Half-year Report
24/04/2023 14:05
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RNS Number : 2619X Alteration Earth PLC 24 April 2023
24 April 2023
Alteration Earth PLC
Interim Condensed Financial Statements
Half Year to 31 March 2023
Alteration Earth PLC (the "Company") announces its unaudited interim results
for the half year ended 31 March 2023.
Copies of this interim report will be made available on the Company's website
www.altearthplc.com (http://www.altearthplc.com)
Enquiries
For further information, please visit www.altearthplc.com
(http://www.altearthplc.com) or contact:
Alteration Earth PLC
Matthew Beardmore
Director
T: +44 (0)20 4501 8549
Email: info@altearthplc.com (mailto:info@altearthplc.com)
Interim Management Report
The Company was formed to undertake an acquisition of a target company or
business or asset(s) in the clean technology and/or clean, green and renewable
energy sector. The Company's shares began trading on the standard list segment
of the London Stock Exchange's ("LSE") main market for listed securities on 1
July 2022. Even though the Company has only been funded and its shares
publicly traded for a relatively short period of time, we have been active in
executing the Company's objectives as outlined in the Company's prospectus
dated 17 June 2022.
The directors have reviewed numerous potential acquisition opportunities
during the period and provided detailed feedback to the respective management
teams for each opportunity presented to us. Several of the opportunities,
whilst compelling, were too early in their commercial journey to meet with the
requirements of the Company's objectives.
The directors are currently monitoring several potential acquisition
opportunities and, subject to one or more of these opportunities being
suitable for acquisition by the Company, the directors currently consider that
they could meet the Company's objectives. Whilst there can be no guarantee
that any of the potential targets being monitored will progress to the Company
making an offer to acquire such target(s), the directors are encouraged by the
opportunities currently under consideration.
Principal risks and uncertainties
The principal risks and uncertainties facing our business are monitored on an
ongoing basis. The directors have reviewed the principal risks and
uncertainties disclosed in the 2022 Annual Report and concluded that they
remain applicable for the first half of the current financial year. A detailed
description of these risks and uncertainties is set out on pages 3 to 4 of the
2022 annual report.
Martin Samworth, Director
24 April 2023
Statement of Directors' Responsibilities
The directors are responsible for preparing the interim management report in
accordance with applicable law and regulations. The directors confirm that the
interim condensed financial information has been prepared in accordance with
International Accounting Standard 34 (Interim Financial Reporting) as endorsed
for use in the United Kingdom.
The interim management report includes a fair review of the information
required by the Disclosure Guidance and Transparency Rules paragraphs 4.2.7 R
and 4.2.8 R, namely:
• the interim condensed financial statements, which have been
prepared in accordance with applicable accounting standards, give a true and
fair view of the assets, liabilities, financial position, and profit or loss
of the issuer as required by DTR 4.2.4 R;
• an indication of important events that have occurred during the
six months ended 31 March 2023 and their impact on the condensed set of
financial information; and
• material related-party transactions during the six months ended 31
March 2023 and any material changes in the related-party transactions
described in the 2022 Annual Report.
The interim management report was approved by the Board of Directors and the
above responsibility statement was signed on its behalf by:
Matthew Beardmore, Director
24 April 2023
Condensed Income Statement and Statement of Other Comprehensive Income
for the Period 1 October 2022 to 31 March 2023
1 October 2022 18 August 2021
to to
31 March 2023 31 March 2022
Notes £ £
Revenue - -
Administration expenses (129,646) (21,553)
OPERATING LOSS (129,646) (21,553)
LOSS BEFORE INCOME TAX (129,646) (21,553)
Income tax 5 - -
LOSS AFTER INCOME TAX (129,646) (21,553)
OTHER COMPREHENSIVE INCOME
- -
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD ________ _______
(129,646) (21,553)
Loss per share expressed in pence per share:
6
Basic (0.72) (2,155,300)
Diluted (0.72) (2,155,300)
Notes:
(i) The Income Statement has been prepared on the basis that all
operations are continuing operations.
