TIDMVELA
RNS Number : 9151N
Vela Technologies PLC
28 September 2023
28 September 2023
Vela Technologies plc
("Vela" or "the Company")
Final results for the year ended 31 March 2023
The Board of Vela (AIM:VELA), an AIM-quoted investing company
focused on early-stage and pre-IPO disruptive technology
investments, is pleased to announce the Company's final results for
the year ended 31 March 2023 .
Vela's Annual Report and Accounts for the year ended 31 March
2023 ("Annual Report") will be sent to shareholders today.
The Company's Annual Report will be available shortly on the
Company's website at http://www.velatechplc.com/
Highlights
Financial:
-- Net assets decreased to GBP7,004,480 compared to GBP7,378,151 at 31 March 2022
-- Cash fell from GBP958,573 at the beginning of the period to
GBP723,576 at the balance sheet date.
-- Loss for the year of GBP378,516 compared to a loss of
GBP1,078,202 in the previous comparable period reflecting a smaller
reduction in the fair value of the investment portfolio against the
prior year.
Operational:
-- Vela invested approximately GBP575,000 in four companies and
realised gross proceeds of approximately GBP712,000 from the sale
of shares in five of its investee companies.
Post Period Highlights:
-- On 20 April Vela entered into a put option for the potential
sale of its economic interest in AZD1656 for a total consideration
of GBP4.0 million. The option was granted by Conduit
Pharmaceuticals Limited ("Conduit") and Murphy Canyon Acquisition
Corp ('Murphy'), a company listed on NASDAQ. Should the option be
exercised by Vela, the consideration that would be payable to Vela
would be satisfied through the issuance of new shares in the
combined company (now called Conduit Pharmaceuticals Inc.). Vela
paid Conduit GBP400,000 as the premium for the option.
-- Also in September, Conduit completed its merger with Murphy
and its shares listed on NASDAQ on 25 September 2023 as Conduit
Pharmaceuticals Inc. ("Conduit Inc."). The put option referred to
above is now exercisable. Accordingly, it is now open to Vela to
exchange its GBP2.75 million economic interest in AZD1656 for GBP4
million worth of Conduit Inc. shares.
-- In May 2023 the Company invested GBP250,000 in a pre-IPO
investment in Tribe Technology and the Board of Vela was pleased to
see Tribe Technology successfully list on AIM in September 2023 in
conjunction with a GBP4.6m fundraising.
The Board will continue to update investors on the portfolio
movements and valuation in the Company's quarterly updates, the
next one being due for the quarter ended 30 September 2023.
chairman's statement
for the year ended 31 March 2023
I am pleased to present the Chairman's statement for the year
ended 31 March 2023. In my half yearly statement for the period
ended 30 September 2022 I made reference to the continued war in
Ukraine, political issues at home, rising inflation and rising
interest rates.
These have not abated as the war in Ukraine intensifies and the
maelstrom surrounding the UK's mini budget in September 2022 which
crashed the Pound causing interest rates to rise to the highest
levels we have seen in more than a decade. At the year end,
interest rates had reached 4.25% alongside high inflation rates of
10.1%. Both of which continued rising into our new financial
year.
With this backdrop of persistently high inflation and rising
interest rates the excitement for listings on the public markets
has evaporated and many investors are choosing to place their funds
in cash instruments for safety and the security of a meaningful
rate of return.
Despite these negatives we maintain our belief that the economic
interest that the Company holds in AZD 1656 will create value for
shareholders. Post year end the Company invested a further
GBP400,000 into a put option agreement to give Vela 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 and its prospective parent company,
Murphy, a Company listed on NASDAQ. Conduit Pharmaceuticals
completed the business combination with Murphy and the enlarged
group, being Conduit Pharmaceuticals Inc. ("Conduit Inc."), began
trading on NASDAQ on 25 September 2023. Further to the announcement
made by the Company on 21 September 2023, the board intends to
exercise the option in due course, at the appropriate time. The
option has an expiry date of 7 February 2024. As previously
announced by Vela the consideration of GBP4.0 million, payable upon
exercise of the option, would be satisfied through the issue to
Vela of new shares in Conduit Inc. and the issue price of the
consideration shares will be based on the volume-weighted average
price per share of Conduit Inc. over the ten business days prior to
the date of notice of exercise, provided in no event shall the
issue price for the consideration shares be lower than $5 or higher
than $15.
EnSilica plc listed in the early part of the financial year
under review and its share price has proved resilient against poor
market conditions and at the appropriate junctures we have sold
shares in EnSilica to realise a gain whilst maintaining a sizeable
shareholding position in the company.
