The information contained within this
announcement is deemed by the Company to constitute inside
information stipulated under the Market Abuse Regulation (EU) No.
596/2014, as retained as part of the law of England and Wales. Upon
the publication of this announcement via the Regulatory Information
Service, this inside information is now considered to be in the
public domain.
Press release
28 May
2024
Cel AI
PLC
("Cel AI " or
"the Company")
Interim results
Cel AI (LSE: CLAI), a UK-based
company that uses artificial intelligence (AI) to deliver the future of
personalised beauty, with tailored beauty advice and product
recommendations in addition to its breakthrough skincare
formulations powered by CBG, announces its unaudited half-year
results to 29 February 2024.
Highlights
·
Net cash as at 29 February 2024 amounted to £1m
(H1 2023: £2.93m);
·
Operating Loss Reduction: Reduced operating loss
by 66% (equivalent to £1.2m), showcasing effective cost management
strategies;
·
New Leadership: Appointed Mike Edwards as new CEO
and chairman to spearhead breakthroughs in AI technology, leading
the Company's ownership of Cel AI, artificial intelligence platform
and driving innovation forward;
·
Rebranding for Competitiveness: Rebranded the
Company from Cellular Goods to Cel AI to enhance competitiveness,
signalling a commitment to innovation and market
leadership.
Post-period highlights
|
·
|
Customer Engagement Campaign: Started the
campaign "Meet Cel", engaging with customers to take them through
the journey of education and awareness on choosing the skincare
products suitable for their individual needs;
|
Outlook
|
·
|
Successfully completed the rightsizing of the
business, significantly reducing costs and extending the Company's
financial runway;
|
|
·
|
While the development of AI holds significant
promise for the Company's future, it's important to note that
tangible results may require additional time to
materialize.
|
For further
information please contact:
|
Cel
AI
|
|
|
Michael (Mike)
Edwards
Chairman and interim CEO
|
via
FSCF
|
|
First Sentinel
Corporate Finance (FSCF)
|
|
|
Investor Relations
Emily
Warrilow
IR@cellular-goods.com
Media Relations
Emily
Warrilow
Media@cellular-goods.com
Corporate Broker & Adviser
Brian
Stockbridge
|
+44 7596
912660
+44 7596
912660
+44 7858
888 007
|
|
Novum Securities
|
|
|
Corporate Broker
Colin Rowbury
Jon
Belliss
|
+44 207 399
9427
|
About Cel AI
PLC:
Cel AI offers an AI-driven skincare
analysis tool that provides customers with personalised skincare
recommendations based on their individual skin type and concerns.
The tool utilises AI algorithms to analyse customer-provided
information and offer tailored product recommendations from a range
of skincare brands. Additionally, it develops and markets premium
quality skincare and wellness products based on proprietary
formulations incorporating lab-made cannabinoids.
The Company is incorporated in the UK and listed
on the Main Market of the London Stock Exchange. For more
information, visit www.getcel.ai.
Forward-looking
statements:
This document contains forward-looking
statements which are subject to known and unknown risks and
uncertainties because they relate to future events, many of which
are beyond the Company's control. These forward-looking statements
include, without limitation, statements in relation to the
Company's financial outlook and future performance. No assurance
can be given that future results will be achieved; actual events or
results may differ materially as a result of risks and
uncertainties facing the Company.
You are cautioned not to rely on these
forward-looking statements, which speak only as of the date of this
announcement. The Company undertakes no obligation to update or
revise any forward-looking statement to reflect any change in its
expectations or any change in events, conditions or circumstances.
Nothing in this document is or should be relied upon as a warranty,
promise or representation, express or implied, as to the future
performance of the Company or the Group or their
businesses.
INTERIM MANAGEMENT REPORT
Despite our strategic investments in
initiatives such as SheerLux activities, international expansion,
and collaboration with Chill PLC, Teyllo and Sephora, Cel AI PLC
faced challenges in achieving growth due to the complex development
of the cannabinoid industry.
These efforts did not yield the
anticipated increase in customer acquisition and revenue
generation. As a result, half-year sales for FY24 declined by 42%,
amounting to £17.9k up to February 2024, compared to £31k for the
same period in 2023.
In response to these performance
challenges and to preserve cash, the Company implemented cost
reduction measures, reducing costs by 66% from £1.82m up to
February 2023 to £627.07k up to February 2024. Going forward,
we have successfully reduced our cash burn rate by a third, from
£150k per month to average £50k per month.