(i) The accounting policies and notes form an integral part of these
condensed financial statements.
Condensed Statement of Financial Position at 31 March 2023
(Unaudited)
As at As at
31 March 30 September
2023 2022
Notes £ £
ASSETS
CURRENT ASSETS
Other receivables 7 13,125 15,411
Cash and cash equivalents 8 932,940 1,069,939
946,065 1,085,350
TOTAL ASSETS 946,065 1,085,350
EQUITY AND LIABILITIES
EQUITY ATTRIBUTABLE TO OWNERS
Share capital 9 54,000 54,000
Share premium 10 941,522 941,522
Other reserves 10 202,500 187,500
Accumulated losses 10 (272,774) (143,128)
TOTAL EQUITY 925,248 1,039,894
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 11 20,817 45,456
TOTAL LIABILITIES 20,817 45,456
TOTAL EQUITY AND LIABILITIES 946,065 1,085,350
Statement of Changes in Equity for the Period 1 October 2022 to 31 March 2023
(Unaudited)
Called up
share Retained
Share Other Total
capital earnings premium
reserves equity
£
£
£
£ £
Balance at 1 October 2022 54,000
(143,128) 941,522 187,500 1,039,894
Deficit for the
period
- (129,646)
- - (129,646)
Share based payment reserve
-
- -
15,000 15,000
Balance at 31 March 2023 54,000
(272,774) 941,522 202,500
925,248
Deficit for the
period
- (143,128)
- - (143,128)
Share based payment reserve
-
- -
187,500 187,500
- (143,128)
- 187,500 44,372
Issue of share capital
54,000 -
1,206,000 - 1,260,000
Cost of share
issue
- -
(264,478) - (264,478)
Balance at 30 September 2022 54,000
(143,128) 941,522 187,500 1,039,894
Consolidated Statement of Cash Flows for the Period 1 October 2022 to 31 March
2023
(Unaudited)
1 October 2022 18 August 2021
to to
31 March 2023 31 March 2022
Notes £ £
Change in working capital 1 (136,999) -
Cash flows from financing activities
Share issue - 54,000
Share premium - 1,206,000
Cash costs of share issue - (111,478)
Net cash from financing activities
- 1,148,522
Increase/(decrease) in cash and cash equivalents
(136,999) 1,148,522
Cash and cash equivalents at beginning of period 2
1,069,939 -
________ ________
Cash and cash equivalents at end of period
932,940 1,148,522
Note: the Company's change in working capital, and decrease in cash, between 1
April and 30 September 2022 amounted to £78,583.
Notes to the Statement of Cash Flows for the Period 1 October 2022 to 31 March
2023
(Unaudited)
1. RECONCILIATION OF LOSS BEFORE INCOME TAX TO CHANGES IN WORKING CAPITAL
1 October 2022 18 August 2021
to to
31 March 2023 31 March 2022
£ £
Loss before income tax (129,646) (21,553)
(Increase)/decrease in trade and other receivables 2,286 -
Increase/(decrease) in trade and other payables (24,639) 21,553
Non-cash costs share based payments 15,000 -
Working capital movement (136,999) -
2. CASH AND CASH EQUIVALENTS
The amounts disclosed on the Statement of Cash Flows in respect of cash and
cash equivalents are in respect of these Statement of Financial Position
amounts:
Period ended 31 March 2023
31 March 30 September
2023 2022
£ £
Cash and cash
equivalents
932,940 1,069,939
Notes to the Condensed Financial Statements for the Period 1 October 2022 to
31 March 2023
(Unaudited)
1. STATUTORY INFORMATION
Alteration Earth Plc (the 'Company') was incorporated on 18 August 2021 in
England and Wales, with registered number 13571750 under Companies Act 2006.
The registered office of the company is c/o Keystone Law, 48 Chancery Lane,
London WC2A 1JF. The Company is a public limited company and was admitted to
the Standard Listing segment of the London Stock Exchange's main market for
listed securities on 1 July 2022. The principal activity of the Company is to
undertake an acquisition of a controlling interest in a company or business in
the CGRE sector.
