revenue 19,741 536,008 - 555,749
Cost of revenue (10,162) (1,039,111) - (1,049,273)
Obsolete inventory expense (33,103) - - (33,103)
Gross profit (loss) (23,524) (503,103) - (526,627)
Exceptional costs (304,867) - - (304,867)
Other operating costs (391,219) (2,860,842) (192) (3,252,253)
Finance costs (3,029) (333,593) - (336,622)
Finance income 5,730 16,841 - 22,571
Other income 35,444 35,252 - 70,696
Net loss from continuing activities (681,465) (3,645,443) (192)
(4,327,100)
Total assets 4,459,832 1,689,095 (4,009,049) 2,139,879
Net assets / (liabilities) 334,452 (1,568,526) - (1,234,074)
US Operations UK Operations Intra-Group Eliminations Total
Year ended 31 March 2024 £ £ £ £
Revenue 68,719 1,839,301 - 1,908,020
Cost of revenue (83,541) (956,512) - (1,040,053)
Obsolete inventory expense (367,507) (27,650) - (395,157)
Gross profit (loss) (382,329) 855,139 - 472,810
Other operating costs (1,461,021) (2,072,934) 10,448 (3,523,507)
Finance costs (5,149) (371,933) - (377,082)
Finance income 12 87,021 - 87,033
Other income 25 245 - 270
Recovery (impairment) of intercompany loan 1,104,240 (1,093,792) (10,448) -
Net loss from continuing activities (744,222) (2,596,254) -
(3,340,476)
Total assets 1,618,577 3,646,648 - 5,265,225
Net assets 1,065,635 1,505,241 - 2,570,876
All of the Group's activities related to its business in the United States
and UK.
5. Nature of Expenses
2025 2024
£ £
Administrative expenses include the following:
Depreciation of property, plant and equipment 402 13,150
Depreciation of right of use asset - 150,200
Amortisation of the domain name "Chill.com" 77,821 51,521
Provision for expected credit losses 28,508 180,000
Loss on lease modification 87,842 -
Auditor's remuneration
- Audit of Group (note 7) 110,000 122,000
- Non-audit services - 45,000
Director's remuneration 330,691 423,437
Staff costs (including Directors) 613,066 550,559
Exceptional item - transfers made to former directors 304,867 -
Finance costs:
Convertible loan note interest 321,869 343,300
Loss on modification of convertible loan note 9,499 -
Interest on shareholder loan 10,711 -
Other (5,457) 33,782
Finance costs 336,622 377,082
Exceptional costs
As disclosed elsewhere in this report, during the period between April and
June 2024, amounts totalling approximately $400,000 (equivalent to £304,867)
were paid out of the Company in connection with arrangements involving former
directors during a period of governance disruption. These payments did not
relate to ongoing services provided to the Company during the period under
review and arose prior to the reconstitution of the Board. No such payments
have been made since that time.
6. Directors and Staff Costs
The average number of staff during the year, including Directors, was 7 (2024:
7). As shown staff costs for the Group, for the year, including Directors,
were:
2025 2024
£ £
Salaries 571,975 469,359
Pension contributions 6,237 2,642
Healthcare Costs - 57,281
578,212 529,282
Social Security and other payroll tax costs 34,854 21,277
613,066 550,559
The Directors have determined that there are no key management personnel other
than the Directors during the year. Management remuneration paid and other
benefits supplied to the Directors during the period plus the associated
social security costs were as follows:
2025 2024
£ £
Salaries and fees 297,043 348,081
Pension contributions 2,642 2,642
Healthcare costs - 49,221
299,685 399,944
Social security and other payroll tax costs 19,116 27,403
318,801 427,347
7. Auditor's remuneration
2025 2024
Chill Brand Group PLC £ £
Fees payable to the Company's auditor for the audit of the individual and 110,000 67,200
group accounts
Non-audit services - 45,000
Chill Corporation
Fees payable to the Company's auditor for the audit of the individual accounts - 54,800
8. Finance income
2025 2024
£ £
Interest income 12,546 87,033
Foreign currency gains 10,025 -
22,571 87,033
9. Other income
2025 2024
£ £
Oil and gas settlement income 35,444 -
Other income 35,252 270
70,696 270
During the period, the Company reached an agreement with a former project partner for the return of approximately £35,000. These funds, relating to maturing bonds previously issued in connection with natural resources sites in Colorado, provided helpful financial support during the period.
10. Taxation
2025 2024
£ £
Current tax - -
Deferred tax - -
Total - -
The charge/credit for the period is made up as follows:
Corporate taxation on the results for the period - -
UK - -
Non-UK - -
Taxation charge/credit for the period - -
A reconciliation of the tax charge/credit appearing in the income statement to
the tax credit that would result from applying the standard rate of tax to the
results for the period is:
Loss per accounts (4,327,100) (3,370,293)
Tax credit at the standard rate of corporation tax at a combined rate of 24% (1,038,504) (808,870)
(2024:24%)
Impact of unrelieved tax losses carried forward 1,038,504 808,870
Taxation credit for the period - -
The Directors consider that there are no material disallowable costs or timing
differences in respect of the current year.
