REG - DG Innovate PLC - Interim Results
28/09/2023 07:00
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RNS Number : 8921N DG Innovate PLC 28 September 2023
28 September 2023
DG Innovate plc
("DG Innovate ", the "Company", or the "Group")
Interim results for the six months ended 30 June 2023
DG Innovate (LSE: DGI), the advanced research and development company
pioneering sustainable and environmentally considerate improvements to
electric mobility and energy storage, announces the Company's unaudited
interim results for the six months ended 30 June 2023.
Chairman's Report
The first half of 2023 saw progress on all fronts, as we continued with the
development of our electric mobility and energy storage technologies and
progressed our commercial opportunities, both with existing and new partners.
Our shareholders again demonstrated their support despite challenging market
conditions via a £418,000 subscription in January, which allowed us to
continue work on our various projects and efforts to commercialise our
ground-breaking IP.
Post-period end, we completed a further £517,000 placing on 19 July, which
has allowed the team to continue development of our technologies. Testing of
our Pareta® high-performance electric vehicle drive is ongoing, and work
continues on our Scale up Readiness Validation of Parallel Motor for
Automotive Applications' ("SUPAR") project with the UK Government's Advanced
Propulsion Centre. As outlined in the technology roadmap in the Company's
Strategic Update announced on 11 October 2022 we plan to move into pilot
manufacturing and volume supply in due course.
Most recently, the team exhibited our integrated Pareta® drives at CENEX-LCV
2023, the UK's premier exhibition and conference devoted to low-carbon vehicle
and fuel cell technologies. This marked the unveiling of our innovative e-axle
for buses and other heavy vehicles, borne out of our ongoing collaboration
with BRIST Axle Systems S.r.l. We also demonstrated our Pareta® fleet
monitoring and tracking system for the first time alongside our driving
simulation software, and have been extremely enthused by the response of
existing and potential new partners.
At the beginning of the period, and alongside our fundraising, Sir Stephen
Dalton and Andrew Boughtwood stepped down as Non-Executive Directors to reduce
the Company's ongoing costs and ensure that the Company's board is of an
appropriate size and composition for its current stage of development. We
remain extremely grateful for their contributions to the Company.
We look forward to updating shareholders further in due course.
Nick Tulloch
Non-Executive Chairman
28 September 2023
Financial Review
For the six months to 30 June 2023, the Group recorded a loss before tax of
£1,908,253 (30 June 2022: £6,516,795; 31 December 2022: £7,868,376). There
was revenue of £30,240 (30 June 2022: £Nil; 31 December 2022: £4,280)
together with £399,641 (30 June 2022: £344,831; 31 December 2022: £433,989)
of grant income in the period.
Cash flow
As at 30 June 2023 the Group held cash of £159,958 (30 June 2022:
£1,650,352; 31 December 2022: £234,990) in the bank account. The Company
raised £418,000 in January, also as stated above, after the period end the
Company raised £517,000 through placing of new shares.
R&D repayment of £92,578 was received during the period for the tax
credit claim for the year ended 31 March 2023, while an R&D tax credit of
£92,697 for the period ended 31 December 2023 was in trade receivables at the
period end and was received in August.
For further information please contact:
DG Innovate plc C/O IFC
Peter Tierney, CEO
Jack Allardyce, CFO
IFC Advisory (Financial PR & IR) 020 3934 6630
Tim Metcalfe
Zach Cohen
Grant Thornton UK LLP (Financial Advisor) 020 7383 5100
Samantha Harrison
Jamie Barklem
Ciara Donnelly
Peterhouse (Broker) 020 7469 0930
Rose Greensmith
Duncan Vasey
Lucy Williams
The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.
