TIDMVELA
RNS Number : 6851X
Vela Technologies PLC
22 December 2023
22 December 2023
Vela Technologies plc
("Vela" or " the Company")
Interim results for the six months ended 30 September 2023
Vela Technologies plc (AIM: VELA), an AIM-quoted investing
company focused on early stage and pre-IPO disruptive technology
investments, is pleased to announce its interim results for the six
months ended 30 September 2023.
Overview
The last six months have continued to be challenging for capital
markets with political unrest continuing both at home and abroad,
the continuing war in Ukraine and rising inflation and interest
rates continue to be factors impacting the small-cap marketplace in
the UK. We remain cautiously optimistic regarding the long-term
future of the Company's overall investment portfolio and we remain
committed to the Company's stated investing strategy.
Despite these negatives, post period end we were pleased to be
able to exercise the put option in the economic interest that the
Company holds in AZD 1656 into shares in Conduit Pharmaceuticals
Inc. ("Conduit"). As previously reported Vela entered into a put
option at a cost of GBP400,000. Following the exercise Vela
received 1,015,760 new shares in Conduit, valued at the date of
exercise at GBP3.75 million (the "Consideration Shares"). It is the
intention of the Board to sell these shares in due course to
augment its cash reserves. On 15 December 2023, Conduit issued a
prospectus in connection with various share issuances, including
the issue of the Consideration Shares to Vela. Following the
publication of the prospectus Vela became able to trade its
Consideration Shares on NASDAQ.
Vela made one new investment during the period, investing
GBP250,000 into Tribe Technologies PLC as part of an IPO funding
round. During the period we have continued to monitor the
investments and have made some small sales when the prices were
favourable.
Turning to the financials, I am pleased to say that Vela's
balance sheet remains strong with no debt and total assets
amounting to GBP7.542 million as at 30 September 2023 (30 September
2022: GBP7.268 million; 31 March 2023: GBP7.043 million). Cash and
cash equivalents as at 30 September 2023 were GBP31,000 (31 March
2023: GBP724,000; 30 September 2022: GBP646,000). Since 31 March
2023 the decrease in Vela's cash reserves can be attributed to
further investments in line with the Company's investing policy
(being Tribe Technology Plc and the put option for Conduit), as
well as the ongoing administrative costs associated with the
Company.
As at 30 September 2023, the investment portfolio comprises a
total of 15 investee companies. 14 of these are held as investments
and had a fair value of GBP2.789 million as at 30 September 2023
(31 March 2023 GBP3.193 million; 30 September 2022: GBP3.546
million). The remaining and largest investment, St George Street
Capital, is held as a financial asset and is held on Vela's balance
sheet at a fair value of GBP4.0 million (30 September 2022: GBP2.35
million; 31 March 2023: GBP2.35 million) with a cost of GBP2.750
million, including the previously acquired, and now exercised, put
option. Investments are held at fair value through profit and loss
using a three-level hierarchy for estimating fair value, as
detailed in the audited financial statements for the year ended 31
March 2023, and, in line with this, investments have been revalued
to reflect the fair value at 30 September 2023.
Vela has made no new investments since the period end, as we
continue to monitor cash reserves and company expenses, but the
Board continues to have meaningful dialogue with engaging parties
as a potential to enhancing the Vela offering.
The Board looks forward to the remainder of the financial year
ending 31 March 2024 with caution but ever mindful of potential new
and follow-on investments in line with its investing policy and the
strategic update announced on 2 September 2022. The Board will
continue to update shareholders, in line with regulatory
guidelines, via its quarterly investment updates and regulatory
announcements. The directors would like to thank shareholders for
their continued support.