2. ACCOUNTING POLICIES
Basis of preparation
The Financial Statements of the Company have been prepared in accordance with
UK-adopted international accounting standards and the Companies Act 2006.
The Financial Statements have been prepared under the historical cost
convention. The principal accounting policies are set out below and have,
unless otherwise stated, been applied consistently for all periods presented
in these Financial Statements. The Financial Statements are prepared in pounds
Sterling and presented to the nearest pound.
Going concern
The financial statements have been prepared on a going concern basis, which
assumes that the Company will continue in operational existence for the
foreseeable future.
The Company has no revenue but has cash resources to finance activities whilst
it identifies and completes suitable transaction opportunities. When a
suitable transaction is identified, the Directors will consider the need for
further funding to complete the transaction.
Having considered forecasts, the Directors consider that the Company has
sufficient funds available to continue in operational existence for at least
12 months from the date of approval of these accounts. Accordingly, the Board
believes it appropriate to adopt the going concern basis in the approval of
the financial statements.
New standards, amendments and interpretations adopted by the Company
The Company has applied the following standards and amendments for the first
time for its annual reporting period commencing 18 August 2021:
* Interest Rate Benchmark Reform - Amendments to IFRS 17 "Insurance Contracts"
* Interest Rate Benchmark Reform - Amendments to IFRS 16 "Leases"
* Interest Rate Benchmark Reform - Amendments to IFRS 9 "Financial
Instruments"
* Interest Rate Benchmark Reform - Amendments to IAS 39 "Financial
Instruments: Recognition &
Measurement"
* Interest Rate Benchmark Reform - Amendments to IFRS 7 "Financial
Instruments: Disclosures"
The amendments listed above did not have any impact on the amounts recognised
in prior periods and are not expected to significantly affect the current or
future periods.
New standards and interpretations not yet adopted
A number of new standards and amendments to standards and interpretations are
effective for annual periods beginning after 1 January 2022 and have not been
applied in preparing these financial statements. None of these are expected to
have a significant effect on the financial statements of the Company.
There are no other IFRSs or IFRIC interpretations that are not yet effective
that would be expected to have a material impact on the Company.
Foreign currency translation
The financial information is presented in Sterling which is the Company's
functional and presentational currency.
Transactions in currencies other than the functional currency are recognised
at the rates of exchange on the dates of the transactions. At each balance
sheet date, monetary assets and liabilities are retranslated at the rates
prevailing at the balance sheet date with differences recognised in the
Statement of comprehensive income in the period in which they arise.
Financial instruments initial recognition
A financial asset or financial liability is recognised in the statement of
financial position of the Company when it arises or when the Company becomes
part of the contractual terms of the financial instrument.
Classification
Financial assets at amortised cost
The Company measures financial assets at amortised cost if both of the
following conditions are met:
(1) the asset is held within a business model whose objective is to collect
contractual cashflows; and
(2) the contractual terms of the financial asset generating cash flows at
specified dates only pertain to capital and interest payments on the balance
of the initial capital.
Financial assets which are measured at amortised cost, are measured using the
Effective Interest Rate Method (EIR) and are subject to impairment. Gains and
losses are recognised in profit or loss when the asset is derecognised,
modified or impaired.
Financial liabilities at amortised cost
Financial liabilities measured at amortised cost using the effective interest
rate method include current borrowings and trade and other payables that are
short term in nature. Financial liabilities are derecognised if the Company's
obligations specified in the contract expire or are discharged or cancelled.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the effective
interest rate ("EIR"). The EIR amortisation is included as finance costs in
profit or loss. Trade payables other payables are non-interest bearing and are
stated at amortised cost using the effective interest method.
