Interim Results for six months ended 31/08/2022

RNS Number : 2193G

Ondo InsurTech PLC

14 November 2022

 

14 November 2022

Ondo Insurtech Plc
("ONDO", the "Company")

Interim Results for the six months ended 31 August 2022

Ondo Insurtech Plc is pleased to announce its unaudited results for the six-month period ended 31 August 2022. A copy of the Interim Results is available on the Company's website,  www.ondoplc.com

FINANCIAL HIGHLIGHTS

· Revenue of £1 million for the six-month period ended 31^st August 2022, which is 55% higher than for the same period a year ago (6 months to end 31^st Aug 2021: £0.6 million)

· £0.4m was from recurring Software and Services +59% growth (6 months to end 31^st Aug 2021: £0.2 million) and £0.6m of turnover was from one-off Hardware and Set-up fees +50% growth (6 months to end 31^st Aug 2021: £0.4 million)

· Gross Contribution for the period was £0.5m +188% (6 months to end 31^st Aug 2021: £0.2 million) therefore illustrating a Gross Margin for the period of 49% achieving the strong unit economics of the business.

· Approximately £0.9 million cash received from customers during the period, 120% growth vs. the same period a year ago (6 months to end 31^st Aug 2021: £0.4 million).

· Period end cash and cash equivalents of c. £1.87million, 1.7 times growth vs the same period a year ago (6 months to end 31^st Aug 2021: £1.06 million)

OPERATIONAL HIGHLIGHTS (including post-period updates)

· Consumer Intelligence Research published showing LeakBot delivers 70% reduction in claims costs

· 15,887 L eakBot units were shipped or sold and awaiting shipment to insurance companies during the period, 2.7 times higher vs the same period a year ago (H1 FY 2021: 5,908)

· Total registered customers on platform at period end were approximately 46,000 , +43% growth ( H1 FY 2021: 32,000) . 

· New contract  signed with Admiral (20,000 unit), LB Forsikring (10,000 units), Privatsikring and new entry into New York State launched in April.

· Green Economy Mark awarded to Ondo by the London Stock Exchange

· Management team further strengthened with CFO Kevin Withington and CTO Chris Jelley hired, and Jim Strickland hired as General Manager for newly formed LeakBot USA Inc

Craig Foster - CEO of Ondo InsurTech Plc - commented: "We are thrilled to release our first set of results as a public company, showing our investors that we are on plan, doing exactly what we said we would do and are on the way to building the market leading company in claims prevention technology for home insurers".

CEO Craig Foster will be providing a live company presentation and Q&A on Monday, 21st November at 2pm (GMT).

The event will be hosted virtually by the London Stock Exchange on its Spark Live Platform and open to shareholders, prospective investors, journalists and financial analysts.

Please register interest here:

https://www.lsegissuerservices.com/spark/ONDOINSURTECH/events/068ec42f-589e-40f1-9f9e-14533986c198

The presentation will subsequently be available on ONDO's company page on the London Stock Exchange website:

https://www.londonstockexchange.com/stock/ONDO/ondo-insurtech-plc/company-page

For more information, please contact:

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

For further information, visit  www.ondoplc.com  contact:

Chairman's Report

We publish today our unaudited interim financial statements which are the first accounts published by Ondo InsurTech Plc ("Company" or "Group" or "Ondo") following the acquisition of LeakBot Limited and the admission to trading of the enlarged group. They therefore provide us with the first opportunity to publish consolidated financial statements for the Group. Together with the information in our prospectus of 14 March 2022, these financial statements provide shareholders with a clear picture of the business and its impressive progress since admission.

The process  leading up to the acquisition of LeakBot Limited were described in the audited annual report dated 28 July 2022, along with a description of the transaction itself as a post-period matter. Following amendments to the sale and purchase agreement made on 28 January 2022, 15 February 2022 and 28 February 2022, the aggregate consideration of £9,799,548 was finalised, split as follows:

• payment to HomeServe Assistance Limited ("Seller") of £1,599,548 in cash;

• issue and allotment of 13,628,275 and 1,363,392 Consideration Shares to the Seller and Gregory Mark Wood CBE respectively at £0.12 per share, representing an aggregate amount of £1,799,000; and

• granting of secured loan notes of the Buyer with a redemption value equal to £6,401,000.

