REG - Ilika plc - Half-year Report
19/01/2023 07:00
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RNS Number : 1848N Ilika plc 19 January 2023
Ilika plc
('Ilika,' the 'Company,' or the 'Group')
Half-year Report
Significant advancements for Stereax & Goliath, positioning the Group for
commercialisation
Ilika (AIM: IKA), a pioneer in solid-state battery technology, announces its
unaudited half-year report for the six months ended 31 October 2022.
Operating Highlights:
Ilika has continued to develop and commercialise its thin-film Stereax(Ò)
miniature solid-state batteries (SSBs) for powering medical devices and
industrial wireless sensors in specialist environments, as well as progressing
its development of large-format Goliath cells for electric vehicles (EV) and
cordless appliances.
Stereax
· Programme launch of product qualification and process optimisation to
increase process yield in preparation for initiating commercial release in Q2
calendar year 2023
· Commercial demand remains strongest from the miniature medical device
sector
· Secured 21 initial orders from 18 customers of which 11 are for implanted
medical devices, 3 for smart dental applications, 2 for smart lenses, 1 for
aerospace and 4 others
Goliath
· Improved the performance of the large format SSBs for electric
vehicles and cordless consumer appliances
· Energy density of prototype cells have increased by c.80% since the
start of the financial year
· Launched a series of scale-up studies including:
Ø Completing a manufacturing equipment design study with COMAU
Ø An economic feasibility study with the UK Battery Industrialisation
Centre (UK-BIC)
Ø Securing grant funding for the commencement of manufacturing equipment
trials
· Continued to interact with a portfolio of automotive and consumer
appliance OEMs globally, demonstrating strong interest for the product
· Progressing discussions for both grant-supported and commercial
projects
Financial Summary:
· Total revenue for the period £0.2m (H1 2022: £0.2m)
· EBITDA loss £4.1m (H1 2022: £2.7m)
Ø The EBITDA loss for the period, excluding share-based payments, increased
due to the increase in operational costs associated with the Stereax
manufacturing facility and the Goliath development programme
· Cash balance at period end £18.6m (H1 2022: £27.7m)
· Grant funding of £0.2m (H1 2022: £0.2m)
Ø In respect of three grant applications during this period.
Post Period End:
· Signed a memorandum of understanding (MOU) with Cirtec Medical LLC
(Cirtec) to transfer Stereax manufacturing under license to Cirtec's facility
in the US
· Appointment of new Chief Financial Officer, Jason Stewart
Commenting on the results Graeme Purdy, CEO of Ilika, said: "The first half
of this year has seen our technical teams make significant progress in
developing both Stereax and Goliath product lines. Our recent MOU with Cirtec
is an important milestone on the journey to implementing our chosen IP
licensing model. The Goliath programme has reached the half-way point in
matching lithium-ion equivalence and we are engaging with partners to assist
with product specification and scale-up. Our Goliath partnering activities
will provide a platform from which we aim to secure both grant funding and
commercial revenue."
Ilika plc +44 (0)23 8011 1400
Graeme Purdy, Chief Executive
Jason Stewart, Chief Financial Officer
Liberum Capital Limited +44 (0) 20 3100 2000
Andrew Godber, William Hall, Nikhil Varghese
Joh. Berenberg, Gossler & Co. KG (Joint Broker) +44 (0) 20 3207 8700
Matt Armitt, Mark Whitmore, Detlir Elezi,
Mara Grasso
Walbrook PR Ltd +44 (0)20 7933 8780 or ilika@walbrookpr.com (mailto:ilika@walbrookpr.com)
Lianne Applegarth Mob: +44 (0)7584 391 303
Nick Rome Mob: +44 (0)7748 325 236
Joe Walker Mob: +44 (0)740 702 0470
About Ilika plc
Ilika specializes in the development of solid-state batteries. Its Stereax
product line is designed for miniature medical implants and specialist
internet of Things (IoT) applications. Stereax enables disruptive product
designers looking for an intrinsically safe, long life (1000s recharges), low
leakage (nA) and miniature power source in a rectangular form factor similar
to ICs. For more information about Ilika, please visit:
https://www.ilika.com (https://www.ilika.com) .