Derecognition
A financial asset is derecognised when:
(1) the rights to receive cash flows from the asset have expired, or
(2) The Company has transferred its rights to receive cash flows from the
asset or has assumed an obligation to pay the received cash flows in full
without material delay to a third party under a 'pass-through' arrangement;
and either (a) the Company has transferred substantially all the risks and
rewards of the asset, or (b) the Company has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred
control of the asset
Impairment
The Company recognises a provision for impairment for expected credit losses
regarding all financial assets. Expected credit losses are based on the
balance between all the payable contractual cash flows and all discounted cash
flows that the Company expects to receive. Regarding trade receivables, the
Company applies the IFRS 9 simplified approach in order to calculate expected
credit losses. Therefore, at every reporting date, provision for losses
regarding a financial instrument is measured at an amount equal to the
expected credit losses over its lifetime without monitoring changes in credit
risk. To measure expected credit losses, trade receivables and contract assets
have been grouped based on shared risk characteristics.
Equity
Share capital is determined using the nominal value of shares that have been
issued.
The Share premium account includes any premiums received on the initial
issuing of the share capital. Any transaction costs associated with the
issuing of shares are deducted from the Share premium account, net of any
related income tax benefits.
Equity-settled share-based payments are credited to a share-based payment
reserve as a component of equity until related options or warrants are
exercised or lapse.
Accumulated losses include all current and prior period results as disclosed
in the income statement.
Share Based Payments
Equity-settled share-based payments are measured at fair value (excluding the
effect of non-market based vesting conditions) at date of grant. The fair
value so determined is expensed on a straight-line basis over the vesting
period, based on the Company's estimate of the number of shares that will
eventually vest and adjusted for the effect of non-market based vesting
conditions. Fair value is measured using the Black Scholes pricing model. The
key assumption used in the model have been adjusted, based on management's
best estimate, for the effects of non-transferability, exercise restrictions
and behavioural considerations.
Critical accounting judgements and key sources of estimation uncertainty
In the process of applying the entity's accounting policies, management makes
estimates and assumptions that have an effect on the amounts recognised in the
financial information. Although these estimates are based on management's best
knowledge of current events and actions, actual results may ultimately differ
from those estimates. Apart from share based payments and share issue costs
discussed below the Directors consider that there are no other critical
accounting judgements or key sources of estimation uncertainly relating to the
financial information of the Company.
Share based payments: share warrants
The Company issued warrants to the lead investor and two directors on 1 July
2022. Equity-settled share-based payments are measured at fair value
(excluding the effect of non-market based vesting conditions) at date of
grant. The fair value so determined is expensed on a straight-line basis over
the vesting period, based on the Company's estimate of the number of shares
that will eventually vest and adjusted for the effect of non-market based
vesting conditions. Fair value is measured using the Black Scholes pricing
model. The key assumption used in the model have been adjusted, based on
management's best estimate of the vesting period and volatility.
Share Issue costs
The costs of share issues are charged against the share premium account. Where
the share issue costs are incurred concurrently with another activity such as
a stock market admission and/or an issue of a prospectus or admission document
then the costs of these activities can be difficult to quantify separately and
therefore reliance is placed on management's best estimate of the split of the
costs.
Loss per share
Basic loss per share is calculated as the profit or loss attributable to
equity holders of the Company for the period, adjusted to exclude any costs of
servicing equity (other than dividends), divided by the weighted average
number of ordinary shares.
Diluted EPS is calculated by dividing the profit attributable to ordinary
equity holders of the Company by the weighted average number of ordinary
shares outstanding during the period plus the weighted average number of
ordinary shares that would be issued on conversion of all the dilutive
potential ordinary shares into ordinary shares.
Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been
identified as the Board as a whole.
Identifying and assessing investment projects is the only activity the Company
is involved in and is therefore considered as the only operating/reporting
segment. Therefore, the financial information of the single segment is the
same a set out in the statement of comprehensive income and statement of
financial position.
Cash and cash equivalents
Cash represents cash in hand and deposits held on demand with financial
institutions. Cash equivalents are short-term, highly-liquid investments with
original maturities of three months or less (as at their date of
acquisition). Cash equivalents are readily convertible to known amounts of
cash and subject to an insignificant risk of change in that cash value.
