Interim Results

Ocean Harvest Technology Group PLC

30 September 2024

 

Ocean Harvest Technology Group Plc ("OHT or "the Company")

Interim Results for six months ended 30 June 2024

Ocean Harvest Technology Group Plc (AIM: OHT), specialists in researching, developing and selling seaweed and ancillary products, announces its unaudited results for the six month period ended 30 June 2024 ("the Period").

The Interim Report for the period ended 30 June 2024 will be published on the Company's website today at www.oceanharvesttechnology.com.

Financial Highlights

·      Reported revenue down 46% to €0.95 million (H1 2023 €1.75 million). Significantly impacted by both OHT's largest OceanFeed customer and largest single seaweed customer of 2023 not ordering in the period

·      Gross margin 34.4% (H1 2023 35.8%) with underlying margin up year-on-year excluding loss-making sale of aged single seaweed inventory

·      Adjusted EBITDA loss of €1.7 million (H1 2023 loss of €1.2 million) through lower revenue and gross profit

·      Cash and cash equivalents at 30 June 2024 €1.1 million (30 June 2023 €4.7 million). The Company has €2.7 million of other current assets including €1.7million of inventory at period end

·      Additional funding of £1.5 million announced separately today (as detailed below), providing the resource to drive significant revenue growth into 2025

Operational Highlights

·      New Chief Commercial Officer Nico Stein joined OHT in Q1 and launched new sales and marketing strategy in Q2

·      Onboarding of two new Pet customers and further two multi-species distributors in Europe, new multi-species distributor in Latin America and an Aqua customer in India all having placed orders in the Period

·      Increasing investment in sales team with additional sales resource added in LAM and APAC regions with further headcount growth planned for late 2024 and early 2025

·      Patent granted covering a wide range of claims about the benefits of using the Company's OceanFeed product in the diets of a range of animals

·      Positive commercial scale sow trial results delivered demonstrating 5% profitability improvement for customers using OceanFeed Swine

Post-period Highlights

·      On 4 September 2024 the Company announced that Ashley Head was appointed as Executive Chairman with immediate effect. After two years as CEO, Mark Williams stepped down from the Board and the Company will look to strengthen the Board and Executive team in the coming months

·      In August 2024 the Company's largest OceanFeed customer resumed ordering and OHT continue to have a strong relationship with this substantial feed producer and broiler integrator

·      Currently in discussion with several potential distributors in South America and Asia

·      As announced separately today, the Company has conditionally raised £1.5 million, before  expenses, by way of the issue of Secured Loan Notes and Warrants to certain existing Shareholders. The net proceeds will be used to meet the Company's immediate working capital requirements and provide the capital to drive significant revenue growth into 2025

Conclusion and Outlook

·      Reflecting the impact on FY 2024 of existing customer ordering patterns and slower onboarding of new customers, the Company now expects to report full year revenue of approximately €2.4 million. Within that there is an expectation of positive organic revenue growth in OceanFeed excluding the one year impact from the largest customer

·      Gross margin from the sale of OceanFeed is expected to continue to increase and is expected to be over 40% for the full year with total margins expected to be over 37%

·      The Company is adequately funded through the loan note facility announced today which gives it sufficient capital (alongside the receivables purchase facility it put in place at the start of 2024) to drive significant revenue growth into 2025.  

Ashley Head, Executive Chairman of Ocean Harvest Technology Group, commented:

"Despite the challenging first half of FY24 the Period has been one of positive change for OHT with the Company now being on a solid footing looking ahead to 2025 and beyond.  Trial data remains very positive and are pleased to see the resumption of regular ordering from our largest customer who remain an enthusiastic user of OceanFeed. The loan note facility provides the Company with the financial stability it needs to continue to implement the sales initiatives which the Board expect to drive revenue growth and improvements in margin going forward. We look forward with great confidence in our product and expect to return to significant growth into 2025."

Executive Chairman's Statement

The first half of 2024 has been one of disappointing performance and important change for OHT to lay the groundwork for stronger performance in future. The Board identified that the sales and marketing strategy required change and improvement in order to enable OHT to deliver on the strong growth potential that it believes it has. The performance in H1 has also highlighted some of the weaknesses in the Company's prior business model, particularly around customer concentration and long sales cycles that these changes are intended to address. This has involved Board and management changes and the implementation of multiple new sales and marketing initiatives.  The initial results are encouraging, however, the benefits of these changes take time to flow through and hence the Company is reporting a disappointing set of financial results for 1H 2024.

