REG - Gelion PLC - Final results to 30 June 2023
12/12/2023 12:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231212:nRSL5130Wa&default-theme=true
RNS Number : 5130W Gelion PLC 12 December 2023
12 December 2023
Gelion plc
("Gelion" or the "Company")
Final results to 30 June 2023
Solid progress against our roadmap to commercialisation, delivering on major
milestones
Gelion plc (AIM: GELN), the Anglo-Australian energy storage innovator,
announces its audited final results for the year ended 30 June 2023.
FY23 Operational highlights
- Acquired a lithium battery IP portfolio from Johnson Matthey for a net
consideration of £3.0m to accelerate the development Lithium-Sulfur (Li-S)
technology.
- John Wood appointed as CEO in November 2022, a battery, clean-tech and
innovation specialist, bringing over 30 years of significant commercial and
manufacturing expertise and C-Suite experience.
- Manufactured 1,200 zinc-bromide cells from our pilot manufacturing line, and
migrated to a zinc hybrid technology.
FY23 Financial highlights
- Total income (R&D tax incentives) for the year of £2.1m, 17% ahead of
market expectations(1).
- Adjusted EBITDA(2) loss of £5.9m, 8% lower than the market expectations(1).
- Implemented cost control measures (in H2 23) resulting in estimated annualised
cost savings of £1m.
- Well capitalised with cash and cash equivalents on the balance sheet of £7.3m
and nil debt as at 30 June 2023.
Post period highlights
- In July 2023, the Group identified a path towards the development of a
zinc-based solution, following the successful match-to-market study and the
Group is now developing a zinc hybrid cell.
- Signed agreements with the University of Sydney and Professor Yuan Chen for
Gelion's Advanced Cathode Project, accelerating progress towards a zinc-based
energy storage solution. Gelion expects to validate the potential of this
technology in Q1 2024.
- Raised £4.1 million via a placing, subscription and retail offer in November
2023, demonstrating support from existing and new investors.
- Successful acquisition of OXLiD Ltd, a UK based Li-S battery technology
developer to accelerate progress towards commercialisation and position Gelion
as a global leader in this expanding market.
- Signed JDA with Ionblox, a US silicon oxide anode developer, to develop high
performance, next-generation LiSiS cells, initially for the global electric
vehicle (EV), electrical vertical-takeoff-and-landing (eVTOL) and drone
markets, before progressing to the stationary energy storage market.
- New Li-S Research and Development facility now fully operational, to optimise
development and accelerate market readiness of this technology by producing
more advanced cell prototypes.
( )
(1) Analyst estimates - total income - £1.7 million and Adjusted EBITDA loss
of £6.4m
(2) Excludes non-recurring expenses such as net loss on sales of fixed assets,
transaction costs, listing and other associated costs and share based
payments. These costs are either considered non-recurring or are non-cash
items and therefore are separately disclosed to assist the user of the
financial information to understand and compare the underlying results of the
Company.
( )
John Wood, CEO of Gelion, commented: "We made solid progress during the year
against our roadmap to commercialisation where the Group delivered major
milestones on both the Li-S and zinc battery technologies. With a strong team
of experts, Gelion has unique technical capabilities and we have now
identified where the business needs to focus to become a global leader in the
provision of safe, robust, and scalable energy storage solutions with
real-world impacts.
"We have started H1 FY24 in a robust position with momentum toward LiS
leadership coming out of the acquisition of OXLiD in the UK, and the joint
development agreement with leading SiOx anode partner Ionblox in the US. Our
Zinc team continued the development of our hybrid cell that is designed to be
readily scalable. With a good financial footing and strong underlying market
drivers as clean technologies are increasingly recognised as fundamental to
the transition to a green economy, I am confident that we will achieve success
for both of our technologies, with Gelion playing a significant role in
providing relevant energy storage solutions."
For further information please visit www.gelion.com (http://www.gelion.com) or
contact:
Gelion plc via Alma
John Wood, CEO
Amit Gupta, CFO
Thomas Maschmeyer, Founder and Principal Technology Advisor
Cavendish Securities plc (Nominated Adviser and Sole Broker) +44 207 220 0500
Corporate Finance
Neil McDonald
Seamus Fricker
Fergus Sullivan
ECM
Barney Hayward
Alma Strategic Communications +44 20 3405 0205
Justine James gelion@almastrategic.com (mailto:gelion@almastrategic.com)
Hannah Campbell
Will Ellis Hancock
About Gelion
Gelion ("gel: ion") is a global -energy storage innovator, supporting the
transition to a more sustainable economy by commercialising two globally
important next generation technologies: Lithium-Sulfur (LiS) and Zinc-based
(Zn) hybrid cells to electrify mobile and stationary applications. Gelion plc
(the Group) is listed on the London Stock Exchange's Alternative Investment
Market and wholly owns Australia based Gelion Technologies Pty Ltd. Gelion
is designing and delivering innovative battery technology to enable that
transition and return value for its customers and investors.
Lithium Sulfur
Gelion's effort is directed at the potential for the LiS chemistry to deliver
double the gravimetric energy density of standard Lithium-ion chemistries
whilst at the same time reducing cost and increasing safety targeting the EV
and e-aviation market, helping to make global transport, energy consumption
and storage more sustainable.
Gelion is developing a product for its high energy density sulfur cathode at
its expanded R&D facilities in Sydney, enabling it to integrate with a
variety of anodes ranging from graphite to silicon to lithium metal, depending
on the targeted application.
Gelion recently also expanded in the UK by acquiring OXLiD Ltd, significantly
increasing Gelion's capability in cathode improvement thereby accelerating
path to commercial partners and commercialisation.
Zinc
Gelion is adapting its zinc technology to comprise an alternate cathode
technology, a zinc hybrid cell to develop complementary next-generation
batteries for the lead-acid eco-system. Early testing indicates that this
solution has the potential to maintain good energy density levels with
enhanced cost and safety aspects. Once fully developed, Gelion intends for our
zinc technology to provide a durable and sustainable market extension within
the ecosystem that supports lead-acid batteries.
Chairman's Statement
Overview
FY23 was another year of strategic progress for Gelion, where we made
significant advancements and achieved key milestones towards commercialising
our next generation battery technologies. We are beginning to experience good
traction on both the Lithium Sulfur and zinc hybrid cells technologies, a
testament to the efforts made throughout the year. The Board has been actively
engaged to ensure we have the right leadership in place and we are now 12
months into the tenure of our CEO, John Wood, and we are seeing the outcomes
of his revised strategy with greatly strengthened IP and an accelerated route
to market. I am confident that Gelion will be able to fast-track the
development and commercialisation of our Li-S and Zinc based technologies,
achieved in conjunction with our strategic partners.
The Company's commitment to global leadership was reinforced by strategic
acquisitions, notably the IP portfolio from Johnson Matthey and Oxis Energy
and The University of Sydney (USyd) IP, solidifying our standing in Lithium
Sulfur (Li-S) technology. Li-S is a potential next generation of Lithium
batteries with approximately twice the energy density of current incumbent
commercial lithium-ion technology. Similarly, the pilot production of Gen 4
zinc-bromide cells and the match-to-market analysis, identified the
applications best suited for the technology and a market ready to be targeted.
The aim to become a global leader in Li-S battery technology has already been
reinforced in H1 24 by:
- The £4.1m fundraise and the recent acquisition of OXLiD Ltd, a UK based Li-S
battery technology developer and the provision of a UK footprint for Gelion as
well as the addition of OXLiD's six highly skilled scientists.
- The joint development agreement (JDA) with Ionblox Inc., a US based silicon
oxide anode developer.
These strategic steps have been taken to accelerate progress towards
commercialisation, position Gelion at the forefront of this expanding market
and demonstrate the continued progress the Group is making. The above
advancements, coupled with our focus on establishing ourselves as a leading
provider of safe, robust, and scalable renewable energy storage solutions,
underscore Gelion's commitment to addressing the pressing global need for
sustainable energy solutions. These successes could not be achieved without
our passionate team, and as a Board, we are privileged to have attracted a
high-performing, dedicated team of seasoned professionals in commercial,
science and engineering disciplines, who are guided by our leaders.
Strategy
Gelion remains committed to delivering long-term value to our stakeholders
through the development of its cutting-edge battery technologies, that will be
of critical importance to the world of tomorrow. A key focus for our CEO,
John, since his arrival in November 2022 has been to understand how best to
achieve this commitment and has resulted in the evolution of the Group's
strategy.
In terms of our Zinc technology, we are confident that the migration of our
Zinc technology path (from zinc-bromide) will lead to the manufacturing of
safer, more cost-effective solutions, with energy densities that will make
them suitable for applications in the existing lead-acid ecosystem. Satisfying
all three requirements is extremely rare and we are confident that this will
set us apart from other players in the market and make our solution highly
desirable, enabling us to compete directly with lead-acid incumbents.
The awareness around the benefits of Li-S batteries and their improved
performance is already large and continuing to grow. Li-S is going to be
fundamental in the enhancement of the next generation of batteries for
electric mobility and as such, it has the potential to power the future of
transport. Gelion's existing IP portfolio combined with the post period end
OXLiD acquisition and the JDA with Ionblox means Gelion is already a global
player with presence in Australia, the UK and the US. Furthermore, the Group
is in a fantastic position to begin to test and subsequently evidence the
effectiveness of its solutions to industry players, a crucial stage in the
development of any technology.
While this shift in Gelion's commercialisation approach will require time and
investment, the Board is confident this approach will provide the fastest
pathway to commercialisation.
Market opportunity
Global demand for energy storage solutions continues to grow exponentially,
supported by the implementation of government policies aimed towards achieving
net-zero commitments. The global battery market share of Li-S technologies is
expected to grow significantly in the coming years, driven by their high
performance and the continuing acceleration in demand for batteries, a market
our technologies will be able to be sold directly into.
Our match to market analysis identified that Gelion's zinc-based technologies
are well-matched to performance requirements for many traditional lead- acid
battery applications. While representing a smaller market than lithium
technologies, the global lead-acid market is still substantial and growing,
presenting significant opportunity for Gelion, with our zinc-based
technologies offering several key competitive advantages over well entrenched
lead-acid batteries.
The opportunities for Gelion are expanding and the storage solutions we are
developing will be pivotal to the lead-acid and lithium-ion storage market
transformations.
The Board / Our people
At Gelion, our diverse and dedicated team is instrumental in achieving our
goal of a greener, cleaner future. Under John's leadership, our team is
energized and motivated, guided by our core values: Environmental
consciousness, cutting-edge innovation, a scientific ethos, realism and a
clear vision of where and how shareholder value can be created.
Our people, from senior leadership to every team member, embody these values
and drive our success. Cementing our reputation as an employer of choice, we
have continued to recruit some of the sharpest business and scientific minds,
who continuously add key contributions to our story.
I am delighted to say that post period end, we have welcomed Louis
Adriaenssens to our team. Louis brings considerable battery experience and was
most recently the supervisor of chemistry at the Panasonic lithium-ion plant
at the Tesla Gigafactory. Louis' appointment comes at the right time for
Gelion, as we take further steps towards commercialisation.
ESG
We take our responsibility to successfully transition to a sustainable economy
seriously and we expect to be playing a key role by developing low-impact and
safe technologies. Both of our energy storage platforms are comprised of
abundant materials, contributing towards a low environmental impact,
sustainability, and recyclability.
In Gelion's organisational structure, internal governance processes are not
isolated components but are intricately integrated into the overarching
business strategy ensuring that the Group consistently adheres to all
pertinent laws and regulations. To bolster this commitment to good governance,
Gelion has adopted the Quoted Companies Alliance Corporate Governance Code
(QCA Code), a framework consisting of 10 guiding principles.
Summary and outlook
As Gelion moves forward, our technologies are aimed at driving the green
energy transition. Our progress in Lithium Sulfur and zinc-based hybrid cells
positions us to make a tangible impact. We remain cognisant of the wider
macroeconomic climate and have taken prudent steps to manage our cost base and
maintain the financial health the Company.
As the Group continues to execute against the clearly defined strategy laid
out by John since his arrival, we take further steps towards building
shareholder value. With a clear strategy, a team with domain experience, and
innovative products, we look to the future with confidence in building
shareholder value.
Dr Steve Mahon
Chairman
12 December 2023
Chief Executive Officer's Statement
Introduction
It gives me great pleasure to present my first full year financial results
statement as CEO of Gelion. H1 FY23 saw Gelion deliver several milestones,
including the pilot production of zinc-bromide batteries in a commercial
partner setting in Sydney, and progressive advancements in the development of
lithium-sulfur (Li-S) additive and electrolyte technologies.
Since my appointment in November 2022, my primary focus has been on the
identification and prioritisation of development pathways that will enable the
Group to deliver commercially viable and scalable, next-generation battery
chemistries.
This involved extensive planning, fostering team development, with a
particular focus on rigorous market analysis and a comprehensive assessment of
both of our technologies relative to a rapidly evolving global landscape,
enabling the identification of potential routes for their pervasive adoption.
