REG - Hellenic Dynamics - Half-year Report
28/12/2023 14:15
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RNS Number : 1055Y Hellenic Dynamics PLC 28 December 2023
28 December 2023
Hellenic Dynamics Plc
("HELD" or "the Company")
Interim Results for the six months ended 30 September 2023
London, 28 December 2023: Hellenic Dynamics Plc (LSE: HELD), a medical
cannabis cultivator with a dedicated focus on producing tetrahydrocannabinol
("THC") dominant strains of medical cannabis flowers for the fast growing
global medical cannabis markets, announces its half-yearly results for the six
months ended 30 September 2023 (the "Period") .
Operational highlights for the period
· Received a European Union grant of EUR €304,425 via the EU
Horizon Europe project, as the only medical cannabis cultivator. The overall
budget for this EU Horizon Europe is just under EUR €9 million over a period
of 36 months. Hellenic Dynamics consortium consists of 29 partners from 11
countries including Kingston University, Queen Mary University of London, and
Fujitsu Technology solutions
· Entered into a five-year memorandum of understanding ("MoU") with
ELGO-DIMITRA, the Institute of Plant Breeding and Genetic Resources, a public
sector entity functioning under the Greek Ministry of Agriculture, Development
and Food located near Thessaloniki, Greece. The MOU set out the intentions of
ELGO-DIMITRA and the Company to collaborate on future projects and research,
including the registration of medical cannabis genetics for European
intellectual property ("IP") ownership
· Developed and implemented the Company's Product Outsourcing and
Development ("POD") cultivation strategy and signed an MOU with Demecan
Holdings, a trading name of Deutsche Medizinalcannabis GmbH, for the
cultivation and supply of medical cannabis flowers
· Signed an exclusive agreement with Nine Lions Bioscience Corp, a
renowned Canadian-based supplier of cannabis genetics, for the exclusive
European cultivation of unique high THC medical cannabis flowers
· Successfully passed all resolutions with an average of 99.93% of
votes at the enlarged Company's first Annual General Meeting, including the
re-appointment of all directors
Operational highlights for post period-end
· Completed the construction of the Company's state of the art,
fully indoor and climate-controlled cultivation facilities, at a significant
low cost
· Elgo Dimitra, the public research institute overseen by the Greek
Ministry of Agriculture successfully began the cultivation of medical cannabis
flowers for Hellenic Dynamics
· Published a new Company presentation and Facility Presentation,
showcasing the position of the Company and the work completed during and post
the period
· Entered into a five year MOU with The Laboratory of Molecular
Pharmacology, Department of Pharmacy of The University of Patras to
collaborate to develop joint scientific research projects, with the intention
to focus on cannabis-based molecules to be used for clinical trials with a
view to cultivate plants to be used by large pharmaceutical companies
· Signed a mezzanine loan facility of up to USD €3 million with
international financial institution Riverfort Global Opportunities
· Successfully completed a capital reorganization and re-issue of
125,300,000 shares with a nominal value of £0.001
Financial highlights for the period
Cash at 31 March 2023 of £2,117,159, with current cash as at 30 September
2023 of £195,780.
Davinder Rai, CEO of Hellenic Dynamics plc, commented:
"The interim period and post period has been one of significant strategic
progress, culminating in the completion of what I truly believe to be one of
the most sophisticated cultivation facility in Europe or even further. The
indoor, fully climate and light controlled facility utilises some of the
most high-tech equipment in the industry. Included in the development of
Hellenic's new 195,506 square meter facility the team has completed the
construction of a new office, a security building, completed the installation
of over 90 motion sensing cameras around a new rehabilitated 3km
of perimeter fencing, construction and fit out of a new propagation
building utilising Priva technology and the completion of our state of the
art cultivation bunkers. This is in addition to the installation of new power
substations, drilling of bore holes and the connection of utilities across
the site. All of this is testament to the hard work and dedication of our
team, all whilst maintaining an exceptionally low cost base. I would like to
thank our investors and shareholders for their continued support and I look
forward to the issue of our annual report next year and the generation of
revenues."
The Directors of the Company accept responsibility for the content of this
announcement.