Whilst a number of the Company's stocks languish, such as
Skillcast Group plc, Northcoders Group plc and MTI Wireless Edge
Limited, these are quality growth companies whose value is not
truly reflected in their share price, which is a common theme
across the markets. And whilst the market appears sceptical of
TruSpine Technologies plc we believe its product is a game-changer
in spinal stabilisation and we continue our support for the
company.
Turning to the financials, Vela reported a loss for the year of
GBP378,516 compared to a loss of GBP1,078,202 in the previous
comparable period. Almost all of this difference, from an
accounting perspective, reflects a GBP25,780 reduction in fair
value of investments in the year being reported on, compared to a
much larger reduction in fair value in the previous financial year.
Net assets decreased to GBP7,004,480 compared to GBP7,378,151 at 31
March 2022 and cash fell from GBP958,573 at the beginning of the
period to GBP723,576 at the balance sheet date. As at 21 September
2023 Vela's cash reserves were approximately GBP43,000.
Since 31 March 2023, the Company has made two new investments
being a GBP250,000 pre-IPO investment in Tribe Technology and the
GBP400,000 investment made into the put option in relation to the
possible sale of Vela's economic interest in AZD1656. The Board of
Vela was pleased to see Tribe Technology successfully list on AIM
in September 2023 in conjunction with a GBP4.6m fundraising.
In August 2022 Antony Laiker rejoined the board, however, in
October 2022, Antony decided to stand down and sell his holding in
the Company. We were very grateful for Antony's input and market
wisdom during his time with us.
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.
strategic report
for the year ended 31 March 2023
Business review
At the period end, the Company held cash of approximately
GBP724,000 (31 March 2022: GBP958,000). It continues to keep
administrative costs to a minimum so that it has sufficient
resources to cover its ongoing running costs while retaining the
maximum funds for further investments.
The Company's loss for the year was approximately GBP378,000
(2022: loss of GBP1,078,000). This loss has arisen primarily from
fair value movements on the Company's investment portfolio. The
valuation of the investment portfolio at 31 March 2023 was
approximately GBP3,193,000 (31 March 2022: GBP2,603,000), an
increase of GBP590,000 on 2022. This resulted from the investment
of GBP575,000 in new and 'follow-on' investments, conversion of the
CLNs held in Ensilica plc, disposals generating proceeds of
GBP709,000, net of a decrease in the valuation of the portfolio of
GBP26,000. In addition to these investments the Company holds a
financial asset (St George Street Capital) valued at GBP2,350,000
as at 31 March 2023 (31 March 2022: GBP2,350,000).
We update shareholders on investee company performance through
the dissemination of investee company regulatory announcements,
together with, when available, information from private companies
which do not have the same disclosure requirements as listed
companies. Additionally, the Board has continued to publish
quarterly investment updates on the performance of the investment
portfolio and on acquisitions and sales. The quarterly investment
updates will continue. Moreover, detailed information on the
investment portfolio is maintained on the Company's website.
During the year the Company made investments in TruSpine
Technologies PLC (GBP300,000), a secondary placing in Northcoders
Group plc (GBP99,000), a further investment in EnSilica plc
(GBP125,000) and an investment in Ethernity Networks Ltd
(GBP49,000). Further details and key points of the investments made
and of the performance of the Company's investee companies are
detailed in note 8 to the financial statements.
The Company had two employees during the period (being two of
the directors) and a Board comprising one male Executive Director,
one female Executive Director and one male Non-Executive
Director.
Principal risks and uncertainties
The preservation of its cash balances and the management of its
capital resources remain the key concerns for the Company. Further
information about the Company's principal risks, covering credit,
liquidity, and capital, is detailed in note 15 to the financial
statements.
The Company remains committed to keeping operational costs to a
minimum.
Approved by the Board of Directors on 27 September 2023; and
signed on its behalf by:
Brent Fitzpatrick MBE
Chairman
For further information, please contact:
Vela Technologies plc Tel: +44 (0) 7421
Brent Fitzpatrick, Non-Executive Chairman 728875
James Normand, Executive Director
Allenby Capital Limited (Nominated Adviser) Tel: +44 (0) 20
3328 5656
Nick Athanas / Piers Shimwell
Peterhouse Capital Limited (Broker) Tel: +44 (0) 20
7469 0930
Lucy Williams / Duncan Vasey
Novus Communications (PR and IR Adviser) Tel: +44 (0) 20
7448 9839
Alan Green / Jacqueline Briscoe
About Vela Technologies
Vela Technologies plc (AIM: VELA) is an investing company
focused on early stage and pre-IPO long term disruptive technology
investments. Vela's investee companies have either developed ways
of utilising technology or are developing technology with a view to
disrupting the businesses or sector in which they operate. Vela
Technologies will also invest in already-listed companies where
valuations offer additional opportunities.