Estimated tax losses of approximately £19 million (2024: £14.9 million)
may be available for relief against future profits, however, the estimated tax
losses are dependent on eradication of losses on the change from a natural
resources business to a consumer packaged-goods business. The deferred tax
asset not provided for in the accounts based on the estimated tax losses and
the treatment of temporary timing differences, is approximately £4.50 million
(2024: £3.2 million). Utilisation of these losses in future may or may not be
possible depending upon future profitability within the Group and the
continued availability of the losses due to the change in the Group's core
activities. The losses from the previous oil and gas activities have been
excluded from the above due to the uncertainty of the value of the losses due
to the change in activities.
No deferred tax asset has been recognised by the Group due to the uncertainty
of generating sufficient future profits and tax liability against which to
offset the tax losses. Although current tax rates in the U.S. differ to those
in the UK, due to the uncertainty of timing of any available relief and the
Corporation tax rates that would be applicable at that time in either the UK
or the U.S., where the Group's operations principally occur, the Directors
have assumed that the applicable tax rate will be 24%, which is a blended rate
given that the tax rate in the USA is 21 percent and the main profits rate
in the UK is 25 percent.
11. Loss for the Period from Discontinued Activities
During the year ended 31 March 2020, the Board decided that the Group should
withdraw from all oil and gas activities due to the continued volatility in
the sector and the lack of progress in establishing profitable niche positions
for the Group. The Group disposed of its interest in its East Denver producing
wells, its Kansas operations and its patent portfolio along with its premises
leases during the current year. The Group continued to incur costs on this
sector through to the year ended 31 March 2024 in relation to the growing of
the vegetation of the land in order to retrieve the bond deposit with the
state.
The results of the discontinued operations which have been included in the
consolidated income statement were as follows:
Period ended 30 September 2025 Year ended
31 March
2024
£ £
Revenue and other income - -
Administrative expenses - (29,817)
Operating loss - (29,817)
Loss on ordinary activities before taxation - (29,817)
Taxation on loss on ordinary activities - -
Loss for the period from discontinued activities - (29,817)
Cash flows from discontinued activities:
Operating activities - (29,817)
Investing activities - -
Financing activities - -
- (29,817)
12. Loss Per Share
Loss (£) Weighted average number of shares Per share amount (£)
For the period ended 30 September 2025
Basic loss per share:
- Continuing activities (4,327,100) 506,443,811 (0.85)p
- Discontinued activities - 506,443,811 -
Totals (4,327,100) 506,443,811 (0.85)p
For the year ended 31 March 2024
Basic loss per share:
- Continuing activities (3,340,476) 345,693,745 (0.96)p
- Discontinued activities (29,817) 345,693,745 (0.01)p
Totals (3,370,293) 345,693,745 (0.97)p
Basic earnings per share is based on net income and is calculated based upon
the daily weighted-average number of common shares outstanding during the
periods presented, Also, this calculation includes fully vested stock awards
that have not been issued as common stock.
Diluted loss per share is calculated by dividing the results after tax
attributable to members by the weighted average number of shares in issue,
adjusted for potentially dilutive share options. Given that the Group is in a
loss position, diluted loss per share has not been presented and the basic
measure has been used.
13. Property, Plant and Equipment
Group Cost Plant and Equipment Total
£ £
At 31 March 2023 95,510 95,510
Translation adjustment (1,808) (1,808)
At 31 March 2024 93,702 93,702
Additions 4,489 4,489
At 30 September 2025 98,191 98,191
Depreciation
At 31 March 2023 52,898 52,898
Charge for the year 13,150 13,150
Translation adjustment (1,126) (1,126)
At 31 March 2024 64,922 64,922
Charge for the period 29,182 29,182
At 30 September 2025 94,104 94,104
Net book Value
At 31 March 2024 (Group) 28,780 28,780
At 30 September 2025 (Group and Company) 4,087 4,087
14. Right-of-Use Asset
Asset Liability
£ £
As of 31 March 2024 (Group) 178,118 (184,636)
Lease additions 46,538 (46,538)
Lease modifications (178,118) 94,563
Depreciation of right of use assets - -
Lease liability principal repayments - 90,073
As of 30 September 2025 (Group and Company) 46,538 (46,538)
Future minimum lease payments under non-cancellable operating leases 30 September 31 March
2025 2024
£ £
Within one year 14,389 92,393
Within two to five years 32,149 92,243
Total 46,538 184,636
The Group leased an office and warehouse space in the US under non-cancelable
operating leases with remaining lease terms expiring on 30 April 2026 (with
an option to extend for another 5 years) and 31 May 2024, respectively. The
warehouse lease expired in May 2024 and the office lease was terminated by way
of a settlement agreement in June 2025. These modifications have resulted in a
decrease in the total amounts payable under the leases and a derecognition of
both of the right-of-use asset and existing lease liabilities with effect from
the date of modification. Accordingly, the Group recognised a lease
modification expense of £87,842.
In September 2025, the Company entered into a three year lease for its UK
warehouse, expiring in September 2028.
