REG - Nanosynth Group PLC - Half-year Report
30/09/2022 07:01
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RNS Number : 2563B Nanosynth Group PLC 30 September 2022
30(th) September 2022
nanosynth group plc
("nanosynth", the "Company" or the "Group")
Half Yearly Report to 30 June 2022
nanosynth group plc, the AIM quoted company specialising in the synthesis and
application of nanoparticles to create new and improve existing products, is
pleased to present its unaudited half yearly report for the six-month period
ended 30 June 2022.
Operational highlights for the period:
· Successful trial results with Volz Holdings and REACH UK
registration
o Creating potential to lead to wider adoption by the global filtration
industry
o Pipeline of interest is already at an advanced stage
· Joint development agreement with a global wellness company for
their first project in the cosmetics market
o On successful completion, opportunity to enter into an exclusive
commercial agreement for the supply of nanoparticles for this cosmetics market
· New share subscription agreement to raise £2,942,500
o Proceeds to be used primarily to fund its working capital requirements as
the Group looks to commercialise its bespoke nanoparticle technology
· Directors continue to purchase shares in the Company
o Confidence in considerable potential of the Group's nanoparticle
technology
· Strengthened Board
o New board members enhance commercial expertise and corporate governance
Mark Duffin, Chief Executive Officer commented:
"We are pleased with the recent updates that we have been able to share as a
result of the hard work especially during the last 12 months. The REACH UK
registration will allow our partner Volz to apply antiviral technology to all
their products. This has the potential to lead to wider adoption by the
global filtration industry. The first project in our R&D programme that
was secured is a testimony to our leadership in the nanotechnology market.
Confidentiality and competitive advantage remain our priority during the
development stage and we look forward to potentially becoming exclusive
partners in the future. The funding arrangements with Lanstead provide further
working capital as the Group looks to commercialise its bespoke nanoparticle
technology.
"As a result, we are very excited about the future of the business and are
confident about the near term prospects of the business."
Enquiries
nanosynth group plc
Mark Duffin (Chief Executive
Officer)
via IFC Advisory
SP Angel Corporate Finance LLP
+44 20
3470 0470
Nominated Adviser and Joint Broker
Stuart Gledhill
Caroline Rowe
IFC Advisory
Ltd
+44 20 3934 6630
Graham Herring
Zach Cohen
Chairman's Statement
The current year has seen the consolidation of the new direction of the Group,
with a refocus on the development and commercialisation of the Group's core
nanoparticle platform and technology.
Through its joint venture with Volz Holding v.o.s. (Volz), the Group has
completed successful trial results in the development of a standard retro-fit
to media production lines that allows for the incorporation of the Group's
antiviral technology into heating, ventilation and air conditioning units.
The UK's Health and Safety Executive has completed its checks and approved
Pharm 2 Farm Limited, a wholly owned subsidiary of nanosynth, for REACH UK
registration and allocated the appropriate substance tonnage that will allow
the production and distribution of up to 100 tonnes of copper oxide nano
material per year.
In addition to the refinement of technology used in the joint venture with
Volz, the Group has identified seven specific market verticals that the
company has decided to further develop and apply to nanoparticle technology
with targeted strategic partners.
The areas include: Animal health and wellbeing, Cosmetics, Medical, Plants,
Food and drink, Functional coating and Electronics.
The Group announced the first such development in August 2022 that it had
entered into a joint development agreement with a global wellness company for
a project in the cosmetics market. It is the intention, on successful
development of a revolutionary product for the market, to enter into an
exclusive commercial agreement for the supply of nanoparticles into that
market.
In addition, we have held numerous meaningful conversations with large
companies across all 7 verticals. In particular, formal discussions have
progressed extensively within the cosmetics and plant verticals which gives us
encouragement that we will be able to deliver further development contracts
during the current financial year although the final timing and eventual
outcome of such discussions remains uncertain.
Subscription
As announced on 26 August 2022, he Group finalised a fundraising via a
Subscription and Sharing Agreement with Lanstead Capital Investors LP
(Lanstead).
Gross proceeds of £2,942,500 will be pledged to Lanstead pursuant to the
Sharing Agreement. The agreement entitles the Group to receive back the
proceeds on a pro-rata basis over 24 months subject to adjustment upwards or
downwards each month depending upon the share price relative to a benchmark
share price of 0.7333 pence per share.
