Preliminary Results

RNS Number : 2958K

Chill Brands Group PLC

31 August 2021

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310

For immediate release

31 August 2021

Chill Brands Group PLC

("Chill", the "Company" or the "Group")

Preliminary Results for the Year Ended 31 March 2021

Chill Brands Group PLC (LSE: CHLL), the international CBD group, is pleased to announce its unaudited preliminary results for the year ended 31 March 2021.  The Company's audited report and accounts for the year ended 31 March 2021, including all notes to the financial statements, are now expected to be announced and published in September.

CHILL BRANDS GROUP PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 

YEARS ENDED 31 MARCH 2021 & 2020

		Notes		Year ended 31 March 2021 £			Year ended 31 March 2020 £
Revenue				320,875			92,606
Cost of sales				(361,517)			(56,684)
Gross profit (loss)				(40,642)			35,922
Administrative expenses				(4,658,159)			(1,884,955)
Other Expense		3		(1,200,000)			-
Operating Loss				(5,898,801)			(1,849,033)
Finance income				1,762			1,904
Loss on ordinary activities before taxation				(5,897,039)			(1,847,129)
Taxation on loss on ordinary activities		4		-			-
Loss for the period from continuing activities				(5,897,039)			(1,847,129)
Loss for the period from discontinued activities				(49,762)			(5,231,384)
Loss for the period				(5,946,801)			(7,078,513)
Other comprehensive income
Items that may be re-classified subsequently to profit or loss:   Foreign exchange adjustment on consolidation				231,644			723,568
Total comprehensive loss for the period attributable to the equity holders				(5,715,157)			(6,354,945)
Earnings per share (basic and diluted) attributed to the equity holders:
Attributable to continuing activities				(3.05)	p		(1.27)	p
Attributable to discontinued activities				(0.03)	p		(3.60)	p
Total				(3.07)	p		(4.87)	p

CHILL BRANDS GROUP PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 31 MARCH 2021 & 2020

		Notes		At 31 March 2021 £		At 31 March 2020 £
Non-Current Assets
Tangible assets				54,597		83,002
Intangible assets				-		-
Total Noncurrent Assets				54,597		83,002
Current Assets
Inventories		5		1,238,779		1,167,736
Trade and other receivables		6		136,093		1,437,132
Assets held for sale				-		301,891
Cash and cash equivalents				333,176		349,006
Total Current Assets				1,708,048		3,255,765
Total Assets				1,762,645		3,338,767
Non-Current Liabilities
Loans, excluding current maturities				72,042		-
Total Noncurrent Liabilities				72,042		-
Current Liabilities
Current maturities of loans				8,382		-
Trade and other payables		7		661,653		1,227,385
Accrued liabilities		3		1,244,750		-
Total Current Liabilities				1,914,785		1,227,385
Total Liabilities				1,986,827		1,227,385
Net Assets				(224,182)		2,111,382
Equity
Share capital		8		2,020,700		1,729,200
Share premium account		8		4,698,441		3,020,616
Share based payments reserve		8		1,431,686		54,171
Foreign currency translation reserve				532,646		301,002
Retained loss				(8,907,655)		(2,993,607)
Total Equity				(224,182)		2,111,382

CHILL BRANDS GROUP PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 

YEARS ENDED 31 MARCH  2021 & 2020

		Share Capital £	Share Premium Account £	Share Based Payment Reserve £	Foreign Currency Translation Reserve £	Retained Loss £	Total £
At 31 March 2019		1,364,831	1,276,611	793,128	(422,566)	3,305,124	6,317,128
Comprehensive income for the period
Loss for the period		-	-	-	-	(7,078,513)	(7,078,513)
Other comprehensive income		-	-	-	-	-	-
Translation adjustment		-	-	-	723,568	-	723,568
Total comprehensive loss for the period attributable to the equity holders		-	-	-	723,568	(7,078,513)	(6,354,945)
Issue of warrant and options		-	-	40,825	-	-	40,825
Lapse of warrants		-	-	(247,825)	-	247,825	-
Exercise of warrants		300,500	1,377,000	(531,957)	-	531,957	1,677,500
Shares issued in the period		63,869	390,130	-	-	-	453,999
Cost relating to share issues		-	(23,125)	-	-	-	(23,125)
At 31 March 2020		1,729,200	3,020,616	54,171	301,002	(2,993,607)	2,111,382
Comprehensive income for the period
Loss for the period		-	-	-	-	(5,946,801)	(5,946,801)
Other comprehensive income		-	-	-	-	-	-
Translation adjustment		-	-	-	231,644	-	231,644
Total comprehensive loss for the period attributable to the equity holders		-	-	-	231,644	(5,946,801)	(5,715,157)
Issue of warrant and options		-	-	1,410,268	-	-	1,410,268
Staff options reassigned		-	-	20,094	-	(20,094)	-
Lapse of warrants		-	-	(52,847)	-	52,847	-
Exercise of warrants		75,000	475,000	-	-	-	550,000
Shares issued in the period		216,500	1,230,000	-	-	-	1,446,500
Cost relating to share issues		-	(27,175)	-	-	-	(27,175)
At 31 March 2021		2,020,700	4,698,441	1,431,686	532,646	(8,907,655)	(224,182)

