TIDMSOP
RNS Number : 5283U
Spinnaker Opportunities PLC
30 July 2020
30 July 2020
Spinnaker Opportunities plc
Half Yearly Report (Unaudited)
For the Period Ended 30 June 2020
Spinnaker Opportunities plc ("Spinnaker" or the "Company")
announces today its preliminary financial results for the period
ended 30 June 2020.
Period Highlights
-- During the period Spinnaker has been await ing confirmation
of the overall listing requirements for cannabis-related companies
by the appropriate UK regulatory bodies so the Company can co
mplete its proposed acquisition of the entire issued share capital
of Kanabo Research Ltd ("Kanabo")
-- Advanced a further sum of GBP200,000 to Kanabo under the
terms of the existing Loan Facility Agreement to enable Kanabo to
grow sales and invest in future development
-- Raised GBP165,000 through the i ssue of convertible loan notes
-- ash of approximately GBP 510,000 on 30 June 2020
Post-Period Highlights
-- Acquisition and admission of enlarged group remains on course
-- Indications received in July 2020 that UK review of
regulatory requirements for cannabis-related companies is nearly
complete which could then allow the transaction to proceed
For further information, please visit
http://www.spinnakeropportunities.uk/ or contact the following:
Peterhouse Capital (Financial adviser and joint broker)
Tel: +44 (0)20 7469 0930
Guy Miller/ Lucy Williams/
Eran Zucker
SI Capital (Joint broker)
Tel: +44 (0)1483 413 500 /
+44 (0) 203 871 4038
Nick Emerson / Greg Mahoney
Blytheweigh (Financial PR)
Tel: +44 (0) 207 138 3553
Tim Blythe/ Camilla Horsfall/ Madeleine Gordon-Foxwell
Chairman's Statement
I am pleased to present the interim financial statements to
shareholders for the six months ending 30 June 2020.
The Company remains focused on the delivery of the acquisition
of Kanabo and along with its management team, we very much look
forward to bringing the business to the London market to enable
Kanabo to achieve its growth potential. The transaction has taken
longer than expected and is still not completed, but the Company
remains positioned to be one of the first cannabis-related
businesses to list on the London Stock Exchange.
Whilst the terms of the acquisition have been agreed, completion
remains subject to the satisfaction of certain conditions,
including inter alia:
-- The transaction will constitute a reverse takeover under the
Listing Rules and will be subject to approval by shareholders of
the Company at a general meeting
-- The Company having obtained a waiver from the Takeover Panel
under Rule 9 of the Takeover Code
-- The successful completion of fundraising activities to be
undertaken by way of a placing and direct subscriptions by new and
existing investors
-- Re-listing of the enlarged group on the London Stock Exchange
Accordingly, there can be no absolute certainty that the
transaction will proceed.
The period under review was spent waiting for confirmation of
the overall listing requirements for cannabis-related companies by
the appropriate UK regulatory bodies. A Share Purchase Agreement
for the transaction was executed on 2 December 2019 and the Company
has been ready to proceed since then. In the second half of July
2020, the Company received indications that a resolution is at last
being actively sought. The Boards of both Spinnaker and Kanabo
remain optimistic and both companies continue to press for a
satisfactory conclusion to the current regulatory processes.
A prospectus setting out final details of the acquisition and
re-admission transaction is expected to be published shortly,
together with a notice of meeting convening and setting out the
resolutions required to be endorsed by members at a general meeting
in order to complete the transaction.
In order to facilitate the execution of Kanabo's business plan
while waiting for completion of the acquisition and re-admission to
trading, the Company supplied two further tranches each of
GBP100,000 to Kanabo during the period, under its Loan Facility
Agreement, secured against the intellectual property of the
business. Financing for the additional loan tranches came from
internal funds together with GBP165,000 raised through convertible
loan notes issued to new and existing subscribers to the
Company.