Our net cash position stood at £1m as of
February 2024 (£1.77m as of August 2023).
Marketing and
product strategy
Cel AI has expanded its market reach by opening
international shipments to Europe, unlocking broader international
exposure. This strategic move aims to capitalise on the demand for
our products beyond domestic borders.
In addition to this expansion, two significant
recognitions underscore the quality and efficacy of our skincare
offerings. Our products were recognised as finalists in the Pure
Beauty Awards, reflecting our commitment to excellence.
Furthermore, our Rejuvenating Face Serum received the Bronze Award
in the "Get The Gloss" Beauty Awards, affirming its effectiveness
and potential in the skincare industry.
A major development for Cel AI is the
refocusing of our investment on our AI tool development that will
assist our customers in making the best skincare decisions. We see
this as a great opportunity for growth, allowing us to leverage our
expertise in the wellness industry more effectively and
lucratively.
To further engage and expand our customer base,
we have initiated a social media campaign. This campaign aims to
raise brand awareness, showcase our products' benefits, and foster
community engagement. We are now working to upgrade and optimise
our campaign in this space to enhance its reach and
impact.
Additionally, our wholly owned subsidiary, King
Tide Carbon (King Tide),
achieved a major milestone in November 2023 with the production of
kelp-derived biochar. This accomplishment paves the way for carbon
dioxide removal (CDR)
credit production and a range of applications in agriculture,
environmental restoration, and industry. King Tide is also applying
for entry into several government grant schemes to unlock funds for
future development in the CDR space.
Product pipeline
Cel AI has made the strategic decision to
redirect our focus this year towards building Cel, an innovative
tool aimed at enhancing customer engagement in a more sophisticated
manner.
The development of Cel is not only geared
towards benefiting Cel AI but also presents an opportunity to
assist other companies with their customer base and is expected to
unlock new revenue streams. While we are currently in the
development phase, we remain optimistic about the future growth
potential of Cel AI.
Management structure
For the current scale of operations,
the Board believes that Cel AI has the right size of management
team, with the right technical expertise to evolve the
business.
Current trading
and outlook
The Company has made a solid start to the
second half by advancing its AI-driven tool, Cel, and engaging
customers through social media campaigns and iterative product
generation via user feedback.
In addition to these advancements, the Company
has taken significant steps to reduce costs drastically. This
cost-cutting measure aims to preserve existing capital.
CONDENSED
STATEMENT OF COMPREHENSIVE INCOME
|
|
Notes
|
Six months to 29 February
2024
|
Six months to 28 February
2023
|
Year ended 31 August
2023
|
|
|
|
£
|
£
|
£
|
|
Revenue
|
4
|
17,941
|
31,022
|
67,236
|
|
Cost of sales
|
|
(7,682)
|
(13,332)
|
(25,796)
|
|
Gross
profit
|
|
10,259
|
17,890
|
41,440
|
|
|
|
|
|
|
|
Administrative expenses
|
|
(627,078)
|
(1,827,329)
|
(3,375,179)
|
|
|
|
|
|
|
|
Operating
loss
|
5
|
(626,819)
|
(1,809,439)
|
(3,333,739)
|
|
|
|
|
|
|
|
Finance income
|
|
13,200
|
3,983
|
24,113
|
|
|
|
|
|
|
|
Loss before
taxation
|
|
(603,619)
|
(1,805,456)
|
(3,309,626)
|
|
|
|
|
|
|
|
Taxation
|
|
-
|
-
|
(95)
|
|
|
|
|
|
|
|
Loss after
taxation
|
|
(603,619)
|
(1,805,456)
|
(3,309,721)
|
|
|
|
|
|
|
|
Other comprehensive loss Translation of foreign
operations
|
|
(580)
|
(25)
|
(24)
|
|
|
|
|
|
|
|
Total
comprehensive loss for the period
|
|
(604,199)
|
(1,805,481)
|
(3,309,745)
|
|
|
|
|
|
|
|
Basic and
diluted loss per share - pence
|
6
|
0.11
|
0.36
|
0.62
|
All transactions arise from continuing
operations.
The accompanying accounting policies and notes
form an integral part of these unaudited interim financial
statements.