Enquiries:
Hellenic Dynamics Plc +44 (0)20 3818 7850
Davinder Rai davinder@hellenicdynamics.com
Cairn Financial Advisers
Emily Staples / Jo Turner +44 (0)20 7213 0880
Peterhouse Capital - Corporate Brokers +44 (0)20 7469 0930
Lucy Williams / Charles Goodfellow
About Hellenic Dynamics Plc
Founded in 2019, Hellenic Dynamics is specifically focused on the cultivation
and supply of THC ("tetrahydrocannabinol") - dominant strains of medical
cannabis flowers, destined for the growing medical cannabis markets
across Europe. Hellenic Dynamics' core strategy is to develop and operate its
40,000 square metre active cultivation licence from its 195,506 square metre
facility located near Thessaloniki in Northern Greece. In full production,
Hellenic Dynamics is capable of producing over 54,000 kg of dried flowers per
annum.
Hellenic Dynamics will take advantage of its relatively low cost base
resulting from a comparatively low cost of power, having its own running
water supply and the labour rates for skilled and semi-skilled labour in
Northern Greece.
26 European countries now allow medical cannabis via prescription and the
European cannabis market is expected to reach €17.39 billion per annum by
2028. Sales of Hellenic Dynamics' dried THC-dominant cannabis flowers and
extracts are initially intended for export into Europe's largest market -
Germany, in addition to other European markets including domestically in
Greece.
As the first medical cannabis cultivator to obtain a listing on the main
market for listed securities of the London Stock Exchange, Hellenic is
significantly different to the number of CBD (Cannabidiol) related companies
that have appeared over the recent years. Hellenic Dynamics cultivates
THC-dominant medical cannabis flowers. THC-dominant medical cannabis products
are only available via a medical prescription. Medicinal cannabis has been
approved for use both in the United Kingdom and Germany, plus 24 other
European countries, for conditions including but not limited to chronic pain,
intractable chemotherapy-related nausea, anxiety, insomnia,
Tourette's syndrome, substance use disorder, multiple sclerosis, IBS, spinal
cord treatment, lack of appetite due to HIV/AIDS, cachexia, anorexia and
glaucoma.
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed to be, forward
looking statements. Forward looking statements are identified by their use of
terms and phrases such as ''believe'', ''could'', "should" ''envisage'',
''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect",
''will'' or the negative of those, variations or comparable expressions,
including references to assumptions. These forward-looking statements are not
based on historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of operations,
performance, future capital and other expenditures (including the amount,
nature and sources of funding thereof), competitive advantages, business
prospects and opportunities. Such forward looking statements reflect the
Directors' current beliefs and assumptions and are based on information
currently available to the Directors.
Chairman's statement
The Company has achieved a number of significant milestones during the period
ended 30 September 2023 and post period. Having completed the Reverse Takeover
("RTO") and gaining Admission to the London Stock Exchange's Main Market for
Listed Securities on 5 December 2022. I am extremely pleased that following
the inheritance of the Company's issued share capital and Articles of
Association ("AoA"), we have successfully completed a capital restructure and
adopted new AoA, more in line with the Company and its future.
Aside from the restructuring of the Company, the work completed at the nearly
200,000 square meter facility is world leading in terms of medical cannabis
cultivation, especially when we consider the extremely low associated costs. I
very much look forward to the generation of revenues during 2024 and executing
on a number of the Company's Agreements.
I would like to take this opportunity to thank our team and our shareholders
for their continued support.
Sir Anthony Jolliffe
Non-executive Chairman
28 December 2023
Condensed statement of comprehensive income
For the six months ended 30 September 2023
6 months to 30 September 2023 6 months to 30 September 2022
(unaudited) (unaudited)
£ £
Revenue - -
Cost of sales - -
Gross profit - -
Administrative expenses (956,782) (167,758)
Operating loss (956,782) (167,758)
Net finance costs (486) (131)
Loss before income tax (957,268) (167,889)
Income tax expense - -
Loss for the period (957,268) (167,889)
Other comprehensive income (7,805) (15,589)
Exchange differences on translating foreign operations
Total other comprehensive income for the period (7,805) (15,589)
Loss for the period and total comprehensive income (965,073) (183,478)
Earnings per share
Basic earnings per share (0.008p) (0.002p)
There are no recognised gains and losses other than those passing through the
Statement of Comprehensive Income.