statement of comprehensive income
for the year ended 31 March 2023
Year ended Year ended
31 March 31 March
2023 2022
Notes GBP'000 GBP'000
------------------------------------------- ------ ----------- -----------
Revenue 1 - -
Administrative expenses 2 (401) (347)
Fair value movements
- on investments 8 (26) (685)
- on derivative instruments 11 9 (75)
Operating loss 2 (418) (1,107)
Finance income 4 40 29
Loss before tax (378) (1,078)
Income tax 6 - -
------------------------------------------- ------ ----------- -----------
Loss for the year and total comprehensive
income attributable to the equity
holders (378) (1,078)
------------------------------------------- ------ ----------- -----------
Loss per share
Basic and diluted loss per share
(pence) 7 (0.002) (0.007)
------------------------------------------- ------ ----------- -----------
statement of financial position
as at 31 March 2023
31 March 31 March
2023 2022
Notes GBP ' GBP '000
000
---------------------------------- ------ --------- ---------
Non-current assets
Investments 8 3,193 2,603
Trade and other receivables 9 3,054 3,024
---------------------------------- ------ --------- ---------
T otal non-current assets 6,247 5,627
Current assets
Trade and other receivables 10 - 751
Derivative financial instruments 11 72 63
Cash and cash equivalents 14 724 958
---------------------------------- ------ --------- ---------
Total current assets 796 1,772
---------------------------------- ------ --------- ---------
Total assets 7,043 7,399
---------------------------------- ------ --------- ---------
Equity and liabilities
Equity
Called up share capital 13 3,291 3,291
Share premium account 7,594 7,594
Share option reserve 46 65
Retained earnings (3,926) (3,572)
---------------------------------- ------ --------- ---------
Total equity 7,005 7,378
---------------------------------- ------ --------- ---------
Current liabilities
Trade and other payables 12 38 21
Total current liabilities 38 21
---------------------------------- ------ --------- ---------
Total equity and liabilities 7,043 7,399
---------------------------------- ------ --------- ---------
These financial statements were approved by the Board,
authorised for issue and signed on their behalf on 27 September
2023 by:
Brent Fitzpatrick MBE
Chairman
Company registration number: 03904195
cash flow statement
for the year ended 31 March 2023
Year ended Year ended
31 March 31 March
2 023 2022
Notes GBP'000 GBP'000
--------------------------------------- ------ ----------- -----------
Operating activities
Loss before tax (378) (1,078)
Share-based payment 5 20
Fair value movements on investments 8 26 685
Fair value movement on derivative
assets (9) 75
Finance income (40) (29)
Decrease in receivables 1 -
Increase / (Decrease) in payables 17 (27)
Total cash flow from operating
activities (378) (354)
--------------------------------------- ------ ----------- -----------
Investing activities
Interest received 10 -
Proceeds from disposal of investments 709 262
Acquisition of loan notes - (750)
Consideration for purchase of
investments (575) (1,581)
Total cash flow from investing
activities 144 (2,069)
--------------------------------------- ------ ----------- -----------
Financing activities
Proceeds from the issue of ordinary
share capital - 1,234
Total cash flow from financing
activities - 1,234
--------------------------------------- ------ ----------- -----------
Net (decrease) in cash and cash
equivalents (234) (1,189)
Cash and cash equivalents at start
of year 958 2,147
--------------------------------------- ------ ----------- -----------
Cash and cash equivalents at the
end of the year 14 724 958
--------------------------------------- ------ ----------- -----------
Cash and cash equivalents comprise:
Cash at bank 724 958
--------------------------------------- ------ ----------- -----------
Cash and cash equivalents at end
of year 14 724 958
--------------------------------------- ------ ----------- -----------
statement of changes in equity
for the year ended 31 March 2023
Share
Share Share Retained Option Total
Capital Premium Earnings Reserve Equity
GBP GBP '000 GBP GBP'000 GBP
'000 '000 '000
---------------------------- -------- --------- ----------- -------- --------
Balance at 1 April 2022 3,291 7,594 (3,572) 65 7,378
Transactions with owners
Share-based payment - - - 5 5
Lapse of share options in
the period - - 24 (24) -
Transactions with owners - - 24 (19) 5
---------------------------- -------- --------- ----------- -------- --------
Total comprehensive income
for the year - - (378) - (378)
Balance at 31 March 2023 3,291 7,594 (3,926) 46 7,005
---------------------------- -------- --------- ----------- -------- --------
Balance at 1 April 2021 3,048 6,603 (2,600) 151 7,202
---------------------------- -------- --------- ----------- -------- --------
Transactions with owners
Share-based payment - - - 20 20
Lapse of share options in
the period - - 106 (106) -
Issue of share capital 243 991 - - 1,234
Transactions with owners 243 991 106 (86) 1,254
Total comprehensive income
for the year - - (1,078) - (1,078)
Balance at 31 March 2022 3,291 7,594 (3,572) 65 7,378
---------------------------- -------- --------- ----------- -------- --------
1 Revenue and segmental information
The Company is an investing company and as such there is only
one identifiable operating segment, being the purchase, holding and
sale of investments. Similarly, the Company operates in only a
single geographic segment, being the United Kingdom. The results
and balances and cash flows of the segment are as presented in the
primary statements.