This work has significantly influenced the Group's current strategic and
commercialisation approaches, and has reinforced my view that Gelion is on the
right track to deliver pioneering, cutting-edge technologies that will
underpin the company's goal of establishing a leading position in the highly
competitive energy storage sector.
A primary motivation for me to join Gelion was the opportunity to collaborate
with Professor Thomas Maschmeyer, an extraordinary scientist who established
the company, offering truly innovative technological solutions, and the
exceptional team of highly talented and dedicated employees that has formed
around him.
It is incredibly motivating to lead the Gelion team in our shared mission to
deliver value to our shareholders by bringing our two globally significant
next-generation technologies to market.
Technology overview
The first technology, based on combinations of Lithium (Li) and Sulfur (S),
yields very high gravimetric energy densities, and the second uses Zinc (Zn)
in combination with our new cathode technology to yield robust, long-life
storage solutions. Together, we believe these technologies will play a pivotal
role in facilitating the global transition toward sustainable energy solutions
for both mobile and stationary storage applications.
Gelion has clearly defined objectives to establish itself as a company of
global relevance in both technologies and in FY23, the Group made crucial
steps towards achieving these goals.
Lithium Sulfur
To accelerate our Li-S effort, Gelion acquired a lithium IP portfolio from
Johnson Matthey. This will help us advance the development of our Li-S
technology on a path that is intended to be compatible with a variety of
lithium anode materials, including those based on mostly either graphite,
silicon, silicon oxide or lithium metal.
Zinc
To enhance the cost-efficiency and adoption potential of our Zinc technology,
we have realigned our focus toward the development of a next-generation
zinc-based hybrid cell. This innovative approach is designed to complement the
existing lead-acid ecosystem, to fit within existing battery standards, and to
capitalise on the technological advancements and insights gained from our
earlier zinc-bromide research program, thereby lowering barriers to adoption.
Post-period end
The new financial year has commenced on a robust note, marked by a successful
fundraise of approximately £4.1m and subsequent acquisition of OXLiD Ltd, a
UK based Li-S battery technology developer. This strategic acquisition serves
to accelerate progress towards commercialisation and to underpin Gelion's move
towards a global leadership position in this expanding market.
In our Zinc technology, we recently signed two agreements with The University
of Sydney and Professor Yuan Chen for Gelion's Advanced Cathode Project,
facilitating progress towards our zinc-based energy storage solution and we
expect to validate the potential of this technology by Q1 2024.
We have also announced the joint development agreement (JDA) with Ionblox
Inc., a US based silicon oxide anode developer. Gelion and Ionblox will
jointly aim to develop high performance, next-generation LiSiS cells,
initially for the global electric vehicle (EV), electrical
vertical-takeoff-and-landing (eVTOL) and drone markets, before progressing to
the stationary energy storage market.
Our operational achievements in FY23 have set a solid foundation, and we are
witnessing this momentum rolling over into the new fiscal year coupled with
continued strong customer interest in our technologies.
On top of the Ionblox agreement, we are working towards developing a range of
strategic partnerships that will assist in fast-tracking our commercialisation
path, while supporting the Board's confidence in the Group's ability to
deliver long-term growth.
Evolution of our strategy
Li-S Batteries
Based on the very high gravimetric energy densities, Li-S-based energy storage
continues to be elevated in the industry as its enormous potential in the
mobility markets becomes widely understood.
Our extensive network across the industry will be key to our ability to
establish the required supply chains and commercialise our products, while we
expand and mature as a participant in the global community.
The technology has historically been held back by challenges including the
poor conductivity of sulfur, which results in limited charging rates, and low
cycle life associated with the so-called "polysulfide shuttle". There is
growing confidence within the industry that viable solutions to overcome these
key challenges have been identified.
In H2 FY23, we acquired the Li-S battery patent portfolio from Johnson Matthey
(including solid and liquid electrolytes, disordered rock salt, electrode
formulation and battery materials recycling) for a net cost of ~£3.0 million
(gross cost of £4.25 million less sale of non-core IP portfolio for £1.2
million). This acquisition is of significant strategic importance to the
business and is facilitating the acceleration of our technology development.
The IP portfolio includes more than 350 patents across 65 patent families as
well as development programs, technology transfer packages, market and
portfolio analyses, manufacturing design and cost models for our Li-S
technology.
We are encouraged by the progress being made toward realising the potential of
this IP when combined with Gelion's existing technologies. As a result, we
have now expanded the testing capacity of our research and development
facilities by 50% to ensure we can optimise development and accelerate market
readiness of this technology. Based in Sydney, the site has the capability to
increase Gelion's prototyping toward cell development and the progressive
commissioning of the capability commenced in October 2023.
Although the market for new battery technologies is very competitive and both
our zinc hybrid and Li-S cell technologies have, and will continue to have,
competition from other energy storage innovators aiming at similar performance
and market segments, we are confident in our strategy leading to market
impact.
In that context, Gelion is developing and securing IP with the objective of
establishing freedom-to-operate and a protective buffer around our technology
to prevent infringement and to retain our competitive advantage. We are also
growing our team of technology experts and partnering to maximise our IP
advantage and opportunity for success. This is perfectly illustrated by our
recent acquisition of OXLiD.
Zinc-based energy storage
Zinc is a very important battery element, primarily owing to its abundance,
non-toxic nature, and cost-effectiveness. Since joining Gelion, a key priority
has been to align our exceptional technological capabilities with consumer
expectations. From this process (started in March 2023), we concluded that to
commercialise our zinc-bromide technology we would need to overcome
significant challenges around safety under forcing conditions (e.g., external
temperatures above 130ºC) and associated regulation.
Based on these insights, we initiated the 12-month zinc-bromide research
(R&D) programme. Building on the progress we had made already, we realised
that by adjusting our technology direction away from bromide towards a hybrid
chemistry target there are paths to both lower cost (increased
competitiveness), and easier scaling (earlier achievement of safety and
regulation compliance validation) referred to as Gen5 hybrid technology. These
elements receive further strength because of their compatibility with existing
global supply chains.
This hybrid Gen5 cell is designed to deliver features highly sought after in
the market, including robustness, wide temperature tolerance, adaptability to
a broad range of state-of-charge levels, and the ability to be stored and
transported in a discharged state.
Nonetheless, technology risk remains until we achieve a sufficient level of
development and testing. Battery science is complex, with all aspects and
components of the cell (e.g., anode, cathode, and electrolyte) impacting each
other.
Therefore, any alterations in the design elements require a re-evaluation of
all advancements. Consequently, we are reviewing carefully before
accelerating. We anticipate validating the potential of this technology by Q1
2024 and will provide a comprehensive update to our shareholders consistent
with the previously communicated timelines for the current programme.
Acquisition of OXLiD
With our clearly defined ambition to grow rapidly into a company with a global
profile we are delighted to have concluded the strategic acquisition of OXLiD
in November 2023, which delivers a significant increase in capability, a UK
footprint and accelerates our path in the commercialisation of Li-S
technology. The UK and European battery technology market presents a growing
opportunity for the Group. The UK government is supporting battery science
development; stewardship of the academic technology effort is being led by the
Faraday Institution (https://www.faraday.ac.uk/faraday- battery-challenge/)
and its Li-S focused consortium LiSTAR.
Adding the acquisition of OXLiD to our Johnson Matthey IP acquisition gives
Gelion a strong opportunity to work within the UK research and industry
community, expand our network of contacts, and strengthen our overall position
in the UK market. Modern technology and supply chain development is now best
achieved by establishing global reach, while utilising local regional
incentives.
JDA with Ionblox
We signed the JDA with Ionblox in November, with the aim to deliver safe,
high-energy density, lower cost lithium silicon sulfur (LiSiS) cells for the
global electric vehicle (EV), electrical vertical-takeoff- and-landing (eVTOL)
and drone markets, before progressing to the stationary energy storage market.
The EV and eVTOL industries are in need of highly competitive next-generation
battery technologies to underpin the transition to net-zero emissions. The
International Energy Agency estimates that approximately 300 million EVs will
be required by 2030, compared with 10 million EVs in 2022, a 2900% increase.
Technologies the ones we will jointly be developing, will be integral to
servicing this exponential increase in demand.
Summary and Outlook
We made good progress during FY23 against our roadmap to commercialisation,
covering the strategic lithium battery IP portfolio acquisition, expansion of
the Li-S R&D facility, pivoting from zinc-bromide to a zinc-based hybrid
cell solution, and further collaboration with the University of Sydney.
We have started H1 FY24 in a strong position with:
- the development toward a zinc hybrid cell that is designed to be readily
scalable and to deliver features important to the market. We intend to update
further on the progress and the validation of our zinc hybrid technology and
preparations for market readiness during Q1 2024;
- the recently completed expansion of our R&D laboratory for our Li-S
technology;
- the successful acquisition of OXLiD;
- £4.1m capital raise demonstrating support of our existing and new investors;
- JDA with Ionblox in the US, which will enable Gelion to produce lithium
silicon sulfur batteries
- a strong focus on strategic relationships including ongoing discussions toward
important partnerships to further accelerate our path.
It is in the combination of these factors that success and delivery of value
to our stakeholders and customers will be found. I am highly optimistic for
the future of our business.
I am also confident that we will achieve success for both of our technologies,
with Gelion playing a significant role in providing relevant energy storage
solutions as the world continues its transition to cleaner energy.
We are very grateful for what we have been able to accomplish with your help
and support but are even more excited about what the future holds. I therefore
thank you again for your investment in Gelion and look forward to reporting
positive developments in 2024.
John Wood
CEO
12 December 2023
Chief Financial Officer's Review
Overview
FY23 was another busy year for Gelion, a year filled with accomplishments,
inorganic activities, strategic reflection and direction and realignment of
priorities.
In FY23, we invested in our people, primarily scientists, chemical and
mechanical engineers, further strengthening our human capital to drive
innovation towards commercialisation, manufacturing at pilot scale, and
growing our IP moat to further establish our market-leading position in the
global Li-S battery ecosystem.
Despite the significant macroeconomic challenges in FY23, we have successfully
accomplished product development while maintaining the cost base within
original plans. These challenges continue and the Group has been proactive in
reducing discretionary expenditure to ensure efficient capital deployment.
Li-S technology
The Group made huge strides in progressing our Li-S technology ahead of
original plans, facilitated by the strategically important acquisition of the
Johnson Matthey/Oxis Energy IP portfolio in March 2023 for £3.0m (net costs
post sale of the silicon anode IP and exclusive licence back for Li-S
technology), placing Gelion among the top global players in the Li-S battery
market.
This IP portfolio potentially also provides additional commercialisation
opportunities (development or licensing), in the areas of lithium battery
recycling and alternative electrode technologies. It was identified that quick
action was required to exploit the IP and, therefore, decided to expand the
R&D capability of the team by increasing team members and facilities which
became operational in September 2023.
Post year-end, we also acquired OXLiD Ltd, a UK based Li-S business with roots
back to Oxis Energy, to target the Europe and UK market while doubling our
effort to achieve technical milestones to target our near-term target
applications. The acquisition was for a total consideration of approximately
£4.2m (£1.25m cash on completion, £0.4m deferred cash consideration and
£2.5m in shares escrowed for 18 months) and was funded from the recently
concluded capital raise of £4.1m in November 2023.
We recently also signed a JDA with the US based Ionblox Inc., a leader of
silicon oxide anode developer with an aim to develop lithium silicon-sulfur
batteries.
Zinc-based energy storage solution
Our primary focus during the past year has been on advancing our zinc battery
solution. We successfully set up the pilot facility and manufactured 1,200
zinc-bromide batteries. Rigorous testing of these batteries and validation
processes have provided critical insights, which resulted in Gelion choosing
to pivot to the Gen5 zinc hybrid cell (bromine free). This technology will
incorporate learnings from the past eight years into a new system design,
which the Group expects will result in development efficiencies to help
achieve improved cell performance against the metrics of cost, safety, and
performance.
We recognise the importance of collaboration in a dynamic and competitive
industry and, as a result, have developed further partnerships with the
University of Sydney to assist in the Gen5 zinc hybrid battery research. The
board believes this will not only validate the viability of Gelion's
technology, but also open doors to future product development collaborations
from suppliers and other like stakeholders. We are actively working on
translating our innovative solutions into market- ready products. Our strategy
involves carefully targeted product launches and pilot programs to validate
market demand and gather valuable customer feedback.
This was achieved whilst maintaining a focus on value creation and strategic
growth. As part of the Company's commitment to enhancing shareholder value and
ensuring long-term financial resilience, from March 2023 efforts have been
made to pursue initiatives to manage costs whilst continuing to deliver
solutions that the world really needs.