The Sharing Agreement provides the opportunity for the Group to benefit from
positive future share price performance.
However, if the Company's 20-day Volume Weighted Average Share Price is less
than the benchmark price, then the amount received by the Company under the
Sharing Agreement will be proportionately less than the gross proceeds of the
Lanstead Subscription which were pledged by the Company to Lanstead at the
outset.
Board Update
On 30 June 2022 the Group announced the appointment of Andrew Stedman as Chief
Financial Officer and Peter Gray as an independent Non-Executive Director.
Andrew was appointed non-Board CFO on 7 February 2022. He brings the
experience of a well rounded and highly commercial finance leader with
substantial M&A and deal exposure skills which are closely aligned with
our strategic objectives.
Peter has a wealth of experience in corporate and M&A transactions and
frequently lectures on the subject of mergers and acquisitions. He is
employed as a partner in Finn Corp Group plc, a corporate finance and broking
house.
Financial Overview
During the six months to 30 June 2022, the Group recorded revenues from
continuing operations of £9,988 compared with £133,116 for the six months to
30 June 2021. The operating loss from continuing operations for the period
was £1,781,217 (30 June 2021: £1,162,718). The loss per share on
continuing operations was 0.085 pence (30 June 2021: loss per share 0.057
pence).
● Consolidated net assets at 30 June 2022 amounted to £3,443,023
(31 December 2021: £4,959,667).
● Cash balances at the period end amounted to £1,787,242 (31
December 2021: £3,760,992).
The Interim results include non-recurring charges as a result of action taken
to reduce overhead cost. The Board has now completed its review as of
September 22 and now believes that, as a result of these actions, the cash
burn has been reduced to a sustainable level.
Acknowledgments
On behalf of the Board, I would like to extend our thanks to our business
partners, customers, employees and shareholders for their continued support
throughout the period.
Richard Clarke
Non-Executive Chairman
NANOSYNTH GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six month period ended 30 June 2022
Notes Unaudited 6 months ended Unaudited 6 months ended
30 June 30 June
2022 2021
(restated)
£ £
Revenue 9,988 133,116
Cost of sales (66,870) (98,690)
Gross (loss)/profit (56,882) 34,426
Administration expenses (1,724,335) (1,197,144)
Operating loss (1,781,217) (1,162,718)
Finance income - -
Finance costs - -
Loss before income tax (1,781,217) (1,162,718)
Income tax 26,866 -
Loss for the period from continuing operations (1,754,351) (1,162,718)
Loss for the period from discontinued operations (25,275) (29,292)
Total comprehensive income for the period (1,779,626) (1,192,010)
Loss and total comprehensive income attributable to:
Equity holders of the parent (1,779,626) (1,175,284)
Non-controlling interests - (16,726)
Earnings per ordinary share attributable to owners of the parent during the
period (expressed in pence per share)
4
Basic and diluted - continuing operations (0.085) (0.057)
Basic and diluted - discontinued operations (0.001) (0.001)
Basic and diluted - total (0.086) (0.058)
NANOSYNTH GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2022 Unaudited Audited Unaudited
30 June 31 December 30 June
2022 2021 2021
Notes £ £ £
Non-current assets
Intangible assets 1,885,935 1,764,419 1,764,419
Property, plant and equipment 75,063 42,391 258,206
Total non-current assets 1,960,998 1,806,810 2,022,625
Current assets
Trade and other receivables 141,004 80,348 277,983
Corporation tax - 1,396 1,396
Inventories 8,385 16,679 497,168
Assets classified as held for sale - - 10,786
Cash and cash equivalents 1,787,242 3,760,992 4,662,778
Total current assets 1,936,631 3,859,415 5,450,111
TOTAL ASSETS 3,897,629 5,666,225 7,472,736
Equity attributable to owners of the parent
Share capital 3 5,805,331 5,805,331 5,805,331
Share premium 13,674,215 13,674,215 13,674,215
Warrants reserve 121,516 - -
