TIDMALK
RNS Number : 8572L
Alkemy Capital Investments PLC
18 May 2022
18 May 2022
Alkemy Capital Investments Plc
Annual Report & Financial Statements
Alkemy Capital Investments plc ("Alkemy") is pleased to announce
the publication of its audited Annual Report and Accounts for the
year ended 31 January 2022 (the "Annual Report"). The Annual Report
is available on the Company's website, www.alkemycapital.co.uk .
The Annual Report for the year ended 31 January 2022 is set out in
full below.
Further information
For further information, please visit the Company's website:
www.alkemycapital.co.uk or www.teesvalleylithium.co.uk
-Ends-
Alkemy Capital Investments Plc Tel: 0207 317 0636
Sam Quinn info@alkemycapital.co.uk
VSA Capital Limited Tel: 0203 005 5000
Andrew Monk (corporate broking) amonk@vsacapital.com
Andrew Raca (corporate finance) araca@vsacapital.com
Shard Capital Partners LLP
Damon Heath Tel: 0207 186 9952
damon.heath@shardcapital.com
Isabella Pierre Tel: 0207 186 9927
isabella.pierre@shardcapital.com
NOTES TO EDITORS
Alkemy is seeking to develop, construct and operate the world's
leading independent and sustainable lithium hydroxide production
facility.
Alkemy, through its wholly-owned subsidiary Tees Valley Lithium,
has secured a 9.6ha brownfields site at the Wilton International
Chemical Park located in Teesside, a major UK Freeport.
Alkemy has completed a Class 4 Feasibility Study for its
proposed lithium hydroxide facility which will process feedstock
imported from various sources to produce 96,000 tonnes of a
premium, low-carbon lithium hydroxide annually, representing around
15% of Europe's projected demand.
Forward Looking Statements
This news release contains forward--looking information. The
statements are based on reasonable assumptions and expectations of
management and Alkemy provides no assurance that actual events will
meet management's expectations. In certain cases, forward--looking
information may be identified by such terms as "anticipates",
"believes", "could", "estimates", "expects", "may", "shall",
"will", or "would". Although Alkemy believes the expectations
expressed in such forward--looking statements are based on
reasonable assumptions, such statements are not guarantees of
future performance and actual results or developments may differ
materially from those projected. Mining exploration and development
is an inherently risky business. In addition, factors that could
cause actual events to differ materially from the forward-looking
information stated herein include any factors which affect
decisions to pursue mineral exploration on the relevant property
and the ultimate exercise of option rights, which may include
changes in market conditions, changes in metal prices, general
economic and political conditions, environmental risks, and
community and non-governmental actions. Such factors will also
affect whether Alkemy will ultimately receive the benefits
anticipated pursuant to relevant agreements. This list is not
exhaustive of the factors that may affect any of the
forward--looking statements. These and other factors should be
considered carefully and readers should not place undue reliance on
forward-looking information.
Chairman's Statement
I have great pleasure in presenting our maiden Annual Report as
a public company. Alkemy Capital Investments plc ("Alkemy" or the
"Company") was incorporated on 21 January 2021 and in September
2021 raised GBP1.5 million before expenses in an initial public
offering on the Main Market of the London Stock Exchange (the
"IPO").
We formed Alkemy in order to undertake the acquisition of a
controlling interest in a company or business (an "Acquisition"),
in the mining and technology metals sectors, reflecting the
experience of the Company's board of Directors and advisers. Since
our IPO, the Company saw a steady flow of potential Acquisition
opportunities and actively reviewed a number of projects covering
all stages of development in a range of commodities in multiple
jurisdictions.
Whilst evaluating these opportunities it became evident to the
Board that there was a significant and attractive opportunity to
rapidly establish a business in the downstream minerals processing
sector. The Company, together with its advisers, undertook an
in-depth review of the potential of this strategy, which further
strengthened the Board's conviction.
In February 2022, we announced the formation of a subsidiary
called Tees Valley Lithium Limited ("TVL") that would aim to
develop the UK's first Lithium Hydroxide processing facility. This
transaction and change of strategy constituted a reverse takeover
transaction under the listing rules of the London Stock Exchange
and resulted in Alkemy becoming an operating company.
Although we are still in the early stages, our aim is to build
the most sustainable and significant producer of lithium hydroxide
globally, utilising the advantages of the UK's chemical processing
skills, infrastructure, green energy and legislation. We expect to
update the market in due course on further exciting developments as
we continue to advance this project.
Lithium Hydroxide Market
China dominates lithium conversion capacity (currently
processing 90% of the world's Lithium Hydroxide) and increasingly
is moving upstream to secure feedstock. The market for lithium
hydroxide has been well articulated by many analysts with a
consensus forecasting that it will go into deficit causing prices
to rise significantly over the medium term.
It is also expected that Europe and the US will continue to use
the higher performance NMC batteries which require a lithium
hydroxide feedstock.
Lithium Hydroxide Facility - Tees Valley
Alkemy via its wholly owned subsidiary TVL is looking to
develop, construct and operate one of the world's most sustainable
producers of lithium hydroxide with a view to becoming a key
supplier to the UK and European mobile energy market and has
identified and entered into an exclusivity agreement with Sembcorp
Utilities (UK) in respect of a brownfields site at the Wilton
International chemical engineering park located in Teesside, a
major UK Freeport.
We have conducted initial high level due diligence into the
feasibility of establishing a Lithium Hydroxide Monohydrate ("LHM")
plant at the site which will aim to initially produce 24,000 tonnes
per annum, and up to 96,000 tonnes per annum, from lithium
feedstock from various sources, to be sold to the UK and European
mobile energy markets. We are currently reviewing several
methodologies for the production of lithium hydroxide and consider
that processing LHM by either causticisation or electrochemical
processing are the most suitable for the Company.
The proposed development timeline is based on progressing
production by way of causticisation having achieved better results
in recent studies and is also based on knowledge of the accelerated
development timelines being achieved on other projects known to the
Directors.
The anticipated timeline for the development of the project is
as follows:
-- Class 4 Capex and Opex study - completed April 2022
-- Front End Engineering Study (FEED) - completed in Q3 2022
-- Long lead time procurement - Q3 2022 to Q2 2023
-- Financing - Q4 2022
-- Main Construction, subject to financing - Q4 2022 to Q4 2023.
We are currently in discussions with several potential providers
of primary lithium sulphate feedstock and look forward to updating
the market on this in due course.
Key consultants/partners
Since announcing our change of strategy we have appointed
several industry leading consultants to help us deliver the
project, including:
-- Wave International - a leading consulting firm in the battery and tech metals sector, with extensive upstream and
downstream lithium processing experience. Wave delivered the Class 4 study and have had a significant involvement
in the development of lithium hydroxide refineries in Australia. Wave will manage all work programmes including
the work of our other experts and consultants, in order to develop a best-in-class lithium hydroxide monohydrate
refining process.
-- ANZAPLAN - a leading engineering consultant who will assist TVL in the development of the electrochemical route
process.
-- Nagrom laboratories - a leading laboratory who will advise on the removal of impurities.
We expect to make further appointments as the project develops
and will keep the market updated on this front.
Funding
Alkemy is considering various funding options for the project
including private equity, a structured bond and an institutional
equity component and will update the market on this in due course.