2 Loss from operations
The loss from operations is stated after charging:
31 March 31 March
2 023 2022
GBP'000 GBP'000
---------------------------------------- --------- ---------
Auditor's remuneration for the
audit 24 18
Auditor's remuneration for corporation
tax compliance services 2 2
Fair value movements on investments 26 685
Share-based payment 5 20
----------------------------------------- --------- ---------
3 Staff costs
The average number of persons employed or engaged by the Company
(including Directors) during the period was as follows:
31 March 31 March
2023 2022
--------------------------------- --------- ---------
Directors and senior management 3 3
Total 3 3
--------------------------------- --------- ---------
The above included two individuals (2022 - two) employed by the
Company and one (2022 - one) engaged under the terms of a letter of
appointment.
The aggregate amounts charged by these persons were as
follows:
31 March 31 March
2023 2022
GBP'000 GBP'000
---------------------------- --------- ---------
Wages and salaries 124 97
Social security costs 10 12
Amounts invoiced 69 62
Share-based payment charge 5 20
208 191
---------------------------- --------- ---------
The amounts noted above relate to the Company's directors.
Further details of directors' remuneration is provided in note
5.
4 Finance income and expense
Finance income
31 March 31 March
2023 2 022
GBP'000 GBP'000
--------------------------- --------- ---------
Other interest receivable 40 29
Total finance income 40 29
--------------------------- --------- ---------
Finance income includes GBP30,000 (2022: GBP29,000),
representing the unwinding of the discount on the Company's loan
receivable from BIXX Tech Limited. Further details are provided in
note 9.
5 Directors and senior management
Directors' remuneration
Year ended 31 March 2023
------------------------------------------------
Salary Fees Pension Equity Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
N B Fitzpatrick - 62 - - 62
A Laiker (appointed 21 July
2022 / resigned 19 October
2022) - 7 - - 7
J Normand 62 - - - 62
E Wilson 62 - - - 62
----------------------------- -------- -------- -------- -------- --------
124 69 - - 193
----------------------------- -------- -------- -------- -------- --------
Year ended 31 March 2022
------------------------------------------------
Salary Fees Pension Equity Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
N B Fitzpatrick - 62 - - 62
J Normand 62 - - - 62
E Wilson (appointed 1 September
2021) 35 - - - 35
--------------------------------- -------- -------- -------- -------- --------
97 62 - - 159
--------------------------------- -------- -------- -------- -------- --------
Directors ' and senior management ' s interests in shares
The Directors who held office at 31 March 2023 held the
following shares:
31 March 31 March
2023 2022
----------------- ---------- ----------
N B Fitzpatrick 1,500,000 1,500,000
J Normand - -
E Wilson - -
----------------- ---------- ----------
The total share-based payment costs in respect of options
granted are:
31 March 31 March
2 023 2022
GBP'000 GBP'000
Directors 5 20
----------- --------- ---------
As at 31 March 2023, the total number of outstanding options
held by the Directors over ordinary shares was 270,000,000 (2022:
278,444,780), representing 1.7 per cent of the Company's issued
share capital. A total of 8,444,780 options lapsed in the
period.
Further details regarding the options issued are provided in
note 17.
6 Tax
There was no charge to current or deferred taxation in the
current or prior period.
A deferred tax asset relating to losses carried forward has not
been recognised due to uncertainty over the existence of future
taxable profits against which the losses can be used. The Company
has unused tax losses of approximately GBP6.7m (2022: GBP6.5m).
Tax reconciliation
31 March 31 March
2023 2022
GBP'000 GBP'000
------------------------------- --------- ---------
Loss before tax (378) (1,078)
Tax at 19% on loss before tax (72) (205)
Effects of:
Loss relief carried forward 72 205
------------------------------- --------- ---------
Total tax expense - -
------------------------------- --------- ---------
7 Loss per share
Loss per share has been calculated on a loss after tax of
GBP378,000 (2022: loss after tax of GBP1,078,000) and the weighted
average number of shares in issue for the year of 16,252,335,184
(2022: 15,091,929,620).