CONDENSED
STATEMENT OF CHANGES IN EQUITY
|
|
Ordinary share
capital
|
Share
premium
|
Foreign currency
translation
|
Share-based payment
reserve
|
Retained
earnings
|
Total
|
|
|
£
|
£
|
£
|
£
|
£
|
£
|
|
Balance at 1 September 2022
|
507,250
|
12,513,101
|
(1,300)
|
1,564,070
|
(9,730,889)
|
(4,852,232)
|
|
Loss for the period
|
-
|
-
|
-
|
-
|
(1,805,456)
|
(1,805,456)
|
|
Other comprehensive
income
|
-
|
-
|
(25)
|
-
|
-
|
(25)
|
|
Total comprehensive income for the
period
|
-
|
-
|
(25)
|
-
|
(1,805,456)
|
(1,805,481)
|
|
|
|
|
|
|
|
|
|
Share-based payments
|
-
|
-
|
-
|
155,772
|
-
|
155,772
|
|
Total contributions by
owners
|
-
|
-
|
-
|
155,772
|
-
|
155,772
|
|
Balance at 29 February 2023
|
507,250
|
12,513,101
|
(1,325)
|
1,719,842
|
(11,536,345)
|
3,202,523
|
|
Balance at 1
March 2023
|
507,250
|
12,513,101
|
(1,325)
|
1,719,842
|
(11,536,345)
|
3,202,523
|
|
Loss for the period
|
-
|
-
|
-
|
-
|
(1,504,266)
|
(1,504,266)
|
|
Other comprehensive income
|
-
|
-
|
1
|
-
|
-
|
1
|
|
Total comprehensive income for the
period
|
-
|
-
|
1
|
-
|
(1,504,266)
|
(1,504,265)
|
|
Shares issued
|
95,000
|
475,000
|
|
|
|
570,000
|
|
Share-based payments
|
-
|
-
|
-
|
(5,450)
|
-
|
(5,450)
|
|
Total contributions by owners
|
95,000
|
475,000
|
-
|
(5,450)
|
-
|
564,550
|
|
Balance at 31
August 2023
|
602,250
|
12,988,101
|
(1,324)
|
1,714,392
|
(13,040,611)
|
2,262,808
|
|
|
|
|
|
|
|
|
|
Balance at 1
September 2023
|
602,250
|
12,988,101
|
(1,324)
|
1,714,392
|
(13,040,611)
|
2,262,808
|
|
Loss for the period
|
-
|
-
|
-
|
-
|
(603,619)
|
(603,619)
|
|
Other comprehensive income
|
-
|
-
|
(580)
|
-
|
-
|
(580)
|
|
Total comprehensive income for the
period
|
-
|
-
|
(580)
|
-
|
(603,619)
|
(604,199)
|
|
|
|
|
|
|
|
|
|
Share-based payments
|
-
|
-
|
-
|
7,211
|
-
|
7,211
|
|
Total contribution by owners
|
-
|
-
|
-
|
7,211
|
-
|
7,211
|
|
Balance at 29
February 2024
|
602,250
|
12,988,101
|
(1,904)
|
1,721,603
|
13,644,230
|
1,665,820
|
|
|
|
|
|
|
|
| |
The accompanying accounting policies and notes
form an integral part of these unaudited interim financial
statements.
CONDENSED
STATEMENT OF CASH FLOWS
|
|
Six months to 29 February
2024
|
Six months to 28 February
2023
|
Year ended 31 August
2023
|
|
|
£
|
£
|
£
|
|
Cashflow from operating activities
|
|
|
|
|
Loss before income tax
|
(603,619)
|
(1,805,456)
|
(3,309,721)
|
|
Share-based payment
charge
|
7,211
|
155,772
|
150,322
|
|
Increase in inventory
|
(742)
|
(21,406)
|
(78,757)
|
|
Increase in trade and other
receivables
|
(53,591)
|
111,257
|
158,269
|
|
Increase in trade and other
payables
|
(120,579)
|
113,756
|
(93,331)
|
|
Research and development non
cash
|
-
|
-
|
570,000
|
|
Foreign exchange
differences
|
(580)
|
(25)
|
(24)
|
|
Finance income
|
10,913
|
(2,682)
|
(22,812)
|
|
|
|
|
|
|
Net
cash flows used in operating activities
|
(760,987)
|
(1,448,784)
|
(2,626,054)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
Finance income
|
(10,913)
|
2,682
|
22,812
|
|
Net
cash flow from investing activity
|
(10,913)
|
2,682
|
22,812
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
Proceeds from issue of shares, net
of issue costs
|
-
|
-
|
-
|
|
Net cash
inflow from financing activities
|
-
|
-
|
-
|
|
|
|
|
|
|
Net
movement in cash and cash equivalents
|
(771,900)
|
(1,446,102)
|
(2,603,242)
|
|
Opening cash and cash
equivalents
|
1,772,892
|
4,376,134
|
4,376,134
|
|
Closing cash and cash equivalents
|
1,000,992
|
2,930,032
|
1,772,892
|
The accompanying accounting policies and notes
form an integral part of these unaudited interim financial
statements.