During the COVID-19 pandemic, Kanabo has implemented appropriate
policies to protect the health of its staff and to manage costs. In
the meantime, business development activities directed towards
expanding the list of qualified suppliers of raw materials and
sales through its distributor network in the target markets have
continued in line with Kanabo's business plan.
We continue to believe that helping to open the new and exciting
medicinal cannabis sector to investors in London will be
worthwhile. The consumer demand for alternative healthcare has
never been higher, and the sector, therefore, offers a valuable
growth platform as the UK and the world overcome the COVID-19
crisis.
I would like to take this opportunity to thank my board
colleagues, retained advisers and the transaction advisory team for
their dedication and hard work which has brought the Company within
sight of a ground-breaking transaction. We look forward to updating
shareholders through to completion and beyond.
Results for the 2020 interim financial period
A summary of the key financial results is set out in the table
below:
Unaudited Unaudited Audited
30.6.2020 30.6.2019 31.12.2019
GBP'000 GBP'000 GBP'000
--------------------- ---------- ---------- -----------
Revenue - - -
Operating expenses (111) (157) (365)
--------------------- ---------- ---------- -----------
Operating loss (111) (157) (365)
Finance income 10 1 2
--------------------- ---------- ---------- -----------
Loss before tax (101) (156) (363)
Taxation - - -
Loss for the period (101) (156) (363)
Interest
The net interest cost for the company for the period was
GBPnil.
Loss before tax
Loss before tax for the period was GBP101,000.
Taxation
Taxation charge was GBPnil for the period.
Earnings per share
Basic and diluted earnings per share for the period was 0.35p
loss.
Financial position
The Company's unaudited balance sheet as at 30 June 2020 can be
summarised as set out in the table below:
Assets Liabilities Net assets
GBP'm GBP'm GBP'm
GBP'000 GBP'000 GBP'000
------------------------------------ -------- ------------ -----------
Non-current assets and liabilities - - -
Current assets and liabilities 834 (231) 603
Total as at 30 June 2020 834 (231) 603
------------------------------------ -------- ------------ -----------
Cash flow
Net cash outflow for 2020 was GBP81,000.
Interim Condensed Income Statement
Six month period ended 30 June 2020
Unaudited Unaudited
6 months 6 months Audited
ended ended Year ended
30.06.20 30.06.19 31.12.19
Note GBP'000 GBP'000 GBP'000
Revenue - - -
Cost of sales - - -
--------------------------- ----- ---------- ---------- ------------
Gross profit - - -
Operating expenses (111) (157) (365)
--------------------------- ----- ---------- ---------- ------------
Operating loss (111) (157) (365)
Net finance income 10 1 2
Loss before tax (101) (156) (363)
Taxation - - -
--------------------------- ----- ---------- ---------- ------------
Loss for the period (101) (156) (363)
Loss attributable to the
Company (101) (156) (363)
--------------------------- ----- ---------- ---------- ------------
Loss per share expressed
in pence per share
From continuing and total
operations:
Basic & diluted loss per
share, pence 5 (0.35) (0.5) (1.2)
The Company has no items of other comprehensive income.