Other reserves 1,531,519 1,405,836 1,321,214
Translation reserve 92,181 92,181 92,181
Retained loss (17,781,788) (16,017,896) (13,852,286)
EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT 3,442,974 4,959,667 7,040,655
Non-controlling interests 49 - (97,405)
TOTAL EQUITY 3,443,023 4,959,667 6,943,250
Current liabilities
Trade and other payables 207,326 462,483 252,340
Social security and other taxes 247,280 244,075 204,112
Liabilities classified as held for sale - - 73,034
Total current liabilities 454,606 706,558 529,486
Total non-current liabilities - - -
TOTAL LIABILITIES 454,606 706,558 529,486
TOTAL EQUITY AND LIABILITIES 3,897,629 5,666,225 7,472,736
NANOSYNTH GROUP PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six month period ended 30 June 2022
Attributable to owners of the parent
Share Share premium Warrant reserve Other reserves Translation reserve Retained Minority Interests Total
capital Loss
£ £ £ £ £ £ £ £
As at 1 January 2021 5,795,751 12,445,569 - 1,677,276 92,181 (13,033,293) (80,679) 6,896,805
Loss and total comprehensive income for the period - - - - - (1,175,284) (16,726) (1,192,010)
Transactions with owners, recognised directly in equity:
Shares issued (net of costs) 9,580 1,227,845 - (78,183) - - - 1,159,242
Warrants exercised - 801 - (801) - - - -
Share based payments issued - - - 79,213 - - - 79,213
Share based payments expired/exercised - - - (356,291) - 356,291 - -
As at 30 June 2021 5,805,331 13,674,215 - 1,321,214 92,181 (13,852,286) (97,405) 6,943,250
As at 1 January 2022 5,805,331 13,674,215 - 1,405,836 92,181 (16,017,896) - 4,959,667
Loss and total comprehensive income for the period - - - - - (1,779,626) - (1,779,626)
Transactions with owners, recognised directly in equity:
Minority interest - - - - - - 49 49
Warrants issued - - 121,516 - - - - 121,516
Share based payments issued - - - 141,417 - - - 141,417
Share based payments expired - - - (15,734) - 15,734 - -
As at 30 June 2022 5,805,331 13,674,215 121,516 1,531,519 92,181 (17,781,788) 49 3,443,023
NANOSYNTH GROUP PLC
CONSOLIDATED STATEMENT OF CASH FLOW
For the six month period ended 30 June 2022
Unaudited Unaudited
6 months ended 6 months ended
30 June 30 June
2022 2021
(restated)
£ £
Cash flows from operating activities
Loss for the period on continuing activities (1,754,351) (1,162,718)
Loss for the period from discontinued operations (25,275) (29,292)
Depreciation of property, plant and equipment 8,396 6,086
Share based payments 141,417 299,230
Release of lease liabilities and provision - (29,253)
Decrease/(increase) in inventories 8,294 (433,677)
(Increase)/decrease in trade and other receivables (59,210) 135,140
(Decrease) in trade and other payables (251,953) (46,544)
Cash used in operations (1,932,682) (1,261,028)
Interest expense - -
Net cash used in operating activities (1,932,682) (1,261,028)
Cash flows used in investing activities
Purchases of property, plant and equipment (41,068) (238,908)
Net cash (used)/generated in investing activities (41,068) (238,908)
Cash flows from financing activities
Repayments of lease liabilities - (20,000)
Issue of shares and warrants, net of issue costs - 2,444,225
Net cash generated from financing activities - 2,424,225
Net (decrease)/increase in cash and cash equivalents (1,973,750) 924,289
Cash and cash equivalents at beginning of period 3,760,992 3,741,135
Cash and cash equivalents at end of period 1,787,242 4,665,424
NOTES TO THE INTERIM RESULTS:
1. General information and accounting policies
The principal activity of nanosynth group plc ("the Company") and its
subsidiaries (together "the Group") is the synthesis and application of
nanoparticles to create new, and improve existing products.
The Company is a public limited company, incorporated and domiciled in the
United Kingdom, with its shares traded on the London Stock Exchange's AIM.
Its registered office is: 27-28 Eastcastle Street, London W1W 8DH.
This announcement is for the unaudited interim results for the period ended 30
June 2022.
The Directors approved these unaudited interim results on 30th September 2022.