In the presentation of the Statement of Cash Flows, cash and cash equivalents
also include bank overdrafts. Any such overdrafts are shown within borrowings
under 'current liabilities' on the Statement of Financial Position.
Taxation
Tax currently payable is based on taxable profit for the period. Taxable
profit differs from profit as reported in the income statement because it
excludes items of income and expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Company's liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax
bases used in the computation of taxable profit and is accounted for using the
balance sheet liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised. Such
assets and liabilities are not recognised if the temporary difference arises
from initial recognition of goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled, or the asset realised. Deferred tax is
charged or credited to profit or loss, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and
liabilities on a net basis.
3. EMPLOYEES AND DIRECTORS
The average number of employees during the period was NIL.
1 October 2022 to 31 March 2023 18 August 2021 to 30 September 2022
£ £
Directors' remuneration: fair value of warrants granted
15,000 7,500
4. AUDITORS' REMUNERATION
1 October 2022 to 31 March 2023 18 August 2021 to 30 September 2022
£ £
Fees payable to the company's auditor for the audit of the company's annual
financial statements relating to:
17,000 25,000
Prior period
Current period
5,000 -
12,000 25,000
Note: the Company is not registered for and cannot reclaim VAT. Fees are
therefore stated inclusive of VAT.
5. INCOME TAX
Interim period income tax is accrued based on the estimated average annual
effective corporate income tax rate of 19 per cent (18 August 2021 to 31 March
2022: 19 per cent).
Factors affecting future tax
charge
The standard rate of corporation tax in the UK is 19%. Accordingly, the
Company's effective tax rate for the period to 31 March 2023 was 19%. With
effect from 1 April 2023 the mainstream corporate tax in the UK increased and
the Company's effective corporation tax rate will increase to 25% from that
date.
6. EARNINGS PER SHARE
Basic EPS is calculated by dividing the profit for the period attributable to
ordinary equity holders of the Company by the weighted average number of
ordinary shares outstanding during the period.
Diluted EPS is calculated by dividing the profit attributable to ordinary
equity holders of the Company by the weighted average number of ordinary
shares outstanding during the period plus the weighted average number of
ordinary shares that would be issued on conversion of all the dilutive
potential ordinary shares into ordinary shares.
Reconciliations are set out below.
Basic and Diluted EPS Earnings £ Weighted average number of shares Per share amount pence
Earnings attributable to ordinary shareholders
1 October 2022 to 31 March 2023 (129,646) 18,000,000 (0.72)
18 August 2021 to 31 March 2022 (21,553) 1 (2,155,300)
Diluted EPS are not separately calculated as the warrants would be
anti-dilutive due to the loss, the weighted average number of shares including
the dilution shares is 20,700,000 (31 March 2022: 1 share).
7. TRADE AND OTHER RECEIVABLES
31 March 2023 30 September 2022
£ £
Current:
Prepayments 13,125 15,411
13,125 13,125
8. CASH AND CASH EQUIVALENTS
31 March 2023 30 September 2022
£ £
Bank account 932,940 1,069,939
932,940 1,069,939
9. SHARE CAPITAL AND SHARE PREMIUM
No of shares Share Capital Share Premium Total
£ £ £
Issued on Incorporation
Ordinary shares of £0.001 each 2 0.002 - 0.002
Issued on 23 November 2021 4 0.004 - 0.004
Consolidation of shares on 29
November 2021 to £0.003 each 2 0.006 - 0.006
Issued on 1 July 2022 at £0.04 each 8,999,998 27,000 333,000 360,000
seed price
Issued on 1 July 2022 at £0.10 each 9,000,000 27,000 873,000 900,000
subscription price _________ ______ ________ ________
As at 30 September 2022 and 18,000,000 54,000 1,206,000 1,260,000
as at 31 March 2023
The Company has only one class of share. All ordinary shares have equal voting
rights and rank pari passu for the distribution of dividends and repayment of
capital.