For leases with a term of 12 months or less (short-term leases) with no
purchase option, IFRS 16 permits a lessee to make an accounting policy
election by class of underlying asset not to recognise lease assets and lease
liabilities. If a lessee makes this election, it should recognise the lease
expense for such leases generally on a straight line basis over the lease
term.
15. Intangible Assets
Domain Name "Chill.com"
£
Cost
Balance at 31 March 2023 1,300,456
Translation adjustments (24,616)
Balance at 31 March 2024 and 30 September 2025 1,275,840
Accumulated amortisation
Balance at 31 March 2023 (91,032)
Charge for the year (51,521)
Translation adjustments 2,210
Balance at 31 March 2024 (140,343)
Charge for the year (77,281)
Balance at 30 September 2025 (217,624)
Net book value at 31 March 2024 (Group) 1,135,497
Net book value at 30 September 2025 (Group and Company) 1,058,216
The Group entered into an agreement to purchase the domain name "Chill.com"
and all intellectual property rights that it has accrued in connection with
the domain name and its use. The Group values the intangible assets at cost in
accordance with IAS 38 Intangible Assets.
For the purposes of recognition of the asset's value, the Group has determined
that the Chill.com domain has an estimated useful life of 25 years, and its
value should therefore be amortised over that same period. As at 30 September
2025, the remaining useful life was approximately 20 years.
In determining the appropriate estimated useful life of the Asset, the Group's
management has given consideration to the following factors:
· the treatment of domain assets by international regulatory bodies;
· the impact of the Asset on revenues generated by the Group;
· the continued development of an e-commerce platform under the Asset;
· the commercial opportunities attracted by ownership of the Asset; and
· the likelihood of realising the assets full purchase value on any
future disposal.
In accordance with IAS 36 Impairment of Assets, the Group assesses impairment
of the intangible asset if internal or external factors or events cause the
recoverable amount to be below the carrying value of the intangible asset.
Assessment is performed as to whether indicators are met; at which point if
they are an impairment assessment is performed whereby the Company assesses
the carrying value versus the recoverable amount. Impairment charges are
recognised within administrative expenses in the statement of comprehensive
income.
Whilst sales of third-party brands made through the domain during the
financial year were lower than previously forecasted, the bearing of this
performance on future growth is, in the opinion of the Company's management,
limited. This is because while the domain was acquired with ambitious growth
aspirations, little was done in practice to realise these goals or to deliver
growth. In particular, the Company did not:
· Consistently execute a search engine optimisation strategy to enhance
the organic visibility of the site on search engines;
· Execute any paid advertising program to drive targeted traffic to the
site from Google or Meta platforms, including Instagram and Facebook;
· Operate an effective affiliate or influencer marketing campaign;
· Allocate any meaningful budget to attract user traffic to the site or
build an extended email marketing list.
Consequently, we do not consider that the past performance of the domain
reflects its potential under a properly resourced and executed strategy.
16. Investment in Subsidiary and Loan to Group Companies
Company 2025 2024
£ £
Investment in subsidiaries at cost 15,746,468 15,746,468
Less: impairment provision (15,746,468) (15,746,468)
Investment in subsidiaries - -
The Company has four wholly-owned subsidiaries as at 30 September 2025 (31
March 2024: three).
All subsidiary companies are consolidated in the Group's financial statements.
Name Place of Incorporation and Operation Proportion of Ownership Interest
Highlands Natural Resources Corporation USA 100%
Highlands Montana Corporation USA 100%
Zoetic Corporation USA 100%
Chill Connect Limited England and Wales 100%
The principal activity of Zoetic Corporation is as a developer and producer of
nicotine-free vape products and other consumer packaged-goods products.
Highlands Natural Resources Corporation and Highlands Montana Corporation were
dormant throughout the period ended 30 September 2025. The registered office
of the USA based subsidiaries is 1601 Riverfront Drive Suite 201, Grand
Junction, Colorado 81501. The ownership in all cases is 100% of the issued
ordinary shares of each company and in all cases represents 100% of the voting
rights.
The investments in the shares of the subsidiaries are long term holdings and
were initially made for the long term financing of the Group's oil and gas
activities. Given the withdrawal of the Group from the oil and gas sector, and
the associated losses generated from those discontinued activities, the Board
has taken the view that there is no certainty of any significant sums being
generated in the future from those activities to support the initial
investment values. Consequently, the Company has made full provision against
the investment in the shares of its US based subsidiaries.
During the year ended 31 March 2024, the Company made further loans to Zoetic
Corporation and Highlands Natural Resource Corporation to fund the US
operations. The Board does not consider that in due course such loans will be
recoverable in full. In particular, management has assessed the
non-performative elements of the business and the Company is in the process of
shutting its US operations while it focuses on developing its core business.
Due to this, it was considered reasonable to impair the loans as of 31 March
2024. See Critical accounting judgements and key sources of estimation
uncertainty at note 2.18.
The registered office of Chill Connect Limited which was incorporated on 29
May 2025 is 71-75 Shelton Street, Covent Garden, London WC2H 9JQ.
