REG - Gelion PLC - Interim results to 31 December 2023
27/03/2024 07:00
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RNS Number : 4212I Gelion PLC 27 March 2024
27 March 2024
Gelion plc
("Gelion", "the Group" or the "Company")
Interim results to 31 December 2023
Gelion (AIM: GELN), the Anglo-Australian battery innovator, is pleased to
announce its interim results for the six months ended 31 December 2023.
HY24 Operational highlights
- Raised £4.1m via a placing, subscription and retail offer in November 2023,
with strong support from existing and new investors
- Acquired OXLiD Ltd, a UK based Lithium Sulfur (Li-S) battery technology
developer to accelerate progress towards commercialisation, further
positioning Gelion as a global leader in this expanding market
- Signed JDA with Ionblox, a US silicon oxide (SiOx) anode developer, to develop
high performance, next-generation Lithium Silicon Sulfur (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
- 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 developing a zinc hybrid cell referred to as Gen5 hybrid technology
with the objective of achieving a scalable chemistry.
- 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
- 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
HY24 Financial highlights
- Company continues to be debt free with cash and cash equivalents at period end
of £7.5m (June 23: £7.3m)
- Adjusted EBITDA(1) loss for the period was £3.2m (H1 FY23 EBITDA loss:
£4.4m), a 28.9% decrease driven by:
o Six months impact of the cost saving initiatives implemented by the business
since March 2023 that is expected to deliver an estimated annualised cost
savings of c£1.0m; and
o Completion of the pilot manufacturing project i.e. the manufacturing of
batteries and BMS development in H2 FY23, associated with the Acciona trial.
Post period highlights
- Feb 2024 - Appointed Louis Adriaenssens as Chief Technology Officer and Dr
Adrien Amigues as President of Gelion UK and Europe, to further strengthen
Gelion's Senior Leadership Team
- March 2024 - announced the recent test results of its Next Generation
Lithium-Sulfur battery development demonstrating early validation of the
primary elements of the Group's technology plan.
(1) EBITDA is defined as the Earnings Before Interest, Tax, Depreciation and
Amortisation. Adjusted EBITDA is defined as EBITDA before share based payment
charges and other non-recurring costs. 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: "Our activity in 2023 laid the foundation
for Gelion to establish leadership in what we consider to be the most exciting
emerging battery technology, Lithium Sulfur. Safe, low cost, abundant, and
high performance - a technology that although have been challenging to get to
readiness to commercialise, we believe it's nearing its time, largely as a
result of outcomes pioneered first in Oxis and now in Gelion.
"Even more exciting than the inorganic (acquisition) activity last year to
secure IP and capability, is the progress that is being made every day
organically by both our Lithium Sulfur and Zinc Hybrid teams to bring the
pieces together and establish Gelion's unique proposition.
"We acknowledge that we still have a journey ahead before we convert the
intrinsic value to commercial reward and we aim to achieve this with our
technologies by establishing key relationships with strategic partners that
will benefit from the transformation.
"I would like to thank shareholders for their support as we focus all our
efforts to deliver a successful future for Gelion and all our stakeholders."
Investor Presentation
The Company will be hosting a retail investor presentation on 11 April 2024
at 9.30 am BST, via the Investor Meet Company platform.
The presentation will be hosted by John Wood - CEO, Amit Gupta - CFO,
Louis Adriaenssens - Chief Technology Officer and Thomas Maschmeyer -
Founder and Non-Executive Director and is open to all existing and potential
shareholders.
Registration can be completed via the following link:
https://www.investormeetcompany.com/gelion-plc/register-investor
(https://www.investormeetcompany.com/gelion-plc/register-investor)
Questions can be submitted pre-event via the Investor Meet Company dashboard
up until 9.00am GMT the day before the meeting or at any time during the live
presentation. Investors who already follow Gelion on the Investor Meet Company
platform will automatically be invited.
CONTACTS
Gelion plc via Alma
John Wood, CEO
Amit Gupta, CFO
Thomas Maschmeyer, Founder and Principal Technology Advisor
Cavendish Capital Markets Limited (Nominated Adviser and Broker) +44 207 220 0500
Corporate Finance
Neil McDonald; Seamus Fricker; Fergus Sullivan
Sales
Leif Powis
Alma Strategic Communications (Financial PR Adviser) +44 20 3405 0205
Justine James; Hannah Campbell; Will Ellis Hancock gelion@almastrategic.com
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 (Li-S) and Zinc-based
(Zn) hybrid cells to electrify mobile and stationary applications. Gelion plc
(the Group) is listed on the London Stock Exchange's AIM 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 Li-S chemistry to deliver
double the gravimetric energy density of standard Lithium-ion chemistries
whilst concurrently 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 its 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 its
zinc technology to provide a durable and sustainable market extension within
the ecosystem that supports lead-acid batteries.