As it is intended to finance and operate the facility via its
operating subsidiary TVL, if this is achieved it is anticipated
that there will be no immediate dilution to Alkemy's shareholders
as part of the proposed financing process.
We would like to take this opportunity to thank our shareholders
for their continued support and look forward to reporting on our
progress during 2022 as we deliver on our new strategy.
Paul Atherley
Non-Executive Chairman
17 May 2022
Strategic Report
The Directors present the Strategic Report of the Company for
the period ended 31 January 2022.
Review of business and future developments
The Company was incorporated and registered in England and Wales
on 21 January 2021 and on 27 September 2021 was admitted to the
Standard Listing segment of the Official List of the UK Listing
Authority and to trading on the London Stock Exchange, having
raised GBP1.5 million (before expenses) from the issue of 2,999,999
million ordinary shares at a placing price of 50p.
The Company was formed to undertake an Acquisition of a
controlling interest in a company or business. Given their
experience, the Board focused on the mining and technology metals
sectors.
As noted in the Chairman's Statement on page 4, after the period
end on 25 February 2022, the Company announced that it had entered
into an exclusivity agreement (the "Exclusivity Agreement") with
Sembcorp Utilities (UK) Limited and a heads of terms in respect of
a proposed option to enter into a lease over a brownfields site
(the "Site") at Wilton International (the "Agreement to Lease") and
a long lease over the Site. Wilton International is a
well-established chemical engineering park located in Teesside, a
major Freeport in the UK. A lease may be entered into by TVL, a
subsidiary of the Company, following exercise of the option granted
under the Agreement to Lease (the "Lease"). It is intended that TVL
will be the operating company that develops the Project.
On entry into the Exclusivity Agreement, the Company paid an
exclusivity fee of GBP50,000 and was granted a six month period of
exclusivity in which to further evaluate the Site and prepare the
definitive Lease, a utilities agreement and a services agreement,
giving effect to the heads of terms. The entering into the
Exclusivity Agreement and incorporation of TVL constituted an
Acquisition and reverse takeover transaction under the rules of the
London Stock Exchange.
If, during the six month exclusivity period the Board determines
that the opportunities presented by the development of the Site
would be in the best interests of shareholders, the Company, via
TVL, intends to enter into the Lease and to commence the design,
finance and construct of a plant that will produce Lithium
Hydroxide Monohydrate from Lithium Sulphate Monohydrate feedstock
with a view to becoming a key supplier to the UK and European
battery cell manufacturers (the "Project").
The principal activity of the Company is to act as the holding
company to TVL, an operating subsidiary, which will enter into the
Agreement to Lease and the Lease. The Company will provide a parent
company guarantee to Sembcorp in order to guarantee the operating
subsidiary's obligations under the Agreement to Lease and the
Lease. The Company aims to implement an operating strategy with a
view to generating value for its shareholders through the creation
of a Lithium Hydroxide Monohydrate facility.
Key performance indicators
During the reporting period, the Company was focused on the
evaluation of various opportunities in the mining sector. When the
Company enters into the Lease, then financial, operational, health,
safety, and environmental KPIs will become more relevant and
reported upon as appropriate. As a result, the Directors are of the
opinion that, other than the maintenance of cash and cash
equivalents, analysis using KPI's is not appropriate for an
understanding of the business at this time.
2021
Cash and cash equivalents GBP 1,113,923
Principal risks and uncertainties
The principal risks and uncertainties currently faced by the
Company are set out further in the Risk Management Report on page
16.
Gender analysis
A split of our Directors, senior managers and employees by
gender at the end of the financial period is as follows:
Male - 2
Female - 2
The Company recognises the need to operate a gender diverse
business. The Board will also ensure any future employment takes
into account the necessary diversity requirements and compliance
with all employment law. The Board has experience and sufficient
training and qualifications in dealing with such issues to ensure
they would meet all requirements. More detail will be disclosed in
the future annual reports once the Company enters into the Lease
and has completed its transition to an operating company.
Corporate social responsibility
The Company aims to conduct its business with honesty, integrity
and openness, respecting human rights and the interests of
shareholders and employees. The Company aims to provide timely,
regular and reliable information on the business to all its
shareholders and conduct its operations to the highest
standards.
The Company strives to create a safe and healthy working
environment for the wellbeing of its staff and to create a trusting
and respectful environment, where all members of staff are
encouraged to feel responsible for the reputation and performance
of the Company.
The Company aims to establish a diverse and dynamic workforce
with team players who have the experience and knowledge of the
business operations and markets in which we operate. Through
maintaining good communications, members of staff are encouraged to
realise the objectives of the Company and their own potential.
Corporate environmental responsibility
This will become more relevant once the Company enters into the
Lease and completes its transition to an operating company. The
Board contains personnel with a good history of running businesses
that have been compliant with all relevant laws and regulations and
there have been no instances of non-compliance in respect of
environment matters.
The Company's policy is to minimize the risk of any adverse
effect on the environment associated with its activities with a
thoughtful consideration of key areas such as energy use,
pollution, transport, renewable resources, health and wellbeing.
The Company also aims to ensure that its suppliers and advisers
meet with their legislative and regulatory requirements and that
codes of best practice are met and exceeded.
Section 172(1) Statement - Promotion of the Company for the
benefit of the members as a whole
The Directors believe they have acted in the way most likely to
promote the success of the Company for the benefit of its members
as a whole, as required by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
1. Consider the likely consequences of any decision in the long term,
2. Act fairly between the members of the Company,
3. Maintain a reputation for high standards of business conduct,
4. Consider the interests of the Company's employees,
5. Foster the Company's relationships with suppliers, customers and others, and
6. Consider the impact of the Company's operations on the community and the environment.
The pre-revenue nature of the business is important to the
understanding of the Company by its members, employees and
suppliers, and the Directors are as transparent about the cash
position and funding requirements as is allowed under LSE
regulations.
The application of the s172 requirements can be demonstrated in
relation to the some of the key decisions made during 2021 and
after the period end:
1. Appointment of a high calibre, experienced management team;
2. Announcing the Company's new strategy; and
3. The execution of the Exclusivity Agreement.
The Board takes seriously its corporate social responsibilities
to the environment in which it works which will become more
relevant once the Company enters into the Lease and completes its
transition to an operating company.
Paul Atherley
Non-Executive Chairman
17 May 2022
Board of Directors
Paul Atherley - Non-Executive Chairman (appointed 21 January
2021)
Mr Atherley is a highly experienced senior resources executive
with wide ranging international and capital markets experience. He
graduated as mining engineer from Imperial College London and has
held a number of senior executive and board positions. He is
currently Chairman of LSE listed Pensana Plc which is establishing
the world's first independent and sustainable rare earth processing
facility in the UK.
He is based in London and has broad experience in raising debt
and equity finance for resource companies. He served as Executive
Director of the investment banking arm of HSBC Australia where he
undertook a range of advisory roles in the resources sector. He has
completed a number of acquisitions and financings of resources
projects in Europe, China, Australia and Asia.
Mr Atherley is a strong supporter of Women in STEM and has
established a scholarship which provides funding for young women to
further their education in science and engineering.