Loan to Group Undertaking Loan at Cost Impairment Provision Net Total
£ £ £
At 31 March 2023 11,580,990 (11,580,990) -
Additions 1,093,789 - 1,093,789
Impairment - (1,093,789) (1,093,789)
At 31 March 2024 and 30 September 2025 12,674,779 (12,674,779) -
17. Inventories
Group 2025 Company 2025 Group 2024 Company 2024
£ £ £ £
Finished goods 461,056 461,056 667,807 222,949
Raw materials - - 351,129 -
Impairment provisions - - (879,098) (116,214)
Totals 461,056 461,056 139,838 106,735
Obsolete inventory expense (Group) 2025 2024
Impairment of hemp inventory - 351,129
Inventory provisions based on "best by" date - 29,835
Write-off of inventory due to slow movement 33,103 14,193
Total charge for the period / year 33,103 395,157
The Group's inventory of hemp seeds was fully impaired in the year ended 31
March 2024. Despite the seeds' strong genetic profile, proven cultivation
viability, and potential for alternative applications, the Company
acknowledged the uncertainty surrounding their commercialisation. The failure
to meet EU uniformity standards limits their immediate marketability in
Europe, while regulatory and market dynamics in other regions, such as the
United States, remain subject to external factors.
Given the uncertainty introduced by these factors, the Directors elected to
fully impair the value of the feminised hemp seed inventory in the year ended
31 March 2024. This decision does not diminish the seeds' inherent potential
but reflects a cautious approach given the challenges associated with their
immediate monetisation.
Below is a reconciliation of the movement of the accumulated provision for
obsolete inventory for the Group.
2025 2024
Accumulated provision for obsolete inventory brought forward (879,098) (544,796)
Provisions during the period - (395,157)
Inventory allowance released in the year 879,098 53,068
Translation adjustment - 7,787
Accumulated provision carried forward - (879,098)
Management reviews inventory best by dates and creates a provision for
inventory based on the inventory provisioning policy discussed in Note 2.12.
18. Trade & Other Receivables
Group Company 2025 Group Company 2024
2025 2024
£ £ £ £
Trade receivables (gross) 445,546 445,546 1,546,308 1,501,808
ECL provision (207,061) (207,061) (180,000) (180,000)
Trade receivables (net of ECL provision) 238,485 238,485 1,366,308 1,321,808
Prepayments & other debtors 231,540 231,540 1,101,396 992,193
470,025 470,025 2,467,704 2,314,001
The ageing of trade receivables is as follows:
Group Company 2025 Group Company 2024
2025 2024
£ £ £ £
Not past due 45,884 45,884 38,611 23,144
Past-due 1-30 days 16,366 16,366 51,282 24,510
Past due 31-60 days 1,410 1,410 26,235 19,159
Past due 61-90 days 1,226 1,226 1,430,180 1,434,995
Past due more than 90 days 380,660 380,660 - -
Gross trade receivables 445,546 445,546 1,546,308 1,501,808
The Group applies the IFRS9 simplified approach to measuring expected credit
losses using a lifetime expected credit loss provision for trade receivables.
To measure expected credit losses on a collective basis, trade receivables are
grouped based on similar credit risk and ageing. The Group's customer base is
of a similar bracket and share the same characteristics, as such these have
been treated as one population. The expected lifetime losses in respect of
trade receivables are considered to be £207,061 (2024: £180,000).
The expected credit losses have been based on historical, current and
forward-looking information. The Group does not change the classification of a
trade receivable if payment is delayed where the value is considered to be
recoverable. The Group assesses trade receivables and the associated debtors
to determine the appropriateness of this treatment and the likelihood of
recovery.
Provision for expected credit losses (Group) 2025 2024
Brought forward 180,000 -
Movement in expected credit loss provision 27,061 180,000
Carried forward 207,061 180,000
19. Cash & Cash Equivalents
Group 2025 Company 2025 Group 2024 Company 2024
£ £ £ £
Cash at bank 99,957 99,881 1,315,289 1,225,912
Cash at bank comprises of balanced held by the Group in current bank accounts.
The carrying amount of these assets approximated to their fair value.
20. Trade & Other Payables
Group 2025 Company 2025 Group 2024 Company 2024
£ £ £ £
Trade and other payables 455,731 373,021 658,143 439,131
Amounts due to subsidiary - 450,707 - -
Accruals 256,465 231,465 228,798 89,272
712,196 1,055,193 886,941 528,403
Trade payables, accruals and other payables principally comprise amounts outstanding for trade purchases and continuing costs and are stated at amortised cost.
The Directors consider that the carrying amount of trade and other payables approximates to their fair value.
Amounts due to subsidiary
The amounts due to a subsidiary are payable to Zoetic Corporation and are unsecured, interest-free and repayable on demand.
21. Share Capital
2025 2024
£ £
Allotted called up and fully paid:
522,926,812 ordinary 1p shares (2024:506,291,025 ordinary 1p shares) 5,119,527 4,953,169
The Company has only one class of share. All ordinary shares have equal voting rights and rank pari passu for the distribution dividends and repayment of capital.