CEO Statement
The momentum from Gelion's achievements in the financial year ended 30 June
2023 ("FY23") carried forward into the first half of Gelion's 2024 Financial
Year ("H1 FY24"). The Group made significant progress towards its goal of
global technology leadership in Lithium Sulfur (Li-S) following the Company's
acquisition of the Johnson Matthey IP portfolio. In H1 FY24 Gelion also
completed the acquisition of OXLiD alongside a successful £4.1m fundraise in
November 2023, to support the acquisition and to provide the associated
working capital needs of the combined business. In addition, the Company
signed a Joint Development Agreement (JDA) with the leading Silicon Oxide
(SiOx) anode partner, Ionblox, in the US with a focus on achieving a Lithium
Silicon Sulfur (LiSiS) cell technology. These initiatives have enabled Gelion
to expand the Company's footprint in the UK and establish a strategic
relationship in the US, countries where Gelion continues to press for
leadership in the LiS technology.
The Group accelerated its programme to develop complementary next generation
batteries targeted for introduction alongside the lead-acid eco-system, with
the development of the zinc-based hybrid cell, which the Company is designing
to be readily scalable. To support this effort, Gelion entered into agreements
with The University of Sydney to access development support from Professor
Yuan Chen, an expert in Zinc technologies.
In parallel, the Group has remained committed to disciplined cost control to
support the investment necessary for advancing the Group's strategic
objectives. Gelion has continued to invest in the Company's IP portfolio, with
a particular focus on building out the Company's LiS research capability.
Looking ahead, I am confident we are well positioned to continue developing
relevant energy storage solutions for the future. Development of leadership in
battery technology requires a team environment that combines creativity and
discipline in the same effort. Gelion has assembled a formidable team that is
deeply committed to the mastery of technologies capable of broad integration
into the global supply chain. The Company's acquisition activity in 2023
helped the Company progress its technology offering and talent pool within the
Company's Australia and the UK based teams. Gelion's team is working hard to
steer the Company towards leadership in the vast, rapidly growing, and highly
competitive market for high performance battery technologies.
Strategy
Whilst the market for new battery technologies is very competitive and both
Gelion's Li-S and zinc hybrid cell technologies have, and will continue to
have, competition from other energy storage innovators aiming at similar
performance and market segments, Gelion continues to make progress in line
with the Company's strategic milestones.
In FY23 and H1 FY24 the Company has built a solid foundation from which Gelion
can now accelerate its technology development. Gelion's extensive network
globally and across the industry will be key in establishing the required
supply chains and commercialisation, while we expand and mature as a
participant in the global community.
Technology overview / achievements
The first technology, based on combinations of Lithium (Li) and Sulfur (S),
yields very high gravimetric energy densities (measured as amount of energy
per battery weight) and continues to be elevated in the industry as its
enormous potential in the mobility markets (critical to drive down the weight)
becomes widely understood. The second uses Zinc (Zn) in combination with
Gelion's new cathode technology and has the potential to yield robust,
long-life storage solutions. Together, Gelion 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 H1 FY24, the Group made crucial
steps towards achieving these goals.
Lithium Sulfur
The acquisition of OXLiD is already enabling the enlarged Group to accelerate
progress and to underpin Gelion's move towards a global technology leadership
position in this expanding market. OXLiD is dedicated to the development and
commercialisation of LiS batteries for electrified transportation and
sustainable energy storage in the electric aviation (drones and eVTOL) and
electric vehicle markets.
In the same week, Gelion also signed a JDA with Ionblox Incorporated
(Ionblox), the California based next-generation battery technology company
transforming the future of mobility by land and air: a leading silicon oxide
anode developer with multiple performance attributes - fast charging, high
energy, high power, and long life at low cost. Ionblox's investors include
Lilium, Applied Ventures, Temasek and Catalus Capital.
By combining Ionblox's technology development with the Group's technology and
broad IP and know-how (the IP Portfolio), Gelion is seeking to achieve full
cell performance that will be competitive across a broad span of applications
based on the expected combination of high performance, low cost, safety, and
the abundance of the materials.
Lithium Sulfur is a path to high gravimetric energy density (double the
typical gravimetric energy density of current Lithium-Ion batteries) and
therefore half the weight. In addition, the technology also is a path to
higher safety and lower costs. Recent reporting on the challenges associated
with accelerated tyre wear from the weight of batteries in e-Vehicles has
emphasised that gravimetric energy density will be an increasingly important
metric in battery performance generally for electric mobility. Put simply,
Gelion sees huge potential for LiS, using various combinations of its
important capabilities and characteristics, across many application classes in
energy storage globally as it is progressively mastered.
Building on the expanded capabilities in Australia, Johnson Matthey IP
portfolio, OXLiD and the Ionblox JDA, post period end, the Group provided an
update on update on its Next Generation Li-S battery development, signalling
the primary elements of Gelion's plan are being validated as we progress.