Focused cost saving efforts
Balancing efficiency and innovation
Our cost control measures have been thoughtfully implemented to strike a
balance between maximising efficiency and fostering innovation. These measures
resulted in annualised cost savings of c. £1.0m across staff, consultants,
and other overheads. By streamlining certain processes and optimising resource
allocation, we have remained steadfast in our commitment to invest in research
and development, ensuring that we continue to innovate and, at the right time,
offer cutting-edge products to our customers.
Prioritising sustainable savings
Our approach to cost control is rooted in sustainability. While certain
savings reflect a temporary reduction in costs, which were important to be
undertaken to match the Group's current needs and development status, we have
also made efforts to identify and address areas where costs can be reduced
without compromising the quality and integrity of our offerings. These efforts
have not only yielded immediate financial benefits and reduced cash burn but
have also positioned us for sustainable growth over the long term.
This disciplined approach has allowed us to redirect resources towards
high-impact projects that align with our strategic goals; for example, IP
portfolio management, fostering a more agile and competitive organisation.
In conclusion, our commitment to cost control is a pivotal aspect of our
overall financial strategy. While our efforts to date have resulted in
immediate improvement in cash burn, they are underpinned by a broader vision
of sustainable growth, innovation, and value creation. It is the board's
belief that by striking the right balance between managing costs and strategic
investments, we will be well-positioned to navigate dynamic market
environments and deliver sustainable returns to our valued investors.
Financial highlights
Income statement
Total income for the year ended 30 June 2023 was £2.1m (2022: £1.7m)
primarily from R&D tax incentives resulting from the ongoing development
programmes of the business for both technologies.
Adjusted EBITDA loss (defined as the Earnings Before Interest, Tax,
Depreciation, Amortisation, listing and other non-recurring costs and share
based payment charges), increased to £5.9m (2022: £4.1m) reflecting FY23
being the first full year post listing. Refer to the note 25 to the financial
statement for a reconciliation to IFRS measures.
Operating losses before non-recurring items and share based payments expense
increased to £6.4m (2022: £4.4m) primarily due to:
- £1.2m increase in research and development spend, a significant proportion of
which relates to staff costs resulting from the increase in the average number
of R&D staff from 26 in FY22 to
36 in FY23 and pilot manufacturing project
- £1.0m increase in administrative costs reflecting additional costs of being a
public company
- partially offset by an increase in other income
Statement of financial position and cash flows
At 30 June 2023, current assets amounted to £9.4m (2022: £19.2m), including
cash and cash equivalents and term deposits of £7.3m (2022: £17.0m)
primarily driven by:
- operating cash outflow of £6.0m (2022: £5.3m); and
- IP acquisition and management expenses of £3.0m (2022: £0.05m), property,
plant, and equipment of £0.5m (2022: £0.7m) largely relating to the
commissioning of the pilot manufacturing plant and other lab equipment
Research and development
Research and Development continues to form a material part of the Group's
activity this year, with a significant portion relating to pilot manufacturing
of our zinc-bromide battery. The Group expensed most of its development costs
of £4.1m for the year (2022: £3.0m). The Group had qualifying research and
development costs against which it expects to receive the R&D tax
incentives of £2.05m from the Australian Taxation Office.
Foreign currency exposure
The Group currently does not face any significant currency exposure; however,
it does expect this to increase in the future as exposure to both foreign
currency translation risk and transaction risk increases resulting from plans
to scale. A large majority of the Group operating overheads are in Australian
dollars whereas procurement of materials and equipment are in other foreign
currencies.
We have signed a FX hedging contract with a financial institution however
there weren't any outstanding hedging contracts as of June 2023. The Group
expects to maintain a natural hedge to transactional exposure by invoicing in
foreign currencies where appropriate to minimise the
Outlook
Over the past year, we have faced both challenges and opportunities, and I am
proud to say that we have not only navigated these waters successfully but
have also made significant strides toward our strategic goals.
While innovation remains a cornerstone of our Group's strategy, we are
conscious of the fact the industry is changing rapidly, and strategic moves
need to be made to shorten the time to market. As such, we not only continued
to invest in research and development, but we also acquired global patent
portfolios and OXLiD to enable us to capitalise on the Li-S momentum. The
Board believes our prospects remain promising as our internal development and
inorganic activities have placed Gelion at the forefront of this rapidly
evolving industry while managing risk, reward, and efficient use of
shareholder funds at the same time.
Our research indicates the adoption of renewable energy sources is
accelerating, creating a higher demand for reliable energy storage solutions.
With governments and businesses alike committing to ambitious sustainability
targets, we are poised to capitalise on this trend. Our pipeline of innovative
products is robust, and we are committed to bringing these advancements to
market in a timely manner.
Our technologies aim to cater to both mobile and stationary storage
applications and our strategy specifically targets markets and opportunities
that Gelion can pursue in the near term and then expand into in the medium to
long term.
We extend our gratitude to our shareholders, partners, and employees for their
unwavering support as we embark on this exciting journey towards a more
sustainable energy future.
Amit Gupta
CFO
12 December 2023
Consolidated Statement of Comprehensive Income
Year ended 30 June
Notes 2023 2022
£'000 £'000
Other income 4 2,054 1,745
Total income 2,054 1,745
Administrative expenses (3,841) (2,847)
Research and development expenses (4,147) (2,970)
Share-based payments expense (894) (49)
Depreciation and amortisation (463) (308)
Operating loss before non-recurring items 6 (7,291) (4,429)
Non-recurring items: 5
Listing and other associated costs - (4,658)
Loss on sale of assets (186) -
Advisory costs related to purchase and sale of the IP (80) -
Total non-recurring items (266) (4,658)
Operating loss (7,557) (9,087)
Finance costs (3) (73)
Finance income 153 3
Loss on ordinary activities before taxation (7,407) (9,157)
Tax on loss on ordinary activities 8 - -
Loss on ordinary activities after taxation (7,407) (9,157)
Total loss for the year attributable to equity holders of the parent
Other comprehensive income:
Items that may be reclassified to profit or loss
- Exchange gains/(losses) arising on translation of foreign 9 (695) 713
operations
Total comprehensive loss for the year attributable to equity holders of the (8,102) (8,444)
parent
Loss per share (basic and diluted) attributable to the equity holders (pence) 11 (6.90) (9.20)
The above results relate entirely to continuing activities.
There were no acquisitions or disposals of businesses in the period.
The accompanying notes form part of this financial information.
Consolidated Balance Sheet
As at 30 June
Notes 2023 2022
£'000 £'000
Assets
Non-current assets
Intangible assets 12 3,349 362
Property, plant and equipment 13 957 1,050
Current assets
Cash and cash equivalents 15 7,268 16,024
Short-term investments 16 - 1,017
Other receivables 16 2,114 2,153
Total Assets 13,688 20,606
Liabilities
Current liabilities
Trade and other payables 14, 17 1,057 854
Non-current liabilities
Trade and other payables 14, 17 27 31
Total liabilities 1,084 885
Net assets 12,604 19,721
Equity
Issued capital 18 108 107
Share premium account 18 20,752 20,662
Other non-distributable reserves 18 5,328 5,148
Capital reduction reserve 18 11,194 11,194
Accumulated losses (24,778) (17,390)
Total equity 12,604 19,721
The financial statements of Gelion Plc, company registration number 09796512,
were approved by the Directors and authorised for issue on 12 December 2023.
The accompanying notes form part of this financial information.
Consolidated Statement of Cash Flows
Year ended 30 June
Notes 2023 2022
£'000 (Restated)
£'000
Cash flow from operating activities
Loss for the year before exchange losses (7,407) (9,157)
Adjustments for:
- depreciation 409 296
- amortisation 54 12
- net finance loss / (income) (147) -
- loss on disposal of property, plant and equipment 127 8
- impairment of intangible assets 48 -
- share-based payments expense 894 3,902
Changes in operating assets/liabilities
- Decrease / (increase) in receivables 24 (740)
- Decrease / (increase) in prepayments 15 (162)
- Increase / (decrease) in payables (45) 507
Net cash used in operating activities* (6,028) (5,334)
Cash flows from investing activities
Purchase of intangible assets (3,982) (48)
Sale of intangible assets 1,189 -
Purchase of tangible property, plant and equipment (456) (733)
Short-term investments (term deposits) 1,017 (1,017)
Interest received 146 2
Net cash used in investing activities (2,086) (1,796)
Cash flows from financing activities
Proceeds from issue of shares 18 16,222
Proceeds on issue of convertible loan notes that were subsequently converted - 5,999
Transaction costs of issue of shares* - (1,541)
Repayment of leasing liabilities (46) (126)
Net cash used in financing activities* (28) 20,554
Net increase/(decrease) in cash held (8,142) 13,424
Cash and cash equivalents at beginning of financial year 16,024 1,913
Effect of exchange rate changes (614) 687
Cash and cash equivalents at end of financial year 15 7,268 16,024
The accompanying notes form part of this financial information.
* FY22 has been restated for transaction costs related to the issue of shares,
more details have been provided in the note 2.3.
Consolidated Statement of Changes in Equity
Share capital Share premium Accumulated losses Capital reduction reserve Other non-distributable reserves Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 July 2021 33 11,251 (8,389) - 691 3,587
Loss on ordinary activities after taxation - - (9,157) - - (9,157)
Other comprehensive income - - - - 713 713
Total comprehensive loss for the year - - (9,157) - 713 (8,444)
Contributions by and distributions to owners:
Bonus issue 57 (57) - - - -
Capital reduction - (11,194) - 11,194 - -
Share-based payment charge - - - - 3,902 3,902
Shares issued during the period 11 16,032 - - - 16,043
Shares issued during the period through a convertible loan 6 5,993 - - - 5,999
Costs of shares issued - (1,541) - - - (1,541)
Exercise of share options - 178 158 - (158) 178
Total contributions by and distributions to owners: 74 9,411 158 11,194 3,744 24,581
Balance at 30 June 2022 107 20,662 (17,390) 11,194 5,148 19,721
Balance at 1 July 2022 107 20,662 (17,390) 11,194 5,148 19,721
Loss on ordinary activities after taxation - - (7,407) - - (7,407)
Other comprehensive income - - - - (695) (695)
Total comprehensive loss for the year - - (7,407) - (695) (8,102)
Contributions by and distributions to owners:
Bonus issue - - - - - -
Capital reduction - - - - - -
Share-based payment charge - - - - 894 894
Shares issued during the period 1 73 - - - 74
Shares issued during the period through a convertible loan - - - - - -
Costs of shares issued - - - - - -
Forfeited / cancelled options - - 19 - (19) -
Exercise of share options - 17 - - - 17
Total contributions by and distributions to owners: 1 90 19 - 875 985
Balance at 30 June 2023 108 20,752 (24,778) 11,194 5,328 12,604
The accompanying notes form part of this financial information.
Notes to The Consolidated Financial Statements
1. General Information
Gelion Plc ('Gelion' or the 'Company') is a 100% owner of an Australian
subsidiary that conducts research and development in respect of an innovative
battery system and associated industrial design and manufacturing.
Gelion is a public limited company, limited by shares, incorporated and
domiciled in England and Wales. The Company was incorporated on 26 September
2015. The registered office of the Company is at c/o Armstrong, Level 4 LDN:W,
3 Noble Street London EC2V 7EE. The registered company number is 09796512.
Gelion Plc was incorporated as Gelion UK Ltd. On 12 November 2021, the Company
was re-registered as a public limited company under the Companies Act and its
name was changed to Gelion plc.
The Board, Directors and management referred to in this document refers to the
Board, Directors and management of Gelion.
2. Accounting Policies
2.1 Basis of preparation
The principal accounting policies applied in the preparation of the Group
financial statements are set out below. These policies have been consistently
applied to the period presented, unless otherwise stated.
These financial statements have been prepared in accordance with UK-adopted
International Accounting Standards and International Accounting Standards as
issued by the International Accounting Standards Board (IASB) and
Interpretations.
The preparation of financial statements in compliance with UK-adopted
International Accounting Standards requires the use of certain critical
accounting estimates. It also requires Group management to exercise judgement
in applying the Group's accounting policies. The areas where significant
judgements and estimates have been made in preparing the financial statements
and their effect are disclosed in note 2.20.
These financial statements are presented in Great British Pounds (GBP) unless
otherwise stated, which is the Company's presentational currency and the
parent company's functional currency. Amounts are rounded to the nearest
thousand, unless otherwise stated. The functional currency of the subsidiary
is Australian Dollars (AUD). Some numerical figures included in this Annual
Report have been subject to rounding adjustments. The policies adopted for
translation of the subsidiary's assets, liabilities, income and expenses are
set out in note 2.18.
2.2 Basis of consolidation
The consolidated financial statements consolidate the financial statements of
Gelion Plc and of its subsidiary undertaking drawn up to each reporting date.
Where the Company has control over an investee, it is classified as a
subsidiary. The Company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee, and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of the elements of control.
Profit or loss and each component of other comprehensive income are attributed
to the equity holders of the parent of the Group. When necessary, adjustments
are made to the financial statements of subsidiaries to bring their accounting
policies in line with the Group's accounting policies. All intra-group assets
and liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full on
consolidation.