Sam Quinn - Non-Executive Director (appointed 21 January
2021)
Sam Quinn is a corporate lawyer with over fifteen years' worth
of experience in the natural resources sector, in both legal
counsel and management positions. Mr Quinn is a principal of
Silvertree Partners, a London-based specialist corporate services
provider for the natural resources industry. In addition Mr Quinn
holds various other Non-Executive Directorships and company
secretarial roles for listed and unlisted natural resources
companies. During time spent in these roles, Mr Quinn has gained
significant experience in the administration, operation, financing
and promotion of natural resource companies.
Previously, Mr Quinn worked as the Director of Corporate Finance
and Legal Counsel for the Dragon Group, a London based natural
resources venture capital firm and as a corporate lawyer for
Jackson McDonald Barristers & Solicitors in Perth, Western
Australia and for Nabarro LLP in London.
Helen Pein - Non-Executive Director (appointed 27 September
2021)
Helen has over 30 years' experience in natural resources sector
and currently serves as a Director of Pan Iberia Ltd, Trident
Royalties Plc and Panex Resources Pty Ltd.
Helen was formerly a Director of Pangea Exploration Pty Ltd, a
company affiliated with Denham Capital where she was part of the
team directly responsible for the discovery of a number of
world-class gold and mineral sands
deposit across Africa. Helen is a recipient of the Gencor Geology Award.
Directors' Report
The Directors present their annual report together with the
financial statements and Auditor's Report for the period ended 31
January 2022.
Results and dividends
The results of the Company for the period ended 31 January 2022
are set out in the Statement of Comprehensive Income on page 27.
The Directors do not recommend the payment of a dividend for the
period.
Directors and Directors' interests
The Directors who served during the period to date are as
follows:
Paul Atherley
Sam Quinn
Helen Pein
The direct and beneficial shareholdings of the Board in the
Company as at 31 January 2022 were as follows:
Number of ordinary shares % of issued
Direct Beneficial Total Share capital
P Atherley 3,000,000 - 3,000,000 50.1%
S Quinn 60,000 190,000 250,000 4.17%
H Pein - - - -
Substantial shareholders
As at the date of this Report, the total number of issued
Ordinary Shares with voting rights in the Company was 5,999,999.
The Company has been notified of the following interests of 3 per
cent or more in its issued share capital as at the date of this
report.
Shareholder Number of ordinary shares % of issued
share capital
Paul Atherley 3,000,000 50.1%
Jarvis Nominees 1,200,000 20%
Sam Quinn 250,000 4.17%
Colin Stone 200,000 3.33%
* Sam Quinn's shareholding includes 50,000 shares held by
Silvertree Partners LLP (which is 50% beneficially owned) and
140,000 shares held by Lionshead Consultants Limited (which is 100%
beneficially owned).
Corporate governance
The Company has set out its full Corporate Governance Statement
on page 19. The Corporate Governance Statement forms part of this
Directors' report and is incorporated into it by cross
reference.
Greenhouse gas disclosures
The Company has no head office and only one employee other than
its Directors, and therefore has minimal carbon emissions below
40,000 kWh. It is not practical to obtain emissions data and as
such none is disclosed. This disclosure will become more relevant
once the Company enters into the Lease and completes its transition
to an operating company .
Supplier payment policy
The Company's current policy concerning the payment of trade
creditors is to follow the CBI's Prompt Payers Code (copies are
available from the CBI, Centre Point, 103 New Oxford Street, London
WC1A 1DU).
The Company's current policy concerning the payment of trade
creditors is to:
-- settle the terms of payment with suppliers when agreeing the terms of each transaction;
-- ensure that suppliers are made aware of the terms of payment
by inclusion of the relevant terms in contracts; and
-- pay in accordance with the Company's contractual and other legal obligations.
Financial instruments and risk management
The Company is exposed to a variety of financial risks and the
impact on the Company's financial instruments are summarised in the
Risk Management Report. Details of the Company's financial
instruments are disclosed in note 14 to the financial
statements.
Directors' insurance
The Company has implemented Directors and Officers Liability
Indemnity Insurance.
Events after the reporting period
On 25 February 2022 the Company announced that it had entered
into the Exclusivity Agreement and incorporated a subsidiary TVL,
to pursue its new strategy of developing a Lithium Hydroxide
facility at Teesside, UK. Further details of this are contained in
the Strategic Report on page 6.
Going concern
The Company's assets are comprised almost entirely of cash. The
Directors have outlined their proposed new strategy for the Company
in the Chairman's Statement on page 4. As part of their assessment
of going concern, the Directors have prepared cash forecasts that
show that the Company has sufficient cash resources in order to
complete the acquisition executed after the period end and adopt
the new strategy.
In order for the Company to be successful in its new strategy,
it will need to raise additional funds in the immediate term. The
Directors are reasonably confident that such funds will be
forthcoming if and when they are required, however as a successful
fundraising in support of this strategy cannot be assured, a
material uncertainty exists in this regard. The Directors have a
reasonable expectation that the Company has adequate resources to
continue in operational existence for the foreseeable future.
Accordingly, the Directors believe that as at the date of this
report it is appropriate to continue to adopt the going concern
basis in preparing the financial statements.
Disclosure of information to Auditors
The Directors confirm that:
-- So far as each Director is aware, there is no relevant audit
information of which the company's auditor is unaware; and
-- The Directors have taken all steps that they ought to have
taken as Directors in order to make themselves aware of any
relevant audit information and to establish that the auditors are
aware of that information.
Auditor
A resolution proposing the re-appointment of Crowe U.K. LLP as
auditor will be put to shareholders at the Annual General
Meeting.
This Directors' Report has been approved by the Board and signed
on its behalf by:
Paul Atherley
Non-Executive Chairman
17 May 2022
Directors' Remuneration Report
Until the Lease is entered into and the Company completes its
transition to an operating company, the Company will not have a
separate remuneration committee. The Board will instead
periodically review the quantum of Directors' fees, taking into
account the interests of shareholders and the performance of the
Company and the Directors.
The items included in this report are unaudited unless otherwise
stated.
The Directors who held office at 31 January 2022 are summarised
as follows:
Name of Director Position
P Atherley Non-Executive Chairman
S Quinn Chief-Executive Officer
H Pein Non-Executive Director
Directors' Letters of appointment
Letter of Appointment - Paul Atherley
Pursuant to a letter of appointment dated 21 September 2021
between the Company and Mr Atherley, Mr Atherley is engaged as
Chairman with fees of GBP24,000 per annum. Mr Atherley's
appointment is for an initial term of 12 months. The appointment
can be terminated by either party on three months written
notice.
Letter of Appointment - Sam Quinn
Pursuant to a letter of appointment dated 21 September 2021
between the Company and Sam Quinn, Mr Quinn is engaged as a
Non-Executive Director with fees of GBP18,000 per annum, for an
initial term of 12 months. The appointment can be terminated by
either party on three months written notice.
Letter of Appointment - Helen Pein
Pursuant to a letter of appointment dated 21 September 2021
between the Company and Helen Pein, Helen is engaged as a
Non-Executive Director with fees of GBP18,000 per annum. Helen's
appointment is for an initial term of 12 months. The appointment
can be terminated by either party on three months written
notice.
In addition to the salaries received under the service
agreements referenced above, Sam Quinn and Helen Pein will be
remunerated for additional work performed for the Company which is
outside the scope of their service agreements, including project
due diligence, consultancy and management services. Sam Quinn and
Helen Pein's contractual daily rate for these additional services
is GBP1,000 per day and both Sam Quinn and Helen Pein shall be
subject to a maximum of 3 days per calendar month.