Sales strategy

The Company announced in January that Nico Stein was appointed as the new Chief Commercial Officer for the Company. Subsequently, a number of the existing sales team have been replaced, the Company has successfully recruited two new sales people in Latin America and South East Asia and is planning further additions, particularly in Europe. The Company is rapidly expanding the number of countries it is in a position to sell into and will continue to deepen and broaden the reach of the team in the coming months.

OHT has identified specific regions and segments of the global animal nutrition market where it believes it has the greatest near term growth potential and has increased its resources focussed on those opportunities.  OHT has also increased its use of indirect sales channels in a number of regions to help it effectively access a wider geographic area and, where appropriate, more mid and smaller sized customers.  It is expected that this will also help to reduce the concentration of the company's customer base. Four new distributors have been added year to date with additional customers expected in the coming months. The Company has been very pleased by the level of interest shown by a wide variety of distributors that it has been engaging with and looks forward to supporting their sales efforts going forward.

A key focus is on commercialising at scale the strong performance data that the company has announced with regards to egg laying hens, and subsequent to the period end, sows. Whilst for many customers using OceanFeed is their first experience with seaweed, in the Companion Animals sector the use of individual seaweeds is more established, particularly for dogs and horses. Here the sales strategy is focused on highlighting the many benefits that our products have relative to existing seaweeds that are typically used, particularly lower levels of heavy metals and Iodine. As noted below, we are already starting to see some of those efforts pay off and look forward to reporting further progress on this at the full year results in March 2025.

The Board believes that these changes and improvements will enable OHT to capitalise on its enormous potential from the growing demand for sustainable and natural ingredients which improve the profitability and sustainability of feeding production animals. OceanFeed has demonstrated benefits when used in multiple species of production animals through improved growth rates and feed conversion efficiency and lower mortality rates.  OceanFeed also has a lower carbon footprint than additives produced from land-based plants and generates economic benefits in the communities where our seaweed raw material is harvested. 

Whilst the benefits of these initiatives are not immediate, the Company has seen a number of early benefits including the onboarding of three new pet food customers in Europe which are using OceanFeed as a replacement for traditional single seaweed products in their recipes, the onboarding of a Greek distributor with initial new customers in Poultry and Aqua, and the shipment of Aqua and Bovine product to a new customer in India.  The Company is also finalising arrangements with several new European distributors and a Central American distributor based in Mexico, who covers Central America more broadly, and has made the first shipment of OceanFeed products to that region.

The continuing increase in OHT's gross margin % is further tangible evidence that OHT's OceanFeed product is attracting customer support.

Supply Chain and R&D

Through the period the Company has significantly reduced the volume of seaweed it has purchased in line with the lower than expected sales volumes.  OHT has been actively engaged with its suppliers through the Period to ensure the strong developments it has made in expanding its seaweed supply chain in recent years can be maintained.  With the recent traction from the revised sales and marketing initiatives and an improved sales volume outlook relative to H1, OHT is confident that it will be able to keep its seaweed supply chain operating and build up again to the previous volumes that it had been sourcing.

The Company has continued to make strong progress in its research trials and other intellectual property development. A summary of the achievements during the first half of 2024 include:

·      The completion in June of a large, commercial scale trial in sows and the piglets from their litter.  This trial demonstrated that the use of OceanFeed Swine in Sow diets led to a statistically significant increase in the number of live piglets in their litter.  The economic benefit of this is calculated to be additional revenue of over $24 per sow per year under current economic conditions, which OHT believes results in an approximate 5% improvement in profit per sow for the groups of sow farming customers it is targeting. OHT sees this providing significant commercial benefits and opportunity for sales growth.

·      Academic research which has shown that, in addition to the long demonstrated pre-biotic effect of using OceanFeed, its inclusion in diets also leads to improvements in anti-inflammatory, antioxidant and pathogen-binding properties to commercially beneficial levels.  OHT has seen a positive response from new customer targets to the evidence of these additional benefits.

·      OHT was granted a broad patent protecting the claim that its OceanFeed seaweed blend causes a pre-biotic effect and can lead to higher growth rates, improve feed efficiency and lower mortality.  Importantly this patent covers the application in a wide range of animal species as well as a wide range of potential product formulations.