The following was a subsidiary undertaking of the Group:
Name Registered office Class of shares Holding
Gelion Technologies Pty Limited Australia Ordinary A 100%
The shareholding is held directly.
The registered office of Gelion Technologies Pty Limited is Level 16, 101
Miller Street, North Sydney, NSW 2060.
2.3 Restatement of comparatives
Where required by accounting standards, comparative figures have been adjusted
to conform to changes in presentation for the current financial year. These
restatements do not impact the net result of the business reported in FY22.
Prior Period Restatements of Financial Statements
Management has made one restatement in the company's previously issued
consolidated financial statements for the year ended 30 June 2022. This was
identified post the release of results and therefore has been restated within
the financial statements for the year ended 30 June 2023.
This restatement is a reallocation and therefore does not impact either the
reported losses or cash position, and does not impact the financial
performance or financial position of the Company.
- Transaction costs on Share Issue - Restatement
Transaction costs related to the issue of shares in FY22 of £805k have been
restated from financing activities to operating activities in the Cash Flow
Statement given these were not directly attributable to the initial capital
raise in November 2021.
The net effect of this reclassification for the financial year 2022 is a
decrease of £805k in cash flow from operating activities and an increase in
cash flow from financing activities by the same amount. There is no impact on
cash position at closing of FY22 (30 June 2022).
2.4 Going concern
The financial statements have been prepared on a going concern basis which
assumes that the Group will have sufficient funds available to enable it to
continue to trade for the foreseeable future. In making their assessment that
this assumption is correct, the Directors have undertaken an in-depth review
of the business, its current prospects, and cash resources as set out below.
The Directors have prepared a cash flow forecast for the period ending 31
December 2024. The Group meets its normal working capital requirements through
existing cash resources (cash and cash equivalents including term deposits)
which, at 30 June 2023, amounted to £7.3m (2022: £17.0m) with another £2.1m
expected to be received from the R&D tax incentives in or around December
2023. The going concern period includes a receipt of further R&D tax
incentives and grants of £2.2m. In addition, the Group recently completed a
capital raise of £3.7m net of transaction costs, of which c. 1.6m was
utilised towards the acquisition of OXLiD Ltd including associated transaction
costs.
After due consideration of these forecasts and current cash resources, the
Directors consider that the Group has adequate financial resources to continue
in operational existence for the foreseeable future (being a period of at
least twelve months from the date of this report), and for this reason the
financial statements have been prepared on a going concern basis.
By the end of the period analysed, the Group will still hold a reasonable
proportion of the monies which should give the business sufficient funds to
operate in a similar way beyond the forecast period.
The Directors have also considered reasonably plausible down side scenarios,
including a further 5% increase in salaries (payment of which is within the
Directors control) and a 5% reduction in grant income. Under this scenario the
business would still have adequate financial resources to continue for at
least 12 months from the date of approval of these financial statements. In
addition, if required to due to other unforeseen reasons, the Directors could
take further mitigating action to reduce cash outflows by reducing uncommitted
capital expenditure. The accounts have therefore been prepared on a going
concern basis.
The Directors have considered all of the above factors and believe that as the
potential opportunities are announced to the market including the scale and
prospects, the Group will be able to raise any funds required to enable it to
continue to trade and grow towards self-sufficiency.
2.5 Revenue recognition
The Group recognises revenue as follows:
Revenue from Contracts with Customers (IFRS 15)
Revenue is recognised at an amount that reflects the consideration to which
the Group is expected to be entitled in exchange for transferring goods or
services to a customer. For each contract with a customer, the Group:
identifies the contract with a customer; identifies the performance
obligations in the contract; determines the transaction price which takes into
account estimates of variable consideration and the time value of money;
allocates the transaction price to the separate performance obligations on the
basis of the relative stand-alone selling price of each distinct good or
service to be delivered; and recognises revenue when or as each performance
obligation is satisfied in a manner that depicts the transfer to the customer
of the goods or services promised.
2.6 Other income
Grants and other benefits received from the government are recognised in the
Statement of Comprehensive Income at the fair value of the cash received.
Government grants are primarily research and development incentives. This
represents a refundable tax offset that is available on eligible research and
development expenditure incurred by the Group.
Government grants are not recognised until there is reasonable assurance that
the Group will comply with the conditions attaching to them and that the
grants will be received. Government grants that are receivable as compensation
for expenses or losses already incurred or for the purpose of giving immediate
financial support to the Group with no future related costs are recognised in
profit or loss in the period in which they become receivable.
2.7 Taxation
The income tax expense or benefit for the period is the tax payable on the
current periods taxable income based on the national income tax rate for each
jurisdiction, adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and adjustments
recognised for prior periods where applicable.
Deferred tax assets relating to temporary differences and unused tax losses
are recognised only to the extent that it is probable that future taxable
profit will be available against which the benefits of the deferred tax asset
can be utilised. Deferred tax assets and liabilities are offset when there is
a legally enforceable right to offset current tax assets and liabilities and
when the deferred tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where the entity has a
legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent
that it relates to items recognised in other comprehensive income or directly
in equity. In this case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
2.8 Earnings per share
Basic earnings/loss per share
Basic earnings/loss per share is calculated by dividing:
· the profit or loss attributable to owners of Gelion Plc,
excluding any costs of servicing equity other than Ordinary Shares; by
· the weighted average number of Ordinary Shares
outstanding during the financial year, adjusted for bonus elements in Ordinary
Shares issued during the financial year.
Diluted earnings/loss per share
Diluted earnings/loss per share adjusts the figures used in the determination
of basic earnings/loss per share to take into account:
· the after-income tax effect of interest and other
financing costs associated with dilutive potential Ordinary Shares; and
· the weighted average number of shares assumed to have
been issued for no consideration in relation to dilutive potential Ordinary
Shares.
2.9 Cash and cash equivalents and short-term investments
Cash and cash equivalents
For the purpose of presentation in the Statement of Cash Flows, cash and cash
equivalents includes cash on hand, deposits held at call with financial
institutions, other short-term highly liquid investments with original
maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in
value, and bank overdrafts. Term deposits that are held for a period of less
than three months form a part of cash and cash equivalents.
Short-term investments
Short-term investments in FY22 comprise of term deposits held by UK licensed
banks for a period greater than three months, over which it can be converted
to known amounts of cash with insignificant risk of change in value. The
amounts were measured at amortised cost using the effective interest method in
line with IFRS 9.
2.10 Property, plant and equipment
Plant and equipment are stated at historical cost less accumulated
depreciation and impairment. Historical cost includes expenditure that is
directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost
of each item of property, plant and equipment (excluding land) over their
expected useful lives as follows:
Plant and equipment
3-7 years
Office furniture and equipment
3 years
Leasehold improvements are depreciated over the unexpired period of the lease
or the estimated useful life of the assets, whichever is shorter.
The residual values, useful lives and depreciation methods are reviewed, and
adjusted if appropriate, at each reporting date.
An item of property, plant and equipment is derecognised upon disposal or when
there is no future economic benefit to the Group. Gains and losses between the
carrying amount and the disposal proceeds are taken to profit or loss.
2.11 Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The
right-of-use asset is measured at cost, which comprises the initial amount of
the lease liability, adjusted for, as applicable, any lease payments made at
or before the commencement date net of any lease incentives received, any
initial direct costs incurred, and, except where included in the cost of
inventories, an estimate of costs expected to be incurred for dismantling and
removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the
unexpired period of the lease or the estimated useful life of the asset,
whichever is the shorter. Where the Group expects to obtain ownership of the
leased asset at the end of the lease term, the depreciation is calculated over
its estimated useful life. Right-of-use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding
lease liability for short-term leases with terms of 12 months or less. Lease
payments on these assets are expensed to profit or loss as incurred.
2.12 Intangible assets
Research and development
Research and development expenditure is recognised as an expense as incurred.
No research and development costs have been capitalised to date given the
stage of the business.
Development expenditure is recognised as an expense except those costs
incurred on development projects can be capitalised as intangible assets to
the extent that such expenditure is expected to generate future economic
benefits.
Patents and trademarks
Separately acquired trademarks and patents are recognised at historical cost.
Patents have a finite life and are subsequently carried at cost less
accumulated amortisation. Separately acquired trademarks are shown at
historical cost. They are considered to have infinite lives and are assessed
for impairment at each year end. The Group amortises intangible assets with a
limited useful life using the straight-line method over their expected useful
lives as follows:
Patents
15-20 years
Disposal of intangible assets
When an intangible asset, such as a patent, is disposed of or no longer
expected to generate future economic benefits, it is derecognized from the
financial statements. The profit or loss on disposal is determined as the
difference between the carrying amount of the asset at the time of disposal
and the proceeds from its disposal.
The Group may dispose of intangible assets through various methods, including
but not limited to sale, abandonment, or expiration of the asset's legal
rights. The method of disposal is chosen based on the circumstances at the
time of disposal. Any gain or loss on the disposal of an intangible asset is
recognized in the statement of profit or loss in the period in which the
disposal occurs.
2.13 Impairment of non-financial assets
Non-financial assets are reviewed 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 carrying
amount exceeds its recoverable amount.
To date all impairments that have been recognised have been due to patent
costs capitalised in respect of patent applications that have subsequently
lapsed or been rejected. When this occurs, the Group fully impairs the
carrying amount of the patent at that date.
2.14 Trade and other payables
These amounts represent liabilities for goods and services provided to the
Group prior to the end of the financial year and which are unpaid. Due to
their short-term nature, they are measured at amortised cost and are not
discounted. The amounts are unsecured and are usually paid within 30 days of
recognition.
2.15 Financial instruments
IFRS 9 requires an entity to address the classification, measurement and
recognition of financial assets and liabilities.
a) Classification
The Group classifies its financial assets in the following measurement
categories:
· those to be measured at amortised cost.
The classification depends on the Group's business model for managing the
financial assets and the contractual terms of the cash flows.
The Group classifies financial assets as at amortised cost only if both of the
following criteria are met:
· the asset is held within a business model whose objective is to collect
contractual cash flows; and
· the contractual terms give rise to cash flows that are solely payment of
principal and interest.
b) Recognition
Purchases and sales of financial assets are recognised on trade date (that
is, the date on which the Group commits to purchase or sell the asset).
Financial assets are derecognised when the rights to receive cash flows
from the financial assets have expired or have been transferred and the Group
has transferred substantially all the risks and rewards of ownership.
c) Measurement
At initial recognition, the Group measures a financial asset at its fair value
plus, in the case of a financial asset not at fair value through profit or
loss (FVPL), transaction costs that are directly attributable to the
acquisition of the financial asset.
Transaction costs of financial assets carried at FVPL are expensed in profit
or loss.
d) Tax receivables
Management has assessed that tax receivables arising from a refundable tax
offset from Australian Taxation Office, for eligible R&D expenditure, are
recognised at its par value. These receivables are expected to be collected in
a short-term period and the Directors have assessed there is no need for
impairment of these receivables. This is based on Australian government credit
rating (AAA) and successful historical collection of tax receivables.
2.16 Share-based payments
The Group provides benefits to its employees in the form of share-based
payments, whereby employees render services in exchange for shares or rights
over shares (equity-settled transactions) in the parent entity.
The cost of these equity-settled transactions with employees is measured by
reference to the fair value of the equity instruments at the date at which
they are granted. The fair value is determined using a Black- Scholes model.
This calculation is completed by the parent entity.
The cost of these equity-settled transactions is recognised as an expense,
with a corresponding increase in equity, over the period in which the service
conditions are fulfilled (the vesting period), ending on the date on which the
relevant employees become fully entitled to the award (the vesting date).
At each subsequent reporting date until vesting, the cumulative charge to
profit and loss is the product of:
· the grant date fair value of the award;
· the current best estimate of the number of awards that will vest;
· the expired portion of the vesting period; and
· the removal of any fair value attributable to share options that
have contractually lapsed or expired.
The charge to profit and loss for the period is the cumulative amount as
calculated above less the amounts already charged in previous periods. There
is a corresponding entry to the share-based payment reserve in equity.
If a share-based payment arrangement is modified, the minimum expense
recognised over the vesting period is the original fair value. If the
modification increases fair value, the additional fair value is recognised
over the remaining vesting period.
2.17 Non-Recurring Items
The Group considers certain unusual or infrequent items that either because of
their size or their nature, or relevance to the business as are non-recurring
and disclose separately to report the underlying performance of the business.
For an item to be considered as a separate item, it must initially meet at
least one of the following criteria:
· It is a significant item, which may cross more than one
accounting period.
· It has been directly incurred as a result of either an
acquisition / divestment or funding related or arises from a major business
change.
· It is unusual in nature, e.g. outside the normal course of
business.
If an item meets at least one of the criteria, the Board, through the Audit
and Risk Committee, then exercises judgement as to whether the item should be
classified as an allowable adjustment to IFRS performance measures and
disclosed separately.