Condensed statement of financial position
As at 30 September 2023
30 September 2023 31 March 2023
(Unaudited) (audited)
Note £ £
ASSETS
Non-current assets
Intangible assets 8,246 8,814
Property, plant and equipment 9 1,035,641 632,244
Right-of-use assets 264,993 317,583
Other receivables 3,038 3,085
1,311,918 961,726
Current assets
Other receivables 422,686 186,896
Cash and cash equivalents 195,780 2,117,159
618,466 2,304,055
TOTAL ASSETS 1,930,384 3,265,781
EQUITY AND LIABILITIES
Share capital and reserves
Issued share capital 10 14,800,182 14,800,182
Share premium 10 2,971,570 2,971,570
Merger reserve 20,828,894 20,828,894
Reverse acquisition reserve (31,497,974) (31,497,974)
Convertible loan notes reserve - 41,305
Capital redemption reserve 7,500 7,500
Share based payment reserve 157,302 62,921
Retained earnings (6,498,080) (5,533,007)
TOTAL EQUITY 769,394 1,681,391
Current liabilities
Trade and other payables 11 614,544 654,990
Provisions 212,175 212,175
Lease liabilities 78,423 80,530
905,142 947,695
Non-current liabilities
Lease liabilities 255,848 303,000
Loan notes - 333,695
255,848 636,695
TOTAL LIABILITES 1,160,990 1,584,390
TOTAL EQUITY & LIABILITIES 1,930,384 3,265,781
Condensed statement of changes in equity
For the six months ended 30 September 2023
Share capital Share premium Share based Merger reserve Reverse acquisition reserve Convertible loan note reserve Capital redemption reserve Retained earnings Total
payment
reserve
£ £ £ £ £ £ £ £ £
At 30 September 2022 232,211 902,610 - - - - - (980,320) 154,501
Shares issued during the period 263,333 526,667 - - - - - - 790,000
Transfer to reverse acquisition reserve (232,211) (902,610) - - 1,134,821 - - - -
Recognition of PLC equity at acquisition of subsidiary 4,122,400 2,816,208 - - (1,389,452) - 7,500 - 5,556,656
Issue of shares for the acquisition of subsidiary 10,414,449 - - 20,828,894 (31,243,343) - - - -
Equity element of convertible loan notes - - - - - 41,305 - - 41,305
Cost of share issue - (371,305) - - - - - - (371,305)
Share based payment - - 62,921 - - - - - 62,921
Total comprehensive loss for the period - - - - - - - (4,552,687) (4,552,687)
At 31 March 2023 14,800,182 2,971,570 62,921 20,828,894 (31,497,974) 41,305 7,500 (5,533,007) 1,681,391
Total comprehensive loss for the period - - - - - - - (965,073) (965,073)
Share based payment - - 94,381 - - - - - 94,381
Repayment of convertible loan notes - - - - - (41,305) - - (41,305)
At 30 September 2023 14,800,182 2,971,570 157,302 20,828,894 (31,497,974) - 7,500 (6,498,080) 769,394
Condensed cash flow statement
For the six months ended 30 September 2023
6 months to 6 months to
30 September 2023 30 September 2022
(unaudited) (unaudited)
£ £
Cash from operating activities:
Loss before taxation (957,268) (167,889)
Adjusted for:
Depreciation 56,311 24,788
Share based payment expense 94,381 -
Finance costs 486 131
Foreign exchange movements 6,992 1,653
Operating cashflow before working capital movements (799,098) (141,317)
(Increase)/ decrease in trade and other receivables (235,743) 16,712
(Decrease)/ increase in trade and other payables (40,446) 117,029
Finance costs (486) (131)
Taxation paid - -
Net cash (outflow)/inflow from operating activities (1,075,773) 7,707
Cash flows from investing activities:
Purchase of property, plant and equipment (421,346) (779)
Net cash flows from / (used) in investing activities (421,346) (779)
Cash flows from financing activities:
Repayment of convertible loan notes (375,000) -
Payment of lease liabilities (49,260) -
Net cash flows from financing activities (424,260) -
Net (decrease)/increase in cash and cash equivalents (1,921,379) (8,486)
Cash and cash equivalents brought forward 2,117,159 14,104
Cash and cash equivalents carried forward 195,780 5,618
For the purposes of the cash flow statement, cash and cash equivalents
comprise the following:
As at 30 September 2023 As at 30 September 2022
£ £
Cash at bank and in hand 5,618
195,780
Bank overdraft - -
195,780 5,618
1. Corporate information
The interim condensed financial statements of Hellenic Dynamics Plc ("the
Company") for the six months ended 30 September 2023 were authorised for
issue in accordance with a resolution of the directors on 28 December 2023.