In conjunction with the completion of the acquisition of LeakBot Limited, and readmission of its shares to trading on 14 March 2022, the Company raised £3,427,500 through the issue of 28,562,508 Shares at a price of 12 pence each and the grant of 14,281,252 warrants to subscribe for Shares at an exercise price of 25 pence each pursuant to a placing by SI Capital Limited as placing agent for the Company and a private subscription carried out by the Company.

Upon completion, Leakbot Limited became a wholly owned subsidiary of Ondo.

The total commissions and other estimated fees and expenses in connection with the acquisition of LeakBot Limited and the associated fundraise were approximately £592,000 plus VAT.

Through ownership of its l subsidiary LeakBot Limited, Ondo has become a B2B InsurTech business which has developed and patented the underlying technologies for a propriety leak detection system. The Group's primary business is the manufacture (through third-party manufacturers) of the LeakBot device and supply of the LeakBot device and the provision of underlying claims mitigation services to its household insurer partners. The integrated system enables household insurers to mitigate the cost of claims arising due to an escape of water. This is achieved through the installation of a proprietary technology at insured households and the provision of claims mitigation services such as find-and-fix plumbing repairs and data to assess risk. The unique technology is now protected by 29 different patents, issued and granted, and has been proven by 3^rd party research to be capable of reducing water damage claims costs for insurers by 70%.  Insurers in the UK, Denmark, Sweden, Ireland and the US pay for the LeakBot system and derive the benefit of claims mitigation through the prevention of leaks at insured households.

I am pleased to be able to note that Ondo has made an encouraging start to life as a public company during the period under review and to date. Under the challenging macro-economic conditions that we have experienced since admission, the Board is very much focused on the achievement of financial breakeven, and I am pleased to note that through strong business growth and financial discipline we are making good progress towards this important milestone. Our Chief Executive Officer Craig Foster expands on our strategy, our achievements to date and the outlook for the Group in his accompanying review.

We were very pleased to welcome Jim Strickland (GM North America), Dr Chris Jelley (Chief Technology Officer, CTO) and Kevin Withington to the management team during and shortly after the period, with Kevin Withington being further appointed to the Board as Finance Director from 26 September 2022. These experienced resources position the Group for further growth and strong governance.

Following the period end, Ondo announced that the accounting reference date, adding one month to the current financial year to align it to the nearest calendar quarter end. Our next audited results will therefore be presented for the 13-month period until 31 March 2023.

Together with my colleagues on the board and with our talented management, I look forward with confidence to being able to report on further progress.

Gregory Mark Wood CBE

Chairman

14 November 2022

Chief Executive Officer's Report

I am very pleased to announce our interim results for the period ending 31^st August 2022 - our first set of consolidated results as Ondo InsurTech Plc.

Since arriving on London Stock Exchange in March 2022 we have announced a whole raft of new partnerships.  For the first time today, our shareholders can see how quickly those announcements can be turned into trading results for the company.

Our mission - A world leader in claims prevention tech for home insurers - solving a $17bn problem

Our mission is to become a world leader in claims prevention technology for home insurers. Our first set of results show how we are on our way to fulfilling this vision.  The reason I am confident we will be successful is that we have the only patented and proven solution to one of the most significant perils in home insurance - claims caused by water damage. In the US and UK there are 1.6m claims a year caused by water damage, costing insurers $17bn annually.  With our flagship product LeakBot we have a patented and proven solution to this significant industry problem.

Operational Highlights

In the first Half year, we have announced a raft of new partnerships all contributing towards our goal of becoming the leader in claims prevention technology for home insurers.

In May we published a landmark study based on research by Consumer Intelligence, who delved into the claims experience of our customer base, which at the time spanned 56,000 device-years of data.  That study showed that in the UK where our model is the most mature, we can reduce water damage claims costs by 70% - giving us new statistics which underpin the value of the business model for our insurance partners. 

In August we were also proud to announce that Ondo had received the London Stock Exchange's Green Economy Mark. The Mark identifies companies that derive a significant amount of their sales from green economy products and services, and Ondo received the award in recognition of LeakBot's ability to save significant amounts of water by resolving leaks in homes.  

In July we announced a new landmark contract  with Admiral in the UK. Admiral are the first mainstream UK insurer to adopt the LeakBot system.  Admiral are one of the biggest home insurers in the UK with 1.3 million customers and are the fastest growing home insurer with 11% growth in the last year.  Admiral have begun a rollout of 20,000 LeakBots over a 6 month period on their Platinum cover product, using the results to scope out the opportunity for a larger scale roll-out across the Admiral book. 