8 Investments
31 March 31 March
2023 2022
GBP'000 GBP'000
------------------------------------------ --------- ---------
Opening fair value 2,603 1,969
Additions during the year at cost 1,325 1,581
Fair value of disposals made during
the year (709) (262)
Movement in fair value charged to profit
or loss (26) (685)
------------------------------------------ --------- ---------
Closing balance 3,193 2,603
------------------------------------------ --------- ---------
Investments are held at fair value through profit and loss using
a three-level hierarchy for estimating fair value. Note 15 provides
details of the three-level hierarchy used.
Additions during the year:
Investment in EnSilica plc ("EnSilica")
In May 2022 EnSilica plc's shares were admitted to trading on
AIM. Vela's investment of GBP750,000 in convertible loan notes,
together with the relevant interest, were converted into 1,764,788
shares representing 2.3% of the then issued share capital. In March
2023, the Company invested an additional GBP125,000 in EnSilica
through the purchase of 178,572 ordinary shares at 70 pence per
share. The investment was made as part of a GBP2.0 million placing
undertaken by EnSilica.
Investment in TruSpine Technologies Plc ("TruSpine")
In June 2022, the Company completed the subscription for
6,000,000 ordinary shares in TruSpine for a cost of GBP300,000,
representing 5.07% of TruSpine's then issued share capital.
8 Investments (continued)
Further Investment in Northcoders Plc ("Northcoders")
In November 2022, the Company invested an additional GBP99,999
in Northcoders at a price of GBP3 per share. The investment was
part of a secondary placing in Northcoders which was undertaken as
a result of excess demand following an oversubscribed placing that
raised GBP2.1 million for Northcoders. Following this investment,
Vela held 349,999 ordinary shares in Northcoders representing 4.6%
of the issued share capital of Northcoders.
Investment in Ethernity Networks Ltd ("Ethernity")
In January 2023, the Company completed the subscription for
700,000 ordinary shares in Ethernity for a cost of GBP49,000,
representing 0.68 per cent of Ethernity's issued share capital.
Disposals during the year:
Part disposal of Northcoders Group Plc
In September 2022, the Company disposed of 25,000 shares in
Northcoders at a price of GBP3.50 per share generating gross
proceeds of GBP87,500. Following the disposal Vela was interested
in 316,666 shares representing 4.6 per cent of the issued share
capital.
Part disposal of investment in Cornerstone FS PLC
("Cornerstone")
In July 2022 the Company disposed of 50,000 shares in
Cornerstone at a price of 14.2p per share, generating gross
proceeds of GBP7,115. Following the disposal Vela remained
interested in 595,902 shares representing 1.2% of the issued share
capital at the period end.
Part disposal of EnSilica Plc
Between May 2022 and the end of March 2023 the Company disposed
of a total of 833,653 shares in EnSilica at an average price of 61p
per share, generating gross proceeds of GBP587,345 for the Company.
Following the disposals and investment in March 2023, Vela remained
interested in 1,109,707 ordinary shares representing 1.42% of the
issued share capital at the period end.
Part disposal of investment in Ethernity Networks Ltd
In March 2023 the Company disposed of 350,000 shares in
Ethernity generating gross proceeds of GBP25,222. Following the
disposal Vela remains interested in 350,000 shares representing
0.34% of the current issued share capital.
Part disposal of investment in Kanabo Group PLC ("Kanabo")
In February 2023 the Company disposed of 150,000 shares in
Kanabo, generating gross proceeds of GBP5,000. Following the
disposal Vela remains interested in 1,157,692 shares representing
1.1% of the current issued share capital.
9 Trade and other receivables - non-current
31 March 31 March
2023 2022
GBP'000 GBP'000
--------------------------------- --------- ---------
Loan due from BIXX Tech Limited 704 674
Other financial asset 2,350 2,350
3,054 3,024
--------------------------------- --------- ---------
Loan due from BIXX Tech Limited
The loan represents the consideration receivable for the
disposal of certain investment assets in August 2020, as detailed
in previous financial statements. The total consideration
receivable is GBP855,000, which is receivable after seven years.
The consideration has been discounted at a market interest rate at
the time of the transaction of 4.5% to reflect the deferred payment
term. Income of GBP30,000 (2022: GBP29,000), represents the
unwinding of the discount and is recognised within finance income
in note 4.
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 (see note 13).
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 locked-in consideration shares at a price of 0.1
pence per share. The directors considered 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 contract does not include a defined exit date
and so has been classified as non-current at the reporting date, as
the Company did not have an unconditional right to require
settlement of the contract within 12 months.
At the previous reporting date, 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.
Post year end the Company entered into a put option for the
potential sale of its interest in the Asset. Further details are
disclosed at note 20.