2.18 Foreign currency translation
The functional currency of each company in the Group is that of the primary
economic environment in which the entity operates. Monetary assets and
liabilities denominated in foreign currencies are translated into GBP at the
rates of exchange ruling at the period end. Transactions in foreign currencies
are recorded at the rate ruling at the date of the transaction.
All differences are taken to the Statement of Comprehensive Income. On
consolidation, the assets and liabilities of the Group entities that have a
functional currency different to the presentational currency are translated
into GBP at the closing rate at the date of the Statement of Financial
Position. Income and expenses for each statement of profit or loss are
translated at average exchange rates for the period. Exchange differences are
recognised in other comprehensive income and accumulated in a foreign exchange
translation reserve.
2.19 Contributed equity
Ordinary Shares are classified as equity. Incremental costs directly
attributable to the issue of new shares are deducted from the share premium
account.
When the Group issues a hybrid instrument consisting of a debt host liability
and a non-closely related embedded derivative (the conversion feature) and the
Group accounts for the debt host at amortised cost and the embedded derivative
at FVTPL, when conversion takes place, no gain or loss on conversion is
recognised. The equity issued is measured by reference to the sum of the
carrying amount of the host debt liability plus the carrying amount of the
embedded derivative at the date of conversion, rather than the fair value of
the shares issued. This approach is in line with the policy followed for
conversion of compound instruments.
Retained losses includes all current and prior period results.
2.20 Input taxes
Revenues, expenses and assets are recognised net of the amount of associated
goods and services tax (GST) in Australia or value added tax (VAT) in the UK,
unless the sales tax incurred is not recoverable from the taxation authority.
In this case it is recognised as part of the cost of acquisition of the asset
or as part of the expense.
Receivables and payables are stated inclusive of the amount of sales tax
receivable or payable. The net amount of sales tax recoverable from, or
payable to, the taxation authority is included with other receivables or
payables in the balance sheet.
Cash flows are presented on a net basis. The sales tax components of cash
flows arising from investing or financing activities which are recoverable
from, or payable to the taxation authority, are presented as operating cash
flows.
2.21 Critical accounting judgements and key sources of estimation
uncertainty
The preparation of the financial information requires the use of accounting
estimates which, by definition, will seldom equal the actual results.
Management also needs to exercise judgement in the process of applying the
Group's accounting policies. The areas involving a high degree of judgement or
complexity, or areas of assumptions and estimates are:
Critical accounting judgements
- R&D tax incentives
From 1 July 2011, the Australian Taxation Office has provided a tax incentive,
in the form of a refundable tax offset of 43.5%, for eligible research and
development expenditure. Management has assessed its research and development
activities and expenditure and applied judgement in determining which expenses
are likely to be eligible under the scheme. For the period ended 30 June 2023
the Group has recorded other income of £2,049,000 (2022: £1,719,000) based
on expected tax refunds to be received from the government (recognised under
Other receivables at 30 June 2023).
- Recognition of a deferred tax asset
The Group has incurred tax losses in both Australia and the UK in each of the
periods reported in these financial statements. No deferred tax asset has been
recognised in respect of these losses, as the Directors believe that there is
not sufficient certainty over future profits that would utilise them.
Key sources of estimation uncertainty
- Estimation of useful lives of property, plant and equipment and
intangible assets
The Group determines the estimated useful lives and related depreciation and
amortisation charges for its property, plant and equipment and finite life of
intangible assets. The useful lives could change significantly as a result of
technical innovations or some other event. The depreciation and amortisation
charge will increase where the useful lives are less than previously estimated
lives, or technically obsolete or non-strategic assets that have been
abandoned or sold will be written off or written down.
Patents are recognised at cost. Management believes this is the best estimate
at the current time, during the research and development phase. The key
assumption for amortisation is the useful life which is determined by the life
of the patent (grant to expiration date - usually 15-20 years). The Directors
do not believe that a future change in the useful life of patents is probable
in the foreseeable future.
Trademarks are recognised at cost. Management believes this is the best
estimate at the current time. The key assumption for trademarks is they have
an infinite life as they do not have an expiration date.
- Impairment of patents and trademarks
The Group assesses impairment of patents and trademarks at each reporting date
by evaluating conditions specific to the Group and to the particular asset
that may lead to impairment. If an impairment trigger exists, the recoverable
amount of the asset is determined. To date the only impairments recognised
have been due to patent costs capitalised in respect of patent applications
that have subsequently lapsed or been rejected. In these instances, the Group
fully impairs the carrying amount of patent at that date.
- Derecognition of intangible assets (patents and trademarks)
An intangible asset is derecognised on disposal, or when no future economic
benefits are expected from use or disposal. Gains or losses arising from
derecognition of an intangible asset, measured as the difference between the
net disposal proceeds and the carrying amount of the asset, are recognised in
profit or loss when the asset is derecognised.
- Recognition of equity-settled share-based payments
The cost of equity-settled share-based payment transactions with employees is
measured by reference to the fair value of the equity instruments at the date
at which they are granted. The fair value is determined using a Black-Scholes
model. The Group applies a straight-line vesting approach, whereby the
instruments are split into tranches according to the vesting conditions
applied. Please refer to note 19 for the key assumptions and inputs used in
the model to determine the fair values at each measurement date.
2.22 Standards, amendments and interpretations to existing
standards that are effective for the first time in the financial year
During the year ended 30 June 2023, Gelion has adopted the following new IFRSs
(including amendments thereto) and IFRIC interpretations that became effective
for the first time.
Standard Effective date, annual period beginning on or after
Amendments to IAS 1, IAS 8, IAS 12 and 1 January 2023
IFRS Practice Statement 2
IFRS 17 Insurance Contracts 1 January 2023
Their adoption has not had any material impact on the disclosures or amounts
reported in the financial information.
Standards issued but not yet effective:
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the Group has decided not to adopt early.
Standard Effective date, annual period beginning on or after
Lease Liability in a Sale and Leaseback (Amendment to IFRS 16) 1 January 2024
IAS 1 Presentation of Financial Statements (Amendment - Classification of 1 January 2024
Liabilities as Current or Non-Current)
IAS 1 Presentation of Financial Statements (Amendment - Non-current 1 January 2024
Liabilities with Covenants)
IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures 1 January 2024
(Amendment - Supplier Finance Arrangements)
All of the above standards issued but not yet effective have been endorsed by
the UK Endorsement Board.
The Directors are evaluating the impact that these standards will have on the
financial information of Gelion.
3. Segment Reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been
identified as the Board as a whole.
In the opinion of the Directors, during each of the two-years ended 30 June,
Gelion operated in the single business segment of battery production and
development.
UK Australia As at 30 June 2023 UK Australia As at 30 June 2022
£'000 £'000
Non-current assets
Intangible assets - 3,349 3,349 - 362 362
Property, plant and equipment - 957 957 - 1,050 1,050
Total income
Other income 5 2,049 2,054 26 1,719 1,745
Depreciation and amortisation - (463) (463) - (308) (308)
Finance income (interest) 98 55 153 - 2 2
Operating loss
Operating loss (966) (6,591) (7,557) (574) (8,513) (9,087)
4. Other Income
Year ended 30 June
2023 2022
£'000 £'000
R&D tax concessions 2,049 1,719
Recovery of VAT 5 26
2,054 1,745
The subsidiary incurs R&D expenditure which qualifies for relief under a
tax incentive scheme provided by the Australian Taxation Office. Management
estimates the expenditure each year relevant to approved R&D activities in
respect of which a claim can be made at each reporting date. The accounting
policy in respect of recognition of this income is detailed in note 2.6 and
the key accounting judgements applied are detailed in note 2.21.
5. Non-Recurring Items
Year ended 30 June
2023 2022
£'000
£'000
Listing costs - 411
Share-based payments accelerated due to listing - 3,853
Key management bonus contingent on listing - 394
Net loss on sales of fixed assets 186 -
Transaction costs incurred for IP acquisition and divestment 80 -
Total non-recurring items 266 4,658
Certain costs were incurred in FY22 relating to the Company converting from a
private to public limited company, its subsequent admission to AIM, issuance
and sale of shares and associated professional costs. For more details on
these expenses please refer to FY22 Annual Report on our website:
https://gelion.com/wp-content/uploads/2022/11/Gelion-Annual-Report-and-Financial-Gelion-Statements-for-the-year-ended-30-June-2022.pdf#page=71
(https://gelion.com/wp-content/uploads/2022/11/Gelion-Annual-Report-and-Financial-Gelion-Statements-for-the-year-ended-30-June-2022.pdf#page=71)
Non-recurring costs in FY23 include one-off loss on sales of fixed assets and
advisory costs incurred in relation to the purchase and sale of the IP
portfolio that were non-recurring in nature. These have been separately
disclosed to assist the user of the financial information to understand and
compare the underlying results of the Company.
6. Operating Loss Before Listing and Other Non-Recurring Items
Operating loss is stated after the following specific income and expenses:
Year ended 30 June
Note 2023 2022
£'000
£'000
R&D tax concessions 4 2,049 1,719
Depreciation and 12, 13 (463) (308)
amortisation
Employee benefits 10 (5,223) (3,212)
R&D expenses (1,553) (1,391)
Out of which:
External R&D services (925) (669)
R&D materials, consumables & other (628) (722)
Administration and other expenses (1,212) (1,214)
Share-based payments (recurring) (894) (49)
7. Auditors' Remuneration
Year ended 30 June
2023 2022
£'000 £'000
Fees payable to the Company's auditors for the statutory audit of the 70 52
Company's annual financial statements
Fees payable to the Company's auditors and its associates for the audits of 33 24
the Company's subsidiaries
Non-audit services
Reporting accountant services - 278
Taxation and other services 9 31
Total auditors' remuneration 112 385
8. Taxation
Year ended 30 June
2023 2022
£'000
£'000
The charge/credit for the year is made up as follows:
Corporation taxation on the results for the year - -
Taxation (charge)/credit for the year - -
Numerical reconciliation of income tax expense to accounting loss:
Profit/(loss) for the year before income tax (7,407) (9,157)
Prima facie tax benefit on loss from ordinary activities before income tax at (1,852) (2,290)
25% (2022: 25%)
Add/(less) tax effect of:
Non-deductible expenditure 1,435 2,200
Non-assessable income - -
R&D tax offsets (512) (430)
Tax losses incurred but not recognised 878 506
Difference in tax rates applied 51 14
Total income tax expense - -
Non-deductible expenses include share-based payments and expenditure subject
to R&D tax incentive.
Estimated tax losses of £7,452,000 (2022: £4,138,000) are available for
relief against future profits. No deferred tax asset has been provided for in
the accounts based on the estimated tax losses. The estimated tax losses per
jurisdiction is as follows and don't have an expiry date in each of these
jurisdictions:
Year ended 30 June
2023 2022
£'000 £'000
Estimated tax losses arising in the UK 1,664 793
Estimated tax losses arising in Australia 5,788 3,345
Total tax losses available to carry forward 7,452 4,138
The standard rate of corporation tax in Australia, where the subsidiary is
based, is 25% (2022: 25%).
As per note 2.7, deferred tax assets have not been recognised on the basis the
Company is not forecasted to make a profit for the foreseeable future.
9. Exchange Gains and Losses Arising on Translation of Foreign
Operations
Gelion Technologies Pty Limited, a battery manufacturing business incorporated
in Australia, was merged into Gelion UK Limited in 2016 so as to maximise
operational synergies and generate further cost savings.
A gain or loss through other comprehensive income arises on translation of the
subsidiary's assets and liabilities from Australian Dollars to Great British
Pounds at each year end.
10. Employee Benefit Expenses and Numbers
Employee benefit expenses (including Directors) comprise:
Year ended 30 June
2023 2022
£'000
£'000
Recurring costs:
Salaries and wages including taxes 4,005 2,957
Defined contribution pension cost 324 206
Share-based payment expense - recurring 894 49
Total employee benefits expense (note 6) - recurring 5,223 3,212
Non-recurring costs:
Salaries and wages including taxes - 394
Defined contribution pension cost - -
Share-based payment expense - 3,853
Total employee benefits expense (note 7) - non-recurring - 4,247
Refer to note 20 for details of classification of share-based payments expense
between recurring and non-recurring costs.
Average Employee Numbers
2023 2022
(#)
(#)
R&D 36 26
Administration 17 11
Average number of employees 53 37
Employee headcount at period end 47 51
Increase in the average number of employees from FY22 to FY23 is primarily
impacted by:
· the full year impact of new hires who commenced in late FY22; and
· the inclusion of temporary staff who assisted in the pilot
manufacturing plant during FY23.
The actual closing headcount decreased to 47 at 30 June 2023 (51 at 30 June
2022) due to cost saving measures implemented by management where only
selected roles were replaced, rather than filling all vacant positions.