In August we announced our 3^rd partner in Denmark, disclosing that LB Forsikring  were rolling out LeakBot after a successful trial where they saw a 50% reduction in claims costs.  LB Forsikring have committed to roll out at least 10,000 devices to their 126,000 home insurance customers in Denmark, with 3,000 devices being distributed before the end of 2022.

In North America we are now concluding a pilot with Mapfre in Massachusetts, recently announced in April an expansion into the State of New York and have presented alongside Hiscox to many US carriers at the Society of Insurance Research Annual Conference to explain our model in detail.  Based on robust pipeline we are bullish about prospects in the USA.

Back in the UK - building on the green credentials bestowed by the Green Economy Mark we signed a new deal with our first water utility. Portsmouth Water are running our first water utility pilot to test whether LeakBot can be used to help reduce what water companies refer to as "customer side leakage".  Complementary to our Home Insurance go-to-market model, water utilities could open up a whole new route to market for LeakBot.

Financial Results

Although many of these contracts  are newly signed , our strong set of financial results demonstrate the growing momentum of the business. 

1H Revenue was £1m over the 6 months 55% growth vs year ago.  For the first time we have disclosed how this revenue is made up from ongoing Software and Services to insurers, compared to set-up fees and hardware fees.  This revenue is made up of £0.6m of one-off device and set-up fees (+50% growth), and £0.4m of revenue from ongoing Services and Subscriptions (+59% growth).  This underlines the recurring revenue aspect of our business model) showing the strong growth through the period as we onboard new partnerships.

This revenue growth was driven by a growth in registered devices to 46,000 +43% up on the prior year and more encouraging these customers continue to generate ongoing Services and Subscription revenues, a strong indicator of the good lifetime value of these customers.

Cash received from our insurance partners  totalled £0.9m in the 6 months, up 120% on the previous year . 

The gross margin on this business during the half year was 49% demonstrating the strong unit economics of the LeakBot business.

With revenue up 55%, it is important to keep control on Operating Expenditure which I am pleased to report has only increased by 7% despite adding the additional overheads of being a PLC, adding three senior executives to the team (CFO, CTO and General Manager for North America) and adding additional costs of  replacing  some of the group services when we separated from HomeServe PLC.

Tackling Tough Times Head On

While today's economic situation is challenging, we are well placed to weather the storm.  Upward cost pressures on water damage claims costs actually create more of an incentive for insurers to try and mitigate these costs.  We are managing upward cost pressures on our hardware costs successfully, and although we have seen some cost increases, we have managed to pass these on to our customers creating no material difference in the life time value of a customer. 

Our immediate focus - more of the same

We are on a mission to become the world leader in claims prevention technology for home insurers.  Our immediate focus is to do more of the same - sign more partnerships, install more units in homes, driving continued year-on-year savings for carriers and delivering year-on-year recurring returns for our shareholders. 

We are really pleased to be able to announce these first results to the market and to demonstrate that we are delivering exactly what we set out to do in the Prospectus.  Likewise, we have good line of site for the 2HY results and are equally looking forward to making more announcements soon and showing further progress for the full year period.

Thank you to all the team who make it happen every day, to our homeowners for doing their bit and to the insurers and investors who have been early adopters and believers in our mission - we are just getting started.

Craig Foster

CEO Ondo InsurTech Plc

14 November 2022

INCOME STATEMENT AND STATEMENT OF COMPRENSIVE INCOME

		U naudited	U naudited	Audited
		S ix months ended	S ix months ended	Year ended
	Note	31 August 2022	31 August 2021	30 September 2021
		£'000	£'000	£'000
Continuing operations
Revenue		1,004	646	944
Cost of sales		(511)	(475)	(390)
Gross profit		493	171	554
Administrative expenses		(1,844)	(1,725)	(4,608)
Operating loss		(1,351)	(1,554)	(4,054)
Reverse acquisition expenses	6	(706)	-	-
Loss before tax		(2,057)	(1,554)	(4,054)
Tax credit		-	247	831
Loss for the period a nd total comprehensive loss		(2,057)	(1,307)	(3,223)
Earnings per share attributable to equity owners
Basic and diluted (loss) per share (pence)	5	(3.3)	(4.6)	(11.41)