Pursuant to a consultancy agreement dated 21 September 2021
between the Company and Selection Capital Investments Limited the
("Consultancy Agreement"), Paul Atherley is engaged as Key
Personnel (as defined under the Consultancy Agreement) contracted
to provide services to the Company in consideration of payment of
GBP1,500 per day with a maximum amount of days contracted to be 3
days per calendar month.
Terms of appointment
The services of the Directors are provided under the terms of
letters of appointments, as follows:
Director Year of appointment Number of periods Date of current
completed engagement letter
P Atherley 2021 1 21 September 2021
S Quinn 2021 1 21 September 2021
H Pein 2021 1 21 September 2021
Consideration of shareholder views
The Board considers shareholder feedback received. This
feedback, plus any additional feedback received from time to time,
is considered as part of the Company's annual policy on
remuneration.
Policy for salary reviews
The Company may from time to time seek to review salary levels
of Directors, taking into account performance, time spent in the
role and market data for the relevant role. It is intended that
there will be a salary review during the next period as the Company
transitions to an operating company.
Policy for new appointments
It is not intended that there will be any new appointments to
the Board in the near term. It is intended that a full review of
the Board will take place on an annual basis following the
Company's transition to an operating Company.
Directors' emoluments and compensation (audited)
Remuneration paid to the Directors' during the period ended 31
January 2022 was as follows (all figures are stated in GBP):
Directors Salary/Consulting
Director fees fees Total remuneration
P Atherley 31 Jan 2022 8,267 - 8,267
S Quinn 31 Jan 2022 6,200 14,400 20,600
H Pein 31 Jan 2022 6,000 - 6,000
Total 31 Jan 2022 20,467 14,400 34,867
The highest paid Director of the Company in the period was Sam
Quinn, who was paid a total of GBP20,600 representing approx. 77%
more than the average Director remuneration of GBP11,622 in the
period.
Directors' Remuneration Policy
Pursuant to the Directors' letters of appointment, as described
above, the Directors receive fees, all payable monthly in arrears.
There is currently no bonus or long-term incentive plan in
operation for the Directors, although this is subject to review and
may be implemented in due course.
Based on the foregoing, the remuneration policy of the Company
can be summarised as follows:
How the element Operation Maximum potential Performance measures
supports our strategic of the element payout and payment used, weighting
objectives at threshold and time period
applicable
Base Pay
Recognises the role Paid in 12 Contractual sum None
and the responsibility monthly instalments
for the delivery
of strategy and results
Pensions
None n/a n/a n/a
Short term incentives
None n/a n/a n/a
A remuneration committee is expected to be appointed once the
Lease is entered into, to consider an appropriate level of
Directors' remuneration.
Although there is no formal Director shareholding policy in
place, the Board believe that share ownership by Directors
strengthens the link between their personal interests and those of
shareholders.
No views were expressed by shareholders during the period on the
remuneration policy of the Company.
Other matters
The Company does not currently have any annual or long-term
incentive schemes in place for any of the Directors.
The Company does not have any pension plans for any of the
Directors and does not pay pension amounts in relation to their
remuneration.
This Directors' Remuneration Report has been approved by the
Board and signed on its behalf by:
Paul Atherley
Non-Executive Chairman
17 May 2022
Risk Management Report
The Company has undertaken an evaluation of the risks it is
exposed to which are summarised as follows:
There is no assurance that the Company will determine that the
Project is economically viable and the Company may elect not to
execute the option granted under the Agreement to Lease
The success of the Company's business strategy is dependent on
its ability to identify sufficient suitable acquisition
opportunities. Whist the Company believes that the Project presents
a good opportunity, it is still in the process of evaluating such
opportunity. If the Company fails to complete the development of
the Project it may be left with substantial unrecovered transaction
costs, potentially including fees, legal costs, accounting costs,
due diligence or other expenses. Furthermore, even if an agreement
is reached relating to the Project, the Company may fail to
complete the Project for reasons beyond its control. Any such event
will result in a loss to the Company of the related costs incurred,
which could materially adversely affect subsequent attempts to
identify and acquire another target business.
Development and production activities are capital intensive and
inherently uncertain in their outcome and the Company may not make
a return on its investments, recover its costs or generate cash
flows.
The construction of industrial facilities are capital intensive.
In addition, environmental damage could greatly increase the cost
of operations, and various operating conditions may adversely and
materially affect the levels of production. These conditions
include delays in obtaining governmental approvals or consents,
insufficient storage or transportation capacity or a change in
demand for the product. While diligent supervision and effective
maintenance operations can contribute to maximising production
rates over time, production delays and declines from normal
operations cannot be eliminated and may adversely and materially
affect the revenues, cash flow, business, results of operations and
financial resources and condition of the Company and its subsidiary
undertakings from time to time (the "Group").
Currently the Group has insufficient capital to meet the funding
requirements for the development of the Project
As the Company is still evaluating the Project, it is still
considering the associated costs with the development of the
Project and the amount of additional capital that may be
required.
Whilst the Company has sufficient working capital for its
present requirements, that is for at least the next twelve months,
the Company is of the opinion that if it decides to proceed with
the Project, the Group does not have sufficient capital in order to
complete the construction of the Project.
Based on a high-level preliminary review of expected costs the
Directors anticipate that a total of approximately GBP400 million
(excluding financing costs) of additional equity and / or debt
financing will be required and subject to the outcome of the
feasibility and engineering studies the Company's confirmation to
proceed with the Project to fund the evaluation, development and
construction of the Project. The Company intends to raise the
development costs of the Project by:
(a) Debt finance - Any debt finance in respect of the Company
for the purposes of developing and completing the Project, is
likely to be subject to customary conditions precedent. As of the
date of this document, the Company has not yet begun the formal
process of seeking third party debt financing in respect of the
Project, however the Company expects to carry out this process
immediately following completion of the feasibility studies and the
Company's confirmation to proceed with the Project.
(b) Equity finance - In relation to any equity financing, the
Company expects to engage advisers to assist the Company with its
equity funding requirements. The Company has not yet begun the
formal process of seeking formal engagement with advisers for
equity financing in respect of the Project, however the Company
expects to carry out this process in due course following
completion of the feasibility and engineering studies.
Based on the Company's informal discussions with potential debt
and equity providers to date, the Directors are confident that
within the period of twelve months following the date of this
document the Group will be able to secure all the necessary finance
required to develop and complete the Project.
The failure to secure additional financing or to secure such
additional financing on terms acceptable to the Company could have
a material adverse effect on the continued development or growth of
the acquired business, prospects, and the financial condition and
results and operations of the Group and could, ultimately lead to
the insolvency of the Company.
The price of lithium hydroxide is affected by factors beyond the
Group's control
If the Group proceeds with the Project, and the market price of
lithium hydroxide decreases significantly for an extended period of
time, the ability for the Group to attract finance and ultimately
generate profits could be adversely affected. Numerous external
factors and industry factors that are beyond the control of the
Group that affect the price of lithium hydroxide include:
-- industrial demand;
-- levels of production;
-- rapid short term changes in supply and demand because of
speculative or hedging activities; and
-- global or regional political or economic events.
The price at which the Group can sell any lithium hydroxide it
may produce in the future will therefore be relevant to the future
revenues that can be generated by the Group and its ability to
finance the Company going forward and any adverse effects on such
price could have a material adverse effect on the Group's business,
financial performance, results of operations and prospects.