About DG Innovate
DG Innovate is an advanced research and development company pioneering
sustainable and environmentally considerate improvements to electric mobility
and storage, using abundant materials and the best engineering and scientific
practices. DG Innovate is currently developing its products alongside a number
of major manufacturers across the transportation and energy sectors, research
institutions and the UK Government, and has filed 18 patents worldwide. DG
Innovate's current research and development activities are broadly split into
two areas, focusing on novel electric motor technologies and energy storage
solutions. Its two main products are:
· Enhanced Drive Technology (EDT) - High efficiency, cost-effective electric
motors + power electronics;
· Enhanced Battery Technology (EBT) - Sodium-ion batteries offering a
sustainable energy storage solution at similar/greater energy density to
incumbent technologies at a lower cost, increased safety with lower
environmental footprint.
Further information may be found at: https://www.dgiplc.com
(https://www.dgiplc.com)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Six months ended Six months ended Year ended 31
30 June 30 June December
Notes
2023 2022 2022
Unaudited Unaudited Audited
£ £ £
Revenue
Turnover 30,240 - 4,280
Cost of sales (24,662) - (2,000)
Gross Profit 5,578 - 2,280
Grant income 399,641 344,831 433,989
Other income 802 5,307 2,618
Administrative expenses 3 (1,734,306) (1,457,151) (2,715,557)
Share based payments (564,292) (265,934) (338,864)
Total administrative expenses (2,298,598) (1,723,085) (3,054,421)
Operating loss (1,892,577) (1,372,947) (2,615,534)
Reverse acquisition expenses - (5,094,074) (5,094,074)
Finance income 50 81 -
Finance cost (15,726) (49,855) (67,873)
Other gains and losses - - (90,895)
Loss on ordinary activities before taxation (1,908,253) (6,516,795) (7,868,376)
Income tax - 3,472 188,864
Loss for the period and total comprehensive loss attributable to the equity (1,908,253) (6,513,323) (7,679,512)
holders
Earnings per share (pence)
- Basic & diluted 4 (0.021) (0.16) (0.11)
All operating income and operating gains and losses relate to continuing
activities.
There was no other comprehensive income for the period (30 June 2022: £Nil;
31 December 2022: £Nil).
The unaudited comparatives of June 2022 in the interim accounts have been
updated following the audited adjustments as at 31 December 2022. The key
adjustment is to reclassify £680,321 of intangibles assets from the previous
financial year end of 31 March 2022 of Deregallera Holdings Ltd to the new
year end 31 December 2021, following the reverse acquisition in April 2022.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Share Capital Share Premium Capital Redemption Reserve Reverse Acquisition Reserve Merger Share Retained Earnings Total
Reserve Option Reserve
£ £ £ £ £ £ £ £
As at 1 January 2023 8,842,715 33,604,986 8,783,824 (66,211,737) 26,987,257 338,864 (6,954,819) 5,391,090
Comprehensive income
Loss for the period - - - - - - (1,908,253) (1,908,253)
Share based payments - - - - - 564,292 - 564,292
- - - - - 564,292 (1,908,253) (1,343,961)
Total comprehensive loss
Transactions with owners
Issue of share capital 365,833 187,985 - - - - - 553,818
As at 30 June 2023 9,208,548 33,792,971 8,783,824 (66,211,737) 26,987,257 903,156 (8,863,072) 4,600,947
Share Capital Share Premium Capital Redemption Reserve Reverse Acquisition Reserve Merger Share Retained Earnings Total
Reserve Option
Reserve
£ £ £ £ £ £ £ £
As at 1 January 2022 2,029,464 27,723,274 8,783,824 (36,439,255) - - 724,693 2,822,000
Comprehensive income - - - - - - (7,679,512) (7,679,512)
Loss for the period
Share based payments - - - - - 338,864 - 338,864
Total comprehensive loss - - - - - 338,864 (7,679,512) (7,340,648)
Reverse acquisition - - - (29,772,482) - - - (29,772,482)
Issue of share capital 6,813,251 5,881,712 - - 26,987,257 - - 39,682,220
8,842,715 33,604,986 8,783,824 (66,211,737) 26,987,257 338,864 (6,954,819) 5,391,090
As at 31 December 2022
Share Capital Share Premium Capital Redemption Reserve Reverse Acquisition Reserve Merger Share Retained Earnings Total
Reserve Option
Reserve
£ £ £ £ £ £ £ £
As at 1 January 2022 2,029,464 27,723,274 8,783,824 (36,439,255) - - 724,693 2,822,000
Comprehensive income - - - - - - (6,513,323) (6,513,323)
Loss for the period
Share based payments - - - - - 265,934 - 265,934
Total comprehensive loss - - - - - 265,934 (6,227,231) (6,247,389)
Reverse acquisition - - - (29,772,482) - - - (29,772,482)
Issue of share capital 6,813,251 5,881,712 - - 26,987,257 - - 39,682,220
As at 30 June 2022 8,842,715 33,604,986 8,783,824 (66,211,737) 26,987,257 265,934 (5,788,630) 6,484,349
The Share Capital represents the nominal value of the equity shares. The Share
Premium represents the amount subscribed for share capital, in excess of the
nominal amount, less costs directly relating to the issue of shares.