To achieve these results Gelion is currently using a combination of our own
R&D facilities which we extended in 2023 and cell assembly capabilities in
third party trusted partners who are also able to attest to the results our
technology is achieving.
Gelion is following a unique approach that combines the use of inexpensive
materials with low-cost processing. We believe this to be an important
technological contribution that will be a strong base from which to build
commercial success.
Zinc
Zinc is a very important battery element, primarily owing to its abundance,
non-toxic nature, and cost-effectiveness.
In July 2023, we confirmed Gelion is moving away from utilization of Bromide
in our Zinc prismatic cells and would be actively conducting research into an
alternative hybrid cathode direction with the aim of moving beyond intractable
challenges we had encountered toward delivering safety, cost, and performance
goals simultaneously with the original Zinc Bromide target.
Since Gelion transitioned the Zinc target, the team has been driving forward
against a full set of objectives that are needed for the technology to meet
expectations. Having already established the techniques for manufacturing the
full prismatic sized cells that Gelion intends to use for market applications,
Gelion is now developing a hybrid chemistry target, referred to as Gen5 hybrid
technology.
This hybrid Gen5 cell is being 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. These elements receive further
strength because of their compatibility with existing global supply chains.
In August 2023, the Company 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. The
Group is very fortunate to be able to work with Professor Chen to incorporate
his research, understanding, and experience to move both quickly and directly
towards our goals.
Post-period end, the Group has continued to progress its research program to
obtain a degree of confidence over both performance and market fit, before
further investment decisions in relation to the development and pilot testing
are made. Gelion has been diligently following a disciplined process to ensure
we are addressing a complete product target and has been making consistent
progress against all objectives.
The commercial thesis for Gelion's Zinc hybrid technology is to introduce the
technology alongside the Lead Acid industry as the production methods have
similarities and the Zinc solution that Gelion is developing uses benign
materials and is aimed at achieving high & effective recycling at end of
life, much like Lead Acid.
People
Post-period end, the Company expanded its Senior Leadership Team and appointed
Dr Louis Adriaenssens as Chief Technological Officer (CTO) and Dr Adrien
Amigues as President in the UK and Europe.
Louis brings exceptional experience in specialist battery innovation,
manufacturing and commercialisation, having most recently worked in Nevada as
the Supervisor of Chemistry for Panasonic at the Tesla Gigafactory, where he
and his team looked after the processes associated with the production of
approximately 5 million battery cells per day. Dr Adrien Amigues who combines
commercial acumen with technical strength founded OXLiD in 2021 and has now
taken up the role of President of Gelion UK and Europe.
These appointments further enhance Gelion's already impressive and focused
leadership team at this pivotal next stage of our commercialisation journey,
which based on our technology development pathways, places us as a key player
in UK/Europe.
Summary and Outlook
In terms of Gelion's zinc technology, consistent progress is being made toward
the research objectives that must be achieved before establishing a decision
to recommence preparations for commercial prototyping activities. This
research will assess the technology's likely boundary performance conditions
and, given this, we are revisiting the Company's commercial match-to-market
assumptions using direct industry engagement. This research is being
undertaken to allow the Company to make informed decisions and will form part
of a technical and commercial summary update to Gelion's investors once
complete in the coming months.
Following our acquisition activities in 2023, Gelion has focussed its efforts
on establishing LiS leadership by executing the Company's internal development
plan, consisting of three primary objectives:
1. Utilising input from across the Oxis generated technology acquired from
Johnson Matthey and the Group's technological development (Gelion Sydney and
OXLiD), a baseline has been identified that puts us on a path toward products
that can be sensibly manufactured - a high performance and safe cathode
material and electrolyte.
2. Advancing the implementation and testing of full cell technology using
standard Lithium Metal anode approaches, a protected Lithium Metal technology
that we are developing under licence, and the pre-lithiated SiOx anode from
Ionblox.
3. Achieving a detailed plan of test milestones will provide internal and
external visibility of Gelion's progression toward mastering LiS and LiSiS
technologies capable of commercial scaling.
By following the plan, the Company set out for its LiS and LiSiS activities,
Gelion anticipates establishing growing recognition across the industry for
the importance of the technology position the Company is working to secure.
I would like to finish by recognising the efforts of an exceptional team who
are diligently applying themselves to extracting success and toward delivering
value and return from our continuously strengthening technology base and
industry positions.
John Wood
CEO
27 March 2024
CFO Statement
During H1 FY24, the Group remained focused on advancing its next-generation
LiS technology. This involved successful integration of acquired intellectual
property from Johnson Matthey, IP from OXLiD and other strategic collaboration
initiatives, notably including the joint development agreement with Ionblox.