Brent Fitzpatrick
Chairman
21 December 2023
Unaudited Statement of Comprehensive Income
for the six months ended 30 September 2023
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year
ended ended Ended
30 September 30 31
September March
2023 2 022 2 023
Notes GBP'000 GBP'000 GBP'000
------ ------------- ------------ ----------
Revenue - - -
Fair value movements
- on derivatives (55) (26) 9
- on financial asset 1,250 - -
- on investments (518) 55 (26)
------------- ------------ ----------
Net surplus (deficit) arising from
fair value movements 677 29 (17)
Administrative expenses (181) (171) (401)
------------- ------------ ----------
Operating profit (loss) 496 (142) (418)
Finance income 6 15 40
Profit (loss) before tax 502 (127) (378)
Income tax - - -
-------------
Profit (loss) after tax 502 (127) (378)
Other comprehensive income for the - - -
year
Total comprehensive profit (loss) 502 (127) (378)
------------- ------------ ----------
Attributable to:
Equity holders of the company 502 (127) (378)
Profit (loss) per share
Basic and diluted profit (loss) per
share (pence) 4 0.0031 (0.0008) (0.0023)
Unaudited Balance Sheet
as at 30 September 2023
(Unaudited) (Unaudited) (Audited)
30 September 30 September 31
March
2023 2 022 2023
Notes GBP '000 GBP ' GBP'000
000
------ -------------- -------------- -----------
Non-current assets
Investments 5 2,789 3,546 3,193
Trade and other receivables 6 4,704 3,039 3,054
-------------- -------------- -----------
Total non-current assets 7,493 6,585 6,247
-------------- -------------- -----------
Current assets
Derivative financial instruments 7 18 37 72
Cash and cash equivalents 31 646 724
-------------- -------------- -----------
Total current assets 49 683 796
-------------- -------------- -----------
Total assets 7,542 7,268 7,043
-------------- -------------- -----------
Equity and liabilities
Equity
Called-up share capital 8 3,291 3,291 3,291
Share premium reserve 7,594 7,594 7,594
Share-based payment reserve 46 65 46
Retained earnings (3,424) (3,699) (3,926)
-------------- -------------- -----------
Total equity 7,507 7,251 7,005
-------------- -------------- -----------
Current liabilities
Trade and other payables 35 17 38
Total current liabilities 35 17 38
-------------- -------------- -----------
Total equity and liabilities 7,542 7,268 7,043
-------------- -------------- -----------
Unaudited Cashflow Statement
for the six months ended 30 September 2023
(Unaudited) (U naudited) (Audited)
6 months 6 months year
ended ended
ended
30 September 30 September 31
March
2023 2022 2023
GBP'000 GBP'000 GBP'000
------------- ------------- ----------
Operating activities
Proft (loss) before tax 502 (127) (378)
Share based payment - - 5
Fair value movements on investments (732) (55) 26
Fair value movements on derivative instruments 55 26 (9)
Finance income (6) (15) (40)
Decrease in receivables - - 1
Increase (decrease) in payables 2 (4) (17)
------------- ------------- ----------
Total cash flow from operating activities (179) (175) (378)
------------- ------------- ----------
Investing activities
Interest received - - 10
Proceeds from sale of investments 136 163 709
Payment for put option (400) - -
Purchase of investments (250) (300) (575)
------------- ------------- ----------
Total cash flow from investing activities (514) (137) 144
------------- ------------- ----------
Financing activities
Proceeds from exercise of warrants - - -
Proceeds from the issue of ordinary shares - - -
Total cash flow from financing activities - - -
------------- ------------- ----------
Net decrease in cash and cash equivalents (693) (312) (234)
Cash and cash equivalents at start of year/period 724 958 958
------------- ------------- ----------
Cash and cash equivalents at the end of
the year/period 31 646 724
------------- ------------- ----------
Cash and cash equivalents comprise:
Cash at bank 31 534 724
Cash held in trust - 112 -
------------- ------------- ----------
Cash and cash equivalents at end of year/period 31 646 724
------------- ------------- ----------
Unaudited Statement of Changes in Equity
for the six months ended 30 September 2023
Share Share Share Retained Total
capital Premium Option Earnings Equity
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- ---------- --------
Balance at 1 April 2023 3,291 7,594 46 (3,926) 7,005
Profit and total comprehensive
income for the period - - - 502 502
Balance at 30 September 2023 3,291 7,594 46 (3,424) 7,507
--------- --------- --------- ---------- --------
Balance at 1 April 2022 3,291 7,594 65 (3,572) 7,378
Loss and total comprehensive income
for the period - - - (127) (127)
Balance at 30 September 2022 3,291 7,594 65 (3,699) 7,251
Balance at 1 April 2022 3,291 7,594 65 (3,572) 7,378
Share-based payment - - 5 - 5
Lapse of options in the period - - (24) 24 -
Loss and total comprehensive income
for the period - - - (378) (378)
--------- --------- --------- ---------- --------
Balance at 31 March 2023 3,291 7,594 46 (3,926) 7,005
--------- --------- --------- ---------- --------
Notes to the Interim Accounts
for the six months ended 30 September 2023
1. General information
Vela Technologies plc is a company incorporated in the United
Kingdom.