The Share Option Reserve represents share-based payments which represents the
cumulative fair value of options and warrants granted.
Reverse Acquisition Reserve and merger reserve were created due to the reverse
acquisition of Deregallera Holdings Ltd.
The unaudited comparatives of June 2022 have been restated to match the
opening balance of 1 January 2022 in the audited accounts for the financial
year ended 31 December 2022.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE SIX MONTHS ENDED 30 JUNE 2023
As at As at As at
30 30 31
Notes June June December
2023 2022 2022
Unaudited Unaudited Audited
£ £ £
ASSETS
Non-current assets
Property, plant and equipment 5 748,904 868,540 725,091
Intangible asset 6 4,462,676 4,171,835 4,573,592
Current assets
Trade and other receivables 7 418,332 969,736 1,023,552
Cash and cash equivalents 159,958 1,650,352 234,990
578,290 2,620,088 1,258,542
LIABILITIES
Current liabilities
Trade and other payables 8 (667,872) (620,032) (640,229)
Net Current Assets/(Liabilities) (89,582) 2,000,056 618,313
Non-current liabilities 9 (489,481) (556,082) (495,860)
Provision for liabilities (31,570) - (30,046)
NET ASSETS 4,600,947 6,484,349 5,391,090
SHAREHOLDERS' EQUITY
Called up share capital 10 9,208,548 8,842,715 8,842,715
Capital redemption reserve 8,783,824 8,783,824 8,783,824
Share premium account 33,792,971 33,604,986 33,604,986
Share option reserve 903,156 265,934 338,864
Merger reserve 26,987,257 26,987,257 26,987,257
Reverse acquisition reserve (66,211,737) (66,211,737) (66,211,737)
Retained earnings (8,863,072) (5,788,630) (6,954,819)
TOTAL EQUITY 4,600,947 6,484,349 5,391,090
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Six months to 30 June Six months to 30 June Year ended 31 December
2023 2022 2022
Unaudited Unaudited Audited
£ £ £
Loss for the period after tax (1,908,253) (6,513,323) (7,679,512)
(Increase)/decrease in debtors 605,220 (805,654) (992,206)
(Decrease)/increase in creditors within one year 50,912 (319,818) 61,024
Reverse takeover expenses - 5,094,074 5,094,074
Provisions (1,524) - (23,543)
Taxation - - -
Share based payments 564,292 265,934 338,864
Finance income (50) - -
Finance costs 15,726 - 67,873
Amortisation 170,392 207,328 414,656
Depreciation 63,435 95,170 149,942
Losses on disposal of fixed assets - - 90,895
Write-off of share capital - - -
Tax refunded 92,578 - 85,270
Net cash (outflow) / inflow from operating activities (347,272) (1,976,289) (2,392,663)
Cash flows from investing activities
Proceeds from disposal of property, plant and equipment - - 50,832
Purchase of property, plant and equipment (87,248) (104,059) (76,563)
Purchase of intangible fixed assets (59,476) (239,358) (848,443)
Finance income 50 81 -
Finance cost (15,726) - (50,241)
Cash payment on acquisition - - (86,062)
Net cash used in investing activities (162,400) (343,336) (1,010,477)
Cash flows from financing activities
Issue of share capital 418,000 5,210,661 4,347,125
Repayment of borrowings (40,620) (1,298,139) (735,876)
(Repayment)/increase of lease liabilities 57,260 - (71,661)
Net cash generated from financing activities 434,640 3,912,522 3,539,588
Net increase/(decrease) in cash and cash equivalents (75,032) 1,592,897 136,448
Cash and cash equivalents at beginning of period 234,990 57,455 57,455
Cash balance on acquisition - - 41,088
Cash and cash equivalents at end of period 159,958 1,650,352 234,990
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
1. GENERAL INFORMATION
DG Innovate Plc is a public limited company incorporated in the United
Kingdom, registered under company number 04006413. The address of the
registered office is 15 Victoria Mews, Millfield Road, Cottingley Business
Park, Bingley, West Yorkshire, BD16 1PY. On 8 April 2022, Path Investments Plc
changed its name to DG Innovate Plc following the acquisition of Deregallera
Holdings Ltd (formerly DG Innovate Limited) ("DHL"), becoming an advanced
research and development company pioneering sustainable and environmentally
considerate improvements to electric mobility and storage.