In addition to these achievements, the Company has large-scale trial work in progress at research institutes demonstrating the effect of OceanFeed in the diets of salmon, which is an industry facing many challenges, as well as in dairy and beef cattle which is expects to report during the second half of 2024.

Board

OHT has made several changes to its Board since the start of 2024.  In March both Hadden Graham and Tom Onions stepped down from the Board by not seeking re-election at the Company's AGM. As mentioned above, Gerina Eberl-Hancock and Riaan VanDyk were appointed to the Board as non-executive directors, and both bring considerable relevant industry experience along with sales and marketing skills.  Subsequent to the period end, Ashley Head was appointed as Executive Chairman on 3 September following the resignation of Mark Williams as CEO.

Funding

The Company has conditionally raised £1.5 million, before expenses, by way of the issue of secured loan notes and warrants to certain existing Shareholders. The net proceeds will be used to meet the Company's immediate working capital requirements and provide the capital to drive significant revenue into 2025.

The Secured Loan Notes will be issued following approval of the Resolutions by Shareholders at the General Meeting and the satisfaction of all conditions precedent. In order to meet the short-term cash requirements of the Company prior to the General Meeting and the satisfaction of all conditions precedent, it is intended two of the Noteholders will make up to £0.4m available immediately through an on-demand term loan at an interest rate of 12.5%.   Following Shareholder approval of the Resolutions, the Secured Loan Notes will be issued along with the Warrants and the balance of the £1.5 million will be available to be drawn down.

Outlook

In its trading update of 23 July 2024 ("Trading Update"), OHT detailed multiple new initiatives that were implemented in early 2024 to drive growth of its OceanFeed product into its substantial target markets.  Whilst the major benefits of these initiatives are not immediate, the Company has already seen a number of early indications of success including greater momentum in onboarding new customers from a wider range of species, geographies and sales channels and enabling shorter sales cycles.

OHT has a highly concentrated customer base that means the actions of a handful of customers have had a material impact on revenues.  As detailed in the trading update of July, neither the Company's largest OceanFeed customer nor its largest single seaweed customer from 2023 had placed any orders in 1H2024. In addition to existing customer revenues, the Company's previous FY 2024 outlook was reliant on quickly commercialising successful trials outcomes and expanding distribution channels which have been slower to realise than forecast.

Reflecting the impact on FY 2024 of existing customer ordering patterns and slower onboarding of new customers, the Company now expects to report full year revenue of circa €2.4 million.  Within that there is an expectation of positive organic revenue growth in OceanFeed excluding the one-year impact from the largest customer. The Company is pleased to now report that this customer resumed orders in August 2024.

Gross margin from the sale of OceanFeed is expected to continue to increase and is expected to be over 40% for the full year. The Company is adequately funded through the loan note facility announced today which gives it sufficient capital (alongside the receivables purchase facility it put in place at the start of 2024) to drive revenue growth into 2025.

Looking forward, OHT believes that 2025 will be a year of substantial revenue growth with greater revenue visibility from the changes made in its sales and marketing strategy which are resulting in:

1.     targeting the highest opportunity segments in each specific region and market

2.     significant investment in sales and marketing resource and headcount in target regions

3.     increasing breadth of customer base with reduced customer concentration risk

4.     improved customer intelligence and longer term visibility of usage / demand requirements

5.     increased use of distributors with faster customer onboarding and reduced reliance on long trial periods

The trial data and customer feedback remain extremely positive as regards OceanFeed and we look forward to returning to significant growth given the substantial size of the market opportunity.

Financial Summary

The Company has prepared the following financial summary, in addition to the attached financial statements. This summary shows its product revenue and separates the other revenue it records which is a reimbursement of shipping arranged by OHT on behalf of its customers and on which it does not charge a margin. Adjusted EBITDA excludes IPO costs, share based payments, other income/expenses. 2023 comparatives in the table below are updated to reflect this definition.