The Company may be unable to hire or retain personnel required
to support the Company going forward
The Group's ability to compete depends upon its ability to
retain and attract highly qualified management and technical
personnel. Following completion of the Project, the Company will
evaluate the personnel of the acquired business and may determine
that it requires increased support to operate and manage the
acquired business in accordance with the Company's overall business
strategy. There can be no assurance that existing personnel of the
acquired business will be adequate or qualified to carry out the
Company's strategy, or that the Company will be able to hire or
retain experienced, qualified employees to carry out the Company's
strategy
During the development of the Project, the Company may be unable
to acquire or renew necessary concessions, licenses, permits and
other authorisations
The Project will require certain concessions, licences, permits
and other authorisations to carry out its operations. Any delay in
obtaining or renewing a license, permit or other authorisation may
result in a delay in investment or development of a resource and
may have a materially adverse effect on the acquired business'
results of operations, cash flows and financial condition. In
addition, any concessions, licences, permits and other
authorisations of the Project may be suspended, terminated or
revoked if it fails to comply with the relevant requirements.
Failure to obtain (and shortages and disruptions in lead times
to deliver) certain key inputs may adversely affect the Company's
operations during the development of the Project
During the development of the Project, the Company's inability
to timely acquire feedstock, strategic consumables, raw materials,
and processing equipment could have an adverse impact on any
results of operations and financial condition. Periods of high
demand for supplies can arise when availability of supplies is
limited. This can cause costs to increase above normal inflation
rates. Interruption to supplies or increase in costs could
adversely affect the operating results and cash flows of the
Company during the development of the Project.
COVID-19
The Group is committed to ensuring the safety and wellbeing of
all employees, contractors and stakeholders and accordingly will
regularly assess developments and the ability to recommence
operations in a safe and appropriate manner.
Further escalation of the COVID-19 pandemic, and the
implementation of any additional government-regulated restrictions
which delays the Group in carrying out its business activities
ultimately delays the Group's ability to reach production and start
to generate cash and so could have a material adverse impact on the
Group's operations and financial results.
This Risk Management Report has been approved by the Board and
signed on its behalf by:
Paul Atherley
Non-Executive Chairman
17 May 2022
Corporate Governance Statement
The Company observes the requirements of the Quoted Company
Alliance corporate governance code (the "QCA Code") and is in
compliance with the QCA Code, save as set out below:
1. Given the composition of the Board, certain provisions of the
QCA Code are considered by the Board to be inapplicable to the
Company. Specifically, the Company does not consider it necessary
to have a senior independent Director and the Board will, at the
outset, consist of only non-executive Directors.
2. The QCA Code also recommends the submission of Directors for
re-election at annual intervals. No Director will be required to
submit for re-election until the first annual general meeting of
the Company following the Acquisition.
In the future, the Directors may seek to transfer from a
Standard Listing to either a Premium Listing or other appropriate
stock market (although there can be no guarantee that the Company
will fulfil the relevant eligibility criteria at the time and that
a transfer to a Premium Listing or other appropriate stock market
will be achieved). However, in addition to or in lieu of a Premium
Listing, the Company may determine to seek a listing on another
stock exchange. Following such a Premium Listing, the Company would
comply with the continuing obligations contained within the Listing
Rules and the Disclosure and Transparency Rules in the same manner
as any other company with a Premium Listing.
The Company does not have nomination, remuneration, audit or
risk committees. The Board as a whole will instead review its size,
structure and composition, the scale and structure of the
Directors' fees (taking into account the interests of shareholders
and the performance of the Company), take responsibility for the
appointment of auditors and payment of their audit fee, monitor and
review the integrity of the Company's financial statements and take
responsibility for any formal announcements on the Company's
financial performance. Following entry into the Lease, the Board
intends to put in place nomination, remuneration, audit and risk
committees.
The Board has a share dealing code that complies with the
requirements of the Market Abuse Regulations. All persons
discharging management responsibilities (comprising only the
Directors) comply with the share dealing code.
Carbon emissions
The Company currently has no trade, and one employee other than
the Directors and has no office. Therefore, the Company has minimal
carbon emissions and it is not practical to obtain emissions data
at this stage.
Board of Directors
The Company has a Board it believes is well suited for the
purposes of implementing its business strategy, combining skill
sets for the assessment of investment and acquisition of royalties
and streams in the mining sector.
The Directors are responsible for carrying out the Company's
objectives, implementing its business strategy and conducting its
overall supervision. Acquisition, divestment and other strategic
decisions will all be considered and determined by the Board.
The Board will provide leadership within a framework of prudent
and effective controls. The Board will establish the corporate
governance values of the Company and will have overall
responsibility for setting the Company's strategic aims, defining
the business plan and strategy and managing the financial and
operational resources of the Company.
The Board aims to hold meetings on a quarterly basis and is
regularly in contact to discuss prospective acquisition
opportunities.
The Articles of the Company contain express provisions relating
to conflicts of interest in line with the Companies Act 2006.
Shareholder communications
The Company uses its corporate website (www.alkemycapital.co.uk)
to ensure that the latest announcements, press releases and
published financial information are available to all shareholders
and other interested parties.
The AGM is used to communicate with both institutional
shareholders and private investors and all shareholders are
encouraged to participate. Separate resolutions are proposed on
each issue so that they can be given proper consideration and there
is a resolution to approve the Annual Report and Accounts. Notice
of the AGM is sent to shareholders at least 21 days before the
meeting and the results are announced to the London Stock Exchange
and are published on the Company's website.
Paul Atherley
Non-Executive Chairman
17 May 2022
Directors' Responsibility Statement
The Directors are responsible for preparing the Annual Report
and the Financial Statements in accordance with applicable law and
regulations .
Company law requires the Directors to prepare Financial
Statements for each financial year. Under that law the Directors
have elected to prepare the financial statements in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the United Kingdom. Under company law the Directors must not
approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the
Company and of the profit or loss for that period.
In preparing these financial statements, the Directors are
required to:
1. select suitable accounting policies and then apply them consistently;
2. make judgements and accounting estimates that are reasonable and prudent;
3. state whether applicable IFRSs as adopted by the United
Kingdom have been followed, subject to any material departures
disclosed and explained in the financial statements; and
4. prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company and Company
will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the Financial Statements and the Directors Remuneration Report
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and Company, and hence for
taking reasonable steps for the prevention and detection of fraud
and other irregularities.
They are also responsible to make a statement that they consider
that the Annual Report and Financial Statements, taken as a whole,
is fair, balanced, and understandable and provides the information
necessary for the shareholders to assess the Company's position and
performance, business model and strategy.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom. governing the
preparation and dissemination of the Financial Statements may
differ from legislation in other jurisdictions.
Directors' responsibility statement pursuant to disclosure and
Transparency Rule
Each of the Directors, whose names and functions are listed
within the Board of Directors confirm that, to the best of their
knowledge:
1. the financial statements are prepared in accordance with IFRS
as adopted by the United Kingdom, give a true and fair view of the
assets, liabilities, financial position and loss of the Company;
and
2. the Annual Report and financial statements, including the
Strategic Report, includes a fair review of the development and
performance of the business and the position of the Company,
together with a description of the principal risks and
uncertainties that they face.