10 Trade and other receivables
31 March 31 March
2023 2022
GBP'000 GBP'000
------------------- ---------- ---------
Other receivables - 1
Convertible loan - 750
- 751
------------------------------ ---------
In January 2022, the Company invested GBP750,000 by way of a
convertible loan note in EnSilica Limited. The loan notes attracted
interest at a rate of 10 per cent per annum and were repayable on 9
January 2023 unless they had been repaid or converted before this
date. The loan notes converted automatically on an IPO of Ensilica
into new ordinary shares at a discount of 12% of the shares
subscribed for in the IPO. EnSilica's shares were admitted to
trading on AIM in May 2022, at which point the Company exercised
its conversion rights and received 1,764,788 ordinary shares
representing 2.3 per cent of the issued share capital.
11 Derivative financial instruments
31 March 31 March
2023 2022
GBP'000 GBP'000
---------- --------- ---------
Warrants 72 63
72 63
---------- --------- ---------
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.
12 Trade and other payables
31 March 31 March
2023 2022
GBP'000 GBP'000
---------------- --------- ---------
Trade payables 3 1
Accruals 35 20
38 21
---------------- --------- ---------
13 Share capital
31 March 31 March
2 023 2022
GBP'000 GBP'000
-------------------------------------------- --------- ---------
Allotted, called up and fully paid capital
16,252,335,184 Ordinary Shares of 0.01
pence each 1,625 1,625
1,748,943,717 Deferred Shares of 0.08
pence each 1,399 1,399
2,665,610,370 Special Deferred Shares
of 0.01 pence each 267 267
3,291 3,291
-------------------------------------------- --------- ---------
Share rights
The Deferred and Special Deferred Shares are not listed on AIM
and do not carry any rights to receive notice of or attend or speak
or vote at any general meeting or class meeting. There are also no
dividend rights, other than the "Special Dividend" on the Special
Deferred Shares. As described in note 9, upon repayment to the
Company of any amount(s) owed to it pursuant to the loan agreement
between the Company and BIXX Tech Limited, the Company shall, in
priority to any payment of dividend to the holders of the ordinary
shares or any other class of shares, declare and pay to the holders
of the Special Deferred shares a Special Dividend of an aggregate
amount equal to the amount of such sum repaid, pro rata according
to the number of Special Deferred Shares paid up.
On a return of capital, the holders of the Special Deferred
Shares shall be entitled to receive only the amount paid up on such
shares up to a maximum of 0.01 pence per Special Deferred Share
after (i) the holders of the Ordinary Shares have received the sum
of GBP1,000,000 for each Ordinary Share held by them, and (ii) the
holders of the Deferred Shares have received the sum equal to the
amount paid up on such Deferred Shares.
14 Cash and cash equivalents
Cash and cash equivalents comprise the following:
31 March 31 March
2 023 2022
GBP'000 GBP'000
------------------------------------------ --------- ---------
Cash and cash in bank:
Pound sterling 724 958
Cash and cash equivalents at end of year 724 958
------------------------------------------ --------- ---------
15 Financial instruments
The Company uses various financial instruments which include
cash and cash equivalents, loans and borrowings and various items
such as trade receivables and trade payables that arise directly
from its operations. The main purpose of these financial
instruments is to raise finance for the Company's operations and
manage its working capital requirements.
The fair values of all financial instruments are considered
equal to their book values. The existence of these financial
instruments exposes the Company to a number of financial risks
which are described in more detail below.
The main risks arising from the Company's financial instruments
are credit risk and liquidity risk. The Directors review and agree
the policies for managing each of these risks and they are
summarised below. The Company does not have any borrowings on which
interest is charged at a variable rate. The Directors, therefore,
do not consider the Company to be exposed to material interest rate
risk.
Credit risk
This section, along with the liquidity risk and capital risk
management sections below, also forms part of the Strategic
Report.
The Company's exposure to credit risk is limited to the carrying
amount of financial assets recognised at the balance sheet date, as
summarised below:
31 March 31 March
2 023 2022
Classes of financial assets - carrying GBP'000 GBP'000
amounts
----------------------------------------- --------- ---------
Financial assets measured at fair value
through profit or loss 5,615 5,016
Financial assets measured at amortised
cost 704 1,425
----------------------------------------- --------- ---------
6,319 6,441
----------------------------------------- --------- ---------
The Company's management considers that all of the above
financial assets that are not impaired for each of the reporting
dates under review are of good credit quality.
The Company is required to report the category of fair value
measurements used in determining the value of its financial assets
measured at fair value through profit or loss, 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 eleven
(2022: eight) investments classified in this category all of which
are listed on a regulated exchange with publicly available market
prices used to determine the year end value.