Key management personnel
Directors and key management personnel compensation
The total remuneration paid (including bonus accruals) to the Directors and
key management personnel of the Group during the year are as follows:
Year ended 30 June
2023 2022
£'000
£'000
Recurring costs:
Salaries and wages including taxes 873 1,059
Defined contribution pension cost 44 48
Share-based payment expense 691 10
Total key management personnel costs - recurring 1,608 1,117
Non-recurring costs:
Salaries and wages including taxes - 394
Defined contribution pension cost - -
Share-based payment expense - 3,378
Total key management personnel costs - non-recurring - 3,772
Total key management personnel costs 1,608 4,889
The Directors and senior management represent key management personnel.
Further details of Directors' remunerations are given in the Directors'
Remuneration Report. The highest paid Director during the year received total
remuneration (recurring and non-recurring) of £189,014 (2022: £584,900). No
share options were exercised by Directors during the financial year ended 30
June 2023 or 30 June 2022.
Refer to note 19 for details of classification of share-based payments expense
between recurring and non-recurring costs.
11. Loss Per Share
Year ended 30 June
2023 2022
Loss after tax £7,407,000 £9,157,000
Weighted average number of shares (number) 107,944,951 99,888,579
Loss per share (pence) 6.9p 9.2p
The calculation of the loss per share is based on the loss for the financial
period after taxation of £7,407,000 (2022: £9,157,000) and on the weighted
average of 107,944,951 (2022: 99,888,579) Ordinary Shares in issue during the
period.
In FY23, the parent company issued:
· 1,101,516 shares, majority of which relates to a share issue to
ex-CEO Andrew Grimes (1,026,516) in lieu of cancelled options;
· 171,396 ordinary shares to the University of Sydney in exchange
for acquisition of Lithium Sulfur IP ($130,000).
This increase in the number of Ordinary Shares has resulted in the weighted
average number of shares in the year to June 2023 to increase to 107,944,951
(2022: 99,888,579).
There were 8,478,535 share options outstanding at 30 June 2023 (2022:
7,554,360). The impact of these options would be to reduce the diluted loss
per share and therefore they are antidilutive. Hence, the diluted loss per
share reported for the periods under review is the same as the earnings per
share.
12. Intangible Assets
Patents Trademarks Total
£'000 £'000 £'000
At 30 June 2021 334 19 353
Cost
Additions 39 9 48
Disposals - - -
Difference on foreign exchange 14 1 15
At 30 June 2022 387 29 416
Additions 4,298 4 4,302
Disposals (1,189) - (1,189)
Impairment (37) (11) (48)
Difference on foreign exchange (29) (2) (31)
At 30 June 2023 3,430 20 3,450
Amortisation
At 30 June 2021 40 - 40
Amortisation 12 - 12
Difference on foreign exchange 2 - 2
At 30 June 2022 54 - 54
Amortisation 54 - 54
Difference on foreign exchange (7) - (7)
At 30 June 2023 101 - 101
Carrying amount
At 30 June 2022 333 29 362
At 30 June 2023 3,329 20 3,349
On 9 March 2023, Gelion acquired an IP portfolio in a range of next generation
battery material technologies from Johnson Matthey, a British multinational
chemicals and sustainable technologies company. The Company acquired the LiSiS
patent portfolio for £4.3 million and has immediately sold part of portfolio
to a third party for a cash consideration of £1.2 million.
On 13 March 2023, Gelion acquired the University of Sydney's Lithium Sulfur IP
for a total consideration of AUD$130,000, which was satisfied by the issue of
171,396 ordinary shares.
13. Property, Plant and Equipment
Office furniture and equipment Plant and equipment Right-of-use assets Leasehold improvements Total
£'000 £'000 £'000 £'000 £'000
Cost
At 30 June 2021 38 517 341 50 946
Additions 34 649 54 50 787
Disposals - (11) - - (11)
Difference on foreign exchange 3 22 15 2 42
At 30 June 2022 75 1,177 410 102 1,764
Additions 12 416 47 28 503
Disposals 0 (160) 0 0 (160)
Difference on foreign exchange (6) (87) (30) (8) (131)
At 30 June 2023 81 1,346 427 122 1,976
Depreciation
At 30 June 2021 28 123 217 25 393
Charge for the year 11 131 124 30 296
Accumulated depreciation on disposal - (3) - - (3)
Difference on foreign exchange 1 10 15 2 28
At 30 June 2022 40 261 356 57 714
Charge for the year 18 310 49 32 409
Accumulated depreciation on disposal (29) (29)
Difference on foreign exchange (3) (36) (29) (7) (75)
At 30 June 2023 55 506 376 82 1,019
Carrying amount
At 30 June 2022 35 916 54 45 1,050
At 30 June 2023 26 840 51 40 957
14. Leases
The Group has lease contracts in respect of leasehold property used in its
operations. These leases have lease terms of between two and three years.
There is no leasehold property recognised by the Group in the two years ended
30 June presented in these financial statements other than those recognised as
right-of-use assets. Therefore, for the carrying amount of right-of-use assets
at each reporting date and movements in each year ended refer to note 13.
Set out below are the carrying amounts of lease liabilities (included under
trade and other payables) and the movements during each year ended 30 June:
2023 2022
£'000 £'000
Balance as at 1 July 56 122
Additions 47 54
Interest 3 4
Payments (46) (130)
Difference on foreign exchange (4) 6
Balance as at 30 June 56 56
The maturity analysis of lease liabilities is disclosed in note 20.
The following are the amounts recognised in profit or loss:
Year ended 30 June
2023 2022
£'000 £'000
Depreciation expense of right-of-use assets 46 124
Interest expense on lease liabilities 3 4
Total amount recognised in profit or loss 49 128
15. Cash and Cash Equivalents
As at 30 June
2023 2022
£'000 £'000
Cash at bank 7,268 16,024
7,268 16,024
Cash at bank comprises balances held by Gelion Plc and Gelion Technologies Pty
Limited current bank accounts. Cash deposits greater than three months are
recorded within short-term investments as per note 16. See note 20 for further
discussion of these balances.
16. Short-term Investments and Other Receivables
As at 30 June
2023 2022
£'000 £'000
Short-term investments:
Term deposits - 1,017
Total short-term investments - 1,017
Other receivables:
R&D tax incentive 1,934 1,784
Prepayments 172 187
Other debtors 8 182
Total other receivables 2,114 2,153
Term deposits in FY22 comprised cash deposits held by UK licensed banks for a
period of greater than three months, over which there is no recall during the
term of the deposit. The amounts are measured at amortised cost using the
effective interest method in line with IFRS 9. There were no term deposits for
a period greater than three months as of June 2023.
R&D tax incentives are granted by the Australian Taxation Office in the
form of tax offsets. The key judgements applied in the recognition of this
receivable are detailed in note 2.21.
The Directors consider that the carrying value of short-term investments and
other receivables approximates to their fair value.
17. Trade and Other Payables
Due within one year
As at 30 June
2023 2022
£'000 £'000
Trade payables 228 312
Accruals 584 360
Employee liabilities including employment taxes 171 157
Lease liabilities 26 25
Other payables (GST / VAT) 48 -
1,057 854
Due in more than one year
As at 30 June
2023 2022
£'000 £'000
Lease liabilities 27 31
27 31
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and continuing costs. Out of total £584k accruals as of June 2023,
£250k relates to a deferred consideration as per contract with Johnson
Matthey, for recent Lithium IP acquisition. The Directors consider that the
carrying value amount of trade and other payables approximates to their fair
value. Please refer to note 20 for further details.
18. Issued Capital and Reserves
Share capital and premium
Ref. Number of shares Share
on issue
capital
Share
premium
£'000 £'000
Balance as at 1 July 2021 a 4,494,196 33 11,251
Bonus issues and reorganisation b 85,389,724 57 (57)
Capital reduction c - - (11,195)
Shares issued during the period d 11,063,679 11 16,032
Loan notes converted to equity e 5,516,240 6 5,993
Cost of shares issued f - - (1,541)
Exercise of share options 671,000 - 178
Balance as at 30 June 2022 107,134,839 107 20,662
Bonus issues and reorganisation - - -
Capital reduction - - -
Shares issued during the period g/h 1,197,911 1 74
Loan notes converted to equity - - -
Cost of shares issued - - -
Exercise of share options 75,000 - 16
Balance as at 30 June 2023 108,407,750 108.00 20,752
a) Gelion had two classes of share at 1 July 2021 - A Ordinary and B Ordinary
which ranked pari passu.
At 30 June 2021 there were 3,335,196 A Ordinary Shares of £0.01 each.
At 30 June 2021 there were 1,159,000 B Ordinary Shares of £0.0000086 each.
b) On 2 September 2021, the Company consolidated the 1,159,000 B Ordinary
Shares of £0.0000086 each into 1,000 B Ordinary Shares of £0.01 each, on the
basis of one B Ordinary Share of £0.01 for every 1,159 B Ordinary Shares of
£0.0000086 held on the record date (the 'B Share Consolidation').
On 2 September 2021, following the B Share Consolidation, the Company issued
1,158,000 new B Ordinary Shares of £0.01 each by way of a bonus issue to the
holders of such shares on the basis of 1,158 B Ordinary Shares for each one B
Ordinary Share held on the record date (the 'First Bonus Issue').
On 3 September 2021, following completion of the First Bonus Issue, the
Company issued 3,335,196 A Ordinary Shares of £0.01 each and 1,159,000 B
Ordinary Shares of £0.01 each pursuant to a bonus issue of such shareholders
on the basis of one A Ordinary Share for each A Ordinary Share held and one B
Ordinary Share for each B Ordinary Share held, in each case on the record date
(the 'Second Bonus Issue').
c) Immediately following the Second Bonus Issue, a capital reduction was
undertaken and the balance standing to the credit of the share premium account
was cancelled and the amount so cancelled was credited to a distributable
reserve.
On 12 November 2021, the A Ordinary Shares of £0.01 each in the capital of
the Company and the B Ordinary Shares of £0.01 each in the capital of the
Company then in issue were redesignated as Ordinary Shares of £0.01 each in
the capital of the Company carrying the rights and subject to the restrictions
attaching to the Ordinary Shares of the Company as set out in the Articles
(the 'Re-designation')
On 13 November 2021, the Company sub-divided each Ordinary Share of £0.01
each arising from the Re-designation into ten new Ordinary Shares of £0.001
each.
d) Immediately prior to admission to AIM the Company had 89,883,920 shares in
issue. 11,063,679 new Ordinary Shares of £0.001 each were issued in the
fundraising following admission to AIM.
e) On 30 November 2021, a convertible debt instrument was fully converted into
5,516,240 Ordinary Shares of £0.001 each.
f) Transaction costs incurred in the issuing of shares in the period ended 30
June 2022 of £2,346,000 of which £1,541,000 have been offset against share
premium and £805,000 have been expensed.
g) On 19 October 2022, 1,026,515 Ordinary Shares of £0.001 each were issued
to ex-CEO Andrew Grimes (related party transaction) in exchange for
relinquishing 1,830,000 options that had vested.
h) On 13 March 2023, Gelion acquired the University of Sydney's Lithium Sulfur
IP for a total consideration of AUD$130,000, which was satisfied by the issue
of 171,396 Ordinary Shares.
Nature and purpose of other reserves
Other reserves
- Share-based payments reserve
The share-based payments reserve is used to recognise the value of
equity-settled share-based payments provided to employees, including key
management personnel, as part of their remuneration. Refer to note 19 for
further details of these plans.
- Foreign currency translation reserve
The subsidiary's functional currency is AUD and therefore on consolidation a
foreign exchange gain or loss on translation of net assets is recognised
through other comprehensive income at each reporting date. These gains or
losses are accumulated in a foreign currency translation reserve.
- Capital reduction reserve
Immediately following the Second Bonus Issue in FY22, the balance standing to
the credit of the share premium account was cancelled and the amount so
cancelled was credited to a distributable reserve called the 'capital
reduction reserve'.
Other non-distributable reserves:
Share-based payment reserve Foreign currency translation reserve Total other reserves
£'000 £'000 £'000
Balance at 1 July 2021 892 (201) 691
Foreign currency translation reserve movement - 713 713
Share-based payment charge 3,902 - 3,902
Exercise of options (158) - (158)
Balance at 30 June 2022 4,636 512 5,148
Balance at 1 July 2022 4,636 512 5,148
Foreign currency translation reserve movement - (695) (695)
Share-based payment charge 894 - 894
Forfeited / cancelled options (19) - (19)
Exercise of options - - -
Balance at 30 June 2023 5,511 (183) 5,328
19. Share-Based Payments
The Directors recognise the role of the Group's staff in contributing to its
overall success and the importance of the Group's ability to incentivise and
motivate its employees. Therefore, the Directors believe that certain
employees should be given the opportunity to participate and take a financial
interest in the success of the Company.
In prior years, the Group operated a Share Option Plan whereby employees and
key service providers were granted options over shares in Gelion UK Limited.