	Six months to	Six months to	Year ended
	30-Jun-24	30-Jun-23	31-Dec-23
	€'000	€'000	€'000
Product revenue	831	1,576	3,029
Other revenue	120	177	339
Reported revenue	951	1,754	3,368
Cost of goods sold	665	1,190	2,230
Gross Profit	286	564	1,138
Gross Margin %	34.4%	35.8%	37.6%
Overheads excluding IPO costs, share based payments, depreciation and finance costs	(1,988)	(1,789)	(3,321)
Adj EBITDA	(1,702)	(1,225)	(2,183)
Finance expense	(22)	(77)	(66)
Depreciation & Amortisation	(127)	(35)	(226)
Other	(219)	6	(55)
Adjusted Earnings	(2,070)	(1,331)	(2,530)
IPO transaction costs	-	(754)	(763)
Share based payments	(61)	(97)	(185)
Profit (loss) before tax	(2,131)	(2,182)	(3,478)

Revenue

Reported revenue declined 46% to €0.95 million (H1 2023 €1.75 million) as a result of the Company's largest OceanFeed customer from 2023 and its largest single seaweed customer not placing any orders in 1H 2024. Other volumes increased year-on-year with higher OceanFeed pricing through annualisation of 2023 price increases and higher prices realised with new customers.

Profitability

The Company recorded gross profit of €0.29 million in the first half vs €0.56 million achieved in the first half of last year. Total gross margin of 34% on product revenue in H1 is a decline vs 36% and 38% recorded in H1 and full year 2023 respectively. Total margins have been negatively impacted by one-off loss-making sales of aged single seaweed inventory, with underlying margins increasing year-on-year benefitting from the increases in OceanFeed average selling prices and improved customer mix. We believe that we will be able to further improve gross margin as we scale the business further.

EPS

Basic loss per share of €0.016 has reduced from a loss of €0.023 in June 2023.

Cash Flow

The company has a cash balance of €1.1 million at 30 June 2024 compared to €4.7 million at 30 June 2023, following proceeds of the March 2023 IPO. Apart from funding the company's losses, the historic build in inventory has been the single largest use of cash and whilst that currently leaves the company with excess inventory, it smoothes the path for the Company to accelerate revenue growth in future.

Ashley Head

Executive Chairman

Unaudited Condensed Consolidated Statement of Total Comprehensive Income

for the interim period ended 30 June 2024

	Note	Six months to 30 Jun 2024	Six months to 30 Jun 2023	Year ended 31 Dec 2023
		(Unaudited)	(Unaudited)	(Audited)
		€	€	€
Product revenue		831,415	1,576,332	3,029,327
Other revenue		120,037	177,478	338,319
Total revenue		951,452	1,753,810	3,367,646
Cost of sales		(665,407)	(1,189,624)	(2,229,858)
Gross profit		286,045	564,186	1,137,788
Other operating income		-	19,930	50,327
Administrative expenses		(2,395,206)	(1,935,142)	(3,836,933)
Operating loss		(2,109,161)	(1,351,026)	(2,648,818)
Finance expense		(21,569)	(77,074)	(65,504)
IPO transaction cost		-	(753,885)	(763,315)
Loss before taxation		(2,130,730)	(2,181,985)	(3,477,637)
Taxation		-	-	71,639
Loss for the period		(2,130,730)	(2,181,985)	(3,405,998)
Other comprehensive income
Item that may be subsequently reclassified to profit or loss:
Currency translation differences		140,027	496	12,159
Total comprehensive loss, net of tax		(1,990,703)	(2,181,489)	(3,393,839)
Total comprehensive loss for the period attributable to owners of the parent		(1,990,703)	(2,181,489)	(3,393,839)
Loss per share - basic and diluted (cent)	5	(0.016)	(0.023)	(0.031)

The above condensed consolidated statement of total comprehensive income relates to continuing operations for the Group.