Approved by the Board on 17 May 2022
Paul Atherley
Non-Executive Chairman
Independent auditor's report to the members of Alkemy Capital
Investments Plc
Opinion
We have audited the financial statements of Alkemy Capital
Investments Plc (the "Company") for the period ended 31 January
2022 which comprise Statement of Comprehensive income, Statement of
Financial Position, Statement of Changes in Equity and Statement of
Cash flows and notes to the financial statements, including
significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and
UK-adopted international Accounting Standards .
In our opinion, the financial statements:
-- give a true and fair view of the state of the company's
affairs as at 31 January 2022 and of its loss for the period then
ended;
-- have been properly prepared in accordance with UK-adopted
international accounting standards;
-- have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the Company
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Material uncertainty related to going concern
We draw attention to the section headed Going Concern in note 2
on page 31 of the financial statements, which details the factors
the Company has considered when assessing the going concern
position. As detailed in the relevant note on page 32, the company
will need to raise additional funds to be successful in its
strategy. As successful fundraising cannot be assured there exists
a material uncertainty that may cast significant doubt on the
Company's ability to continue as a going concern. Our opinion is
not modified in respect of this matter.
In auditing the financial statements, we have concluded that the
directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the company's ability to
continue to adopt the going concern basis of accounting
included:
-- Discussions with management with regards to future funding requirements.
-- Reviewing the directors' going concern assessment including
the worst-case scenario cash flow forecast that covers at least 12
months from the date we expect to sign the audit report.
-- Assessing the cash flow requirements of the Company based on budgets and forecasts.
-- Understanding what forecast expenditure is committed and what
could be considered discretionary.
-- Considering the liquidity of existing assets in the statement of financial position.
-- Considering the options available to management for further
fundraising, or additional sources of finance.
-- Considering potential downside scenarios and the resultant
impact on available and future funds.
-- Making enquiries of management as to its knowledge of events
or conditions beyond the period of their assessment that may cast
significant doubt on the Company's ability to continue as a going
concern, and evaluating the reliability of the data underpinning
the forecast cash flows along with the numerical accuracy of the
calculations.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of
materiality. An item is considered material if it could reasonably
be expected to change the economic decisions of a user of the
financial statements. We used the concept of materiality to both
focus our testing and to evaluate the impact of misstatements
identified.
Based on our professional judgement, we determined overall
materiality for the financial statements as a whole to be
GBP39,500, based on a 5% of loss before tax benchmark as this is
the most appropriate measure of performance for the entity.
We use a different level of materiality ('performance
materiality') to determine the extent of our testing for the audit
of the financial statements. Performance materiality is set based
on the audit materiality as adjusted for the judgements made as to
the entity risk and our evaluation of the specific risk of each
audit area having regard to the internal control environment.
Performance materiality was set at 70% of materiality for the
financial statements as a whole, which equates to GBP27,650.
Where considered appropriate performance materiality may be
reduced to a lower level, such as, for related party transactions
and directors' remuneration.
We agreed with the Board to report to it all identified errors
in excess of GBP1,975. Errors below that threshold would also be
reported to it if, in our opinion as auditor, disclosure was
required on qualitative grounds.
Overview of the scope of our audit
The entity is currently a cash shell having listed during the
period and raised capital from the share issue on the London Stock
Exchange. The transactions during the year are limited to
administration and professional fees. The support for these was
provided to us by management.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Apart from the material uncertainty related to going concern
above, we have determined that there are no other key audit
matters.
Our audit procedures in relation to Going Concern were designed
in the context of our audit opinion as a whole. They were not
designed to enable us to express an opinion on this matter
individually and we express no such opinion.
Other information
The other information comprises the information included in the
annual report other than the financial statements and our auditor's
report thereon. The directors are responsible for the other
information contained within the annual report.
Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion
thereon. Our responsibility is to read the other information and,
in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion the part of the directors' remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion based on the work undertaken in the course of our
audit
-- the information given in the strategic report and the directors' report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
-- the strategic report and the directors' report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company
and its environment obtained in the course of the audit, we have
not identified material misstatements in the strategic report or
the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the financial statements and the part of the directors'
remuneration report to be audited are not in agreement with the
accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit
Responsibilities of the directors for the financial
statements
As explained more fully in the directors' responsibilities
statement set out on page 21, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
-- We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Company and the procedures in
place for ensuring compliance. The most significant identified were
the Companies Act 2006 and Listing Rules for Companies. Our work
included reviewing board minutes, relevant correspondence and
direct enquiries of management and those charged with governance
concerning whether they had knowledge of actual, suspected, or
alleged fraud.
-- As part of our audit planning process we assessed the
different areas of the financial statements, including disclosures,
for the risk of material misstatement. We considered the risk was
greater in areas that involve significant management estimate or
judgement. We communicated identified fraud risks throughout the
audit team and remained alert to any indications of fraud
throughout the audit.
-- To address the pervasive risk of management override of
control, we also performed specific testing of a risk-based
selection of journal entries, both at the year end and throughout
the year.
-- In addition to the risk of management override of controls,
we considered the fraud risk related to any unusual transactions or
unexpected relationships, including assessing the risk of
undisclosed related party transactions.
Owing to the inherent limitations of an audit, there is an
unavoidable risk that some material misstatements of the financial
statements may not be detected, even though the audit is properly
planned and performed in accordance with the ISAs (UK). The
potential effects of inherent limitations are particularly
significant in the case of misstatement resulting from fraud
because fraud may involve sophisticated and carefully organized
schemes designed to conceal it, including deliberate failure to
record transactions, collusion or intentional misrepresentations
being made to us.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Other matters which we are required to address
We were appointed by the board on 27 March 2022 to audit the
financial statements for the period ending 31 January 2022. This is
the first period of account for the company and the first year an
audit is being performed.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the company and we remain independent of the
company in conducting our audit. The only non-audit services
related to Crowe U.K. LLP acting as reporting accountants during
the IPO process.
Our audit opinion is consistent with the additional report to
the Board.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Matthew Stallabrass
Senior Statutory Auditor
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
55 Ludgate Hill
London
17 May 2022
Statement of Comprehensive Income
for the period 21 January 2021 to 31 January 2022
Notes Period to
31 January
2022
GBP
Continuing operations
Administrative expenses 4 (466,903)
Project Development expenses (330,747)
Loss before taxation (797,650)
Taxation 7 -
Loss after taxation for the period (797,650)
Total Comprehensive loss for
the period (797,650)
Earnings per share:
Basic and diluted earnings per
share (pence) 8 (19.875p)
There are no items of other comprehensive income
The notes on pages 31 to 39 are an integral part of these
financial statements.
Statement of Financial Position
As at 31 January 2022
Notes 31 January
2022
GBP
Current assets
Trade and other receivables 73
Cash and cash equivalents 10 1,113,923
Current and Total Assets 1,113,996
Equity
Share Capital 12 120,000
Share Premium 12 1,279,094
Retained Earnings (797,650)
Total Equity 601,444
Current Liabilities
Trade and other payables 11 512,552
Current and Total Liabilities 512,552
Total Equity and Liabilities 1,113,996
The notes on pages 31 to 39 are an integral part of these
financial statements.
The financial statements were approved and authorised for issue
by the Board on 17 May 2022.