Due to the Company's admission to trading on AIM which took place on 30
November 2021 all unvested options were vested triggering an accelerated
share-based payment expense.
In addition to the Original Share Option Plan, the Group agreed to grant
options over Ordinary Shares pursuant to obligations under the service
agreements with the relevant individuals. These service agreement obligations
were triggered by admission to trading on AIM. The service condition is to be
employed with a company in the Group at vesting. Both the acceleration of
option vesting and additional options granted pursuant to service agreement
obligations are triggered by the Company's admission to AIM and therefore can
be considered as part of the same non-recurring event.
In July 2022, the Board introduced a new Share Option Plan. The plan is
designed to motivate and incentivise key talent to assist the Group in
achieving its strategic aims whilst remaining consistent with its tolerance
for risk, all set within delegated limits set out during the recent IPO.
These options are structured as nominal cost options. The options will
normally vest in three equal tranches over three years, subject to continued
employment.
On 21 November 2022, 255,951 options were granted that will vest in three
equal tranches, the first anniversary is 31 August 2023, followed by annual
vesting on 31 August 2024 and 31 August 2025. The options were granted with
the exercise price of 0.1 pence and will be exercisable up to the tenth
anniversary of the grant.
On 8 December 2022, 2,704,000 options granted to Mr John Wood and these will
vest in three tranches as follows: 12 months from grant date 1,622,400, 24
months from grant date 540,800 and 36 months from grant date 540,800. The
options were granted with the exercise price of 0.1 pence and are exercisable
up to the fifth anniversary of the grant.
Year ended 30 June
2023 2022
£'000 £'000
Recurring share-based payment expense recognised 894 49
Non-recurring share-based payment expense recognised - 3,853
Total share-based payment expense 894 3,902
Summary of movements in awards:
New Share Option Plan 2021 and prior Original Share Option Plan Weighted average exercise price
Number Number £
'000s '000s
Outstanding at 1 July 2021 - 5,100 0.26
Granted - 3,600 0.39
Forfeited - (466) 0.33
Exercised - (671) 0.25
Expired - - -
Outstanding at 30 June 2022 - 7,563 0.32
Exercisable at 30 June 2022 - 7,402 0.34
Granted 2,960 - 0.00
Forfeited / Cancelled (64) (1,905) 0.32
Exercised - (75) 0.22
Expired - - -
Outstanding at 30 June 2023 2,896 5,583 0.21
Exercisable at 30 June 2023 - 5,583 0.32
The range of exercise prices for options outstanding at the end of the year
was £0.001 to £1.45 (2022: £0.22 to £1.45).
The weighted average remaining contractual life for the share options
outstanding as at 30 June 2023 was 7.02 years (2022: 7.85 years).
Of the total number of options outstanding at 30 June 2023, 5,582,795 (2022:
7,402,000) had vested and were exercisable.
The weighted average fair value of the options granted in the year was £0.52
(2022: £1.23).
The Black-Scholes option pricing model was used to value the share-based
payment awards granted in the year as it was considered that this approach
would result in materially accurate estimate of the fair value of options
granted. The following table lists the inputs to the models used for share
option plans:
2023 2022
Weighted average fair values at the measurement date £0.52 £1.23
Weighted average exercise price £0.001 £1.45
Dividend yield (%) - -
Expected volatility (%) n/a 62.8
Risk-free interest rate (%) n/a 1.3
Expected life of share options (years) 10 10
*2023 Options that were granted represent nominal cost options with an
exercise price of £0.001. Nominal cost options fair value, under the
Black-Scholes option pricing model, equals the share price at grant date,
therefore expected volatility and risk-free interest rate have no impact on
the valuation. In the year ended 30 June 2023 2,959,951 options (2022:
3,600,000) were granted at an exercise price of £0.001 (2021: £0.39). The
total share-based payment expense for the year was £894,000 (2022:
£3,902,000).
20. Financial Instruments and Risk Management
Capital risk management
The Group manages its capital to ensure it will be able to continue as a going
concern while maximising the return to stakeholders. The overall strategy of
the Group is to minimise costs and liquidity risk.
The capital structure of the Group consists of equity attributable to equity
holders of the Group, comprising issued share capital, and retained earnings
as disclosed in the Consolidated Statement of Changes of Equity.
The Group is exposed to a number of risks through its normal operations, the
most significant of which are credit, currency and liquidity risks. The
management of these risks is vested to the Board of Directors.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group's receivables from
customers. Indicators that there is no reasonable expectation of recovery
include, amongst others, failure to make contractual payments for a period of
greater than 120 days past due. There were no receivables from customers as at
end of June 2023.
The carrying amount of financial assets represents the maximum credit
exposure.
The principal financial assets of the Group are bank balances including
short-term deposits. The Group deposits surplus liquid funds with counterparty
banks that have high credit ratings, and the Directors consider the credit
risk to be minimal. The Group's maximum exposure to credit by class of
individual financial instrument is shown in the table below:
As at 30 June
2023 2023 2022 2022
Carrying value
Maximum exposure
Carrying value
Maximum exposure
£'000 £'000 £'000 £'000
Cash and cash equivalents 7,268 7,268 16,024 16,024
Short-term deposits - term deposits - - 1,017 1,017
7,268 7,268 17,041 17,041
As at 30 June
2023 2023 2023 2022 2022 2022
Rating
Cash at bank
Short-term deposits
Rating
Cash at bank
Short-term deposits
£'000 £'000 £'000 £'000
Royal Bank of Scotland A+ 4,237 - A+ 6,899 1,017
Commonwealth Bank of Australia A+ 3,031 - A+ 9,125 -
7,268 - 16,024 1,017
The Group monitors the credit ratings of counterparties regularly and at the
reporting date does not expect any losses from non-performance by the
counterparties. For all financial assets to which the impairment requirements
have not been applied, the carrying amount represents the maximum exposure to
credit loss.
Currency risk
The Group operates in a global market with income and costs possibly arising
in a number of currencies (AUD, USD, EUR) and is exposed to foreign currency
risk arising from commercial transactions, acquiring fixed assets and raw
materials, as well as translation of net investment in foreign subsidiaries.
Exposure to commercial transactions arise from sales or purchases by operating
companies in currencies other than the companies' functional currency.
Currency exposures are reviewed regularly. The Group has signed an agreement
with financial institution post end of FY22, to set forward exchange rate
contracts to provide certainty in terms of cash flow forecasts.
The Group has a limited level of exposure to foreign exchange risk through
their foreign currency denominated cash balances and a portion of the Group's
costs being incurred in Australian Dollar. Accordingly, movements in the Great
British Pounds exchange rate against these currencies could have a detrimental
effect on the Group's results primarily for reporting purposes.
Currency risk is managed by maintaining some cash deposits in currencies other
than Great British Pounds, particularly those currencies where future
expenditure is forecasted. The table below shows the currency profiles of cash
and cash equivalents:
As at 30 June
2023 2022
£'000 £'000
Cash, cash equivalents and term deposits
US Dollars 317 -
Great British Pounds 1,593 2,471
Australian Dollars 5,358 14,570
7,268 17,041
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
the obligations associated with its financial liabilities that are settled by
delivering cash or another financial asset. The Group's approach to managing
liquidity is to ensure, as far as possible, that it will have sufficient
liquidity to meet its liabilities when they are due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage
to the Group's reputation.
The Group seeks to manage liquidity risk by regularly reviewing cash flow
budgets and forecasts to ensure that sufficient liquidity is available to meet
foreseeable needs and to invest cash assets safely and profitably. The Group
deems there is sufficient liquidity for the foreseeable future.
The Group had cash and cash equivalents at period end as below:
As at 30 June
2023 2022
£'000 £'000
Cash and cash equivalents 7,268 16,024
7,268 16,024
The table below sets out the maturity profile of the Group's financial
liabilities at each year end:
Year ended 30 June 2023
Due in less than one month Due between one and three months Due between three months and one year Due between one year and five years Total
£'000 £'000 £'000 £'000 £'000
Trade and other payables 1,031 - - - 1,031
Lease liabilities 4 9 12 27 53
1,035 9 12 27 1,084
Year ended 30 June 2022
Due in less than one month Due between one and three months Due between three months and one year Due between one year and five years Total
£'000 £'000 £'000 £'000 £'000
Trade and other payables 829 - - - 829
Lease liabilities 4 10 11 31 56
833 10 11 31 885
21. Capital Commitments
There were no capital commitments as at 30 June 2023 and 30 June 2022.
22. Related Party Transactions
Other than the remuneration to key management personnel outlined in note 10 of
these financial statements, there are the following related party
transactions:
Management and R&D service fees of £91,757 (2022: £104,848) were paid to
Thomas Maschmeyer Consulting Pty Ltd (FY22 - Perinato Pty. Ltd), a company
with a common director (Prof Thomas Maschmeyer).
Remuneration of £6,031 was paid to a fixed term employee for services
provided to the company. The employee is a related person of a Group Director.
Remuneration of key management personnel
The remuneration of the Directors, who are the key management personnel of the
Group, is set out in aggregate in note 10 for each of the categories specified
in IAS 24.
23. Events Subsequent to Year End
Equity fundraising through new ordinary shares issue
On 9th November 2023, the company announced that it has successfully raised
gross proceeds of £4.04 million via the placement of 16,838,358 new ordinary
shares at a price of 24 pence per share. As part of the placing, the Directors
subscribed for new ordinary shares which raised gross proceeds of £0.4
million in aggregate.
On 9th November 2023, the Company also announced a retail open offer and
raised £0.06 million at the offer price of 24 pence per share.
On 27 November 2023, the shareholders approved both the capital raising and
the acquisition in a General Meeting.
The Company has therefore raised, in aggregate, gross proceeds of
approximately £4.1m through the capital raising round.
Part of net funds received were used to finance the acquisition of Oxlid Ltd,
as well as to provide working capital to advance all current and new projects.
Acquisition of Oxlid Ltd
On 29th November 2023, the Company completed the acquisition of 100% of
ordinary shares of OXLiD Ltd for a total consideration of approximately £4.2
million which consists of upfront consideration of £3.8 million and deferred
consideration of £0.4 million. The deferred consideration is subject to the
retention of the founder and will be payable equally over 12, 18 and 24
months.
OXLiD Ltd is a UK-based start-up lithium-sulfur battery company. The Company
believes that the acquisition will enhance Gelion's presence in the UK and
strategic positioning within the industry through accelerating
commercialisation of our Li-S technology in several core areas.
The initial accounting for the business combination is incomplete at the time
the financial statements are authorised for issue, given the proximity of the
acquisition date to the date of authorisation of the financial statements.
Therefore, the fair value of the acquired assets and liabilities could not be
made. The expected goodwill would come primarily from technology and product
synergies.
The upfront consideration was settled by 33.1% cash (£1,250,000) and 66.9% in
equity (amounting to £2,522,060, with the issue of 10,508,582 shares valued
at 24 pence per share on 29th November 2023).
No other matter or circumstance has arisen since 30 June 2023 that has
significantly affected, or may significantly affect the Group's operations,
the results of those operations, or the Group's state of affairs in future
financial years.
24. Control
In the opinion of the Directors there is no single ultimate controlling party.
25. Alternative Performance Measures (APM)
The below non-IFRS performance measures have been used. These measures are
additional to IFRS measures and may not be comparable with other companies.
APMs should not be viewed in isolation but as a supplementary information.
In determining whether an item should be presented as an allowable adjustment
to IFRS measures, the Group considers items which are significant either
because of their size or their nature, and which are non-recurring. For an
item to be considered as an allowable adjustment to IFRS measures, it must
initially meet at least one of the following criteria:
· It is a significant item, which may cross more than one
accounting period.
· It has been directly incurred as a result of either an
acquisition / divestment, or arises from a major business change.
· It is unusual in nature, e.g. outside the normal course of
business.
If an item meets at least one of the criteria, the Board, through the Audit
and Risk Committee, then exercises judgement as to whether the item should be
classified as an allowable adjustment to IFRS performance measures.
Adjusted EBITDA loss
Measure: Adjusted EBITDA loss is calculated excluding initial IPO expenses
(listing costs, accelerated share-based payments and key management bonuses
due to the IPO listing), other non-recurring expenses in nature (net loss on
sales of fixed assets, acquisition of IP legal advice and IP valuation costs)
and share based payments charge.
Use: Provides a consistent measure of the profits from the core business
activities. The Company believes that adjusted EBITDA is a useful measure
because it is widely used by securities analysts, investors and other
interested parties to evaluate the profitability of companies. This measure is
closely tracked by management to evaluate the Company's operating performance
and to make financial, strategic and operating decisions and because it may
help investors to understand and evaluate, in the same manner as management,
the underlying trends in the Company's operational performance on a comparable
basis, period on period.