Share capital Share premium
Number £ £
At 31 March 2023 261,115,305 2,611,153 10,923,000
15 May 2023: issue of shares at 4.0p per share 26,500,000 265,000 795,000
5 December 2023: issue of shares at 2.0p per share 154,675,220 1,546,752 1,546,752
Adjustment on convertible loan note conversion - (109,741) (109,741)
26 January 2024: issue of shares at 3.75p per share 64,000,500 640,005 1,760,014
Total number of shares in issue at 31 March 2024 506,291,025 4,953,169 (159,455)
16,635,787 166,358 48,776
26 September 2025: issue of shares at 1.2932p per share
As at 30 September 2025 522,926,812 5,119,527 14,804,346
On 26 September 2025, the Company 16,635,787 new ordinary shares of 1 pence in
settlement of an accrued interest payment due to the Company's largest
shareholder, Jonathan Swann, for his 20,000,000 convertible loan notes issued
in 2023 with an aggregate principal value of £1.6 million, originally
announced on 3 April 2023 (the "2023 CLN"). This payment relates to
outstanding accrued interest of £215,134, with the issue price of the new
Ordinary Shares calculated at the volume-weighted average price ("VWAP") over
the ten trading days following the lifting of the suspension of trading in the
Ordinary Shares, i.e. 11-25 August 2025. The VWAP was 1.2932 pence.
22. Share Options and Warrants
At 30 September 2025 there were options and warrants outstanding over 73,638,096 unissued ordinary shares (2024: 39,146,205). Details of the options and warrants outstanding are as follows:
Issued Exercisable From Exercisable Until Number Outstanding Exercise Price (p)
12 October 2016 Any time until 11 October 2026 250,000 27.75
8 October 2019 8 October 2021 8 October 2029 65,000 10.00
8 October 2019 8 October 2022 8 October 2029 65,000 10.00
8 October 2019 Any time until 8 October 2029 1,000,000 10.00
28 May 2021 Any time until 28 May 2026 10,000,000 60.00
1 June 2021 1 June 2022 1 May 2026 1,200,000 10.00
27 September 2021 23 September 2022 23 September 2026 10,391,432 10.00
23 May 2025 - 8 September 2025 23 May 2025 23 May 2028 50,666,664 1.89
Total 73,638,096
During the period ended 30 September 2025, the Company issued 50,666,664 share
warrants in connection with a £810,000 fundraising through convertible loan
notes. Each warrant entitles the holder to subscribe for one ordinary share,
with an exercise price determined as 1.25× the volume-weighted average price
of the Company's ordinary shares over the ten trading days prior to the
relevant drawdown.
As the Company's shares were suspended from trading until 12 August 2025, the
exercise price for these warrants was deemed to be based on a VWAP of 1.5
pence per share.
The Directors held the following options and warrants at the beginning and end
of the period:
Director At 31 March 2024 Granted in the Period Exercised in the Period Lapsed in the Period At 30 September 2025
T Taylor 2,887,273 - - (2,887,273) -
A Russo 2,887,500 - - (2,887,500) -
C Sommerton - - - - -
Total 5,774,773 - - (5,774,773) -
The options held by T. Taylor and A. Russo issued in October 2019 and
exercisable until 8 October 2029 lapsed on their departure from the Group. All
other options are exercisable between 8 September 2024 and 8 September 2029.
The market price of the shares at the year-end was 1.575 p per share.
23.Equity-settled Share-based Payments Reserve
2025 2024
£ £
Brought forward and carried forward 4,516,608 4,516,608
The details of the exercise price and exercise period of options outstanding
at the year-end are given in Note 22 above.
Details of the options and warrants outstanding at the period end are as
follows:
Options and Warrants 2025 Number 2025 Weighted average exercise price - pence 2024 Number 2024 Weighted average exercise price-pence
Outstanding at the beginning of the period 39,146,205 22.83p 48,496,779 18.82p
Granted 50,666,664 1.89p - -
Lapsed during the period (16,174,773) 9.88p (9,350,574) 2.0p
Outstanding at the period end 73,638,096 11.27p 39,146,205 22.83p
The options and warrants outstanding at the period end have a weighted average
remaining contractual life of 2.09 years (2024: 2.55 years).
Full details of the exercise price and potential exercise dates are given in
Note 22 above.
24. Compound Loan Note Equity Component Reserve
The Company has issued convertible loan notes which constitute compound
financial instruments under IAS 32.
A further breakdown of the equity component of the loan notes that have been
recorded in the Compound Loan Note Equity Component Reserve is shown in Note
26.
25. Capital Commitments
There were no capital commitments at 30 September 2025 or 31 March 2024.