These unaudited condensed interim financial statements for the
six months ended 30 September 2023 have been prepared in accordance
with International Financial Reporting Standards (IFRS) and IAS 34
"Interim Financial Reporting" as adopted by the European Union and
do not constitute statutory accounts as defined in Section 434 of
the Companies Act 2006. This condensed set of financial statements
has been prepared applying the accounting policies that were
applied in the preparation of the Company's published financial
statements for the year ended 31 March 2023 and are presented in
pounds sterling.
The comparative figures for the financial year ended 31 March
2023 have been extracted from the Company's statutory accounts
which have been delivered to the Registrar of Companies and
reported on by the Company's Auditors. Their report was unqualified
and contained no statement under section 298 (2) or (3) of the
Companies Act 2006.
2. Changes in accounting policy
The assessment of new standards, amendments and interpretations
issued but not effective are not anticipated to have a material
impact on the interim financial statements.
3. Going concern
The Directors have considered the Company's activities, together
with the factors likely to affect its future development and
performance, the financial position of the Company, and its cash
flows and liquidity position, taking account of the current market
conditions. This review has demonstrated that the Company shall
continue to operate within its own resources.
The Directors believe that the Company is well placed to manage
its business risks successfully and that the Company has adequate
resources to continue in operational existence for the foreseeable
future. Accordingly, they consider it appropriate to adopt the
going concern basis in preparing these condensed financial
statements.
4. Profit (loss) per share
Profit / (Loss) per share has been calculated on a profit of
GBP502,000 (six months to 30 September 2022: GBP127,000 loss; year
to 31 March 2023: GBP378,000 loss) and the weighted number of
average shares in issue for the period of 16,252,335,184 (30
September 2022: 16,252,335,184; 31 March 2023: 16,252,335,184).
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2023 2022 2023
-------------- -------------- ----------
Profit (loss) (GBP'000) 502 (127) (378)
Earnings (loss) per share (pence) 0.0031 (0.0008) (0.0023)
5. Investments
Other
Investments
GBP'000s
-------------
Fair value at 1 April 2023 3,193
Additions during the period 250
Disposals during the period (136)
Current period fair value movement charged to profit or
loss (518)
-------------
Fair value at 30 September 2023 2,789
-------------
Investment in Tribe Technology Group Limited ("Tribe Tech")
In May 2023, Vela invested GBP250,000 in Tribe Tech via an
advance subscription agreement as part of a pre-IPO funding round.
The IPO completed on 5 September 2023 and Vela was issued with
shares at a price of 8p per share which was equivalent to 80% of
the IPO issue price. Following the investment Vela is interested in
3,125,000 ordinary shares representing 1.41 per cent of Tribe
Tech's issued share capital.
Part Disposal in EnSilica Plc
Between May 2023 and September 2023 the Company disposed of a
total of 163,000 shares at an average price of 68p per share,
generating gross proceeds of GBP110,537 for the Company. Following
the disposals Vela remained interested in 946,707 ordinary shares
representing 1.9% of the issued share capital after these
disposals.
Part Disposal in Kanabo Group Plc
In May 2023 the Company disposed of a total of 500,000 shares at
a price of 3p per share, generating gross proceeds of GBP15,460 for
the Company. Following the disposals Vela remained interested in
657,692 ordinary shares.
Part Disposal in Northcoders Group Plc
In May 2023 the Company disposed of a total of 2,500 shares at a
price of GBP3.00 per share, generating gross proceeds of GBP7,189
for the Company. Following the disposals Vela remained interested
in 347,499 ordinary shares.