2. Basis of preparation
The condensed consolidated interim financial information (the "Financial
Information") has been prepared in accordance with the requirements of the AIM
Rules for Companies. As permitted, the Company has chosen not to adopt IAS
34 "Interim Financial Statements" in preparing this Financial Information. The
Financial Information should be read in conjunction with the annual financial
statements for the year ended 31 December 2021, which have been prepared in
accordance with UK-adopted International Accounting Standards (UK-adopted
IAS). In the opinion of the Directors the Financial Information for the period
represents fairly the financial position, results from operations and cash
flows for the period in conformity with generally accepted accounting
principles consistently applied.
The Financial Information set out above does not constitute statutory accounts
within the meaning of the Companies Act 2006. The Financial Information has
been prepared on a going concern basis in accordance with the recognition and
measurement criteria of International Financial Reporting Standards (IFRS) as
adopted by the United Kingdom. Statutory financial statements for the year
ended 31 December 2021 were approved by the Board of Directors on 28 June 2022
and subsequently delivered to the Registrar of Companies and are also
available on the Group's website: [www.nanosynthgroup.com
(http://www.nanosynthgroup.com) ].
The 2022 Financial Information of the Group has not been audited.
These interim results are presented in Sterling rounded to the nearest pound.
Going concern basis
The interim financial information has been prepared assuming that the Group
will continue as a going concern.
The operational requirements of the Group comprise of maintaining a Head
Office in the UK alongside its UK operations. The Directors continually review
the Group's working capital forecasts and manage the further development spend
against the expected cash resources. As detailed in note 6 the Company has
announced the raising of additional funding after the reporting period.
Risks and uncertainties
The Board continuously assesses and monitors the key risks facing the
business. The key risks that could affect the Group's medium-term performance
and the factors that mitigate those risks have not substantially changed from
those set out in the Group's 2021 Annual Report and Financial Statements.
The Group is exposed to market risks (including foreign exchange risk and
price risk), credit risk and to a limited extent, interest rate risk,
liquidity risk and foreign exchange risk.
Critical accounting estimates and judgements
The preparation of Financial Information in conformity with UK-adopted IAS
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the end of the reporting period. It also requires management
to exercise its judgement in the process of applying the Group's Accounting
Policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the Financial
Information, are disclosed in Note 4 of the Group's 2021 Annual Report and
Financial Statements.
Accounting policies
There have been no changes to the Group's accounting policies, presentation
and methods of computation in this Financial Information compared to those
which were applied in the preparation of the Group's Annual Financial
Statements for the year ended 31 December 2021.
The comparative information for the six months ended 30 June 2021 has been
restated to reflect the Cloudveil Limited operation which was returned to its
founders during November 2021 for nominal consideration.
3. Share capital
Allotted, issued and fully paid Number £
At 30 June 2021, 31 December 2021 and 30 June 2022
Ordinary shares of 0.01p each 2,079,071,986 207,907
Deferred shares of 0.1p each 2,358,954,414 2,358,954
Deferred shares of 0.19p each 774,006,790 1,470,613
A deferred shares of 0.01p each 17,678,567,358 1,767,857
5,805,331
4. Earnings per share
Basic earnings per share have been calculated by dividing the loss
attributable to equity holders of the Company after taxation by the weighted
average number of shares in issue during the period. There is no difference
between the basic and diluted earnings per share as the effect on the exercise
of options and warrants would be to decrease the earnings per share.
6 months ended 6 months ended 30 June
30 June
2021
2022
(restated)
Basic and diluted £ £
Loss after taxation on continuing operations (1,754,351) (1,162,718)
Loss after taxation on discontinued operations (25,275) (29,292)
Total loss after taxation (1,779,626) (1,192,010)
Weighted average number of shares 2,079,071,986 2,052,536,524
Earnings per share (pence)
On continuing operations (0.085) (0.057)
On discontinued operations (0.001) (0.001)
On total operations (0.086) (0.058)
5. Dividends
No dividend has been declared or paid by the Company during the six months
ended 30 June 2022 (2021: nil).
6. Events after the reporting period
On 26 August 2022 the Company announced a share subscription by Landstead
Capital Investors LP (Landstead), an institutional investor, for 535,000,000
new ordinary shares at an issue price of 0.55 pence. The gross proceeds were
pledged to Landstead by the Company as part of a Sharing Agreement whereby the
pledged amount would be paid back to the Company on a prorate basis over 24
months subject to an adjustment based upon the share price at that time
against a benchark of 0.7333 pence per share.
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