Paul Atherley
Director
Alkemy Capital Investments plc
Statement of Changes in Equity
For the period ended 31 January 2022
Share Retained
Share capital Premium Earnings Total
GBP GBP GBP GBP
On incorporation 60,000 - - 60,000
Loss for the period - - (797,650) (797,650)
Total Comprehensive income - - (797,650) (797,650)
Transactions with owners:
Issue of shares 60,000 1,279,094 - 1,339,094
Total transactions with
owners 60,000 1,279,094 - 1,339,094
Balance at 31 January 2022 120,000 1,279,094 (797,650) 601,444
The notes on pages 31 to 39 are an integral part of these
financial statements.
Statement of Cash Flows
for the period ended 31 January 2022
Notes Period to
31 January
2022
GBP
Cash flows from Operating Activities
Loss for the year before tax (797,650)
Increase in receivables (73)
Increase in payables 512,552
Net cash outflow from operating activities (285,171)
Cash flows from financing activities
Issue of shares (net of share issue expenses) 1,399,094
Net cash inflow from financing activities 1,399,094
Net increase in cash and cash equivalents
during the period 1,113,923
Cash at the beginning of period -
Cash and cash equivalents at the end
of the period 10 1,113,923
The notes on pages 31 to 39 are an integral part of these
financial statements.
Notes to the Financial Statements
1. GENERAL INFORMATION
Alkemy Capital Investments Plc is a company incorporated and
domiciled in the United Kingdom. The Company is a public limited
company, which is listed on the London Stock Exchange. The address
of the registered office is 1 King Street, Office 3.05, London,
United Kingdom EC2V 8AU.
The Company was initially formed to undertake an acquisition of
a controlling interest in a company or business with the objective
of operating the acquired business and implementing an operating
strategy to generate value for its shareholders through operational
improvements as well as potentially through additional
complementary acquisitions following the Acquisition.
On 25 February 2022, the Company announced that it had formed a
subsidiary called Tees Valley Lithium Limited ("TVL") that would
aim to develop the UK's first Lithium Hydroxide processing
facility. This transaction and change of strategy constituted a
reverse takeover transaction under the listing rules of the London
Stock Exchange and resulted in Alkemy becoming an operating
company.
The financial statements which cover the period from
incorporation on 21 January 2021 to 31 January 2022 are presented
in British Pounds Sterling, the currency of the primary economic
environment in which the Company operates.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of
these financial statements are set out below. The policies have
been consistently applied throughout the period, unless otherwise
stated.
Basis of preparation
The financial statements have been prepared in accordance with
UK adopted International Accounting Standards ("IAS" or
"IFRS").
The financial statements are presented in pounds sterling
("GBP") which is also the functional currency of the Company.
Going Concern
The Company's assets are comprised almost entirely of cash. The
Directors have outlined their proposed new strategy for the Company
in the Chairman's Statement on page 4. As part of their assessment
of going concern, the Directors have prepared cash forecasts that
show that the Company has sufficient cash resources in order to
complete the transaction executed after the period end and adopt
the new strategy.
In order for the Company to be successful in its new strategy,
it will need to raise additional funds in the immediate term. The
Directors are reasonably confident that such funds will be
forthcoming if and when they are required, however as a successful
fundraising in support of this strategy cannot be assured, a
material uncertainty exists in this regard. The Directors have a
reasonable expectation that the Company has adequate resources to
continue in operational existence for the foreseeable future.
Accordingly, the Directors believe that as at the date of this
report it is appropriate to continue to adopt the going concern
basis in preparing the financial statements.
Statement of compliance
The financial statements comply with IFRSs as adopted by the
U.K.
1. The company has adopted all relevant IFRSs which were in
effect from incorporation when preparing these financial
statements.
2. Standards and Interpretations which are effective in the
current period (Changes in accounting policies); None of the
standards which became effective during the period which are
applicable to the Company have had a material impact.
3. Adoption of new Standards and Interpretations to standards in
future periods; The Directors anticipate that the adoption of new
Standards and Interpretations in future periods will have no
material impact on the financial statements of the Company. The
Company expects to adopt all relevant Standards and Interpretations
as and when they become effective.
Segment 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 of Directors that makes
strategic decisions.
The Chief decision maker believes that the company's continuing
operations comprise one segment.
Taxation
Current taxation is the taxation currently payable on taxable
profit for the year.
Current tax is calculated at the tax rates (and laws) that have
been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable 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 the 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 tax
profit nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to
apply in the year when the liability is settled or the asset is
realised. Deferred tax is charged or credited in the income
statement, 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.
Financial assets
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and current and
deposit balances at banks, together with other short-term, highly
liquid investments that are readily convertible into known amounts
of cash within a period of 3 months and which are subject to an
insignificant risk of changes in value.
Financial liabilities
Financial liabilities are recognised in the statement of
financial position when the Company becomes a party to the
contractual provisions of the instrument.
The Company's financial liabilities comprise trade and other
payables.
Trade payables are recognised initially at their fair value and
subsequently measured at amortised cost.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of the Company after deducting all of its
liabilities. Equity instruments issued by the Company are recorded
at the proceeds received net of direct issue costs.
Ordinary shares are classified as equity.
Share capital account represents the nominal value of the shares
issued.
The share premium account represents premiums received on the
initial issuing of the share capital. Any transaction costs
associated with the issuing of shares are deducted from share
premium, net of any related income tax benefits.
Retained earnings include all current period results as
disclosed in the Statement of Comprehensive Income.
Critical accounting judgments and estimations
The preparation of the financial statements in conformity with
IFRS requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenue and
expenses during the reporting period. Although these estimates are
based on management's best knowledge of the amounts, events or
actions, actual results ultimately may differ from these
estimates.
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
The Directors consider the area of critical accounting
judgements or estimations in these financial statements to be the
going concern principal. See above for further details on the
Directors' assessment that the Company is a going concern.
3. BUSINESS AND GEOGRAPHICAL REPORTING
The accounting policy for identifying segments is based on
internal management reporting information that is regularly
reviewed by the chief operating decision maker, which is identified
as the Board of Directors.
At this point, identifying and assessing investment projects is
the only activity the Company is involved in and is therefore
considered as the only operating/reportable segment.
Therefore the financial information of the single segment is the
same as that set out in the Company statement of comprehensive
income, Company statement of financial position, the Company
statement of changes to equity and the Company statement of
cashflows.
4. EXPENSES BY NATURE
2022
GBP
Employee benefit expense (note 6) 156,897
Advertising and Marketing 3,200
Regulatory compliance expense 77,871
Audit 30,000
Legal fees 50,000
Other professional fees 124,253
Other operating expenses 24,682
Total administrative expenses 466,903
Project development costs of GBP330,747 in the period comprise
the costs incurred in progressing the Company's Project in
Teesside, U.K. See note 16 for further details.
5. AUDITOR REMUNERATION
During the year the Company obtained the following services from
the auditor:
2022
GBP
Fees payable to the auditor for non-audit
services 28,200
Fees payable to the auditor for the audit
of the Company 30,000
Total auditor's remuneration 58,200
6. EMPLOYEE BENEFIT EXPENSE
2022
GBP
Directors' salaries 20,467
Staff salaries 21,247
Recruitment costs 114,000
Social security 1,183
Total employee benefit expense 156,897
There was one employee in the period other than the Directors.