NOTES TO THE
FINANCIAL STATEMENTS
1. Information on the Company
The Company is incorporated in
England and Wales (registration number 11537452) and has a Standard
Listing under Chapter 14 of the Listings Rules, trading on the
London Stock Exchange with ticker CLAI.
Cel AI uses advanced cutting-edge
artificial intelligence (AI) to deliver the future of
personalised beauty, with tailored beauty advice and product
recommendations in addition to its breakthrough skincare
formulations powered by CBG.
2. Basis of preparation and principal accounting
policies
This condensed consolidated interim
financial information was approved for issue by the Board on
Saturday the 25th of May 2024.
The Company's directors are
responsible for the preparation of the unaudited interim financial
statements.
The preparation of unaudited interim
financial statements in conformity with IFRSs requires the use of
estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the unaudited interim
financial statements and the reported amounts of expenses during
the period. Although these estimates are based on management's best
knowledge of the amount, event or actions, actual results
ultimately may differ from those estimates.
The Directors consider that in the
proper preparation of the unaudited interim financial statements
there were no critical or significant areas which required the use
of accounting estimates and exercise of judgement by management
while applying the Company's accounting policies.
This condensed consolidated interim
financial information has not been audited and does not include all
of the information required for full annual financial statements.
The financial figures included within this interim report have been
computed in accordance with IFRS applicable to interim periods, and
this report constitutes an interim financial report as set out in
International Accounting Standard 34: Interim Financial
Reporting.
There is no material difference
between the fair value of financial assets and liabilities and
their carrying amount.
The functional and presentational
currency is UK Sterling.
3. Going concern
The Directors have assessed the
current financial position of the Company, along with future cash
flow requirements, to determine if the Company has the financial
resources to continue as a going concern for the foreseeable
future.
The conclusion of this assessment is
that it is appropriate that the Company be considered a going
concern. For this reason, the Directors continue to adopt the going
concern basis in preparing the unaudited interim financial
statements.
4. Revenue
The Company generated revenue from
the sales of its products during the period of £17,941 (28 February
2023: £31,022 and 31 August 2023: £67,236).
5. Operating
loss
Total administrative expenses
include share-based payments of £7,211 (28 February 2023:
£155,772). The related credit to equity is taken to retained
earnings.
6. Earnings per share
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.
|
|
29 February
2024
|
28 February
2023
|
31 August
2023
|
|
|
£
|
£
|
£
|
|
Loss
used to calculate basic and diluted earnings per share
|
(603,619)
|
(1,805,456)
|
(3,309,721)
|
|
|
|
|
|
|
Weighted average number of shares used in
calculating
basic
earnings per share
|
537,962,329
|
507,250,000
|
537,962,329
|
|
|
|
|
|
|
Weighted average number of shares used in
calculating
diluted earnings per share
|
537,962,329
|
507,250,000
|
537,962,329
|
|
|
|
|
|
|
Basic
loss per share (pence)
|
(0.11)
|
(0.36)
|
(0.615)
|
|
|
|
|
|
|
Diluted loss per share (pence)
|
(0.11)
|
(0.36)
|
(0.615)
|
7. Trade and other receivables
|
|
29 February 2024
|
28 February 2023
|
31 August 2023
|
|
|
£
|
£
|
£
|
|
Trade receivables
|
790
|
683
|
-
|
|
VAT debtor
|
16,115
|
38,654
|
31,491
|
|
Prepayments
|
28,437
|
99,376
|
59,100
|
|
Other debtors
|
101,084
|
1,134
|
2,244
|
|
|
146,426
|
139,847
|
92,835
|
There were no receivables that were past due or
considered to be impaired. There is no significant difference
between the fair value of the other receivables and the values
stated above.