STATEMENT OF FINANCIAL POSITION

		Unaudited As at 31 August 2022	Unaudited As at 31 August 2021	Audited As at 30 September 2021
	Note	£	£	£
		£'000	£'000	£'000
Non-current Assets		-	-	-
Current assets
Cash and cash equivalents		1,872	-	-
Inventories		225	279	11
Trade and other receivables		829	800	448
Total current assets		2,926	1,079	459
Total assets		2,926	1,079	459
Current liabilities
Trade and other payables		(774)	(826)	(452)
Bank overdraft		-	(1,344)	(1,726)
Total current liabilities		(774)	(2,170)	(2,178)
Net-current liabilities		2,152	(1,091)	(1,719)
Non-current liabilities
Loans and borrowings	8	(6,401)	-	-
Total non-current liabilities		(6,401)	-	-
Total liabilities		(7,175)	(2,170)	(2,178)
Net liabilities		(4,249)	(1,091)	(1,719)
Equity
Share capital		3,408	28,250	28,250
Share premium		3,902	-	-
Share based payments reserve		215	-	-
Reverse acquisition reserve		20,261	-	-
Retained deficit		(32,035)	(29,341)	(29,969)
Total equity		(4,249)	(1,091)	(1,719)

STATEMENT OF CHANGES IN EQUITY

		Share capital		Share premium		Reverse acquisition reserve		Share based payments reserve		Retained earnings		Total
		£		£		£		£		£		£
		£'000		£'000		£'000		£'000		£'000		£'000
At 01 March 2022		32,530		955		-		165		(32,022)		1,628
Issue of ordinary shares		2,277		3,146		-		-		-		5,423
Cost of share issued		-		(192)		-		-		-		(192)
Total comprehensive loss for the period		-		-		-				(2,057)		(2,057)
Leakbot acquisition		(31,399)		-		20,261		-		2,044		(9,094)
Share based payment		-		(7)				50		-		43
At 31 August 2022		3,408		3,902		20,261		215		(32,035)		4,249

		Share capital		Share premium		Other reserves		Retained earnings		Total
		£		£		£		£		£
		£'000		£'000		£'000		£'000		£'000
At 01 March 2021		28,250		-		-		(28,034)		216
Issue of ordinary shares
Total comprehensive loss for the period		-		-		-		(1,307)		(1,307)
Share based payment		-		-		-		-
At 31 August 2021		28,250		-		-		(29,341)		(1,091)

		Share capital		Share premium		Other reserves		Retained earnings		Total
		£		£		£		£		£
		£'000		£'000		£'000		£'000		£'000
At 01 October 2020		250		-		-		(26,746)		(26,496)
Issue of ordinary shares		28,000		-		-		-		28,000
Loss for the period and total comprehensive expense		-		-		-		(3,223)		(3,223)
At 30 September 2021		28,250		-		-		(29,969)		(1,719)

STATEMENT OF CASH FLOWS

		Unaudited	Unaudited	Audited
		S ix months ended	S ix months ended	Year ended
		31 August 2022	31 August 2021	3 0 September 2021
		£	£	£
		£'000	£'000	£'000
Cash flows from operating activities
Loss before income tax		(2,057)	(1,307)	(4,054)
Adjustments:
Share based payments		42	-	-
R everse acquisition share based payment expense		706	-	-
Movement in working capital
(Increase)/Decrease in trade and other receivables		(119)	(280)	35
(Increase)/Decrease in Inventories		(225)	(800)	345
Increase/(Decrease) in trade and other payables		(143)	826	(424)
Cash used from operations		(1,796)	(1,561)	(4,098)
Group tax relief received		-		1,814
Net cash used in operations		(1,796)	(1,561)	(2,284)
Cash flow from investing activities
C ash acquired with subsidiary		1,679
Purchase of investments		(1,600)	-	-
Net cash flow from investing activities		(79)	-	-
Cash flows from financing activities
Issue of ordinary shares		3,432	-	28,000
Net cash flows from financing activities		3,432	-	28,000
Net increase in cash and cash equivalents		1,715	(1,561)	25,716
Cash and cash equivalents at beginning of period		157	217	(27,442)
Cash and cash equivalents at end of period		1,872	(1,344)	(1,726)

The accounting policies and notes form an integral part of these financial statements.