The consolidated financial information represents the results of DG Innovate
Plc and its subsidiaries (together referred to as Group).
2. ACCOUNTING POLICIES
2.1 Basis of preparation
The condensed consolidated interim financial statements are presented in UK
Sterling and all values are rounded to the nearest pound except where
indicated otherwise.
The condensed consolidated interim financial statements have been prepared
under the historical cost convention or fair value where appropriate.
The results for the six months to 30 June 2023 have been prepared on the basis
of the accounting policies set out in the Company's 2022 annual report and
accounts along with standards which have become effective after 31 December
2022. The interim accounts do not constitute statutory accounts as defined by
section 434 of the Companies Act 2006. The auditor has reported on the 2022
accounts of DG Innovate Plc and the report was unqualified and did not contain
a statement under section 498(2) of (3) of the Companies Act 2006 and the 2022
report and accounts have been filed with the registrar of companies. Under
reverse acquisition accounting the comparatives comprise details of the group
prior to the reverse takeover and as a result these figures are not audited.
During the period, there have been no changes in the nature of the related
party transactions from those described in the Company's 2022 accounts.
2.2 Responsibility statement
The directors confirm that these condensed interim financial statements have
been prepared in accordance with International Accounting Standard 34 "Interim
Financial Reporting", as adopted by the United Kingdom and as issued by the
IASB and that the interim management report includes a fair review of the
information required by DTR 4.2.7R and DTR 4.2.8R, namely;
a) An indication of the important events that have occurred during the first
six months and their impact on the condensed set of financial statements, and
a description of the principal risks and uncertainties for the remaining six
months of the financial year; and
b) Material related party transactions in the first six months and any
material changes in related party transactions described in the last annual
report.
2.3 Segmental reporting
The Group has two distinct areas of focus (Enhanced Drive Technology and
Enhanced Battery Technology), and management have identified the Group's
series of Pareta® electric drives and hard carbon anode materials as its two
cash generating units (CGUs). However, as the Group is currently in the
development phase and effectively operates as one operating unit under IFRS 8,
segmental information is not available or presented within these accounts.
The aggregate value in use calculated for the two identified CGUs as at 30
June 2023 was in excess of the carrying value of the intangible assets, and
the Directors therefore believe the value of these assets is not impaired at
30 June 2023. This accounting treatment resulted in an impairment loss of
£Nil (30 June 2022: £Nil; 31 December 2022: £Nil). The carrying value of
the intangible assets of the two identified CGUs as at 30 June 2023 are
Enhanced Drive Technology £2,252,887 (30 June 2022: £2,053,313; 31 December
2022: £2,292,986) and Enhanced Battery Technology £2,209,789 (30 June 2022:
£2,118,522; 31 December 2022: £2,280,606).
2.4 Reverse acquisition
On 8 April 2022, the Company acquired DHL via a reverse takeover which
resulted in the Company becoming the ultimate holding company of the Group.