Unaudited Condensed Consolidated Statement of Financial Position

as at 30 June 2024

	Note	30 Jun 2024	30 Jun 2023	31 Dec 2023
		(Unaudited)	(Unaudited)	(Audited)
ASSETS		€	€	€
Non-current assets
Right of use asset	7	378,291	101,229	40,492
Intangible assets	6	158,794	109,962	184,208
Property, plant and equipment		458,511	373,999	398,788
Loan receivable		50,000	-	50,000
Total non-current assets		1,045,596	585,190	673,488
Current assets
Trade and other receivables		1,024,789	1,290,706	1,595,664
Inventories		1,678,368	1,016,729	1,450,884
Cash and cash equivalents		1,073,376	4,756,926	2,598,501
Corporation tax asset		72,781	72,537	71,269
Total current assets		3,849,314	7,136,898	5,716,318
Total assets		4,894,910	7,722,088	6,389,806
EQUITY AND LIABILITIES
Equity
Share capital		1,477,482	1,477,482	1,477,482
Share premium		8,104,571	8,128,086	8,104,571
Share-based payment reserve		355,459	206,406	294,367
Merger reserve		26,932,455	26,932,455	26,932,455
Foreign exchange reserve		104,347	(47,343)	(35,680)
Retained losses		(32,938,396)	(29,583,653)	(30,807,666)
Total equity		4,035,918	7,113,433	5,965,529
Non-current liabilities
Lease liability	7	263,626	47,613	-
Total non-current liabilities		263,626	47,613	-
Current liabilities
Trade and other payables		476,718	493,265	376,663
Lease liability	7	118,648	67,777	47,614
Total current liabilities		595,366	561,042	424,277
Total Liabilities		858,992	608,655	424,277
Total equity and liabilities		4,894,910	7,722,088	6,389,806

Unaudited Condensed Consolidated Statement of Changes in Equity

for the interim period ended 30 June 2024

	Share capital €	Share premium €	Share-based payment  reserve €	Merger reserve €	Foreign exchange reserve €	Retained  losses €	Total  equity €
As at 1 January 2024	1,477,482	8,104,571	294,367	26,932,455	(35,680)	(30,807,666)	5,965,529
Loss for the period	-	-	-	-	-	(2,130,730)	(2,130,730)
Other comprehensive loss:
Foreign currency exchange difference	-	-	-	-	140,027	-	140,027
Total comprehensive loss for the period	-	-	-	-	140,027	(2,130,730)	(1,990,703)
Transactions with owners
Share-based payment	-	-	61,092	-	-	-	61,092
Total transactions with owners	-	-	61,092	-	-	-	61,092
As at 30 June 2024	1,477,482	8,104,571	355,459	26,932,455	104,347	(32,938,396)	4,035,918

Unaudited Condensed Consolidated Statement of Changes in Equity

For the interim period ended 30 June 2023

	Share  capital €	Share premium €	Share-based payment reserve €	Merger  reserve €	Foreign exchange reserve €	Retained losses €	Total equity €
As at 1 January 2023	761,448	-	109,456	26,932,455	(47,839)	(27,401,668)	353,852
Loss for the period	-	-	-	-	-	(2,181,985)	(2,181,985)
Other comprehensive loss:
Foreign currency exchange difference	-	-	-	-	496	-	496
Total comprehensive loss for the period	-	-	-	-	496	(2,181,985)	(2,181,489)
Transactions with owners
Issue of share capital	434,093	6,511,388	-	-	-	-	6,945,481
Conversion of convertible loan notes	281,941	2,220,658	-	-	-	-	2,502,599
Cost of raising equity	-	(603,960)	-	-	-	-	(603,960)
Share-based payment	-	-	96,950	-	-	-	96,950
Total transactions with owners	716,034	8,128,086	96,950	-	-	-	8,941,070
As at 30 June 2023	1,477,482	8,128,086	206,406	26,932,455	(47,343)	(29,583,653)	7,113,433

Unaudited Condensed Consolidated Statement of Changes in Equity

for the year ended 31 December 2023

	Share capital €	Share premium €	Share-based payment reserve €	Merger reserve €	Foreign exchange reserve €	Retained  losses €	Total equity €
As at 1 January 2023	761,448	-	109,456	26,932,455	(47,839)	(27,401,668)	353,852
	-	-	-	-		(3,405,998)	(3,405,998)
Loss for the year
Other comprehensive loss:
Foreign currency exchange difference	-	-	-	-	12,159	-	12,159
Total comprehensive loss for the year	-	-	-	-	12,159	(3,405,998)	(3,393,839)
Transactions with owners
Issue of share capital	434,093	6,511,388	-	-	-	-	6,945,481
Conversion of convertible loan notes	281,941	2,220,658	-	-	-	-	2,502,599
Cost of raising equity	-	(627,475)	-	-	-	-	(627,475)
Share-based payment	-	-	184,911	-	-	-	184,911
Total transaction with owners	716,034	8,104,571	184,911	-	-	-	9,005,516
As at 31 December 2023	1,477,482	8,104,571	294,367	26,932,455	(35,680)	(30,807,666)	5,965,529