Further disclosures in respect of Directors' remuneration are
included within the Directors' Remuneration Report.
7. INCOME TAX
2022
GBP
Current tax -
Total -
2022
GBP
Loss on ordinary activities before taxation (797,650)
Tax calculated at domestic rate applicable to UK standard
rate for small companies of 19% (151,554)
Effects of:
Expenses not deductible for tax purposes -
Tax losses carried forward on which no deferred tax
asset is recognised 151,554
Income tax credit -
Tax losses totalling approximately GBP797,650 have been carried
forward for use against future taxable profits. No deferred tax
asset has been recognised in respect of these tax losses.
Increases to the UK Corporation tax rate from 19% to 25% is
effective from 1 April 2023, which was announced in the Spring
Budget 2021.
8. EARNINGS PER SHARE
(a) Basic
Basic earnings per share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period.
2022
GBP
Loss from continuing operations attributable to equity
holders of the company (797,650)
Weighted average number of ordinary shares in issue 4,013,298
Pence
Basic and fully diluted loss per share from continuing
operations (19.875)
As at 31 January 2022 there were no potentially dilutive
instruments in issue for consideration in arriving at the fully
diluted loss per share.
9. DIVIDENDS
There were no dividends paid or proposed by the Company.
10. CASH AND CASH EQUIVALENTS
2022
GBP
Cash at bank and on hand 1,113,923
1,113,923
All of the Company's cash and cash equivalents are held in
accounts which bear interest at floating rates and the Directors
consider their carrying amount approximates to their fair value.
Details of the credit risk associated with cash and cash
equivalents is set out in note 13.
11. TRADE AND OTHER PAYABLES
2022
GBP
Trade payables 331,997
Other payables 3,394
Accrued expenses 177,161
Total trade and other payables 512,552
Trade payables and accruals principally comprise amounts
outstanding for trade purchases and ongoing costs. The Company has
financial risk management policies in place to ensure that all
payables are paid within the pre-agreed credit terms. The Directors
consider that the carrying amount of trade payables approximates to
their fair value.
12. SHARE CAPITAL AND SHARE PREMIUM
Number of Share premium
ordinary shares Share Capital GBP
of 2p GBP
At 21 January 2021 3,000,000 60,000 -
Share issues 2,999,999 60,000 1,440,000
Share issue expenses - - (160,906)
At 31 January 2022 5,999,999 120,000 1,279,094
Share issues in period:
On 21 January 2021 the Company issued 3,000,000 ordinary shares
of 2p for cash.
On 27 September 2021, 2,999,999 ordinary shares were issued for
cash at 50p per share, raising GBP1,500,000 before expenses of
GBP160,906.
13. RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company is exposed to a variety of financial risks which
result from both its operating and investing activities. The
Company's risk management is coordinated by the Board of Directors
and focuses on actively securing the Company's short to medium term
cash flows by minimising the exposure to financial markets.
The main risk the Company is exposed to through its financial
instruments is credit risk.
Capital risk management
The Company's objectives when managing capital are:
(a) to safeguard the Company's ability to continue as a going
concern, so that it continues to provide returns and benefits for
shareholders;
(b) to support the Company's growth; and
(c) to provide capital for the purpose of strengthening the
Company's risk management capability.
The Company actively and regularly reviews and manages its
capital structure to ensure an optimal capital structure and equity
holder returns, taking into consideration the future capital
requirements of the Company and capital efficiency, prevailing and
projected profitability, projected operating cash flows, projected
capital expenditures and projected strategic investment
opportunities. Management regards total equity as capital and
reserves, for capital management purposes. The Company is not
subject to externally imposed capital requirements.
Credit risk
The Company's financial instruments that are subject to credit
risk are cash and cash equivalents. The credit risk for cash and
cash equivalents is considered negligible since the counterparties
are reputable financial institutions.
The Company defines a default by a counterparty to be an event
in which a balance receivable remains unsettled after a period of
90 days from the date on which the balance was due for
settlement.
The Company's maximum exposure to credit risk is GBP1,113,923
comprising cash and cash equivalents.
Liquidity Risk
The Company monitors its rolling cashflow forecasts and
liquidity requirements to ensure it has sufficient cash to meet its
operational needs. As the Company maintains its cash reserves in
instant access current accounts liquidity risk to operations is
deemed to be minimal.
Interest Rate Risk
As the Company has no debt and does not maintain cash reserves
on long term deposit accounts liked to interest rates, interest
rate risk to operations is deemed to be minimal.
Foreign Exchange Risk
As the operations of the Company are focused entirely within the
United Kingdom, and hence denominated in Pounds Sterling, foreign
exchange risk to operations is deemed to be minimal.
14. FINANCIAL INSTRUMENTS
Categories of financial instruments:
2022
GBP
FINANCIAL ASSETS AT AMORTISED COST:
Cash and cash equivalents 1,113,923
2022
GBP
FINANCIAL LIABILITIES AT AMORTISED COST:
Trade and other payables 512,552
15. RELATED PARTY TRANSACTIONS
The compensation payable to Key Management personnel comprised
GBP34,867 paid by the Company to the Directors in respect of
services to the Company. Full details of the compensation for each
Director are provided in the Directors' Remuneration Report.
Sam Quinn is a partner in Silvertree Partners LLP who received
GBP24,419 during the period for the provision of administration,
bookkeeping and secretarial services. At the period end, an amount
of GBPNil was due to Silvertree Partners LLP.
Sam Quinn is a director and shareholder of Lionshead Consulting
Ltd who received GBP14,400 during the period for the provision of
consulting services. At the period end, an amount of GBPNil was due
to Lionshead Consulting Ltd.
Paul Atherley is a director and shareholder of Selection Capital
Ltd who received GBP38,600 during the period in reimbursement of
various costs met on behalf of the Company in relation to its IPO.
At the period end, an amount of GBPNil was due to Selection Capital
Ltd.
16. POST PERIOD-END EVENTS
On 25 February 2022, the Company announced that it had entered
into an exclusivity agreement with Sembcorp Utilities (UK) Limited
and a heads of terms in respect of a proposed option to enter into
a lease over a brownfields site (the "Site") at Wilton
International (the "Agreement to Lease") and a long lease over the
Site, a well-established chemical engineering park located in
Teesside, a major Freeport in the UK. A lease may be entered into
by TVL, a subsidiary of the Company incorporated following the
reporting date, following exercise of the option granted under the
Agreement to Lease. It is intended that TVL will be the operating
company that develops the Project. A fee of GBP50,000 was paid by
the Company for the initial 6 month exclusivity option to lease,
with a further GBP245,000 to become payable if the option is
exercised in this period, giving both parties a period of 12 months
from exercise in which to formally execute the lease documentation,
whereby the Company will become liable to annual lease rentals of
GBP500,850 per annum for the first two years and GBP742,700 per
annum thereafter for the remainder of the 30 year lease term. On 8
March 2022 the Company announced the appointment of John Walker as
CEO of TVL.
17. ULTIMATE CONTROLLING PARTY
The Directors consider that Mr Paul Atherley's 50.01% interest
in the Company constitutes a controlling position and as such
considers him to be the ultimate controlling party.
18. CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
There were no contingent liabilities or capital commitments as
at 31 January 2022.
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END
FR EAESXFLAAEAA
(END) Dow Jones Newswires
May 18, 2022 10:07 ET (14:07 GMT)
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