6. Trade and other receivables - non-current
30 30 31
September September March
2023 2022 2023
GBP'000 GBP'000 GBP'000
----------- ----------- --------
Loan due from Bixx Tech Limited 704 689 704
Other financial asset 4,000 2,350 2,350
4,704 3 , 039 3,054
----------- ----------- --------
Loan due from Bixx Tech Limited
The loan represents the consideration receivable for the
disposal of certain investment assets in August 2020. The total
consideration receivable is GBP855,000 which is receivable after
seven years. The consideration has been discounted at a market
interest rate of 4.5%.
Under the terms of the loan agreement, the Company has provided
an undertaking to distribute a sum equal to any repayment of the
loan to the holders of the Special Deferred Shares. This
distribution will be by way of a dividend declared on the Special
Deferred Shares ("the Special Dividend"). In the event that
insufficient distributable reserves exist at the end of the
seven-year loan term, the repayment of the loan will be deferred
for a further year. This deferral will continue until such a time
as the Company has sufficient distributable reserves to be able to
pay the Special Dividend.
Other financial asset - Investment in St George Street
Capital
On 20 October 2020, the Company entered into a contract with St
George Street Capital ("SGSC") for an 8% economic interest in the
potential future commercialisation of SGSC's asset to treat
individuals with diabetes who are suffering with COVID-19 ("the
Asset"). The consideration payable under the terms of the contract
was GBP2.35m which was settled by cash of GBP1.25m and the issue of
1,100,000,000 consideration shares at a price of 0.1 pence per
share. The directors consider that this represented the fair value
of the contract at the date of investment.
The contract gives the Company a right to future economic
benefits and has been classified as a financial asset measured at
fair value through profit and loss. The directors estimate that the
contract will not be realised within 12 months of the reporting
date and so the asset has been classified as non-current.
SGSC had successfully completed the Phase II trials and had
moved on to the process of investigating options for funding Phase
III clinical trials (which would involve a significantly larger
sample of patients than Phase II) and onward commercialisation of
the Asset. The development of the Asset continues to progress along
the typical drug development pipeline. However, the need for SGSC
to raise further funding in order to commence the Phase III trials,
to successfully complete those trials and achieve commercialisation
of the drug gives rise to an inherent level of risk in respect of
the ultimate realisation of the Asset, which the directors took
into consideration when estimating its fair value as at 31 March
2023. The directors considered the position at the balance sheet
date and were of the view that there had not been any major
developments (either positive or negative) or milestones achieved
in the period up to the reporting date which would give rise to a
material change in the fair value of the contract during this time.
Accordingly, the original consideration payable under the contract
represents the directors' best estimate of its fair value, as a
standalone contract, as at 31 March 2023.
In April 2023, the Company entered into a put option agreement
(the "Option") to give the Company the right, but not the
obligation, to sell its economic interest in the commercialisation
of the Covid-19 application of AZD1656 for a total consideration of
GBP4.0 million. The Option was granted by Conduit Pharmaceuticals
Limited ("Conduit") and its prospective parent company, Murphy
Canyon Acquisition Corp ("Murphy"), a Company listed on NASDAQ at
that time. On exercise of the Option by Vela, the consideration
that would be payable to Vela will be satisfied through the
issuance of new shares of authorised common stock of par value
$0.001 of Murphy. The Option is exercisable solely at the
discretion of Vela and Vela paid Conduit GBP400,000 in cash as the
premium for the Option, with the consideration settled from Vela's
existing cash resources.
On 21 September 2023 Conduit completed its merger with Murphy
and its shares were listed on NASDAQ. Following the listing on
NASDAQ the put option became exercisable. As a result, at 30
September 2023 Vela was in a position to exchange its GBP2.75
million economic interest in AZD1656 for GBP4 million worth of
Conduit shares. This is reflected in the valuation of the 'other
financial asset' at the half-year end.
Subsequent to the half-year period end (on 1 December 2023) Vela
exercised the put option to sell its economic interest for shares
in Conduit. Under the terms of the put option Vela received
1,015,760 new shares of authorised common stock of par value $0.001
in Conduit.