NOTES TO THE FINANCIAL INFORMATION

For the six months ended 31 August 2022

1.  Basis of preparation

The interim condensed consolidated financial statements for the six months ended 31 August 2022 have been prepared in accordance with IAS 34 Interim Financial Reporting. The Group has prepared the financial statements on the basis that it will continue to operate as a going concern. The Directors consider that there are no material uncertainties that may cast significant doubt over this assumption. They have formed a judgement that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, and not less than 12 months from the end of the reporting period.

On 21 March 2022, Ondo Insurtech Plc completed the acquisition of Leakbot Limited ("Leakbot") via a reverse takeover which resulted in the Company becoming the ultimate holding company of the Group.  The transaction was accounted for as a reverse acquisition since it did not meet the definition of a business combination under IFRS 3.  In accordance with IFRS 2, a share based payment expense equal to the deemed cost of the acquisition less the fair value of the net assets of the Company at acquisition was recognised. The comparatives within the interim accounts therefore represent that of the legal subsidiary and accounting acquirer, Leakbot. The annual accounts of Leakbot have been disclosed for the most recent financial year end which was for the year ended 30 September 2021. 

The interim accounts have been prepared in accordance with accounting policies that are expected to be applied in the Group Annual Report and Accounts for the year ended 31 March 2023.

The comparative financial information for the year ended 30 September 2021 in this interim report does not constitute statutory accounts for that period under 435 of the Companies Act 2006. Statutory accounts for the year ended 30 September 2021 have been delivered to the Registrar of Companies.

The auditors' report on the accounts for 30 September 2021 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. Several amendments apply for the first time in 2022, but do not have an impact on the interim condensed consolidated financial statements of the Group.

2.  Estimates and judgements

The preparation of interim financial statements requires management 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 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:

Share based payments

The estimates of share-based payment costs require that management selects an appropriate valuation model and makes decisions on various inputs into the model, including the volatility of its own share price, the probable life of the options before exercise, and behavioral consideration of employees. A significant element of judgement is therefore involved in the calculation of the charge.

3.  Going concern

As at 31 August 2022, the Group's cash position totalling 1,872,000 and it was in a strong net current asset position. Based on the Group's current cash reserves and detailed cash forecasts produced, the Directors are confident that the Group will be able to meet its obligations as they fall due over the course of the next 12 months and that the Group will continue to remain a going concern.

4.  Operating expenses by nature

		Unaudited Six months	Unaudited Six months	Audited Year
		Ended	ended	ended
		31 August 2022	31 August 2021	3 0 September 2021
		£	£	£
		£'000	£'000	£'000
Directors' remuneration		1 64	-	-
Professional fees		251	330	1,067
Share based payments		42	-	-
Staff cost		737	1,028	2,536
Bad debts		-	309	712
Sundry expenses		650	58	293
		1,844	1,725	4,608

5.  Earnings per share

The basic earnings per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of shares in issue.

The Company had in issue 68,169,612 ordinary shares at 31 August 2022 & 28,250 ordinary shares at 31 August 2021. The loss attributable to equity holders and weighted average number of ordinary shares for the purposes of calculating diluted earnings per ordinary share are identical to those used for basic earnings per ordinary share.

		Unaudited Six months	Unaudited Six months	Audited Year
		ended	ended	ended
		31 August 2022	31 August  2021	3 0 September 2021
		£	£	£
		£'000	£'000	£'000
Loss for the period attributable to equity holders		(2,057)	(1,307)	(3,223)
Weighted average number of shares in issue		63,000,257	28,250,000	28,250,000
Basic and diluted (l oss) per share (p ence )		(3.3)	(4.6)	(11.41)

6.  Reverse acquisition

On 21 March 2022, Ondo Insurtech Plc ("Company") formerly known as Spinnaker Acquisitions Plc, acquired through a share for share exchange the entire share capital of Leakbot Limited, whose principal activity is to act on the B2B insurance tech sector.

Although the transaction resulted in Leakbot becoming a wholly owned subsidiary of the Company, the transaction constituted a reverse acquisition, as the substance of the transaction was that Leakbot Limited gained effective control of Ondo Insurtech plc.

As the Company's activities prior to the acquisition were purely the maintenance of the London Stock Exchange  Listing, acquiring Leakbot and raising equity finance to provide the required funding for the operation of the acquisition, it did not meet the definition of a business in accordance with IFRS 3.