Early test results affirm the significance of these initiatives in driving the
development of Gelion's LiS technology. Additionally, efforts continue in the
cathode development and feasibility studies for Gen 5 Zinc Hybrid cells, aimed
first at validation and subsequent commercialisation.
Interim results
These interim results confirm the effectiveness of the Company's 2023
cost-saving initiatives, leading to material reductions in operating
expenditure while maintaining planned activities. The H1 FY24 interim results
include the financial performance of OXLiD for one month from post-acquisition
period, 30 November - 31 December 2023.
Other income
The Group's policy is to recognise R&D tax incentive (as Other income) at
year-end. Post 30 June, management assesses its R&D activities and
associated expenditure and identifies expenses that are likely to be eligible
under the scheme. These are then reviewed and assessed by independent experts.
Given the importance of getting these claims accurately filed with the
Australian Taxation Office (ATO), R&D tax incentive is only recognised
post review by the independent expert and the auditors.
The Group has recognised grant income in the H1 FY24 results from approved
grants for OXLiD through the Faraday Battery Challenge (FBC) and the Advanced
Propulsion Centre (APC).
Adjusted EBITDA Loss
Adjusted EBITDA loss (defined as the Earnings Before Interest, Tax,
Depreciation, Amortisation, share based payment charges and other
non-recurring costs) for the period was £3.2m (H1 FY23 EBITDA loss: £4.4m).
The 28.9% decrease in the Adjusted EBITDA loss was driven by:
· Six months impact of the cost saving initiatives implemented by the business
since March 2023 across headcount, administrative expenses, and contractors.
These savings cumulatively are estimated to be c. £1.0 m on an annualised
basis. Average headcount decreased from 51 in H1 FY23 (July 2022 to December
2022) to 43 in H1 FY24 reflecting the focus on optimising operations; and
· Completion of the pilot manufacturing project i.e. the manufacturing of
batteries and BMS development in H2 FY23, associated with the Acciona trial.
Non-recurring items relate to expensed portion of the transaction costs
incurred in relation to the acquisition of OXLiD Ltd (£225k) and the capital
raise (£88k).
Balance sheet
The Company continues to be debt free with the key items being:
· Cash and cash equivalents at period end: £7.5m (June 23: £7.3m) as a result
of:
o capital raise of £3.4m (net of transaction costs relating to the capital
raise and the acquisition);
o payment made towards acquisition of OXLiD £1.4m (incl. of payment into escrow
account); and
o receipt of R&D tax incentives of £1.9m.
· Net assets increased by £2.8m at 31 December 2023 due to recognition of
goodwill (£3.6m) generated from the acquisition of OXLiD, as well as capital
investments in equipment (£0.3m) and intangible assets (£0.3m) partially
offset by the receipt of R&D tax incentive and consequent decline in
receivables.
FY24 Outlook
Gelion remains committed to its disciplined approach to cost management and
strategic capital deployment. Leveraging both organic growth initiatives and
strategic opportunities, Gelion aims to accelerate our development and enhance
our market position, with a view to maximise shareholder return.
With a streamlined cost structure and a debt-free balance sheet, Gelion is
strategically positioned to capitalise on the market opportunity, and we
continue to be confident in the long-term prospect of the Company.
Amit Gupta
CFO
27 March 2024
Consolidated Statement of Comprehensive Income
Notes Six months ended 31 Dec 2022
Six months ended 31 Dec 2023 £'000
£'000 Unaudited & Restated
Unaudited
Other income 3 35 -
Total income 35 -
Administrative expenses 4 (1,482) (2,142)
Research and development expenditure 5 (1,708) (2,294)
Share-based payments expense* 6 (416) (367)
Depreciation and amortisation (297) (206)
Operating loss before non-recurring items (3,868) (5,009)
Non-recurring items: 7
Acquisition related costs (225) -
Capital raising related costs (88) -
Total non-recurring items: 7 (313) -
Operating loss (4,181) (5,009)
Finance costs (2) (2)
Finance income 68 76
Loss on ordinary activities before taxation (4,115) (4,935)
Tax on loss on ordinary activities - -
Loss on ordinary activities after taxation (4,115) (4,935)
Total loss for the period 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 203 (42)
operations
Total comprehensive loss for the period attributable to equity holders of the (3,912) (4,977)
parent
Loss per share (basic and diluted) attributable to the equity holders (pence) 8 (3.60) (4.60)
The above results relate entirely to continuing activities.
* Six-months ended 31 Dec 2022 have been restated for the treatment of fair
value of non-cash share based payments, more details in the note 2.2.
The company has reclassified depreciation and amortisation from administrative
expenses for the period of six-months ended Dec 2022, in line with changes
made to the audited financial statements for the year ended 30 June 2023.
The results for the six months ended 31 December 2023, also include the
results of OXLiD Ltd from the date of acquisition, more details in note 9.