Reconciliation:
Year ended 30 June
2023 2022
£'000 £'000
Operating loss (7,557) (9,087)
Adjustments
Listing and other non-recurring costs 266 4,658
Share-based payments expense 894 49
Depreciation and amortisation 463 308
Adjusted EBITDA loss (5,934) (4,072)
Operating loss before listing and other non-recurring costs
Measure: Operating loss before listing and other non-recurring costs is
calculated excluding initial IPO listing expenses (listing costs, share-based
payments and key management bonuses due to the IPO listing), other
non-recurring expenses in nature (net loss on sales of fixed assets,
acquisition of IP legal advice and IP valuation costs).
Use: Provides a consistent measure of the profits from the core business
activities. The Company believes that adjusted operating loss is a useful
measure because it is widely used by securities analysts, investors and other
interested parties to evaluate the profitability of companies. This measure is
closely tracked by management to evaluate the Company's operating performance
and to make financial, strategic and operating decisions and because it may
help investors to understand and evaluate, in the same manner as management,
the underlying trends in the Company's operational performance on a comparable
basis, period on period.
Reconciliation:
Year ended 30 June
2023 2022
£'000 £'000
Operating loss (7,557) (9,087)
Listing and other non-recurring costs 266 4,658
Operating loss before listing and other non-recurring costs (7,291) (4,429)
Adjusted loss after taxation
Measure: Adjusted loss after taxation is calculated excluding initial IPO
listing expenses (listing costs, share-based payments and key management
bonuses due to the IPO listing), other non-recurring expenses in nature (net
loss on sales of fixed assets, acquisition of IP legal advice and IP valuation
costs).
Use: Provides a consistent measure of the profits from the core business
activities. The Company believes that adjusted loss after taxation is a useful
measure because it is widely used by securities analysts, investors and other
interested parties to evaluate the profitability of companies. This measure is
closely tracked by management to evaluate the Company's operating performance
and to make financial, strategic and operating decisions and because it may
help investors to understand and evaluate, in the same manner as management,
the underlying trends in the Company's operational performance on a comparable
basis, period on period.
Reconciliation:
Year ended 30 June
2023 2022
£'000 £'000
Loss on ordinary activities after taxation (7,407) (9,157)
Listing and other non-recurring costs 266 4,658
Adjusted loss after taxation (7,141) (4,499)
Parent Company Balance Sheet
As at 30 June
Notes 2023 2022
£'000 £'000
Assets
Non-current assets
Investment in subsidiary 4 24,589 28,233
Current assets
Cash and cash equivalents 4,237 6,899
Other receivables 5 79 1,145
Total assets 28,905 36,277
Liabilities
Current liabilities
Trade and other payables 6 172 616
Total liabilities 172 616
Net assets 28,733 35,661
Equity
Issued capital 7 108 107
Share premium account 7 20,752 20,662
Share-based payment reserve 7 5,510 4,635
Capital reduction reserve 7 11,194 11,194
Accumulated losses (8,831) (937)
Total equity 28,733 35,661
As permitted by Section 408 of the Companies Act 2006, no income statement or
statement of comprehensive income is presented for the Company.
The financial statements of Gelion Plc, company registration number 09796512,
were approved by the Directors and authorised for issue on 12 December 2023.
Parent Company Statement of Changes in Equity
Share Share premium Accumulated Losses Capital reduction reserve Share-based payment reserve Total
capital
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 July 2021 33 11,251 (534) - 892 11,642
Total comprehensive loss for the period - - (561) - - (561)
Contributions by and distributions to owners:
Bonus issue 57 (57) - - - -
Capital reduction - (11,194) - 11,194 - -
Share-based payment charge - - - - 3,902 3,902
Shares issued during the period 11 16,032 - - - 16,043
Shares issued during the period through a convertible loan 6 5,993 - - - 5,999
Costs of shares issued - (1,541) - - - (1,541)
Exercise of share options - 178 158 - (158) 178
Balance at 30 June 2022 107 20,662 (937) 11,194 4,635 35,661
Balance at 1 July 2022 107 20,662 (937) 11,194 4,635 35,661
Total comprehensive loss for the period - - (7,894) - - (7,894)
Contributions by and distributions to owners:
Bonus issue - - - - - -
Capital reduction - - - - - -
Share-based payment charge - - - - 894 894
Shares issued during the period 1 73 - - - 74
Forfeited / cancelled options - - - - (19) (19)
Exercise of share options - 17 - - 17
Total contributions by and distributions to owners: 1 90 - - 875 966
Balance at 30 June 2023 108 20,752 (8,831) 11,194 5,510 28,733
1. General Information
Gelion Plc ('Gelion' or the 'Company') is a 100% owner of an Australian
subsidiary that conducts research and development in respect of an innovative
battery system and associated industrial design and manufacturing.
Gelion is a public limited company, limited by shares, incorporated and
domiciled in England and Wales. The Company was incorporated on 26 September
2015. The registered office of the Company is at c/o Armstrong, Level 4 LDN:W,
3 Noble Street London EC2V 7EE. The registered company number is 09796512.
Gelion Plc was incorporated as Gelion UK Ltd. On 12 November 2021, the Company
was re-registered as a public limited company under the Companies Act and its
name was changed to Gelion plc.
The Board, Directors and management referred to in this document refers to the
Board, Directors and management of Gelion.
2. Accounting Policies
2.1. Basis of preparation
These separate financial statements have been prepared in accordance with
Financial Reporting Standard 101, 'Reduced Disclosure Framework' (FRS 101).
The financial statements have been prepared under the historical cost
convention and in accordance with the Companies Act 2006.
The preparation of financial statements in compliance with FRS 101 requires
the use of certain critical accounting estimates. It also requires Group
management to exercise judgement in applying the Group's accounting policies.
The areas where significant judgements and estimates have been made in
preparing the financial statements and their effect are disclosed in note 2.21
of the consolidated financial statements.
The following exemptions from the requirements of IFRS have been applied in
the preparation of these financial statements, in accordance with FRS 101:
· Paragraphs 45(b) and 46 to 52 of IFRS 2 - Share-Based Payment
· IFRS 7 - Financial Instruments (Disclosures)
· Paragraphs 91 to 99 of IFRS 13 - Fair Value Measurement
· The following paragraphs of IAS 1 - Presentation of Financial
Statements
· 10(d) - Statement of cash flows
· 16 - Statement of compliance with all IFRS
· 38A - Requirement for minimum of two primary statements, including
cash flow statements
· 38B-D - Additional comparative information
· 111 - Statement of cash flows information
· 134-136 - Capital management disclosures
· IAS 7 - Statement of cash flows
· Paragraph 17 of IAS 24 - Related party disclosures relating to
key management personnel
· The requirement of IAS 24 - Related party transactions relating
to transactions between group members
These financial statements are presented in Great British Pounds (GBP) unless
otherwise stated, which is the Company's presentational and functional
currency. Amounts are rounded to the nearest thousand, unless otherwise
stated.
2.2. Significant accounting policies
The accounting policies of the Company are the same as those of the Group
which are set out in the relevant Notes to the Consolidated Financial
Statements, except that it has no policy in respect of consolidation and
investments in subsidiaries are carried at historical cost, less any
provisions for impairment.
2.3. Critical judgements and key sources of estimation uncertainty
As noted in note 2.21 to the consolidated financial statements the preparation
of the financial statements requires management to make estimates and
assumptions that affect the reported amount of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities. Company specific
critical judgements are as follows:
- Impairment of investments in subsidiaries.
The Company is making significant investments into Gelion Technologies Pty to
assist with the development and deployment of its technologies. In assessing
the carrying value of this asset for impairment, the Directors will at the end
of each reporting period assess whether there is any indication that an asset
may be impaired including the Investment in Subsidiary. The assessment will
consider indications for potential impairment and assess the impairment amount
with reference to the recoverable amount and carrying amount of the asset.
2.4. Share-based payments
The Group provides benefits to its employees in the form of share-based
payments, whereby employees render services in exchange for shares or rights
over shares (equity-settled transactions) in the parent entity as per note
2.16 of the consolidated financial statements. The only difference to that
policy is that the costs relating to share-based payments is capitalised in
the parent as part of the investment in the Group's subsidiary.
Share-based payments deemed non-recurring
The Group operated a share option plan whereby employees and key service
providers were granted options over shares in Gelion UK Limited. Due to the
Company's admission to trading on AIM which took place on 30 November 2021 all
unvested options were vested triggering an accelerated share-based payment
expense.
In addition to the existing share option plan the Group agreed to grant
options over Ordinary Shares pursuant to obligations under the service
agreements with the relevant individuals. These service agreement obligations
were triggered by admission to trading on AIM.
Both the acceleration of option vesting and additional options granted
pursuant to service agreement obligations are triggered by the Company's
admission to AIM and therefore can be considered as part of the same
non-recurring event.
3. Results for the Year
The Company recorded a loss for the financial year ended 30 June 2023 of
£7,894,000 (2022: loss £561,000). The auditors' remuneration for audit and
other services is disclosed in note 7 to the consolidated financial
statements.
4. Investment in Subsidiary
The following was a subsidiary undertaking of the Group:
Name Registered office Class of shares Holding
Gelion Technologies Pty Limited Australia Ordinary A 100%
The shareholding is held directly.
The registered office of Gelion Technologies Pty Limited is Level 16, 101
Miller Street, North Sydney, NSW 2060.
2023 2022
£'000
£'000
Balance as at 1 July 28,233 11,424
Additions - equity subscription 2,482 12,907
Additions - share-based payment charge 894 3,902
Less - options cancelled (19) -
Less - impairment (7,001) -
Balance as at 30 June 24,589 28,233
Share-based payment charges capitalised relate to the share-based payment
charges incurred by the parent company for options granted by the parent to
the employees of the subsidiary.
As for the impairment of the investment, please refer further to note 4.1.
4.1. Impairment of Investment in Subsidiary
The Company tests the net recoverable amounts of assets annually for
impairment, or more frequently if there are indicators of impairment. During
the year, Management considered the recoverability of its investment in
subsidiary, which is disclosed in Note 4. The subsidiary continues to operate,
incurring research and development activity and generates losses, which is
seen as temporary. The fair value measurement of this investment is classified
as Level 1 under IFRS 13.
Gelion Technologies Pty Limited (100% subsidiary of Gelion plc) is responsible
for well over 95% of Group activities, along with the future revenue
opportunities (currently being the only centre for R&D and the sole
manufacturing entity). As such, this single cash generating unit contributes
significantly to the market capitalisation of the Group (and parent company,
listed on AIM).
Since the Company is pre-revenue, the directors do not think the value in use
to be an appropriate measure to determine recoverable amount. The directors
have therefore considered the market capitalisation less relevant adjustments
as a proxy in the 'fair value less costs to sell' assessment'.
The market capitalisation of the Group on 30 June 2023 was £28.7 million
(108,407,750 shares at the share price of 26.5 pence). Certain adjustments
were made to the market capitalisation being the cash balance (£4.2 million)
and net payables (£0.1 million) in the parent company at 30 June 2023
resulting in the indicative carrying value of £24.6 million.
In comparing the cost of the total investment (£31.59 million), the
indicative carrying value of £24.6 million represents an impairment of £7.0
million to be recognised in the current year. If this exercise was undertaken
on 30 November 2023, the impairment would decrease by £1.6 million to £5.4
million.
The Company will continue to assess the recoverable amount of its investment
in subsidiary annually or whenever there are indications of impairment, in
accordance with IAS 36. Any subsequent changes in the recoverable amount and
impairment losses will be recognized in the financial statements in the
periods in which they occur.
5. Trade and Other Receivables
As at 30 June
2023 2022
£'000 £'000
Short term deposits - 1,017
Prepayments 50 63
Other debtors 29 65
79 1,145
Term deposits in FY22 comprised cash deposits held by UK licensed banks for a
period of greater than three months, over which there is no recall during the
term of the deposit. The amounts are measured at amortised cost using the
effective interest method in line with IFRS 9. There were no term deposits for
a period greater than three months as of June 2023.
6. Trade and Other Payables
Due within one year
As at 30 June
2023 2022
£'000 £'000
Trade payables 28 19
Amounts owed to Group companies 59 342
Accruals 85 255
172 616
7. Share Capital
Details of the Company's share capital are as set out in note 18 to the
consolidated financial statements.
Details of the Company's share premium account and other reserves are as set
out in note 18 to the consolidated financial statements.
Details of the movements in retained earnings are set out in the parent
company Statement of Changes in Equity.
8. Related Party Transactions
Year ended 30 June
2023 2022
£'000 £'000
Management fees - 89
Arrangement fees - 119
- 208
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR EAFAAFSFDFFARecent news on Gelion
See all newsREG - Gelion PLC - Director/PDMR Shareholding - Grant of Options
AnnouncementREG - Gelion PLC - Notice of Presentation
AnnouncementREG - Gelion PLC - Result of Retail Offer
AnnouncementREG - Gelion PLC - Execution of Materials Testing Agreement
AnnouncementREG - Gelion PLC - Result of Placing and Subscription
Announcement