CHILL BRANDS GROUP PLC

CONSOLIDATED STATEMENT OF CASH FLOWS 

YEARS ENDED 31 MARCH  2021 & 2020

		2021 £		2020 £
Cash Flows From Operating Activities
Loss for the period		(5,946,801)		(7,078,513)
Adjustments for:
Depreciation and amortization charges		20,677		330,315
Impairment provision		206,685		4,401,185
Loss on disposal of tangible and intangible assets		-		194,625
Share based payments		2,506,768		-
Charge in respect of grant of options		-		40,826
Foreign exchange translation adjustment		193,717		500,680
Operating cash flow before working capital movements		(3,018,954)		(1,610,882)
Increase in inventories		(275,743)		(1,167,376)
Decrease in trade and other receivables		1,301,039		940,182
Decrease in trade and other payables		(235,732)		(416,985)
Increase in accrued expenses		1,244,750		-
Net Cash outflow from Operating Activities		(984,640)		(2,255,061)
Cash Flows From Investing Activities
Proceeds from sale of assets held for sale		301,891		-
Purchase of tangible fixed assets		(1,352)		(162,625)
Net Cash generated from/(used in) Investing Activities		300,539		(162,625)
Cash Flows From Financing Activities
Net proceeds from issue of shares		542,825		2,108,374
Loans made by the Company		80,424		(1,190,500)
Convertible loan notes issued by the Company		-		330,000
Net Cash Generated from Financing Activities		623,249		1,247,874
Net increase (decrease) in cash and cash equivalents
As above		(60,852)		(1,169,812)
Cash and cash equivalents at beginning of period		349,006		1,508,649
Foreign exchange adjustment on opening balances		45,022		10,169
Cash and cash equivalents at end of period		333,176		349,006

 

Notes to the Financial Statements

Basis of preparation

Chill Brands Group plc (the 'Company') is a public limited company, which is listed on the London Stock Exchange and incorporated and domiciled in the UK. The registered office of the Company is 27/28 Eastcastle Street, London W1W 8DH.

The preliminary results (unaudited) (referred to as the 'preliminary results') include the results of the Company and its subsidiaries (together referred to as the 'Group'). The preliminary results of the Group have been prepared on the basis of the accounting policies set out in the statutory financial statements for the year ended 31 March 2020. Whilst the financial information included in this announcement has been computed in accordance with the recognition and measurement requirements of international accounting standards in conformity with the requirements of the Companies Act 2006 and international financial reporting standards adopted pursuant to Regulation (EC) No. 1606/2002 as it applies in the European Union, this announcement does not itself contain sufficient disclosures to comply with IFRS.

The information for the year ended 31 March 2021 does not constitute statutory accounts for the purposes of section 435 of the Companies Act 2006. A copy of the accounts for the year ended 31 March 2020 was delivered to the Registrar of Companies. The auditors' report on those accounts was not qualified and did not contain statements under section 498(2) or 498(3) of the Companies Act 2006. The audit of the statutory accounts for the year ended 31 March 2020 is not yet complete. These accounts will be finalised on the basis of the financial information presented by the Directors in these preliminary results and will be delivered to the Registrar of Companies following the Company's annual general meeting.

The preliminary results are prepared on the historical cost basis. The same accounting policies, presentation and methods of computation are followed in the preliminary results as were applied in the Group's 2020 annual audited financial statements.

Going Concern

The Directors have considered the financial performance and position of the Company, the post year end fundraising of £6 million, fees settled, as well as the outlook for future financial years including the distribution agreements signed, post year end performance and the general market. The Directors have taken these into consideration and applied them to a variety of scenarios including a worst case scenario of no sales and a linked reduced cost base. Based on this the Directors consider it appropriate to adopt the going concern basis in the preparation of this preliminary announcement.