The accompanying notes form part of this financial information.
Consolidated Balance Sheet
Notes 31 Dec 2023 30 June 2023
£'000 £'000
Unaudited Audited
Assets
Non-current assets
Goodwill 9 3,596 -
Intangible assets 3,686 3,349
Property, plant and equipment 1,206 957
Current assets
Cash and cash equivalents 7,451 7,268
Other receivables 10 550 2,114
Total Assets 16,489 13,688
Liabilities
Current liabilities
Trade and other payables 1,090 1,057
Non-current liabilities
Trade and other payables 17 27
Total liabilities 1,107 1,084
Net assets 15,382 12,604
Equity
Issued capital 11 136 108
Share premium account 11 24,488 20,752
Other non-distributable reserves 11 8,461 5,328
Capital reduction reserve 11 11,194 11,194
Accumulated losses (28,897) (24,778)
Total equity 15,382 12,604
The accompanying notes form part of this financial information.
Consolidated Statement of Cash Flows
Six months ended Six months ended
31 Dec 2023 31 Dec 2022
£'000 £'000
Unaudited Unaudited & Restated
Cash flow from operating activities
Loss for the period before exchange losses and non-recurring items: (3,802) (4,935)
Acquisition related costs (225) -
Capital raising related costs (88) -
Total non-recurring items (313) -
Loss for the period before exchange losses (4,115) (4,935)
Adjustments for:
- depreciation & amortisation 297 205
- net finance loss / (income) (73) (17)
- impairment of intangible assets 16 -
- share-based payments expense 416 367
- changes in working capital 2,050 2,229
Net cash used in operating activities (1,409) (2,151)
Cash flows from investing activities
Acquisition of subsidiary, net of cash acquired (1,076) -
Other investments - escrow account (133) -
Purchase of intangible assets (626) (34)
Purchase of tangible property, plant and equipment (405) (371)
Short-term investments (term deposits) - (5,213)
Interest received 72 19
Net cash used in investing activities (2,168) (5,599)
Cash flows from financing activities
Proceeds from issue of shares 4,100 1
Transaction costs in relation to issue of shares (348) -
Repayment of leasing liabilities (25) (23)
Net cash generated from / (used in) financing activities 3,727 (22)
Net increase / (decrease) in cash held 149 (7,772)
Cash and cash equivalents at beginning of reporting period 7,268 16,024
Effect of exchange rate changes 34 (42)
Cash and cash equivalents at end of reporting period 7,451 8,210
The accompanying notes form part of this financial information.
* Six-months ended 31 Dec 2022 have been restated for the treatment of fair
value of share based payments, more details in the note 2.2.
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 2022 (Audited) 107 20,662 (17,390) 11,194 5,148 19,721
Total comprehensive loss for the period* - - (4,935) - (42) (4,977)
Contributions by and distributions to owners:
Share-based payment charge* - - - - 367 367
Shares issued during the period 1 - - - - 1
Balance at 31 Dec 2022 (Unaudited)* 108 20,662 (22,326) 11,194 5,474 15,114
Balance at 1 Jan 2023 (Unaudited) 108 20,662 (22,326) 11,194 5,474 15,114
Total comprehensive loss for the period - - (2,472) - (653) (3,125)
Contributions by and distributions to owners:
Share-based payment charge - - - - 527 527
Shares issued during the period - 73 - - - 73
Forfeited / cancelled share options - - 19 - (19) -
Exercise of share options - 17 - - - 17
Balance at 30 June 2023 (Audited) 108 20,752 (24,778) 11,194 5,328 12,604
Balance at 1 Jul 2023 108 20,752 (24,778) 11,194 5,328 12,604
(Audited)
Total comprehensive loss for the period - - (4,115) - 203 (3,912)
Contributions by and distributions to owners:
Merger relief reserve (fair value of shares issued on acquisition) 11 - - - 2,512 2,523
Share-based payment charge - - - - 416 416
Shares issued during the period 17 4,083 - - - 4,100
Cost of shares issued - (348) - - - (348)
Balance at 31 Dec 2023 (Unaudited) 136 24,488 (28,897) 11,194 8,461 15,382
* Six-months ended 31 Dec 2022 have been restated for the treatment of fair
value of share based payments, more details in the note 2.2.
Notes to The Consolidated Financial Statements
1. General Information
Gelion Plc ('Gelion' or the 'Company') is a 100% owner of:
· Gelion Technologies Pty Ltd, an Australian subsidiary that
conducts research and development in respect of an innovative battery system
and associated industrial design and manufacturing; and
· OXLiD Ltd, a UK subsidiary which is involved in the research and
development of lithium-sulfur battery technology.