26. Borrowings
Group 2025 Company 2025 Group 2024 Company 2024
£ £ £ £
Bounce Back Loan Scheme loan - - 22,500 22,500
Shareholder loan 460,811 460,811 - -
Other loan - - 9,771 -
Convertible loan notes 2,154,408 2,154,408 1,590,501 1,590,501
2,615,219 2,615,219 1,622,772 1,613,001
Current 460,811 460,811 211,017 202,000
Non-current 2,154,408 2,154,408 1,411,755 1,411,001
2,615,219 2,615,219 1,622,772 1,613,001
Group 2025 Group 2024 Company 2024
Company 2025
£ £ £ £
Balances brought forward 1,622,772 1,613,001 4,503,619 4,484,558
Issue of CLNS 810,000 810,000 - -
Equity component on issue of CLNS (163,326) (163,326)
Amount transferred to equity on modification of CLN (112,000) (112,000) - -
Non-cash accretion 19,734 19,734 343,300 343,300
Interest capitalised as share capital - - (192,000) (192,000)
Interest paid - - (127,490) (127,490)
Loss on modification 9,499 9,499 - -
Receipt of shareholder loan 450,100 450,100 - -
Interest accrued on shareholder loan 10,711 10,711 - -
Repayment of loans (32,271) (22,500) (19,269) (9,979)
Conversion of CLNs - - (2,885,388) (2,885,388)
Balances carried forward 2,615,219 2,615,219 1,622,772 1,613,001
Convertible Loan Notes
Between May and September 2025, Chill Brands raised £810,000 through the
issue of convertible loan notes (the "Fundraising" or the "2025 CLNS'') and
secured agreement from its largest shareholder, Jonathan Swann, to extend the
terms of convertible loan notes entered into during 2023 (the"2023 CLNs").
2023 Convertible Loan Notes
On 31 March 2023, the Company issued convertible loan notes with an aggregate
value of £1,600,000 with an interest rate of 12%. Originally, the lender
had the right between the date of issuance and 1 April 2026 to serve a
conversion notice on the Group to convert all or some of the notes outstanding
into the applicable number of conversion shares up to 20,000,000 at the
conversion price of 8 pence per share. To the extent not already redeemed or
converted, the notes in issue were to be paid to the lender on 1 April 2026.
On 23 May 2025, the Company agreed to vary the terms of these convertible loan
notes such that their maturity date is extended to 15 May 2028, and their
conversion price is amended to 2.15 pence per ordinary share, resulting in a
potential issuance of up to 74,418,605 conversion shares.
In summary, the Company entered into a deed of variation with Mr Swann to
amend the terms of the 2023 CLN as follows:
· The maturity date has been extended from 1 April 2026 to 15 May
2028;
· The conversion price has been reduced from 8 pence per share to
2.15 pence per share, being the price at which the Company's shares were
suspended on 3 June 2024;
· Outstanding accrued interest of £215,134 was settled by the
issue of new ordinary shares in the Company, priced at the volume-weighted
average price ("VWAP") over the ten trading days following the lifting of the
current suspension in the Company's shares;
· The 2023 CLN was assigned by Mr Swann to his wholly-owned
company, Denstone Investments Ltd.
2025 Convertible Loan Notes
On 11 March 2025, the Company announced its intention to raise funds through
the issue of up to 66,666,666 new Convertible Loan Notes of 1.5 pence each
(the "2025 CLNs"). The Company raised £870,000 from its largest shareholder,
Jonathan Swann, and a number of other investors. The terms of the fundraising
were as follows:
· the CLNs have a conversion price of 1.5 pence per new ordinary
share, being a 30.2% discount to the closing price of the Company's shares on
the day prior to the suspension of trading in the Company's shares on 3 June
2024;
· the CLNs attract interest at a rate of 10% per annum with a
maturity date three years from the date of their issue;
· the principal, along with the fixed interest, may be converted
into new ordinary shares solely at the election of the subscriber and
following the suspension of trading in the Company's shares being lifted;
· the minimum investment amount under the Fundraising was set at
£10,000. Investors subscribing for up to £50,000 of CLNs (the "Initial
Subscribers") were required to remit funds to the Company at the time of
subscription. For subscriptions in excess of £50,000, drawdown of funds were
at the discretion of the Company and may occur at any time within 12 months
from the date of issue of the CLNs, the first drawdown having been made; and
· the Company also issued to subscribers a warrant to subscribe for
one New Ordinary Share per CLN. The exercise price of each warrant shall be
equal to 1.25 times the volume-weighted average (the "VWAP") of the Company's
Ordinary Shares over the ten trading days immediately preceding the date of
the relevant Drawdown Notice. As at the date of the announcement, the
Company's Ordinary Shares were suspended from trading. Accordingly, in respect
of drawdowns made prior to the resumption of trading in the Company's Ordinary
Shares, the VWAP for the purposes of calculating the exercise price of the
associated warrants was deemed to be 1.5 pence per Share. Warrants awarded
to the Initial Subscribers, as opposed to those resulting from future
drawdowns after trading in the Company's shares resumed, shall be deemed to be
issued during the suspension. The exercise price of warrants awarded to the
Initial Subscribers was therefore calculated in line with a VWAP of 1.5 pence
per Ordinary Share. A total of 50,666,664 warrants were issued.
Jonathan Swann participated in the Fundraising through his wholly owned
company, Denstone Investments Ltd.