The transaction was accounted for in accordance with the principles of reverse
acquisition accounting, since it did not meet the definition of a business
combination under IFRS 3. In accordance with IFRS 2, a share-based payment
expense equal to the deemed cost of the acquisition less the fair value of the
net assets of the Company at acquisition was recognised. The comparatives
within the consolidated statement of financial position, the consolidated
statement of comprehensive income, consolidated statement of changes in equity
and the consolidated cashflow statement represent that of the legal subsidiary
and accounting acquirer, DHL. In the consolidated statement of financial
position, the share capital and premium as at 31 December 2021 is that of the
Company (DG Innovate Plc) with the reverse acquisition reserve representing
the difference between the deemed cost of the acquisition and the net assets
of the Company as at 7 April 2022. The consolidated statement of comprehensive
income for the period represents the results of both DG Innovate Plc and DHL.
3. ADMINISTRATIVE EXPENSES
Six months to 30 June 2023 Six months to 30 June 2022 Year ended 31 December
2022
Unaudited Unaudited Audited
£ £ £
Directors remuneration 393,292 486,241 845,381
Other administrative expenses 1,341,014 970,910 1,870,176
1,734,306 1,457,151 2,715,557
4. LOSS PER SHARE
The calculation of the basic and diluted loss per share is based on the loss
on ordinary activities after taxation of and on the weighted average number of
ordinary shares in issue.
There was no dilutive effect from the share options or convertible loan notes
outstanding during the period.
In order to calculate the diluted earnings per share, the weighted average
number of ordinary shares in issue is adjusted to assume conversion of all
dilutive potential ordinary shares according to IAS33. Dilutive potential
ordinary shares include convertible loan notes and share options granted to
Directors and consultants where the exercise price (adjusted according to
IAS33) is less than the average market price of the Company's ordinary shares
during the period.
The weighted average number of shares is calculated using the number of DG
Innovate Plc shares owned by the accounting acquirer DHL pre and post the
reverse takeover on 8 April 2022.
Six months to 30 June 2023 Six months to 30 June 2022 Year ended 31 December
2022
Unaudited Unaudited Audited
£ £ £
Net loss for the period (1,908,253) (6,513,323) (7,679,512)
The weighted average number of shares in the period were:
Basic and dilutive ordinary shares 9,147,913,081 4,105,884,193 7,032,070,240
Basic and dilutive earnings/(loss) per share (pence) (0.021) (0.16) (0.11)
5. PROPERTY, PLANT AND EQUIPMENT
Improvements to leasehold property Plant & equipment Right of use asset Total
£ £ £ £
Cost
At 1 January 2023 314,294 1,368,095 373,453 2,055,842
Additions - 8,723 78,525 87,248
At 30 June 2023 314,294 1,376,818 451,978 2,143,090
Depreciation
Depreciation at 1 January 2023 314,294 974,848 41,609 1,330,751
Charge in the period - 42,419 21,016 63,435
Depreciation at 30 June 2023 314,294 1,017,267 62,625 1,394,186
Carrying value
At 30 June 2023 - 359,551 389,353 748,904
At 31 December 2022 - 393,247 331,844 725,091
At 30 June 2022 - 519,952 348,588 868,540
6. INTANGIBLE ASSETS
IPR & Total
Patents
£ £
Cost
At 1 January 2023 7,068,754 7,068,754
Additions 59,476 59,476
At 30 June 2023 7,128,230 7,128,230
Amortisation
Amortisation at 1 January 2023 2,495,162 2,495,162
Charge in the period 170,392 170,392
Amortisation at 30 June 2023 2,665,554 2,665,554
Carrying value
At 30 June 2023 4,462,676 4,462,676
At 31 December 2022 4,573,592 4,573,592
At 30 June 2022 4,171,835 4,171,835
7. TRADE AND OTHER RECEIVABLES
As at 30 As at 30 As at 31 December 2022
June June
2023 2022
Unaudited Unaudited Audited
£ £ £
Prepayments 69,811 30,518 129,159
Other taxes and social security 260,889 429,096 706,222
Other debtors 87,632 510,122 188,171
418,332 969,736 1,023,552
Also included in other debtors are amounts repayable of £87,369 (30 June
2022: £355,610; 31 December 2022 £188,036) by certain Directors in respect
of incorrectly awarded bonuses.