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 originally incorporated as Gelion UK Ltd. On 12 November 2021,
Gelion UK Ltd 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 interim consolidated financial statements for the period 1 July 2023 to 31
December 2023 are unaudited. The financial statements also incorporate the
unaudited figures for the interim period 1 July 2022 to 31 December 2022 and
the audited figures for the year ended 30 June 2023 (where applicable). These
interim consolidated financial statements have been prepared in accordance
with IAS 34 Interim Financial Reporting. They do not include all disclosures
that would otherwise be required in a complete set of financial statements and
should be read in conjunction with the 2023 annual report.
2.2 Restatement of comparatives
Where required by accounting standards, comparative figures have been adjusted
to conform to changes in presentation for the current period. These
restatements have impacted the reported net result of the business for the six
months period ended 31 December 2022.
Prior Period Restatements of Financial Statements
Management has made one restatement in the company's previously issued
consolidated financial statements for the period ended 31 December 2022. This
was identified post the release of interim results and were restated within
the financial statements for the year ended 30 June 2023.
This restatement is due to a correction in accounting treatment of 1,830,000
vested options that were forfeited in exchange for shares issued to ex-CEO
Andrew Grimes in the period to 31 December 2022. There is no impact on cash
position at 31 December 2022 however there is an increase of £186k for
non-cash share based payments charge, therefore impacting net result for 31
December 2022. Further, the treatment in the fair value of the forfeited
options of £2,342,775 was previously transferred from share based payments
reserve to accumulated losses, this has now been reversed and the fair value
charge remains in share based payments reserve. These restatements do not
impact the 30 June 2023 full year results as the correct accounting treatment
was applied for these results.
2.3 Going concern
In assessing whether the Company has the ability to continue as a going
concern, the Directors have modelled a business-as-usual cash flow forecast
for the period up to 31 March 2025 including the receipt of an estimated
R&D tax incentive (for the period ending 30 June 2024) of c. £1.7m and
grant income (approved but unclaimed) in the UK of c. £0.6m, both based on
previous receipts.
The Company expects it will remain cash positive for the period up to 31
January 2025 under its current operating plan, though under a scenario whereby
all discretionary expenses are reduced and uncommitted expenditure are
delayed, this can be extended to April 2025. The Directors are in the process
of evaluating additional funding options, including government grants
(uncommitted at the date of this report). The Directors also note that the
Company recently concluded a capital raise of £4.1 million in November 2023,
which was used in part for the purchase of OXLiD, giving them confidence that
the Company can attract additional investment. Furthermore, the Board is
confident that in the event that they choose to raise additional finance, this
would be achievable based on the future prospects of the business and previous
experience in raising equity finance, while acknowledging that this would be
influenced by the market conditions at that time.
Some uncertainty arises in relation to obtaining additional funding and there
is material uncertainty that may cast significant doubt about the Group's
ability to continue as a going concern, therefore it may be unable to realise
its assets and discharge its liabilities in the normal course of business.
The Board remains committed to ensuring the solvency/viability and long-term
future of Gelion and will update investors accordingly in the coming months.
For avoidance of doubt, the financial statements do not include the
adjustments that would result if the Group were unable to continue as a going
concern.
2.4 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 period, adjusted for bonus elements in Ordinary Shares issued during the
period.
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.
2.5 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, expired, cancelled or forfeited.
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.
2.6 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.
2.7 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.
2.8 Critical accounting judgements and key sources of
estimation uncertainty
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. The Group recognises a receivable for R&D tax incentive at
the year-end only based on total eligible expenditure incurred during the
year. As such, no R&D tax incentive receivable has been recognised for the
period ended 31 December 2023.
Business combination
In our accounting for business combination, judgment was required in
determining whether an asset is identifiable and should be recorded separately
from goodwill. Additionally, estimating the acquisition-date fair values of
the identifiable assets acquired and liabilities assumed involved considerable
judgment. The necessary measurements are based on information available on the
acquisition date and are based on expectations as well as assumptions that
have been deemed reasonable by management.
3. Other income
Following the recent acquisition of OXLiD Ltd, the Company started recognising
grant income (accrued for the period post-acquisition) which relates to
approved grant funding of OXLiD through the Faraday Battery Challenge (FBC)
and the Advanced Propulsion Centre (APC) programs. The grant funding is
recognised on an accrual basis and are claimed either on a monthly or a
quarterly basis with the funds received in the month after the claim
submission.
Six months ended 31 Dec 2023 Six months ended 31 Dec 2022
£'000
£'000
Unaudited Unaudited
Grant income 35 -
Total other income 35 -
4. Administrative Expenditure
Administrative expenditure includes personnel and related costs (including
salaries, benefits and payroll tax) and costs associated with external
consultancy services.
5. R&D Expenditure
R&D expenditure includes personnel and related costs (including salaries,
benefits and payroll tax) and costs associated with product research, design
and development.
6. 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 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. 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.