The aggregate historic cost of the eleven investments is
GBP3,145,110 (2022: GBP2,343,803) and the fair value as at 31 March
2023 was GBP2,364,534 (2022: GBP1,738,769).
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 (2022: two)
unquoted investments classified in this category. The historic cost
of these investments is GBP450,000 (2022: GBP450,000) and the fair
value as at 31 March 2023 was GBP828,186 (2022: GBP864,644). These
investments were valued using the latest transaction prices for
shares in the investee companies which were obtained through either
(a) publicly available information (e.g. registrar), (b)
information in respect of recent transactions which the Company was
invited to participate or, where available, (c) direct liaison with
the investee company. The Company also holds warrants for shares in
four investee companies, which have been valued using an option
pricing model with observable inputs. The fair value of these
assets as at 31 March 2023 was GBP71,827 (2022: GBP63,194).
Valued using models with significant unobservable market
parameters - "Level 3"
Inputs to Level 3 fair values are unobservable inputs for the
asset. Unobservable inputs may have been used to measure fair value
to the extent that observable inputs are not available, thereby
allowing for situations in which there is little, if any, market
activity for the asset at the measurement date (or market
information for the inputs to any valuation models). As such,
unobservable inputs reflect the assumptions the Company considers
that market participants would use in pricing the asset. The
Company has two (2022: two) unquoted investments classified in this
category. The historic cost of these investments is GBP300,000
(2022: GBP300,000) and the fair value as at 31 March 2023 was
GBPnil (2022: GBPnil). The nature of some of the investments that
the Company holds, i.e. minority shareholdings in private companies
with limited publicly available information, means that significant
judgement is required in estimating the value to be applied in the
year end accounts. Management uses knowledge of the sector and any
specific company information available to determine a valuation
estimate. The Company also holds a non-current financial asset
described in note 9 to the financial statements at a fair value of
GBP2,350,000, which is also the historic cost of the asset. Further
details regarding the determination of the fair value of this asset
are provided in note 9.
Liquidity risk
The Company maintains sufficient cash to meet its liquidity
requirements. Management monitors rolling forecasts of the
Company's liquidity on the basis of expected cash flow in
accordance with practice and limits set by the Company. In
addition, the Company's liquidity management policy involves
projecting cash flows and considering the level of liquid assets
necessary to meet these.
Maturity analysis for financial liabilities
31 March 2 023 31 March 2022
------------------ ------------------
Within Later Within Later
than than
1 year 1 year 1 year 1 year
GBP'000 GBP'000 GBP'000 GBP'000
------------------- -------- -------- -------- --------
At amortised cost 38 - 21 -
------------------- -------- -------- -------- --------
Capital risk management
The Company's objectives when managing capital are to safeguard
the Company's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. This is achieved by making investments
commensurate with the level of risk. The Company is performing in
line with the expectations of the Directors.
The Company monitors capital on the basis of the carrying amount
of equity. The Company policy is to set the amount of capital in
proportion to its overall financing structure, i.e. equity and
long-term loans. The Company manages the capital structure and
makes adjustments to it in the light of changes in economic
conditions and the risk characteristics of the underlying assets.
In order to maintain or adjust the capital structure, the Company
may adjust the amount of dividends paid to shareholders, issue new
shares or loan notes, or sell assets to reduce debt.
16 Reconciliation of net funds
A s
at 1 Cash As at
April flow Non-cash 31 March
2022 movement 2023
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- -------- -------- ---------- ----------
Cash and cash equivalents 958 (234) - 724
958 (234) - 724
--------------------------- -------- -------- ---------- ----------
17 Share-based payments
On 26 August 2020 two of the Directors were granted equity
settled share-based payments. The principal terms of these grants
are as follows:
James Normand was granted 180,000,000 options to subscribe for
ordinary shares of 0.01p each in the Company. The options have an
exercise price of 0.024p and are exercisable for a period of ten
years from the date of the grant. Half the options became
exercisable 12 months after grant, subject to the Company's closing
mid-market share price being at least 0.048p per Ordinary Share for
30 consecutive business days, and the remaining half become
exercisable 24 months after grant, subject to the Company's closing
mid-market share price being at least 0.072p per Ordinary Share for
30 consecutive business days.
In addition, on the same date, Brent Fitzpatrick, Chairman of
the Company, was granted 90,000,000 options to subscribe for
Ordinary Shares in the Company. The options have an exercise price
of 0.024p and are exercisable for a period of ten years from the
date of the grant. Half the options became exercisable 12 months
after grant, subject to the Company's closing mid-market share
price being at least 0.048p per Ordinary Share for 30 consecutive
business days, and the remaining half become exercisable 24 months
after grant, subject to the Company's closing mid-market share
price being at least 0.072p per Ordinary Share for 30 consecutive
business days. Following this grant of options, Brent Fitzpatrick
held a total of 104,562,427 share options equivalent to 1.46 per
cent. of the issued share capital of the Company at the time.