The Company and its subsidiary ("the Group") have a principal activity of the
cultivation and supply of medical cannabis flowers. The address of its
registered office is 21 Arlington Street, London, SW1A 1RN.
Hellenic Dynamics Plc is a limited company, incorporated in England and Wales,
whose shares are publicly traded on the London Stock Exchange in the standard
segment.
2. Notes to the Interim Report
Basis of preparation
The Company's half-yearly financial statements for the six months ended 30
September 2023 were authorised for issue by the directors on 28 December 2023.
The half-yearly financial statements, which are unaudited, do not constitute
statutory accounts within the meaning of Section 434 of the Companies Act
2006. The statutory accounts for the year ended 31 March 2023 have been filed
with the Registrar of Companies at Companies House. The audit report on the
statutory accounts for the year ended 31 March 2023 was unqualified and did
not contain any statements under Section 498 (2) or (3) of the Companies Act
2006.
On 5 December 2022, the Company acquired Hellenic Dynamics S.A. via a reverse
takeover which resulted in the Company becoming the ultimate holding company
of the Group. The transaction was accounted for as a reverse acquisition since
it did not meet the definition of a business combination under IFRS 3. The
comparatives within the condensed statement of comprehensive income and
condensed statement of changes in equity and the condensed cashflow statement
represent that of the legal subsidiary and accounting acquirer, Hellenic
Dynamics S.A. for the interim period to 30 September 2022 and not that of
Hellenic Dynamics Plc. The interim financial statements as at 30 September
2022 reflected the figures of Hellenic Dynamics Plc as it was prior to the
reverse takeover.
The annual financial statements of the Company for the year ended 31 March
2024 will be prepared in accordance with UK-adopted international accounting
standards in conformity with the requirements of the Companies Act 2006,
IFRIC Interpretations and with those parts of the Companies Act 2006
applicable to companies reporting under UK-adopted IAS. Accordingly, these
interim financial statements have been prepared using accounting policies
consistent with those which will be adopted by the Company in the financial
statements and in compliance with IAS 34 "Interim financial reporting".
The functional currency for each entity in the Group is determined as the
currency of the primary economic environment for which it operates. The
functional currency of the parent company, Hellenic Dynamics PLC, is Pounds
Sterling (£). The functional currency of its subsidiary, Hellenic Dynamics
S.A., is the Euro (€). The Group has chosen to present its consolidated
financial statements in Pounds Sterling (£), as the Directors believe it is a
more appropriate presentational currency of the users of the consolidated
financial statements. Foreign operations are included in accordance with the
policies set out in the Annual Report and Accounts.
The interim financial statements have been prepared in accordance with the
accounting policies set out in the annual financial statements for the year
ended 31 March 2023.
New standards, amendments and interpretations adopted by the Group
There are no accounting pronouncements which have become effective from 1
April 2023 that have a material impact on the Company's interim condensed
financial statements.
New standards, amendments and interpretations adopted not yet by the Group
The standards and interpretations that are relevant to the Group, issued, but
not yet effective, up to the date of these interim Financial Statements have
been evaluated by the Directors and they do not consider that there will be a
material impact of transition on the financial statements.
3. Significant accounting policies
The interim condensed financial statements have been prepared in accordance
with the accounting policies adopted in the Company's most recent annual
financial statements for the year ended 31 March 2023.
4. Going concern
The interim financial statements are prepared on a going concern basis which
the directors believe to be appropriate. At the balance sheet date, the
company had total assets of £1,930,384 and a cash balance of £195,780.
Subsequent to the period ended 30 September 2023 the Company secured a
mezzanine draw down loan facility of USD €3million, which will support the
current plans of the group. The Directors believe that the Company will be
able to meet its obligations as they fall due.
5. Estimates and judgements
The judgements, estimates and assumptions applied in the interim condensed
financial statements, including the key sources of estimation uncertainty,
were the same as those applied in the Company's last annual financial
statements for the year ended 31 March 2023.