1. General Information

Chill Brands Group plc ("the Company") (formerly Zoetic International plc) and its subsidiaries (together "the Group") are involved in the development, production and distribution of premium cannabidiol (CBD) products.  The Company, a public limited company incorporated and domiciled in England and Wales, is the Group's ultimate parent company. The Company was incorporated on 13 November 2014 with Company Registration Number 09309241 and its registered office and principal place of business is 27/28 Eastcastle Street, London W1W 8DH.

2. Segment Reporting

In the opinion of the Directors, there were no separate operational segments to be reported upon during the current or previous year. The Group's oil and gas activities have been discontinued in the prior year with the remaining activities of the Group relate to its CBD business activities in the United States and UK. Information relating to the CBD activities are shown in the primary statements.

3. Other Expense

On 9 March 2021, the Group entered into a financing agreement with LDA Capital Limited which included a termination clause of £1,200,000 to terminate the agreement. On 4 May 2021, the Group announce the termination of the financing agreement with LDA Capital Limited and entered into a settlement agreement to pay LDA Capital £1,200,000 to terminate the financing agreement. As of 31 March 2021, the Group accrued £1,200,000 to the settlement and termination of the financing agreement with LDA Capital Limited with the charge recorded to other expense.

4. Taxation

		2021 £	2020 £
The charge/credit for the period is made up as follows:
Corporate Taxation on the results for the period
UK		-	-
Non-UK		-	-
Taxation charge/credit for the period		-	-
A reconciliation of the tax charge/credit appearing in the income statement to the tax credit that would result from applying the standard rate of tax to the results for the period is:
Loss per accounts		(5,946,901)	(7,078,513)
Tax credit at the standard rate of corporation tax at a combined rate of 20% (23.15%):		(1,189,360)	(1,415,703)
Impact of costs disallowable for tax purposes		-	--
Impact of temporary timing differences		-	--
Impact of unrelieved tax losses carried forward		1,189,360	1,415,703
Taxation credit for the period		-	-

The Directors consider that there are no material disallowable costs or timing differences in respect of the current year.

Estimated tax losses of £26,000,000 (2020: £20,000,000) may be available for relief against future profits. The deferred tax asset not provided for in the accounts based on the estimated tax losses and the treatment of temporary timing differences, is approximately £5,200,000 (2020: £4,000,000). Utilization of these losses in future may or may not be possible depending upon future profitability within the Group and the continued availability of the losses due to the change in the Group's core activities.

5. Inventories

	Group 2021 £	Group 2020 £
Finished goods	1,157,960	1,167,736
Raw materials	80,819	-
	1,238,779	1,167,736

6. Trade & Other Receivables

	Group 2021 £	Group 2020 £
Trade receivables	55,637	217,449
Loans	-	1,190,500
Prepayments and other debtors	80,456	29,183
	136,093	1,437,132

All amounts in trade receivables are due within 3 months. Prepayments & other debtors includes £nil  (2020: £nil) which is receivable in more than one year.

The Directors consider that the carrying amount of trade and other receivables approximates to their fair value. Fair values have been calculated by discounting cash flows at prevailing interest rates.

Included in Trade and Other receivables were Loan Notes totaling £nil (2020: £1,190,500). These arose from the exercise of 23,810,000 warrants in March 2020. In order to facilitate the exercise of these warrants which would generate funds for the company of £1,190,500, the Company allowed the transfer of the warrants to a new holder and their immediate exercise, with the payment of the exercise price being deferred via the Loan Notes. The loans carry interest at 1% per annum and are secured against the underlying shares. The loans were repayable in 10 equal monthly instalments commencing 30 April 2020.

The Group applies the IFRS9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade receivables. To measure expected credit losses on a collective basis, trade receivables are grouped based on similar credit risk and ageing. The Group's customer base is of a similar bracket and share the same characteristics, as such these have been treated as one population. The expected lifetime losses are considered to be £nil.

7. Trade & Other Payables

	Group 2021 £	Group 2020 £
Bank borrowings	-	256,929
Trade payables	339,938	109,238
Convertible Loan Notes	-	330,000
Accruals & other payables	321,715	531,218
	661,653	1,227,385

Bank borrowings represent a loan to a US based subsidiary, secured on the producing assets of that subsidiary. The loan was for an initial period of one year but has been extended pending disposal of the underlying assets, which took place post year end when the loan was repaid. The loan carried interest at 5% above US base rate. The net debt of the Group decreased from £256,929 at 31 March 2020 to £nil at 31 March 2021 as part of the sale of the oil and gas assets held for sale.