8. Trade and other payables
|
|
29 February 2024
|
28 February 2023
|
31 August 2023
|
|
|
£
|
£
|
£
|
|
Trade creditors
|
37,107
|
259,392
|
104,892
|
|
Accruals
|
23,491
|
36,891
|
56,926
|
|
Other creditors
|
4,625
|
96,606
|
23,984
|
|
|
65,223
|
392,889
|
185,802
|
|
|
|
|
| |
All liabilities are payable on demand
or have payment terms of less than 90 days.
9. Share capital
|
|
29 February
2024
|
28 February
2023
|
31 August
2023
|
|
|
|
|
£
|
£
|
£
|
|
|
|
|
|
|
Ordinary shares of £0.001 each
|
602,250
|
507,250
|
602,250
|
The Ordinary Shares have been classified as
Equity. The Ordinary Shares have attached to them full voting and
capital distribution rights.
On 5 May 2023, 95,000,000 Ordinary Shares of
£0.001 each were issued, on conversion of warrants over 95,000,000
shares at 1p each, increasing the number of Ordinary Shares to
602,250,000.
10. Capital and
reserves
Share capital represents issued Ordinary Shares
of £0.001 each, all of which are fully paid.
Share premium is the amount subscribed for
share capital in excess of nominal value less attributable share
issue expenses.
Retained earnings is the cumulative loss of the
Company attributable to equity shareholders.
11. Share-based
payments
The Company has a total of 12,500,000 warrants
to subscribe for additional share capital of the Company. Each
warrant entitles the holder to subscribe for one Ordinary Share in
the Company. Once vested, the right to convert each warrant is
unconditional.
The right to subscribe for Ordinary Shares in
the Company is subject to minimum vesting periods of up to three
years.
No new warrants were issued in the
period.
|
|
|
|
|
|
|
Warrants
issued
|
Weighted average exercise price
(pence)
|
29 February 2024
|
28 February 2023
|
31 August
2023
|
|
|
|
Number
|
Number
|
Number
|
|
|
|
|
|
|
|
At the beginning of the period
|
3.62
|
41,460,000
|
50,460,000
|
50,460,000
|
|
Issued in the period
|
-
|
-
|
-
|
12,000,000
|
|
Exercised in the year
|
-
|
-
|
-
|
(21,000,000)
|
|
Lapsed in the year
|
4.45
|
(28,960,000)
|
|
|
|
At the end of the period
|
1.37
|
12,500,000
|
50,460,000
|
41,460,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In the period, the Company issued share options
to employees as follows:
|
Share options
issued
|
Weighted average exercise price
(pence)
|
29 February 2024
|
28 February 2023
|
31 August
2023
|
|
|
|
Number
|
Number
|
Number
|
|
|
|
|
|
|
|
At the beginning of the period
|
5.74p
|
24,331,594
|
22,550,000
|
22,550,000
|
|
Issued in year
|
-
|
-
|
-
|
7,000,000
|
|
Lapsed in the period
|
-
|
-
|
(5,218,406)
|
(5,218,406)
|
|
At the end of period
|
5.74p
|
24,331,594
|
17,331,594
|
24,331,594
|
Equity-settled share-based payments are
measured at fair-value (excluding the effect of non-market-based
vesting conditions) as determined through use of the Black-Scholes
technique, at the date of issue.
Volatility for the calculation of the
share-based payment charge in respect of the options issued was
determined by reference to movements in the relative share prices
of a selected peer-group of companies listed on the London Stock
Exchange up to the date of admission and also proportionately on
post admission share-price movements of the Company where
relevant.
The total share-based payment charge in the
period was £7,211, which has been charged to administrative
expenses (six months to 28 February 2023: £155,772, all of which
was charged to administrative expenses; year to 31 August 2023:
£150,322, all of which was charged to administrative expenses). All
warrants and options have an exercise period between one and three
years from the date of issue.
The total of the share-based payment charge has
been simultaneously credited to retained earnings.
The total number of warrants issued to
directors (including former directors) is 9,000,000 and the total
number of share options issued to directors is Nil.
|
Share-based
payment charge for the period
|
29 February 2024
|
28 February 2023
|
31 August
2023
|
|
|
£
|
£
|
£
|
|
|
|
|
|
|
Administrative expenses
|
7,211
|
155,772
|
150,322
|