None of the options granted have been exercised.
The options issued in August 2020 have been valued using the
Monte Carlo option pricing model. The amount of remuneration
expense in respect of the share options granted amounts to GBP5,000
(2022: GBP20,000).
Options were also granted to directors in September and October
2015. These options were not exercised and lapsed in September and
October 2022 respectively.
Details of the options outstanding at the year end and the
inputs to the option pricing model are as follows:
Options
granted
26 August
2020
------------------------------- ------------
Share price at grant date
(pence) 0.05
Exercise price (pence) 0.024
Expected life (years) 10
Annualised volatility (%) 86.9
Risk-free interest rate (%) 2.0
Fair value determined (pence) 0.03
Number of options granted 270,000,000
Options exercisable at 31
March 2022 270,000,000
--------------------------------- ------------
The expected future annualised volatility was calculated using
historic volatility data for the Company's share price.
During the period 6,400,000 options granted in October 2015 and
10,489,560 options granted in September 2015 lapsed. The fair value
of these options recorded in the financial statements and processed
as historic remuneration expense was GBP24,130.
18 Contingent liabilities
Under the terms of the Company's loan receivable from BIXX Tech
Limited, described in note 9, 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 (see note 13). 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. As at 31 March 2023, the carrying value
of the loan receivable was GBP704,000 (2022: GBP674,000) and, at
the scheduled maturity date, the final settlement value will be
GBP855,000.
19 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 Director, is also a Director of
Ocean Park Developments Limited. During the year, the Company paid
GBP62,000 (2022: GBP62,000) in respect of his Director's fees to
the Company. The balance due to Ocean Park Developments Limited at
the year-end was GBPnil (2022: GBPnil).
Widdington Limited
Antony Laiker, Non-Executive Director, is also a Director of
Widdington Limited. During the year, the Company paid GBP7,000
(2022: GBPnil) in respect of his Director's fees to the Company.
The balance due to Widdington Limited at the year-end was GBPnil
(2022: GBPnil).
BIXX Tech Limited
Antony Laiker, a significant shareholder of Vela and Director
during the period under review is also a director of BIXX Tech
Limited.
On 26 August 2020, the Company transferred certain investments
to a newly formed wholly owned subsidiary, BIXX Tech Limited, for
consideration totalling GBP855,000 repayable after seven years.
Following the transfer of the investments, BIXX Tech Limited was
sold to a newly formed company, BIXX Limited, with the same
shareholders as Vela Technologies Plc for consideration of GBP1. As
at 31 March 2023, the carrying value of the balance due from BIXX
Tech Limited was GBP704,000 (2022: GBP674,000).
The disposal constituted a related party transaction under the
AIM Rules as Antony Laiker, a director of the Company was the sole
shareholder of BIXX Limited prior to the disposal.
20 Events after the balance sheet date
Put Option for potential sale of Economic Interest in
AZD1656
In April 2023, the Company announced that it had entered into a
put option agreement 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.
Should the Option be exercised 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.
The Option is exercisable in whole at any time from the
completion of Conduit's merger with Murphy (being 25 September
2023) until 7(th) February 2024 at a price per share equal to the
volume-weighted average price per share over the ten business days
prior to the date of notice of exercise, provided, however, in no
event shall the price per share be lower than $5 or higher than
$15. Should Vela exercise the option, the Company will hold shares
in Murphy (now re-named Conduit Pharmaceuticals Inc.) as a publicly
traded company on NASDAQ.
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 of 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 EnSilica's issued share capital.
Part Disposal of Kanabo Group Plc ("Kanabo")
In May 2023, Vela sold 500,000 shares in Kanabo, generating
gross proceeds of GBP15,460 for the Company.
Extraction of information in this announcement
The financial information, which comprises the statement of
comprehensive income, balance sheet, cashflow statement, statement
of changes in equity, and related notes to the financial
statements, is derived from the full Company financial statements
for the year ended 31 March 2023, which have been prepared under UK
endorsed International Financial Report Standards (IFRS) and those
parts of the Companies Act 2006 applicable to companies reporting
under IFRS. It does not constitute full financial statements within
the meaning of section 434 of the Companies Act 2006. This
financial information has been agreed with the auditor for
release.
The full annual report and financial statements for the year
ended 31 March 2023, on which the auditor has given an unqualified
report, and which does not contain a statement under section 498 of
the Companies Act 2006, will be delivered to the Registrar of
Companies in due course.
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END
FR SELEFWEDSEDU
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September 28, 2023 02:00 ET (06:00 GMT)
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