Unaudited Condensed Consolidated Statement of Cash Flows

	Six months to             30 Jun 2024	Six months to     30 Jun 2023	Year end to 31 Dec 2023
	(Unaudited)	(Unaudited)	(Audited)
	€	€	€
Cash flows from operating activities
Loss before taxation	(2,130,730)	(2,181,985)	(3,477,637)
Adjustments for:
Depreciation of property, plant, and equipment	38,293	32,413	67,066
Depreciation of right-of-use assets	62,664	71,589	133,012
Amortisation of intangible assets	26,210	6,485	26,250
Finance expense	21,569	77,074	65,504
Foreign exchange differences on convertible loan note	-	-	182,321
Loss on disposal of property, plant and equipment	-	-	(1,199)
Share based payment	61,092	96,950	184,911
IPO transaction costs	-	753,885	763,315
	(1,920,902)	(1,143,589)	(2,056,457)
Changes in working capital
Increase in inventories	(227,484)	(386,864)	(821,019)
Decrease/(increase) in trade and other receivables	569,363	(49,805)	(294,267)
Increase/(decrease) in trade and other payables	100,055	56,731	(59,871)
Cash used in operations	(1,478,968)	(1,523,527)	(3,231,614)
Taxation credits received	-	-	62,412
Net cash used in operations	(1,478,968)	(1,523,527)	(3169,202)
Cash flows from investing activities
Purchase of property, plant and equipment	(105,493)	(59,890)	(131,590)
Purchase of intangible asset	(2,713)	(19,622)	(190,134)
Payments for development costs	-	(76,209)	-
Net cash flow used in from investing activities	(108,206)	(155,721)	(321,724)
Cash flow from financing activities
Proceeds from issue of share capital	-	6,945,481	6,945,481
Cost of share issue	-	(1,357,845)	(1,390,790)
Proceeds from convertible loan notes	-	-	-
Loan to supplier	-	-	(100,000)
Repayment of related party loan	-	(403,523)	(403,523)
Interest paid on borrowings	-	(20,200)	(13,339)
Other interest paid	(11,402)	-	(247)
Principal paid on lease liabilities	(66,355)	(82,874)	(151,415)
Interest paid on lease liabilities	(10,167)	(11,068)	(16,670)
Net cash (used in)/generated from financing activities	(87,924)	5,069,971	4,869,497
(Decrease)/increase in cash and cash equivalents	(1,675,098)	3,390,723	1,378,571
Cash and cash equivalents at beginning of period	2,598,501	1,194,440	1,194,440
Effect of foreign exchange rate movements	149,973	171,763	25,490
Cash and cash equivalents at the end of the period	1,073,376	4,756,926	2,598,501

for the interim period ended 30 June 2024

Notes to the unaudited interim report for six months ended 30 June 2024

1.   General Information

Ocean Harvest Technology Group Plc (the "Company") is a public limited company which is listed on the AIM Market of the London Stock Exchange and incorporated and domiciled in the UK. Its address of its registered office is 41 London Road, Reigate, England, RH2 9RJ. The registered number of the Company is 13411717.

2.   Basis of preparation

The condensed consolidated interim financial statements include the results of Company and its subsidiaries ("the Group") for the six months ended 30 June 2024 and have not been audited. These condensed consolidated interim financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006.

These condensed consolidated interim financial statements have been prepared in accordance with the AIM rules and the recognition and measurement requirements of UK-adopted International Accounting Standards ("UK-IAS") and adopting the accounting policies that will be applied in the 31 December 2024 annual financial statements and consistent with those disclosed in the 31 December 2023 annual financial statements.

The condensed consolidated financial statements should be read in conjunction with the Group's statutory financial statements for the year ended 31 December 2023. The auditors reported on those accounts and their report was unqualified and did not contain a statement under s498(2) or (3) of the Companies Act 2006

These condensed consolidated interim financial statements were approved by the Board of Directors on 27 September 2024.

3.   Accounting policies

Going concern

The Directors believe that the Group has adequate resources to continue trading for the at least 12 months from the date of approval of these condensed consolidated interim financial statements. Accordingly, the Directors continue to adopt the going concern basis of accounting in preparing these financial statements.