The proceeds of the Fundraising are primarily being used for the following:
the ongoing development, launch and distribution of new, compliant
rechargeable, reuseable pod-based vaping products; the expansion of marketing
campaigns for the chill.com marketplace website to drive brand awareness and
customer acquisition; the expansion of the Company's sales and distribution
infrastructure to enable it to attract and serve additional brands through
enhanced field sales operations; and to support the Company's general working
capital requirements, including potentially examining and pursuing synergistic
and value generative bolt-on acquisitions.
The loan notes each constitute a compound financial instrument under IAS 32.
The liability component represents the net present value of future contractual
cash flows. See below for a breakdown of the classification of the loan notes.
Reconciliation of movements: CLN equity Liability component
component £
£ Totals
£
Amounts as at 31 March 2023 419,168 4,452,079 4,871,247
Conversion in the year (400,116) (2,885,388) (3,285,504)
Interest charged - 343,300 343,300
Interest capitalised as share capital - (192,000) (192,000)
Interest paid - (127,490) (127,490)
Amounts outstanding at 31 March 2024 19,052 1,590,501 1,609,553
Amounts issued recognised as a liability component - 810,000 810,000
Amounts issued and recognised as equity 163,326 (163,326) -
Total of 2025 CLNs issued 163,326 646,674 810,000
Non-cash accretion - 19,734 19,734
Amount transferred to equity on modification of CLN 112,000 (112,000) -
Transfer to retained earnings on modification of 2023 CLNs (19,052) - (19,052)
Loss on modification of 2023 CLNs, recognised in income statement - 9,499 9,499
Amounts outstanding at 30 September 2025 275,326 2,154,408 2,429,734
Summary of CLN liability components:
As at 30 September 2025:
Liability due within one year -
Liability due after more than one year 2,154,408
Total 2,154,408
As at 31 March 2024:
Liability due within one year 192,000
Liability due after more than one year 1,398,501
Total 1,590,501
Shareholder loan
The loan from a shareholder comprises an unsecured drawdown facility of up to
£1,000,000, with a one year maturity, bearing interest at 2% per month. As at
30 September 2025, a total of £450,100 had been drawn.
Net Debt
The table below outlines the changes in net debt for the Group during the period.
At 31 March 2024 Cash Flows Foreign currency adjustments Other At 30
adjustments September 2025
and reclassifications
Cash and cash equivalents 1,315,289 (1,215,332) - - 99,957
Borrowings
Debt due within one year 211,017 417,829 - (168,035) 460,811
Debt due after one year 1,411,755 810,000 - (67,347) 2,154,408
1,622,772 1,227,829 - (235,382) 2,615,219
Total net debt (307,483) (2,443,161) - (235,382) (2,515,262)
At 31 March 2023 Cash Flows Foreign currency adjustments Other adjustments and reclassifications At 31 March 2024
Cash and cash equivalents 3,767,426 (2,447,912) (4,225) - 1,315,289
Borrowings
Debt due within one year 468,893 (19,289) - (238,587) 211,017
Debt due after one year 4,034,726 - - (2,622,971) 1,411,755
4,503,619 (19,289) - (2,861,558) 1,622,772
Total net debt (736,193) (2,428,623) (4,225) 2,861,558 (307,483)
27. Financial Instruments and Risk Management
The Group's financial instruments comprise primarily cash and various items such as trade debtors and trade creditors which arise directly from its operations. The main purpose of these financial instruments is to provide working capital for the Group's operations.
The Group does not utilise complex financial instruments or hedging mechanisms in respect of its non-sterling operations.
Financial Assets by Category
The categories of financial assets included in the balance sheet and the
heading in which they are included are as follows:
Group 2025 Company 2025 Group 2024 Company 2024
£ £ £ £
Non-current assets
Loan to group undertaking - - - -
Current assets
Trade receivables 238,485 238,485 1,366,307 1,321,808
Other receivables - - 5,742 -
Cash and cash equivalents 99,997 99,881 1,315,289 1,225,912
Categorised as financial assets measured at amortised cost 338,482 338,366 2,687,338 2,547,720
The loan to group undertaking has no fixed repayment date and its future
repayment will depend upon the financial performance of subsidiary. All other
amounts are short term and none are past due at the reporting date.
Financial Liabilities by Category
The categories of financial liabilities included in the balance sheet and the
heading in which they are included are as follows:
Group 2025 Company 2025 Group 2024 Company 2024
£ £ £ £
Current liabilities
Trade and other payables 498,155 415,445 658,142 439,131
Borrowings 2,615,219 2,615,2197 1,622,772 1,618,001
Categorised as financial liabilities measured at amortised cost 3,113,374 3,030,6641 2,280,864 2,057,132
All amount, excluding loans, are short term payables.
Credit Risk
The maximum exposure to credit risk at the reporting date by class of
financial asset was:
Group 2025 Company 2025 Group 2024 Company 2024
£ £ £ £
Trade and other receivables 238,485 237,485 1,366,307 1,321,808
Credit and Liquidity Risk
Credit risk is managed on a Group basis. Funds are deposited with financial
institutions with a credit rating equivalent to, or above, the main UK
clearing banks. The Group's liquid resources are invested having regard to the
timing of payments to be made in the ordinary course of the Group's
activities. All financial liabilities are payable in the short term (normally
between 0 and 3 months) and the Group maintains adequate bank balances to meet
those liabilities as they fall due.