10. RESERVES
Retained Share Other
earnings premium reserves Totals
£
£
£ £
18 August 2021 to 30 September 2022
Deficit for the
period
(143,128)
(143,128)
Cash share
issue
- 1,206,000 -
1,206,000
Costs of share
issue
- (264,478)
- (264,478)
Share based payment
reserve
- -
187,500 187,500
At
30 September 2022
(143,128) 941,522 187,500
985,894
1 October 2022 to 31 March 2023
Share based payment
reserve
- -
15,000 15,000
Deficit for the
period
(129,646)
- - (129,646)
At 31 March
2023
(272,774) 941,522 202,500
871,249
11. TRADE AND OTHER PAYABLES
31 March 2023 30 September 2022
£ £
Current:
Other payables 20 9,020
Accruals 20,797 36,436
20,817 45,456
12. CAPITAL COMMITMENTS
There were no capital commitments at 31 March 2023 and at 30 September 2022.
13. SHARE-BASED PAYMENT RESERVE
Share warrants were granted to two directors who were involved as key
management personnel in setting up the Company and formulating its strategy.
Warrants were also granted to the lead Investor for their role in underwriting
the listing costs and lending support with attracting other investors.
All warrants were issued on the Company's shares being admitted to trading.
Exercise dates and exercise prices are shown in this note below. The
directors' warrants can only be exercised after the Company completes a
reverse takeover (as defined in the FCA's Listing Rules) and readmission of
the Company's issued share capital to the Official List and to trading on the
LSE's main market for listed securities ("Readmission"). All warrants are
settled in the Company's equity.
31 March 2023 30 September 2022
£ £
Charge in the period for fair value of directors' warrants 15,000 7,500
Fair value of lead investor warrants granted during the period - 180,000
Categorised as financial assets measured at amortised cost
15,000 187,500
Reserve opening balance 187,500 -
Reserve closing balance 202,500 187,500
The charge for directors' warrants is spread over the 3-year period from 1
July 2022 being the date of grant. The 3-year period is determined by the
Company having 2 years from 1 July 2022 plus a possible 1-year extension to
agree the terms of a reverse takeover and be re-admitted to a recognised stock
exchange.
The Company determines the fair value of its share options granted using a
model based on the Black- Scholes-Merton methodology. In determining the fair
value of its share options granted, the Company made the following
assumptions.
Grant date Share Exercise Expected Expected volatility Expected Dividend Risk Free Interest Fair value at date of
Price Price Life Years Yield Rate grant
01 Jul 22 10p 0.003p 3 404% 0% 2.2% 10p
Expected volatility was determined by reference to historical data for a
similar Special Purpose Acquisition Company in the same market sector and
listed on the same exchange.
The warrants outstanding at the period end have a weighted average remaining
contractual life of 5 years. The exercise price of the warrants is £0.003 per
share.
As at 31 March 2023 and at 30 September 2022 there were 2,700,000 warrants
outstanding. Details of the warrants outstanding are as follows:
Grant Date Exercisable from Expiry Date Number Exercise
outstanding price
01 July 22 01 Jul 22 30 June 2027 1,800,000 0.003p
01 July 22 See a) below see a) below 900,000 0.003p
a) Exercisable at any time within the 5 years from the date of Readmission.
14. CONTINGENT LIABILITIES
There were no contingent liabilities at 31 March 2023 and at 30 September 2022
15. COMMITMENTS UNDER OPERATING LEASES
There were no commitments under operating leases at 31 March 2023 and at 30
September 2022
16. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Company's financial instruments comprise primarily of bank balances. The
main purpose of these financial instruments is to provide working capital for
the Company's operations. The Company does not utilise complex financial
instruments or hedging mechanisms. The company is not trading nor carrying out
any business activities and therefore has not disclosed in this note below all
of the disclosure items set out in IFRS7 as they are not considered material
and relevant to its current status.
Financial assets by category
31 March 2023 30 September 2022
£ £
Current assets
Cash and cash equivalents 932,940 1,069,939
Categorised as financial assets measured at amortised cost
932,940 1,069,939
Financial liabilities by
category
31 March 2023 30 September 2022
£ £
Current liabilities
Other payables 20 9,020
Accruals 20,797 36,436
Categorised as financial assets measured at amortised cost
20,817 45,456
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations
under a financial instrument or customer contract, leading to a financial
loss. The Company does not have trading activities during the current period
and is not exposed to a risk from counterparties not meeting their
obligations.