On 13 December 2023, 1,637,629 options were granted that will vest in three
equal tranches, the first anniversary is 31 August 2024, followed by annual
vesting on 31 August 2025 and 31 August 2026. 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 20 December 2023, 949,751 options were granted that have an 18 month
vesting period and will vest in full on 31 May 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.
Six months ended 31 Dec 2022
£'000
Six months ended 31 Dec 2023
£'000 Unaudited
Unaudited & Restated
Share-based payment expense recognised 416 367
Total share-based payment expense 416 367
* Six-months ended 31 Dec 2022 have been restated for the treatment of fair
value of share based payments, more details in the note 2.2.
Summary of movements in awards:
New Share Option Plan 2021 and prior Original Share Option Plan Weighted average exercise price
'000s Number £
'000s
Outstanding at 1 July 2022 (Audited) - 7,563 0.32
Granted 2,960 - 0.00
Forfeited - (1,905) 0.32
Exercised - - -
Expired - - -
Outstanding at 31 December 2022 (Unaudited) 2,960 5,658 0.21
Exercisable at 31 December 2022 (Unaudited) - 5,589 0.32
Granted - - 0.00
Forfeited / Cancelled (64) - 0.00
Exercised - (75) 0.22
Expired - - -
Outstanding at 30 June 2023 (Audited) 2,896 5,583 0.21
Exercisable at 30 June 2023 (Audited) - 5,583 0.32
Granted 2,587 - 0.00
Forfeited / Cancelled (29) - 0.00
Exercised (12) - 0.00
Expired - - -
Outstanding at 31 December 2023 (Unaudited) 5,442 5,583 0.16
Exercisable at 31 December 2023 (Unaudited) 1,674 5,583 0.24
The range of exercise prices for options outstanding at 31 December 2023 was
£0.001 to £1.45 (2022: £0.001 to £1.45).
The weighted average remaining contractual life for the share options
outstanding as at 31 December 2023 was 5.98 years (2022: 5.90 years).
Of the total number of options outstanding at 31 December 2023, 7,256,964 (31
December 2022: 5,589,000) had vested and were exercisable.
The weighted average fair value of the options granted in the period was
£0.25 (2022: £0.52).
7. Non-Recurring Items
Six months ended 31 Dec 2023 Six months ended 31 Dec 2022
£'000
£'000
Unaudited Unaudited
Acquisition related costs 225 -
Capital raising costs 88 -
Total non-recurring items 313 -
Non-recurring costs in FY24 include one-off capital raise related expenses as
well as expenses related to the acquisition of OXLiD Ltd. These have been
separately disclosed to assist the user of the financial information to
understand and compare the underlying results of the Company.
8. Loss Per Share
Six months ended Six months ended
31 Dec 2023 31 Dec 2022
Unaudited Unaudited
Loss after tax £4,115,000 £4,935,000
Weighted average number of shares (number) 113,792,426 107,577,980
Loss per share (pence) 3.6p 4.6p
The calculation of the loss per share is based on the loss for the financial
period after taxation of £4,115,000 (2022: £4,935,000) and on the weighted
average of 113,792,426 (2022: 107,577,980) Ordinary Shares in issue during the
period.
The weighted average number of shares is reflecting additional 17,082,127
shares issued as part of capital raise activities in November 2023, as well as
10,508,582 shares issued as part of consideration for OXLiD Ltd acquisition on
29(th) November 2023.
There were 11,024,018 share options outstanding as of 31 December 2023 (30
June 2023: 8,478,535). 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.
9. Business combinations during the period
Business combinations are initially accounted for on a provisional basis. The
acquirer retrospectively adjusts the provisional amounts recognised and also
recognises additional assets or liabilities during the measurement period,
based on new information obtained about the facts and circumstances that
existed at the acquisition-date. The measurement period ends on either the
earlier of (i) 12 months from the date of the acquisition or (ii) when the
acquirer receives all the information possible to determine fair value.
On 29(th) November 2023, the Company completed the acquisition of 100% of
ordinary shares of OXLiD Ltd. OXLiD Ltd is a UK-based lithium-sulfur battery
technology company. The Company believes that the acquisition will enhance
Gelion's presence in the UK which will act as a further catalyst to establish
the foundations for strategic partnerships with major supply chain and
industry participants (upstream and downstream), providing a commercially
attractive route to market for Gelion's technology.
The book value of the net assets acquired is as follows:
29 November 2023
£'000
Intangible assets 69
Property, plant and equipment 20
Cash 174
Receivables 88
Payables (175)
Total net assets 176
At the date of authorisation of these financial statements, a detailed
assessment of the fair value of the identifiable net assets is ongoing, given
the proximity to the acquisition date. The Group's assessment of the fair
values of the assets and liabilities recognised as a result of the acquisition
are therefore provisional and will be finalised for the year-end reporting (30
June 2024).