Other taxes and social security comprise the R&D tax credit, tax suffered
on the bonuses noted above and VAT repayable.
8. TRADE AND OTHER PAYABLES
As at 30 As at 30 As at 31 December 2022
June June
2023 2022
Unaudited Unaudited Audited
£ £ £
Trade payables 190,961 412,954 204,356
Accruals and deferred income 188,241 46,134 231,290
Loans and other borrowings 87,679 79,233 83,349
Lease liabilities 74,548 49,600 59,839
Other creditors 126,443 32,111 61,395
667,872 620,032 640,229
9. NON-CURRENT LIABILITIES
As at 30 As at 30 As at 31 December 2022
June June
2023 2022
Unaudited Unaudited Audited
£ £ £
Loans and other borrowings 140,442 228,121 185,393
Lease liabilities 328,994 247,235 286,443
Other creditors 20,045 80,726 24,024
489,481 556,082 495,860
10. SHARE CAPITAL
Unaudited Unaudited
Allotted, called up and fully paid No £
Ordinary Shares of 0.1p each Ordinary Shares of 0.1p each
At 1 January 2022 (Audited)
2,029,463,802 2,029,464
Issued in period 6,813,251,305 6,813,251
At 31 December 2022 (Audited) 8,842,715,107 8,842,715
At 1 January 2023 8,842,715,107 8,842,715
Issued in period 365,833,333 365,833
At 30 June 2023 (unaudited) 9,208,548,440 9,208,548
11. SHARE OPTIONS AND WARRENTS
Movement in the number of options and warrants outstanding and their related
weighted average exercise price, since 31 December 2022 are as follows:
At 30 June 2023 At 30 June 2022 At 31 December 2022
Number of Weighted average exercise price per share Number of Weighted average exercise price per share Number of Weighted average exercise price per share
Options & Options & Options &
Warrants Warrants Warrants
At 1 January 3,937,526,910 0.33p 2,983,297,500 2.50p 2,983,297,500 0.25p
Granted 368,333,333 0.18p 1,109,783,754 0.10p 1,900,233,137 0.26p
Exercised - - (830,800,000) 0.10p (830,800,000) 0.25p
Expired or waived (3,975,633) 0.10p (40,000,000) 0.10p (115,203,727) 0.10p
At period end 4,301,884,610 0.16p 3,222,281,254 0.10p 3,937,526,910 0.33p
The following share options have been granted by the Company and are
outstanding as at the period end of 30 June 2023:
Date of grant Number of ordinary shares under option at 1 January 2023 Granted during period Exercised during period Lapsed/ waived during period Number of ordinary shares under option at 30 June 2023 Weighted average exercise price Expiry date
30/03/2017 4,000,000 - - - 4,000,000 0.1p 29/03/2027
30/03/2017 5,875,000 - - - 5,875,000 1p 29/03/2027
30/03/2017 2,937,500 - - - 2,937,500 2p 29/03/2027
08/10/2020 60,375,000 - - - 60,375,000 0.1p 07/10/2030
18/03/2021 1,289,310,000 - - - 1,249,310,000 0.1p 18/03/2031
08/04/2022 488,598,296 - - (3,975,633) 484,622,663 0.1p 13/04/2032
12/10/2022 690,790,814 - - - 690,790,814 0.1p 12/10/2032
Total 2,501,886,610 - - (3,975,633) 2,497,910,977 0.1p
The following warrants have been granted by the Company:
Date of grant Number of warrants at Granted during period Exercised during period Lapsed during Number of warrants at 30 June 2023 Weighted average exercise price Expiry date
1 January 2023 period
18/03/2021 790,000,000 - - - 790,000,000 0.25p 07/04/2024
08/04/2022 645,640,300 - - - 645,640,300 0.25p 07/04/2024
30/01/2023 - 368,333,333 - - 368,333,333 0.18p 29/01/2025
Total 1,435,640,300 368,333,333 - - 1,803,973,633 0.24p
In January 2023 the Company raised (before expenses) £418,000 through a
subscription and broker option for 348,333,333 new ordinary shares at a price
of 0.12 pence each. Participants in the fundraise were also issued one warrant
with an exercise of 0.18 pence for every subscription share, with an expiry
date of two years from admission. The Company also agreed to issue 17,500,000
ordinary shares and 20,000,000 warrants with the same terms to an adviser for
services provided in connection with the fundraise.