Joint Chairman's and CEO's Statement
Review of Period
Principal Activities
Ilika has continued to pursue its strategy of developing and commercialising
its cutting-edge solid-state batteries (SSBs). The Company's mission is to
rapidly develop leading-edge IP, manufacture and sell SSBs for markets that
cannot be addressed with conventional batteries due to their safety, charge
rates, energy density and life limits. We will achieve this using
ceramic-based lithium-ion technology that is inherently safe in manufacture
and usage and easier to recycle, which differentiates our products from
existing batteries.
Ilika has two product lines: miniature Stereax® SSBs for powering medical
devices and industrial wireless sensors in specialist environments, and large
format Goliath SSBs for electric vehicles (EV) and cordless appliances.
Stereax SSBs
Ilika's miniature Stereax cells are differentiated from other solid-state
technology through its choice of materials and its use of an efficient, low
temperature evaporation process that is capable of higher manufacturing rates
than other existing miniature solid-state routes. This results in the
following benefits relative to previous solid-state battery designs:
· Lower cost of manufacture, avoiding the use of expensive sputtering
targets
· Can be charged and discharged more times through use of a silicon
anode
· Less packaging required
· High temperature resilience
The unique benefits of Stereax batteries make them particularly useful for
medical implants and industrial applications. Miniature Stereax batteries can
enable medical devices in a way that is currently not possible with
conventional lithium-ion batteries. Their compact, high energy-density, high
power characteristics make them useful for a range of medical implant
applications covering blood pressure monitoring to neuro-stimulation.
Industrial automation, or Industrial Internet of Things (IIoT) as it is
sometimes referred to, requires low maintenance batteries with a long
lifetime, sometimes in situations that require them to operate at elevated
temperatures above those for which standard lithium-ion batteries are rated
(typically 60 degC).
Stereax Manufacturing Scale-up and Commercialisation
Ilika successfully commissioned its UK Stereax factory, or fab, at the end of
calendar year 2021. The first product to be released to customers will be the
M300. As mentioned in Ilika's trading update of 17 November 2022, initial
release of this product is expected to commence in Q2 calendar year 2023. In
the medical device sector, commercial ramp up usually takes five years, in
line with regulatory approval timelines. Demand from applications such as
smart orthopaedics, neurostimulation and smart contact lenses has created
opportunities for technology transfer and licensing. Over the past year, Ilika
has experienced significant inflation in energy and consumable costs relative
to its budget expectations, but also relative to other countries such as the
USA. This makes IIoT markets difficult to address from our UK facility and by
the same token it is making an early technology transfer to a larger
manufacturing partner overseas more attractive.
Ilika has intensified its partnering discussions, in particular with Cirtec
Medical LLC, with whom Ilika has recently entered into an MOU to transfer
production under license to Cirtec's Lowell, Massachusetts, US facility. Ilika
will focus on advanced technology development and IP licensing in support of
Cirtec's manufacturing and commercialisation activities.
Large Format Goliath SSBs
Ilika's Goliath cells are differentiated from other solid-state prototype
cells through Ilika's choice of materials, cell architecture and manufacturing
process. The key materials choices to be made by SSB developers relate to the
selection of cathode, electrolyte and anodes. Different developers have
selected differentiated combinations of these materials to achieve an outcome
suitable for their target markets. Ilika has chosen materials that have the
potential to enable longer range vehicles with battery packs that last longer
and can be recycled more easily.
Ilika's initial target market for Goliath in automotive is the luxury
performance market, which is less cost-sensitive than higher volume segments
and is willing to pay a premium for the enhanced vehicle range. In order to
address that market, Ilika is driving forward its Goliath development
programme, in which it has improved the energy density of its prototype cells
by c.80% since the start of the financial year. Ilika is now halfway to its
target of matching lithium-ion energy density by the end of calendar year
2023, which is an important milestone on the way to the initial release of
prototype cells to automotive partners for evaluation in 2024.