6. Risks and uncertainties
The Directors continuously assess and monitor the key risks of the business.
The key risks that could affect the Group's performance and the factors that
mitigate those risks have not substantially changed from those set out in the
Group's most recent annual financial statements for the year ended 31 March
2023.
7. Segmental Reporting
For management purposes the Group is organized into business units based on
its products and services and has two reportable segments, as follows;
· Medical Cannabis Supply - Cultivation and supply of medicinal
cannabis flowers
· Head Office - The provision of management services of the Group
The Executive Management Committee is the Chief Operating Decision Maker
(CODM) and monitors the operating results of its business units separately for
the purpose of making decisions about resource allocation and performance
assessment. Segment performance is evaluated based on profit or loss and is
measured consistently with profit or loss in the consolidated financial
statements. Also, the Group's financing (including finance costs, finance
income and other income) and incomes are managed on a Group basis and are not
allocated to operating segments. Transfer prices between operating segments
are on an arm's length basis in a manner similar to transactions with third
parties.
Segmental operating performance
Six months to 30 September 2023 Six months to
(unaudited) 30 September 2022 (unaudited)
Segmental revenue PBT Segmental revenue PBT
£'000 £'000 £'000 £'000
Medicinal Cannabis Supply - (154) - (168)
Head Office - (803) - -
- (957) - (168)
Inter-segmental revenue and unallocated costs - -
- -
- (957) - (168)
Business segments assets and liabilities
30 September 2023 31 March 2023
(unaudited) (audited)
Segment assets Segment liabilities Segment assets Segment liabilities
£'000 £'000 £'000 £'000
Medical Cannabis Supply 1,715 423 1,019 592
Head Office 215 738 2,247 992
1,930 1,161 3,266 1,584
8. Property, plant and equipment
During the six months ended 30 September 2023, the Group acquired assets with
a cost of £421,346 (Sept 2022 - £779).
9. Share Capital
30 September 2023 31 March 2023
Number £ Number £
Allotted, called up and fully paid
Ordinary shares of 0.1p each 12,530,000,000 12,530,000 12,530,000,000 12,530,000
Founder shares of £1 each 2,270,182 2,270,182 2,270,182 2,270,182
14,800,182 14,800,182
The ordinary shares have attached to them fully voting, dividend, and capital
distribution rights (including on a winding up). The ordinary shares do not
confer any right of redemption.
2,270,182 Founder shares were issued in 2016. The founder shares are not
quoted and do not carry a right to vote or to receive a dividend.
Warrants
During the period, 125,000,000 warrants lapsed as a result of the repayment of
the convertible loan notes. As at 30 September 2023, there were 312,784,810
warrants outstanding.
Share Options
All of the options are equity settled and the charge for the period is
£94,381 (Sept 2022 - £Nil). As at 30 September 2023, the were 1,282,688,148
share options outstanding.
10. Trade and other payables
During the period, convertible loan notes amounting to £375,000 were repaid.
The equity element of the convertible loan note amount to £41,305 was
reversed.
11. Related party transactions
At the end of the period, an amount £14,353 was owed by a director (Mar 2023
- £14,353).
12. Subsequent events
Subsequent to the year end the company undertook a capital reorganisation by
consolidating every 100 Existing Ordinary Shares held into one Ordinary Share
of £0.01 each, followed by a share subdivision and reclassification of each
Consolidated Share into 99 Deferred Shares and one new Ordinary Share of
£0.001 each.
The New Ordinary Shares have the same rights as the Existing Ordinary Shares
including voting, dividend and other rights.
The Deferred Shares have no right to vote or participate in the capital of the
company save in respect of insolvency.
Subsequent to the year end the company entered into a $3 million unsecured
loan facility for a 36 month term of which $450,000 has been advanced. The
annual interest rate payable is 15% per annum. 4,249,291 warrants have been
granted to the lender exercisable at 9.884p for 36 months.
13. Statement of Directors' responsibilities
The Directors of Hellenic Dynamics plc are set out on page 3 of this report.
We confirm that to the best of our knowledge:
· the condensed set of financial statements has been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted for use in the
UK.
· the interim management report includes a fair review of the
information required by;
o DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
o DTR 4.2.8R if the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six months of
the current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
By order of the Board
Davinder Rai
Chief Executive Officer
28 December 2023
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