Summary of significant accounting policies

The condensed consolidated interim financial statements have been prepared using applicable accounting policies and practices consistent with those adopted in the statutory audited consolidated annual financial statements for the year ended 31 December 2023.

4.     Critical accounting judgements and estimates

The preparation of the condensed consolidated interim financial statements requires Directors to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these judgements and estimates.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the statutory audited consolidated financial statements for the year ended 31 December 2023

5.     Loss per share

The calculation of basic and diluted loss per share is based upon the loss of attributable to equity holders divided by the weighted average number of shares in issue during the period.

The loss incurred by the Group means that the effect of any outstanding options would be anti-dilutive and is ignored for the purposes of the diluted loss per share calculation.

	Six months to             30 Jun 2024 (Unaudited) €	Six months to 30 Jun 2023 (Unaudited) €	Year ended 31 Dec 2023 (Audited) €
Loss for the period from continuing activities	(2,130,730)	(2,181,985)	(3,405,998)
	Six months to             30 Jun 2024 (Unaudited) No	Six months to             30 Jun 2023 (Unaudited) No	Year ended 31 Dec 2023 (Audited) No
Weighted average number of ordinary shares	125,855,697	94,073,289	110,095,106
	Six months to             30 Jun 2024 (Unaudited) €	Six months to             30 Jun 2023 (Unaudited) €	Year ended 31 Dec 2023 (Audited) €
Basic and diluted loss per share	(0.016)	(0.023)	(0.031)

6.     Intangible assets

	Patents and licenses              €	Development costs                  €	Total                 €
Cost
At 1 January 2024	29,696	189,761	219,457
Additions	2,713	-	2,713
Exchange differences	-	(1,689)	(1,690)
At 30 June 2024	32,409	188,072	220,481
Amortisation
At 1 January 2024	14,139	21,110	35,249
Charge for the period	3,614	22,596	26,210
Exchange differences	(220)	448	228
At 30 June 2024	17,533	44,154	61,687
Net book
At 30 June 2024 (Unaudited)	14,876	143,918	158,794
At 31 December 2023 (Audited)	15,557	168,651	184,208

Development costs are internally generated intangible assets associated with the development of Group's products. 

7.     Leases

In May 2024 the Group entered into a new lease agreement in relation to the warehouse located in Vietnam. The lease term is 3 years.  The Group has adopted an incremental borrowing rate of 13.52%. The incremental borrowing rate includes an additional risk premium on a lease based in Vietnam and denominated in Vietnamese Dong (VND).

	Leasehold property                  €	Total                 €
Cost
At 1 January 2024	668,305	668,305
Additions	404,748	404,748
Exchange rate differences	2,814	2,814
At 30 June 2024	1,075,867	1,075,867
Amortisation
At 1 January 2024	627,813	627,813
Charge for the period	62,664	62,664
Exchange rate differences	7,099	7,099
At 30 June 2024	697,576	697,576
Net book
At 30 June 2024 (Unaudited)	378,291	378,291
At 31 December 2023 (Audited)	40,492	40,492

Right of use asset

	Leasehold property                  €	Total                 €
Cost
At 1 January 2024	47,614	47,614
Additions	404,748	404,748
Interest expenses	10,167	10,167
Lease payments	(76,522)	(76,522)
Exchange adjustments	(3,733)	(3,733)
At 30 June 2024 (Unaudited)	382,274	382,274

Lease liability

8.     Share-based payment schemes

The Group operates two employee share option schemes that are accounted for as equity-settled share-based payments, which are detailed in the annual report for the year ended 31 December 2023.

In April 2024, the Company granted 1,385,857 options each to Chris Scott, the Group's Chief Financial Officer and Nico Stein, the Group's Chief Commercial Officer under the Share Option Plan with the same vesting conditions as the existing options.

The number of new options granted equals to the number of options that have either been forfeited since the IPO or are due to be forfeited in 2024 by employees leaving the Company.

The total charge for the period ended 30 June 2024 in respect of the two options schemes was €61,092 (2023: €nil) and was recognised in the Statement of Comprehensive Income.

9.     Significant events after the reporting date

The Company has conditionally raised £1.5 million , before  expenses, by way of the issue of Secured Loan Notes and Warrants to certain existing Shareholders. The net proceeds will be used to meet the Company's immediate working capital requirements and provide the capital to drive revenue in 2025.

 

END