Capital Management
The Group considers its capital to be equal to the sum of its total equity.
The Group monitors its capital using a number of metrics including cash flow
projections, working capital ratios, the cost to achieve development
milestones and potential revenue from partnerships and ongoing licensing
activities. The Group's objective when managing its capital is to ensure it
obtains sufficient funding for continuing as a growing concern, The Group
funds its capital requirements through the issue of new share to investors.
Interest Rate Risk
The maximum exposure to interest rate risk at the reporting date by class of
financial asset was:
Group 2025 Company 2025 Group 2024 Company 2024
£ £ £ £
Bank balances and receivables 99,997 99,881 1,315,289 1,225,912
The Group uses liquid resources to meet the cost of future development
activities. Consequently, it seeks to minimise risk in the holding of its bank
deposits. The Group is not financially dependent on the small rate of interest
income earned on these resources and therefore the risk of interest rate
fluctuations is not significant to the business and the Directors have not
performed a detailed sensitivity analysis. Nonetheless, the Directors take
steps when possible and cost effective to secure rates of interest which
generate a return for the Group by depositing sums which are not required to
meet the immediate needs of the Group in interest-bearing deposits. Other
balances are held in interest-bearing, instant access accounts. All deposits
are placed with main clearing banks to restrict both credit risk and liquidity
risk. The deposits are placed for the short term, between one and three
months, to provide flexibility and access to the funds and to avoid locking
into potentially unattractive interest rates.
Market Risk
Market risk arises from changes in interest rates, foreign exchange rates and
equity prices, as well as in their correlations and volatility levels. Market
risk is managed on a Group basis in the ordinary course of the Group's
activities.
Currency Risk
The Group operates in a global market with income possibly arising in a number
of different currencies, principally in Sterling or US Dollars.
The majority of the operating costs are incurred in Sterling with the rest
predominantly in US Dollars. The Group does not hedge potential future income
or costs, since the existence, quantum and timing of such transactions cannot
be accurately predicted.
Financial assets and liabilities denominated in US Dollars and translated into
Sterling at the closing rate were:
Group 2025 Company 2025 Group 2024 Company 2024
£ £ £ £
Financial assets 76 - 50,241 -
Financial liabilities (107,704) - (228,783) -
Net financial (liabilities)/assets (107,628) - (178,542) -
The following table illustrates the sensitivity of the net result for the
period and the reported financial assets of the Group in regard to the
exchange rate for Sterling: US Dollar:
2025 If Sterling Rose 20% If Sterling Fell 20%
as reported
£ £ £
Group result for the period (4,327,100) (4,110,636) (4,543,564)
US Dollar denominated net financial liabilities (107,628) (86,102) (129,154)
Total equity at 30 September 2025 (1,234,074) (1,390,283) (1,077,865)
If Sterling Rose 20% If Sterling Fell 20%
2024
as reported
£ £ £
Group result for the period (3,370,293) (3,285,701) (3,454,885)
US Dollar denominated net financial liabilities (178,542) (161,515) (195,569)
Total equity at 31 March 2024 2,570,877 2,834,231 2,287,523
28. Related Party Transactions
Eric Schrader, a former director of the Company, owns Racquette Hanger, LLC
which let property to the Group during year for the storage and distribution
of products. During the period ended 30 September 2025, the Group made rental
payments to Racquette Hanger, LLC of £nil (2024: £79,202).
Scott Thompson, a former director of the Company, is a partner at Lippes
Mathias which provided legal advice to the Group. During the period ended 30
September 2025, the Group made payments to Lippes Mathias of £16,840 (2024:
£76,983).
A total of £27,000 is outstanding to Graham Duncan, a director of the
Company, as at 30 September 2025. These amounts are unsecured and
interest-free.
In 2021, the Group entered into a distribution agreement with Ox Distributing
LLC, a brokerage firm specialising in ecommerce shipping in convenience
stores, grocery stores and other retail chains in the Unites States. Ox
Distributing, LLC is owned by Eric Schrader, a related party to the Group
given that he was a director of the Company and had significant influence over
the entity. During the period ended 30 September 2025, the Group made sales
net of promotional discounts on products to Ox Distributing, LLC, with terms
equivalent to those that prevail in an arm's length transaction, of £nil
(2024:£35,086) resulting from the sale of products to the Company.
29. Events After the Reporting Period
In October 2025, the Company announced that it had reached a settlement with a
former professional adviser in relation to the various disputes that affected
the Company during 2024.
The settlement, which provided for a cash payment of approximately £210,000
to Chill Brands, was agreed amicably and reflected a commitment by both
parties to resolve their issues constructively and professionally. The
settlement sum was received in full in November 2025.
Both parties consider this matter fully resolved.
No other matters or events occurring after 30 September 2025 are considered
relevant to the Company's financial statements for the Period.
30. Ultimate controlling party
In the opinion of the Directors there is no ultimate controlling party.
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