Interim Condensed Balance Sheet
As of 30 June 2020
Unaudited Unaudited Audited
30 June 30 June 31 December
2020 2019 2019
Note GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Other receivables - - 100
------------------------------ ----- ----------------------- --------------------- ----------------------
Total non-current assets - - 100
------------------------------ ----- ----------------------- --------------------- ----------------------
Current assets
Receivables and prepayments 318 10 13
Cash 516 883 597
------------------------------ ----- ----------------------- --------------------- ----------------------
Total current assets 834 893 610
Total assets 834 893 710
------------------------------ ----- ----------------------- --------------------- ----------------------
Liabilities
Current liabilities
Trade and other payables 66 12 36
Convertible loan 165 - -
Total current liabilities 231 12 36
Net current assets 603 881 574
Net Assets 603 881 674
Share capital 3 735 735 735
Share premium 3 589 592 592
Share based payments reserve 4 92 59 59
Retained earnings (813) (505) (712)
Total equity attributable
to equity holders of the
company 603 881 674
------------------------------ ----- ----------------------- --------------------- ----------------------
Interim Condensed Statement of Changes in Equity
Six months ended 30 June 2020
Share based
payments Retained
Share capital Share premium reserve earnings Total equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ------------- ------------- ----------- --------- ------------
Balance at 1 January
2019 735 592 59 (349) 1,037
Loss for the period - - - (363) (363)
Total comprehensive
loss - - - (363) (363)
Balance at 31 December
2019 735 592 59 (712) 674
Loss for the period - - - (101) (101)
Total comprehensive
loss - - - (101) (101)
Commission on fund
raise - (3) - - (3)
Grant of share options - - 33 - 33
Balance at 30 June
2020 735 589 92 (813) 603
----------------------- ------------- ------------- ----------- --------- ------------
Interim Condensed Cash Flow Statement
Six months ended 30 June 2020
Unaudited Unaudited Audited
30 June 30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
--------------------------------------
Loss for the period (101) (156) (363)
Adjustment for:
Share based payment charge 33 - -
(Increase)/decrease in receivables (205) 3 -
Increase/(decrease) in payables 30 (5) 19
Net cash used in operating activities (243) (158) (344)
Cash flows from investing activities
Loan advanced - - (100)
Net cash from/(used in) investing
activities - - (100)
-------------------------------------- --------- --------- ---------------------
Cash flows from financing activities
Convertible loan notes (net
of costs) 162 - -
Net cash from/(used in) financing
activities 162 - -
-------------------------------------- --------- --------- ---------------------
Net increase/(decrease) in cash
and cash equivalents (81) (158) (444)
-------------------------------------- --------- --------- ---------------------
Cash and cash equivalents brought
forward 597 1,041 1,041
-------------------------------------- --------- --------- ---------------------
Cash and cash equivalents carried
forward 516 883 597
-------------------------------------- --------- --------- ---------------------
Notes to the interim condensed financial statements
For the six month period ended 30 June 2020
1. General information
Spinnaker Opportunities plc (the Company) is a company
incorporated and domiciled in England and Wales. It is a cash shell
company listed on the standard list of the London Stock
Exchange.
2. Summary of significant accounting policies
The principal accounting policies adopted in the preparation of
these financial results are set out below. These policies have been
consistently applied to all financial periods presented, unless
otherwise stated.
Basis of preparation and going concern basis
The interim condensed financial statements for the 6 months
ended 30 June 2020 have been prepared in accordance with IAS 34
Interim Financial Reporting.
The interim financial information set out above does not
constitute statutory accounts within the meaning of Companies Act
2006. It has been prepared on a going concern basis in accordance
with the recognition and measurement criteria of International
Financial Reporting Standards (IFRS) as adopted by the European
Union (adopted IFRS).
The financial statements have been prepared under the historic
cost convention.
The company was incorporated on 17 November 2016 and in 2017 was
admitted to Standard List of London Stock Exchange, the period
under review represents the third interim set of accounts. The
interim financial information for the 6 months ended 30 June 2020
has not been reviewed or audited. The interim financial report was
approved by the Board on 29 July 2020.
The Company's business activities, together with the factors
likely to affect its future development, performance and position
are set out in this review. The financial position of the Company,
its cash flows and liquidity position are described in this
business review. In addition, the below notes to the financial
results include the Company's objectives, policies and processes
for managing its capital; its financial risk management objectives;
details of its financial instruments; and its exposure to credit
risk and liquidity risk. As highlighted below, the Company meets
its day to day working capital requirements through its on-going
cash flows.
Segment reporting
The Company is currently a cash shell and the directors believe
that there is no benefit to show any segmental reporting until a
new strategy is undertaken.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held
at call with banks and other short-term highly liquid investments
with maturities of three months or less. Bank overdrafts that are
repayable on demand and form an integral part of the Company's cash
management are included as a component of cash and cash equivalents
for the purpose of the cash flow statement.
Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares and share
options are recognised as a deduction from equity, net of any tax
effects.
Taxation
Income tax payable is provided on taxable profits using tax
rates enacted or substantively enacted at the balance sheet
date.
Deferred taxation is provided in full, using the liability
method on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the
consolidated financial results. Deferred tax is determined using
tax rates (and laws) that have been enacted or substantively
enacted at the balance sheet date and are expected to apply when
the related balance sheet tax asset is realised or the deferred
liability is settled. Deferred income tax assets are recognised to
the extent that it is possible that future taxable profit will be
available against which temporary differences can be utilised.
Income tax is recognised in the consolidated income statement
except to the extent that it relates to items recognised directly
in equity, in which case it is recognised in equity.
Critical accounting estimates and judgements
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 Company makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial period are discussed below.
Going concern basis of preparation
The Company has approximately GBP510,000 cash at the period end.
The Directors have prepared the accounts on a going concern basis
as they consider that the company has adequate funding.
3. Share capital and share premium
Ordinary shares of 2.5p Number of Share capital Share premium
shares GBP'000 GBP'000
Shares issued brought forward 29,400,120 735 592
------------------------------- ----------- -------------- --------------
At 30 June 2020 29,400,120 735 589
------------------------------- ----------- -------------- --------------
4. Share based payments
Share based payments reserve
Movements in the share based payments reserve in the period
relate to:
GBP'000
---------------------- --------
At the beginning
of the period 59
Share options issued 33
----------------------- --------
At 30 June 2020 92
----------------------- --------
Warrants
Weighted
average
Number exercise
of awards price
-------------------------------- ------------- ----------
At the beginning of the period 26,590,500 GBP0.074
Lapsed (26,590,500)
--------------------------------- ------------- ----------
Exercisable at 30 June 2020 - -
All warrants lapsed in the period to 30 June 2020.
Share options
Weighted
average
Number exercise
of awards price
------------------------------- ------------ ----------
At the beginning of the period 2,440,000 GBP0.05
Granted 1,960,000 GBP0.05
Lapsed (2,440,000) -
------------------------------- ------------ ----------
Exercisable at 30 June 2019 1,960,000 GBP0.05
The options outstanding at 30 June 2020 have a weighted average
remaining contractual life of 2.9 years.
At 30 June 2020, the following options were issued to directors
and advisers of the Company under the share option incentive
scheme:
Date of grant 15-Jun-20
Number granted 1,960,000
Contractual life 3 years
Exercise price GBP0.05
The estimated fair
value GBP0.017
All options vested at the date of the agreement.
The fair value of the options issued during the period
determined using the Black-Scholes valuation model and a share
based payment charge of GBP33,025 (year ended 31 December 2019:
GBPnil) has been recognised in the income statement.
Other significant inputs into the model are:
Issue date share price 5p
Risk free rate 0.2%
Expected volatility 50%
The average volatility has been calculated by using the average
volatility for the Company and other similar companies.
5. Earnings per share
Basic and diluted
The basic earnings per share is calculated by dividing the
(loss)/profit attributable to the ordinary shareholders of the
Company by the weighted average number of Ordinary shares in issue
during the period, excluding Ordinary shares purchased by the
Company and held as treasury shares.
Half year Half year
ended ended Year ended
30.06.20 30.06.19 31.12.19
(Loss)/profit attributable to equity
holders of the Company (GBP'000) (101) (157) (363)
Weighted average number of shares in
issue 29,400,120 29,400,120 29,381,490
(Loss)/earnings per share (pence) (0.3) (0.5) (1.2)
------------------------------------- ---------- ---------- ----------
Due to the loss incurred in the period under review, the
dilutive securities have no effect as at 30 June 2020.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR ZZGZNVLNGGZM
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