Ilika is currently implementing a plan to increase the capacity of its
existing pre-pilot production facility using automation and larger scale items
of equipment, such as a roll-to-roll coater. Ilika has increased the target
capacity of this equipment from 0.5 to 1.5 MWh/a to allow it to scale
production volumes and mature its technology to the level required to respond
to automotive requests for quotation (RFQ) by the end of 2025. Ilika's
experience working with automotive partners in the first half of this year has
shown that the industry expects suppliers to have reached what it defines as
A-Sample readiness to respond to RFQs. Beyond 1.5 MWh/a, at B- and C-Sample
readiness and volumes, Ilika intends to work with manufacturing partners such
as the UK Battery Industrialisation Centre (UK-BIC) to scale to higher levels
of production capacity on production-intent equipment i.e., equipment that
could be used for mass production.
Ilika has financed its Goliath technology development programme with grant
funding from the Faraday Battery Challenge and equity funding. In addition,
Ilika has received grants to support market strategy analysis and scale-up
studies managed by the Advanced Propulsion Centre (APC). The APC-supported
SOLSTICE project between Ilika and Comau, part of Stellantis and a world
leader in the industrial automation field, concluded that there were no cost
or technical barriers to scaling-up Ilika's Goliath solid-state battery
technology for electric vehicles and delivered a plant design for a mega-scale
manufacturing facility. The recently completed BUS100 project was a
collaboration between Ilika and UK-BIC which analysed the economic feasibility
of placing a 100MWh SSB line at UK-BIC to enable Ilika's Goliath electric
vehicle batteries to be manufactured at scale. The findings of that study were
that the UK-BIC's electrode coating lines could be used for Goliath, which
would significantly reduce future capital requirements for Ilika as it
scales-up. Ilika continues to work with equipment suppliers in the STEP
project to de-risk the move to pilot line production levels.
Furthermore, Ilika continues to interact with a portfolio of automotive and
consumer appliance OEMs globally, with a view to intensifying interactions
through both grant-supported and commercially-funded collaborations as the
Goliath technology matures.
Board appointment
Post period end, the Company appointed Jason Stewart as Chief Financial
Officer, effective as of 3 January 2023. Jason has a significant commercial
experience in the manufacturing sector and was most recently interim CFO at
Sunseeker International ltd where he successfully managed the company through
the COVID-19 crisis, managing costs and re-establishing production following
the lockdown.
Outlook
Ilika will continue to deploy its resources to maximise shareholder return
while it delivers its programmes. Regarding Stereax, Ilika will broaden and
deepen its relationship with Cirtec, following up on the recently-signed MOU
with an expected fully-developed contractual relationship. Goliath is
well-aligned with the electrification transformation of the transport sector
and Ilika expects that both government grant support and commercial interest
will intensify as the product matures. Ilika will continue to monitor
competitor developments to ensure Goliath remains a differentiated and
compelling proposition.
Graeme Purdy, CEO
Keith Jackson, Chairman
Ilika plc
Consolidated statement of comprehensive income for the six months ended 31
October 2022
Unaudited Unaudited Audited
Six months ended Six months ended Year
31 Oct 2022 31 Oct 2021 ended
30 Apr 2022
Notes £ £ £
Turnover 203,723 195,418 496,103
Revenue - 15,932 30,878
UK grants 203,723 179,486 465,225
Cost of sales (120,464) (125,257) (218,794)
Gross profit 83,259 70,161 277,309
Administrative expenses (4,940,257) (3,301,949) (7,966,807)
Share-based payment charge (212,708) (248,504) (429,686)
(5,152,965) (3,550,453) (8,396,493)
Operating loss (5,069,706) (3,480,292) (8,119,184)
Financial income 6,262 2,867 5,590
Other Income 44,233 - -
Financial expense (18,299) (14,675) (31,299)
Loss before tax (5,037,510) (3,492,100) (8,144,893)
Taxation 958,210 225,000 1,016,331
Loss for period/total comprehensive income attributable to owners of parent
(4,079,300) (3,267,100) (7,128,562)
Loss per share
Basic and diluted 2 (0.03) (0.02) (0.05)
The results from the periods shown above are derived entirely from continuing
operations.