Trade payables and accruals principally comprise amounts outstanding for trade purchases and continuing costs. The Directors consider that the carrying amount of trade and other payables approximates to their fair value. Fair values have been calculated by discounting cash flows at prevailing interest rates.

8. Equity

	2021 £	2020 £
Allotted called up and fully paid:
202,070,034 ordinary 1p shares (2020:172,920,034 ordinary 1p shares)	2,020,700	1,729,200

The Company has only one class of share. All ordinary shares have equal voting rights and rank pari passu for the distribution of dividends and repayment of capital.

	Number	Par value of shares issued £
At 31 March 2020	172,920,034	1,729,200
3 April 2020 issue of shares at 1p per share	12,900,000	129,000
6 June 2020 issue of shares at 4p per share	8,750,000	87,500
28 October 2020 issue shares upon exercise of warrants at 10p per share	1,000,000	10,000
25 March 2021 issue shares upon exercise of warrants at 12p per share	1,000,000	10,000
31 March 2021 issue shares upon exercise of convertible loan at 6p per share	5,500,000	55,000
Total issued in the period	29,150,000	291,500
Number of shares in issue at 31 March 2021	202,070,034	2,020,700

At 31 March 2021 there were options outstanding over 7,155,000 unissued ordinary shares (2020: 7,405,000). Details of the options outstanding are as follows:

Issued	Exercisable from	Exercisable until	Number Outstanding	Exercisable price (p)
12 October 2016	Anytime until	11 October 2026	250,000	27.75
8 October 2019	8 October 2021	8 October 2029	5,840,000	10.00
8 October 2019	8 October 2021	8 October 2029	65,000	10.00
8 October 2019	Anytime Until	8 October 2029	1,000,000	10.00
Total			7,155,000

8. Equity continued

Director	At 31 March 2020	Granted in the period	Exercised in the period	Lapsed in the period	At 31 March 2021	Exercise Price - pence
NGS Tulloch	2,000,000	-	-	(2,000,000)	-	10p
T Taylor	-	2,887,500	-	-	2,887,500	10p
A Russo	-	2,887,500	-	-	2,887,500	10p
Total	2,000,000	5,775,000	-	(2,000,000)	5,775,000

The options held by N G S Tulloch were exercisable between 8 October 2021 and 8 October 2029. Those options were relinquished in the current year upon Mr. Tulloch resigning from the Board of Directors.

The warrants held by T. Taylor and A. Russo are exercisable until 8 October 2029.

The market price of the shares at the year end was 83.50p per share.

During the year, the minimum and maximum prices were 4.13p and 104.53p per share respectively.

Share Base payments : In April 2020, options of 12,900,000 shares were vested to both T. Taylor and A. Russo at 8.5p. At 31 March 2021, the Group recorded 1,096,500 in share based compensation for the vested options.

In October 2020, T. Taylor and A. Russo were granted options of 5,775,000 shares which are vested over three years from the date of grant in October 2019 subject to continued employment and performance obligations. At 31 March 2021, the Group recorded 1,410,268 in share based compensation for the granted options.

	2021 £
At 31 March 2020	3,020,616
3 April 2020 issue of shares at 8.5 p per share	967,500
2 June 2020 issue of shares at 4 p per share	262,500
28 October 2020 issue of shares upon exercise of warrants at 10 p per share	90,000
25 March 2021 issue of shares upon exercise of warrants at 12 p per share	110,000
31 March 2021 issue of shares upon exercise of warrants at 6 p per share	275,000
Less: costs relating to share issues	1,705,000 (27,175)
Increase in the year	1,677,825
At 31 March 2021	4,698,441

-ENDS-

Media enquiries:

Chill Brands plc		c/o Buchanan
Trevor Taylor, Co-CEO Antonio Russo, Co-CEO
Allenby Capital Limited (Financial Adviser and Broker)		[phone]
Nick Harriss/Nick Naylor (Corporate Finance)
Kelly Gardiner (Equity Sales)
Buchanan
Henry Harrison-Topham / Jamie Hooper / Ariadna Peretz		Tel: [phone]
[e-mail]		www.buchanan.uk.com

 

END

 

 

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