Accordingly, this reverse acquisition does not constitute a business combination and was accounted for in accordance with IFRS 2 "Share-based Payments" and associated IFRIC guidance. Although, the reverse acquisition is not a business combination, the Company has become a legal parent and is required to apply IFRS 10 and prepare consolidated financial statements. The Directors have prepared these financial statements using the reverse acquisition methodology, but rather than recognising goodwill, the difference between the equity value given up by Leakbot's shareholders and the share of the fair value of net assets gained by these shareholders, is charged to the statement of comprehensive income as a share-based payment on reverse acquisition and represents in substance the cost of acquiring an London Stock Exchange  listing.

On 21 March 2022, the Company issued 14,991,667 ordinary shares to acquire the 31,398,986 ordinary shares of Leakbot. Based on a share price of £0.12 (which was used for the fund-raising on the same date).  In addition, a payment of £1,599,548 was made in cash and loan notes with a value of £6,401,000 were issued to the vendor.  T he Company's investment in Leakbot was therefore valued at £9,799,548.

Because the legal subsidiary, Leakbot Limited, was treated on consolidation as the accounting acquirer and the legal Parent Company, Ondo Insurtech plc, was treated as the accounting subsidiary, the excess of the transaction price over the fair value of the assets and liabilities of Ondo Insurtech Plc represented a cost for obtaining a listing. 

According to IFRS 2 the value of the share-based payment is calculated as the difference between the deemed cost and the fair value of the net assets as the acquisition date.

	£'000
Deemed cost	2,376
Fair value of net assets	(1,670)
Reverse acquisition expenses	706

The difference between the deemed cost (£2,376k) and the fair value of net assets (£1,670k) per above resulted in £706k being expensed within ''reverse acquisition expenses'' in accordance with IFRS 2, Share Based Payments, reflecting the economic cost to Leakbot Limited's shareholders on acquiring the entity.

The reverse acquisition reserve which arose from the reverse takeover is made up as follows:

	£'000
Pre-acquisition earnings of Ondo Insurtech	(570)
Pre-acquisition earnings of Leakbot	(1,474)
Leakbot's share capital at acquisition	31,399
Investment in Leakbot	(9,800)
Reverse acquisition expense	706
	20,261

7.  Share based payments

Equity-settled share-based payments are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company's estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.

On 7 March 2022, 653,333 share options were granted with an exercise price of £0.12 and an expiry period of 4 years.

On 7 March 2022, two tranches of share warrants were issued: 1,864,520 warrants at an exercise price of £0.05 with an expiry period of 2 years and 3,374,766 warrants at an exercise price of £0.12 with an expiry period of 4 years.

The fair value of the options has been calculated using the Black-Scholes valuation model. The assumptions used in the fair value calculation were as follows:

		Options	O ptions	O ptions
Date of grant		7 March 2022	7 March 2022	7 March 2022
Number		635,333	1,864,520	3,374,766
Exercise price (pence)		12p	5p	12p
Risk free interest (%)		1.18%	1.12%	0.5%
Expected volatility (%)		18%	18%	18%
Expected life (years)		3.75	2	4
Fair value		0.02	0.07	0.02
Option life		4 years	2 years	4 years

The total share-based payment expense recognised in the income statement for the period ended 31 August 2022 in respect of the share options granted was £42,180.

Volatility was determined by reference to the standard deviation of daily share prices.

At the date of grant, the 800,000 warrants that came under the scope of IFRS 2 Share based payments were valued based on an agreed fee payable to the broker on completion of the fundraising. This resulted in a charge of £7,394 against share premium in respect of share issue costs.

On 7 March 2022, 14,281,252 warrants were issued at an exercise price of 25p each to the investors. No share based payments charge arose for these warrants as they fall outside the scope of IFRS 2.

8.  Loans and borrowings

On 21 March 2022, the Company issued £6,401,000 loan notes to the seller for acquisition of Leakbot Limited. The loan notes carry a fixed interest rate of 10% per annum on the principal amount of the notes outstanding from time to time. The first interest payment due on this for this loan is 31 March 2024. To the extent not previously repaid or redeemed, the lower of the principal amount outstanding from time to time and £1,600,000 under the loan notes will be repayable on or before the third anniversary of the issue date of the loan notes and then (after the third anniversary) on each subsequent anniversary of issue date.

 

END

 

 

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