Consolidated balance sheet as at 31 October 2022
Unaudited Unaudited Audited
Six months ended Six months ended Year
31 Oct 2022 31 Oct 2021 ended
30 Apr 2022
Notes £ £ £
ASSETS
Non-current assets
Intangible assets 2,426,896 1,737,318 1,958,153
Property, plant and equipment 4,831,583 4,843,932 5,072,280
Right-of-use assets 761,126 785,765 891,254
Total non-current assets 8,019,605 7,367,015 7,921,687
Current assets
Trade and other receivables 1,661,395 2,053,304 1,594,326
Current tax receivable 2,019,264 555,000 1,016,822
Other financial assets - bank deposits 772,675 770,902 772,675
Cash and cash equivalents 17,837,980 26,933,312 22,626,280
Total current assets 22,291,314 30,312,518 26,010,103
Total assets 30,310,919 37,679,534 33,931,790
Issued capital and reserves attributable to owners of parent
Issued share capital 1,584,720 1,574,679 1,582,342
Share premium 64,806,916 64,698,829 64,754,910
Capital restructuring reserve 6,486,077 6,486,077 6,486,077
Retained earnings (45,253,488) (37,706,618) (41,386,898)
Total equity 27,624,225 35,052,967 31,436,431
LIABILITIES
Current liabilities
Trade and other payables 1,705,254 1,759,570 1,407,398
Lease liabilities 281,525 195,524 223,644
Total current liabilities 1,986,779 1,955,094 1,631,042
Non-current liabilities
Lease liabilities 459,550 531,108 623,952
Provisions 240,365 140,365 240,365
Total non-current liabilities 699,915 671,473 864,317
Total liabilities 2,686,694 2,626,567 2,495,359
Total equity and liabilities 30,310,919 37,679,534 33,931,790
Consolidated cash flow statement for the six months ended 31 October 2022
Unaudited Unaudited Audited
Six months ended Six months ended Year
31 Oct 2022 31 Oct 2021 ended
30 Apr 2022
£ £ £
Cash flows from operating activities
Loss before taxation (5,037,510) (3,492,100) (8,144,896)
Adjustments for:
Amortisation 21,717 47,116 47,512
Depreciation 767,567 486,299 1,253,038
Equity settled share-based payments 212,708 248,504 429,686
Loss on disposal of plant, property and equipment (750) - (2,000)
Net financial expense/ (income) (32,195) 11,808 25,709
Operating cash flow before changes in working capital, interest and taxes (4,068,463) (2,698,372) (6,390,948)
Decrease/(increase) in trade and other
receivables (67,069) 120,293 279,221
Increase /(decrease) in trade and other payables 297,856 386,360 34,188
Decrease in provisions - - 100,000
Cash utilised by operations (3,837,676) (2,191,719) (5,977,539)
Tax received - - 329,509
Net cash flow from operating activities (3,837,676) (2,191,719) (5,648,030)
Cash flows from investing activities
Interest received 6,262 2,867 5,590
Purchase of intangible assets (490,460) (721,375) (942,606)
Purchase of property, plant and equipment (396,742) (2,920,392) (3,491,671)
Sale of Property, Plant and equipment 750 - 2,000
Increase in other financial assets 0 (1,822) (3,595)
Net cash used in investing activities (880,190) (3,640,722) (4,430,282)
Cash flows from financing activities
Proceeds from issuance of ordinary share capital 54,386 24,769,724 24,833,468
Cost of share issue - (885,414) (885,414)
Capital element of finance leases repaid (106,521) (115,763) (209,371)
Lease Payments interest (18,299) - (31,299)
Net cash from financing activities (70,434) 23,768,547 23,707,384
Net (decrease)/ increase in cash and cash equivalents (4,788,300) 17,936,105 13,629,072
Cash and cash equivalents at the start of the period 22,626,280 8,997,208 8,997,208
Cash and cash equivalents at the end of the period 17,837,980 26,933,313 22,626,280
Consolidated statement of changes in equity (unaudited)
Share premium account Capital
Share capital restructuring reserve Retained earnings
Total
£ £ £ £ £
As at 30th April 2021 1,396,265 40,992,933 6,486,077 (34,688,022) 14,187,253
Share-based payment - 248,504 248,504
Issue of Shares 178,414 24,591,311 24,769,724
Cost of share Issue (885,414) (885,414)
Loss and total
comprehensive income - - - (3,267,100) (3,267,100)
As at 31 October 2021 1,574,679 64,698,829 6,486,077 (37,706,618) 35,052,967