Capital management
The Company considers its capital to be equal to the sum of its total equity.
The Company monitors its capital using a number of key performance indicators
including cash flow projections, working capital ratios, the cost to achieve
development milestones and potential revenue from partnerships and ongoing
licensing activities.
The Company's objective when managing its capital is to ensure it obtains
sufficient funding for continuing as a going concern. The Company funds its
capital requirements through the issue of new shares to investors.
Interest rate risk
The nature of the Company's activities and the basis of funding are such that
the Company will have significant liquid resources. The Company will use these
resources to meet the cost of operations.
The Company is not financially dependent on the income earned on these
resources and therefore the risk of interest rate fluctuations is not
significant to the business and the Directors have not performed a detailed
sensitivity analysis.
Liquidity risk
The Company's liquid resources are invested having regard to the timing of
payment to be made in the ordinary course of the Company's activities. All
financial liabilities are payable in the short term (between 0 to 3 months)
and the Company maintains adequate bank balances to meet those liabilities.
The directors have considered the Company's cash flows for a period of 12
months from the date of approval of these financial statements and do not
consider that the Company is subject to any significant liquidity risk.
16. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT - continued
Currency risk
The Company operates in a global market with income and costs possibly arising
in a number of currencies. The majority of the operating costs are incurred in
GBP (£). The Company does not hedge potential future income or costs, since
the existence, quantum and timing of such transactions cannot be accurately
predicted. The Company did not have foreign currency exposure at period end.
17. RELATED PARTY TRANSACTIONS
a) Key managerial personnel
M Beardmore is a director of the Company and has subscribed £28,000 for
shares in the Company, he was also granted 450,000 warrants on 1 July 2022
which have been fair valued at £45,000 and the charge for these in the period
was £7,500 (30 September 2022: £3,750). There are no amounts outstanding
between M Beardmore and the Company at 31 March 2023 and at 30 September 2022.
b) Other related parties
S Holden was a director of the company from 18 August 2021 until 30 September
2021 and he has been the Company Secretary from incorporation to the date of
approval of these financial statements. He subscribed £28,000 for shares in
the Company after ceasing to hold office as a director. Mr Holden's wholly
owned company, Golden Sky Advisory Limited (GSAL), provides the services of S
Holden to the Company (including as Company secretary) and those totalled
£18,000 inclusive of VAT during the period (1 July to 30 September 2022:
£9,000). There was £3,000 accrued as owing by the Company to GSAL at 31
March 2023 (30 September 2022: £9,000).
Primorus Investments PLC (Prim) held a 27.78% stake in the Company at the date
of its admission to the Official List ( by way of a Standard Listing) and to
trading on the LSE's main market for listed securities ("Admission") and it
underwrote the costs associated with the Admission. Prim subscribed £350,000
for shares in the Company. It also advanced £21,552 to the Company to
re-imburse certain of the Admission costs incurred by the Company and this sum
was repaid to Prim following Admission. Prim was granted 1,800,000 warrants on
1 July 2022 which have been fair valued at £180,000 and fully charged in the
period. There were no transactions with Prim during the period and no amounts
outstanding between Prim and the Company at 31 March 2023 and at 30 September
2022.
Gneiss Energy Limited (GEL) acts as a corporate finance consultant to the
Company and charged a total of £18,000 inclusive of VAT during the period (30
September 2022 £18,000). The charge is for corporate finance advice by GEL
and not for director services. A Coull is an employee of GEL and a director of
the Company as stipulated in the engagement terms of GEL. There were no
amounts outstanding between GEL and the Company at 31 March 2023 and at 30
September 2022.
18. CONTROL
In the opinion of the directors there is no single ultimate controlling party
at 31 March 2023 and at 30 September 2022.
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. END IR BXGDSDGDDGXS
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