Fair value of consideration paid:
£'000
Cash 1,250
Non-cash consideration 2,522
Total consideration 3,772
Cash flow reconciliation:
29 November 2023
£'000
Cash consideration paid 1,250
Less: Cash balance in net assets acquired (174)
Net cash consideration paid 1,076
The consideration was settled by cash (£1.25 million) and in equity
(amounting to £2,522,060, with the issue of 10,508,582 shares in the Company
valued at 24 pence per share on 29(th) November 2023).
The deferred consideration of £400,000 is subject to the retention of the
founder in OXLiD Ltd and will be payable equally over 12, 18 and 24 months,
therefore this part of the arrangement represents post-combination services
and is separate from the business combination (IFRS 3, B55(a) - Continuing
Employment).
Whilst fair value adjustments can potentially result in an increase / decrease
of recognised goodwill, at the date of authorisation of these financial
statements, a provisional goodwill of £3,595,958 has been recognised (fair
value of consideration paid less net assets). The provisional goodwill can be
attributed to Gelion increasing its geographical footprint in the UK, patents/
intangible and PPE assets ultimately strengthening Gelion's position globally
in the LiS technology.
Due to the proximity of the acquisition to the reporting period, the Company
has not performed any impairment testing for the goodwill recognised on
acquisition, which will be undertaken at the year-end i.e. 30 June 2024.
In the six months period ended 31 December 2023. OXLiD Ltd contributed c.£30k
to operating loss to the Group's results.
10. Other receivables
As at 31 Dec 2023 As at 30 June 2023
Unaudited Audited
R&D tax incentive - 1,934
Grant income 87 -
Prepayments 171 172
VAT / GST receivable 134 -
Restricted cash - escrow 133 -
Other debtors 25 8
Total other receivables 550 2,114
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 2.8. Grant income relates to receivables in
OXLiD for grant funding in the UK, obtained through the Faraday Battery
Challenge (FBC) and the Advanced Propulsion Centre (APC).
The Directors consider that the carrying value of other receivables
approximates to their fair value.
11. Issued Capital and Reserves
Share capital and premium
Number of shares Share Share
on issue
capital premium
Ref. £'000 £'000
Balance as at 1 July 2022 (Audited) 107,134,839 107 20,662
Shares issued during the period a 1,026,515 1 -
Balance as at 31 Dec 2022 (Unaudited) 108,161,354 108 20,662
Shares issued during the period b 171,396 - 74
Exercise of share options 75,000 - 16
Balance as at 30 June 2023 (Audited) 108,407,750 108 20,752
Shares issued during the period c 27,590,709 28 4,082
Cost of shares issued d - - (348)
Balance as at 31 Dec 2023 (Unaudited) 135,998,459 136 24,488
a) 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.
b) 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.
c) On 23 November 23, 17,082,127 new ordinary shares of £0.001 have been
issued at a price of 24 pence per share. On 29 November 2023, 10,508,582 new
ordinary shares of £0.001 have been issued as part of consideration for
acquisition of OXLiD Ltd.
d) Transaction costs incurred in the issuing of shares in the period ended 31
December 2023 of £436,000 of which £348,000 was offset against share premium
and £88,000 was expensed.
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 6 for
further details of these plans.
Share-based payments reserve has been restated for the period to 31 December
2022 due to a correction to the treatment of 1,830,000 vested options that
were forfeited in exchange for shares issued to ex-CEO Andrew Grimes. The fair
value of the forfeited options was incorrectly recognised in share-based
payment reserve to 31 December 2022 of £2,342,775. An increase in share based
payments charge was also recognised in the period to 31 December 2022 of
£186,000 showing a revised movement of £367,000 for the period to 31
December 2022. This correction does not impact the 30 June 2023 full year
results as the correct accounting treatment was applied for these results.
- 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 2021, 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 Merger relief reserve Total other reserves
£'000 £'000 £'000 £'000
Balance at 1 July 2022 (Audited) 4,636 512 - 5,148
Foreign currency translation reserve movement - (42) - (42)
Share-based payment charge 367 - - 367
Balance at 31 December 2022 (Unaudited) 5,003 470 - 5,473
Foreign currency translation reserve movement - (653) - (653)
Share-based payment charge 527 - - 527
Forfeited / cancelled share options (19) - - (19)
Balance at 30 June 2023 (Audited) 5,511 (183) - 5,328
Foreign currency translation reserve movement - 203 - 203
Share-based payment charge 416 - - 416
Merger relief reserve (fair value of shares issued on acquisition) - - 2,512 2,512
Balance at 31 December 2023 (Unaudited) 5,927 20 2,512 8,461
* Six-months ended 31 Dec 2022 have been restated for the treatment of fair
value of share based payments, more details in the note 2.2
12. Events subsequent to period end
There are no significant post balance sheet events from 31 December 2023 to
the signing of this report.
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