Share-based payment - - - 181,182 181,182
Issue of shares 7,663 56,081 - - 63,744
Loss and total
comprehensive income - - - (3,861,462) (3,861,462)
As at 30th April 2022 1,582,342 64,754,910 6,486,077 (41,386,898) 31,436,431
Share-based payment - - - 212,708 212,708
Issue of shares 2,378 52,008 - - 54,386
Loss and total
comprehensive income - - - (4,079,300) (4,079,300)
1,584,720 64,806,918 6,486,077 (45,253,490) 27,624,225
Share capital
The share capital represents the nominal value of the equity shares in issue.
Share premium account
When shares are issued, any premium paid above the nominal value is credited
to the share premium reserve.
Retained earnings
The retained earnings reserve records the accumulated profits and losses of
the Group since inception of the business.
Capital restructuring reserve
The capital restructuring reserve arises on the accounting for the share for
share exchange. It represents the difference between the value of the issued
equity instruments of Ilika Technologies Limited immediately before the share
for share exchange and the equity instruments of Ilika plc along with the
shares issued to effect the share for share exchange.
Notes to the consolidated financial statements
1. Accounting policies
Basis of preparation
The interim financial statements, which are unaudited, have been prepared on
the basis of accounting policies consistent with International Financial
Reporting Standards ("IFRSs") adopted by the European Union. The accounting
policies are the same as applied in the Group's latest financial statements.
The interim financial statements do not include all of the information
required for full annual financial statements and do not comply with all the
disclosures in IAS 34 'Interim Financial Reporting'. Accordingly, whilst the
interim financial statements have been prepared in accordance with IFRS they
cannot be construed as being in full compliance with IFRS.
The financial information for the year ended 30 April 2022 does not constitute
the full statutory accounts for that period. The Annual Report and Accounts
for 30 April 2022 have been filed with the Registrar of Companies. The
Independent Auditors' Report on the Annual Report and Accounts for 2022 was
unqualified and did not include references to any matters which the auditors
drew attention by way of emphasis without qualifying their report and did not
contain statements under Section 498(2) or 498(3) of the Companies Act 2006.
Going concern
The financial statements are prepared on a going concern basis which the
directors believe continues to be appropriate. The Group meets its day to day
working capital requirements through existing cash resources which, at 31
October 2022, amounted to £18.6m. The directors have prepared projected cash
flow information for the period ending twelve months from the date of their
approval of these financial statements. On the basis of this cash flow
information the directors believe that the Group will be able to continue to
trade for the foreseeable future.
2. Loss per share
Loss per ordinary share have been calculated using the weighted average number
of shares in issue during the relevant financial periods. The weighted average
number of equity shares in issue and the earnings, being loss after tax, are
as follows:
Unaudited Unaudited Audited
Six months ended Six months ended Year
31 Oct 2022 31 Oct 2021 ended
30 Apr 2022
Number Number Number
Weighted average number of equity shares 158,309,838 148,643,793 153,175,933
£ £ £
Loss, being loss after tax (4,079,300) (3,267,100) (7,128,562)
The loss attributable to ordinary shareholders and weighted average number of
ordinary shares for the purpose of calculating the diluted earnings per
ordinary share are identical to those used for basic earnings per share. This
is because the exercise of share options and warrants would have the effect of
reducing the loss per ordinary share and is therefore not dilutive under the
terms of IAS 33.
- Ends -
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