7. Derivative financial instruments
30 30 31
September September March
2023 2022 2023
GBP'000 GBP'000 GBP'000
----------- ----------- --------
Warrants 18 39 72
18 39 72
----------- ----------- --------
The Company holds warrants providing it with the right to
acquire additional shares in certain of its investee companies at a
fixed price in the future, should the directors decide to exercise
them. The warrants have been recognised as an asset at fair value,
which has been calculated using an appropriate option pricing
model.
8. Share capital
Allotted, called up and fully paid capital 30 30 31
September September March
2023 2 022 2023
16,252,335,184 Ordinary Shares of 0.01 pence
each 1,625 1,625 1,625
1,748,943,717 Deferred Shares of 0.08 pence
each 1,399 1,399 1,399
2,665,610,370 Special Deferred Shares of
0.01 pence each 267 267 267
3,291 3,291 3,291
----------- ----------- -------
9. Financial instruments
The Company is required to report the category of fair value
measurements used in determining the value of its investments, to
be disclosed by the source of its inputs, using a three-level
hierarchy. There have been no transfers between Levels in the fair
value hierarchy.
Quoted market prices in active markets - "Level 1"
Inputs to Level 1 fair values are quoted prices in active
markets for identical assets. An active market is one in which
transactions occur with sufficient frequency and volume to provide
pricing information on an ongoing basis. The Company has twelve (30
September 2022: ten; 31 March 2022: eleven) investments classified
in this category. The aggregate historic cost of these investments
is GBP3,393,803 (30 September 2022: GBP3,393,803; 31 March 2022:
GBP3,145,110) and the fair value as at 30 September 2023 was
GBP1,961,310 (30 September 2022: GBP2,681,046; 31 March 2022:
GBP2,364,534)
Valued using models with significant observable market
parameters - "Level 2"
Inputs to Level 2 fair values are inputs other than quoted
prices included within Level 1 that are observable for the asset,
either directly or indirectly. The Company has two (30 September
2022: two; 31 March 2023: two) unquoted investments classified in
this category. The historic cost of these investments is GBP450,000
(30 September 2022: GBP450,000; 31 March 2023: GBP450,000) and the
fair value as at 30 September 2022 was GBP828,186 (30 September
2022; GBP764,644; 31 March 2023: GBP828,186).
Valued using models with significant unobservable market
parameters - "Level 3"
The Company has two (30 September 2022: two; 31 March 2023: two)
investments that are held at cost less impairment because a
reliable estimate of fair value cannot be determined. As at 30
September 2023 the historical cost of these investments amounted to
GBP300,000 (30 September 2022: GBP300,000; 31 March 2023:
GBP300,000) and the aggregate carrying value was GBPnil (30
September 2022: GBPnil; 31 March 2023: GBPnil).
The Company also holds a non-current financial asset described
in note 9 to the financial statements at a fair value of
GBP4,000,000 (30 September 2022: GBP2,350,000; 31 March 2023:
GBP2,350,000). The historic cost of the asset is GBP2,750,000 (30
September 2022: GBP2,350,000; 31 March 2023: GBP2,350,000).
10. Related party transactions
During the period the Company entered into the following related
party transactions. All transactions were made on an arm's length
basis:
Ocean Park Developments Limited
Brent Fitzpatrick, non-executive chairman, is also a director of
Ocean Park Developments Limited. During the period the Company paid
GBP24,000 (six months ended 30 September 2022: GBP24,000; year
ended 31 March 2023: GBP62,000) in respect of his director's fees
to the Company. The balance due to Ocean Park Developments at the
period end was GBPnil (30 September 2022 GBPnil; 31 March 2023:
GBPnil).
11. Principal risks and uncertainties
Principal risks and uncertainties are set out in the annual
financial statements within the directors' report and also in note
15 to those financial statements and are reviewed on an on-going
basis.
The Board provides leadership within a framework of appropriate
and effective controls. The Board has set up, operates and monitors
the corporate governance values of the Company, and has overall
responsibility for setting the Company's strategic aims, defining
the business objective, managing the financial and operational
resources of the Company and reviewing the performance of the
officers and management of the Company's business both prior to and
following an acquisition.
There have been no significant changes in the first six months
of the financial year to the principal risks and uncertainties as
set out in the 31 March 2023 Annual Report and Accounts.
12. Board approval
These interim results were approved by the Board of Vela
Technologies plc on 21 December 2023.
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END
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