The fair value of equity settled share options and warrants granted is
estimated at the date of grant using a Black-Scholes option pricing model,
taking into account the terms and conditions upon which the options were
granted. The following table lists the inputs to the model:
Warrants Warrants Options Options Options Options
Date of grant/variation 23 Jan 2023 23 Jan 2023 12 Oct 2022 8 Apr 2022 18 Mar 2021 18 Oct 2020
Expected volatility 87% 87% 62% 62% 31% 50%
Expected life 19 months 10 months 8 years 8 years 10 years 10 years
Risk-free interest rate 3.40% 3.40% 4.40% 1.76% 2.00% 2.50%
Expected dividend yield - - - - - -
Possibility of ceasing employment before vesting - - - - - -
Fair value per option/warrant
0.03p 0.01p 0.12p 0.22p 0.15p 0.6p
The expense recognised by the Group for share based payments during the period
ended 30 June 2023 was £564,292 (30 June 2022: £265,934; 31 December 2022:
£338,864).
The average volatility is used in determining the share based payment expense
to be recognised in the period. This was calculated by reference to the
standard deviation of the share price over the preceding 6-month period.
12. RELATED PARTY TRANSACTIONS
Share Options
The following share options were held by the directors during the period:
Director Date of grant Held at 1 January 2023 Surrendered during the period Granted during the period Held at 30 June 2023 Exercise price
J Allardyce 18/03/2021 62,500,000 - - 62,500,000 £0.001
08/04/2022 156,105,002 - - 156,105,002 £0.001
M Boughtwood 08/04/2022 156,105,002 - - 156,105,002 £0.001
P Tierney 12/10/2022 690,790,814 - - 690,790,814 £0.001
Total 1,065,500,818 - - 1,065,500,818
Transaction with related party
During the period Gareth Boughtwood (son of Martin Boughtwood, a director in
the Group) was paid £Nil (30 June 2022: £5,000; 31 December 2022: £Nil) in
respect of IT services.
Other debtors
Included in other debtors are balances due from the following Directors, and
former Directors, in respect of bonuses incorrectly awarded in 2022 and deemed
to be held in trust. Chris Theis £87,369 (30 June 2022: £137,369; 31
December 2022: £137,369), Brent Fitzpatrick £Nil (30 June 2022: £83,005; 31
December 2022 £50,667), Jack Allardyce £Nil (30 June 2022: £96,268; 31
December 2022 £Nil), Nicholas Tulloch £Nil (30 June 2022: £38,968; 31
December 2022 £Nil).
13. POST PERIOD EVENT
In June 2023 the Company raised (before expenses) £517,000 through a placing
of 1,034,000,000 new ordinary shares at a price of 0.05 pence each. Given the
placing price was below the nominal value of 0.1 pence per ordinary share, the
placing was conditional on the passing of capital reorganisation resolutions,
including the subdivision of the each existing ordinary share into one new
ordinary share of 0.01p and one deferred share of 0.09p. These resolutions
were duly passed at the Company's AGM on 19 July 2023, with the shares
subsequently issued and admitted to trading. The Company also agreed to issue
51,700,000 warrants to Peterhouse Capital Limited and other advisers to the
Company for services provided in connection with the Placing. The warrants
have an exercise price of 0.05 pence, and expire one year from admission.
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