9 November 2022

Gelion plc

("Gelion" or the "Company")

 

Final results to 30 June 2022

Successfully transitioned battery manufacturing from laboratory to first industrial production

 

Gelion plc (AIM: GELN), the Anglo-Australian energy storage innovator, is pleased to announce its audited final results for the year ended 30 June 2022.

 

FY22 Financial and operational highlights

 

-	Admitted to trading on AIM on 30 November 2021, following an oversubscribed placing to new and existing shareholders raising £16m
-	Funds raised at IPO have enabled the acceleration of investment into strategic recruitment and transition of battery manufacturing from the laboratory to first industrial production
-	Continue to invest in technology and process development with focus towards establishing performance optimization, validation, and cost reduction
-	Signed a contract with Acciona Energía ('Acciona') to test and supply Gelion batteries for potential commercial deployment
-	Received the LSE Green Economy Mark
-	The Company is well capitalised with cash and cash equivalents and term deposits on the balance sheet of £17.0 million as at 30 June 2022

 

Post period highlights

 

-	Achieved significant milestone with commissioning of the manufacturing plant at Battery Energy Power Solutions ('Battery Energy') in Western Sydney, Australia
-	First industrial production of Gelion's non-lithium zinc-bromide battery
-	Continue to progress discussions with key customers in the energy resource mining as well as oil & gas sector for trials offtakes and partnerships

 

Board update

 

-	Hannah McCaughey completed her tenure as interim CEO and resigned as Director from 28 October 2022
-	John Wood, a battery, clean-tech and innovation specialist, appointed as CEO and commences his role on 21 November, bringing over 30 years of significant commercial and manufacturing expertise and C-Suite experience

 

Rescheduling of IMC presentation

 

The Company would also like to notify shareholders that due to the announced board changes the Investor Meets Company presentation, originally scheduled for 9am GMT on 15 November 2022 has been rescheduled to 9am GMT on 8 December 2022. Those investors who follow the company will be invited to the new meeting.

Should you have any questions, please contact investorhelp@investormeetcompany.com.

 

Dr Steve Mahon, Chairman, commented: "Gelion's first year as a PLC was one of strategic evolution, one in which the Group has accelerated the delivery of its battery technology, underpinned by the recent first industrial production of Gelion's zinc-bromide battery. Gelion's battery technology and industrial partnerships provide the foundation for effective scaling of product to the market at a time when customers are seeking energy storage solutions to meet their rapid decarbonisation targets. The Group is well positioned to become a significant supplier into the growing market for renewable energy storage and grid resilience over the coming years.

 

"Part of our evolution over the past year has also involved changes in management and I am delighted to welcome John Wood to Gelion as CEO, who brings a wealth of commercial, scaling and manufacturing experience."

 

For further information please visit www.gelion.com or contact:

 

Gelion plc Steve Mahon, Chairman Amit Gupta, CFO Thomas Maschmeyer, Founder and Principal Technology Advisor	via Alma PR
finnCap Ltd (Nominated Adviser and Sole Broker)            Corporate Finance Christopher Raggett Seamus Fricker Fergus Sullivan   ECM Barney Hayward	+44 207 220 0500
Alma PR (Financial PR Adviser) Justine James    Josh Royston Hannah Campbell Will Ellis Hancock	+44 20 3405 0205 gelion@almapr.co.uk

 

Chairman's Statement

 

The year to 30 June 2022 was one of strategic evolution for Gelion following its IPO in November 2021 with funds raised to facilitate investment into recruitment and building production ahead of commercialisation.

 

The IPO has provided a platform to enable us to accelerate the delivery of our battery technology to market such that we are well positioned to become a significant supplier into the growing market for renewable energy storage and grid resilience over the coming years. The global stationary energy storage market is poised to grow over the next decade, with BloombergNEF recently forecasting investment worth $US262bn by the end of 2030.

 

We have a steely focus on delivering on our objective to become a provider of safe, robust and scalable renewable energy storage solutions to the world market.

 

The global climate crisis will need bold policy, alongside technical and commercial solutions to ensure we maintain our planet as a prosperous, healthy, and viable place to live. Gelion is clearly committed to playing our part in positively impacting global decarbonisation.

 

Non lithium solution

Our technology is focused on and capable of reducing global reliance on the use of lithium-ion batteries, which play an ever-greater role in the global energy battery market. Their 86% use for electric vehicle (EV) applications mean that this low-weight technology is crucial to the decarbonisation of the global automotive market. Therefore, the stationary energy storage market - such as on-grid and off-grid storage applications - needs to evolve beyond lithium-ion technologies due to several key concerns and issues, including shortage in supply of raw materials, pressure to supply the EV market and their greater suitability for shorter duration compared to the growing demand for longer-duration energy storage.

As a result, there is expected to be limited availability of lithium-ion batteries for stationary energy storage applications. Gelion's zinc-bromide batteries promise to offer a safer, greener, and equally effective alternative to lithium-ion batteries for long-duration electricity storage. Combined with the abundance of zinc around the world and multiple sources of raw material supply, Gelion's zinc- bromide batteries are well placed to provide a viable alternative to lithium-ion batteries.

At the half year, we stated clearly that our focus was on the delivery of a commercial product. We have recently reached a major milestone, transitioning from R&D by delivering on a key objective of production, having successfully commissioned the manufacturing plant at the lead-acid factory of Battery Energy Power Solutions, one of our partners in Western Sydney, Australia. We see the value in our clear strategy to deliver a manufacturing pathway for Gelion's zinc-bromide battery as this is our most mature and differentiated technology.

 

Macroeconomic and geopolitical impacts

 

To set the backdrop of our first year as a listed entity, within weeks of listing, we were hit by a second and then third wave of COVID-19. This caused disruption to supply chains globally, upward pressure on equipment and materials costs, and greater complexity to cross-border transactions and movements. The Group has dealt with these pressures well and proven its ability to mitigate such issues by having a clarity of vision to deliver a marketable product.

 

The invasion of Ukraine has precipitated a change in the geopolitics of global energy with unprecedented increases in energy costs. Along with the widely reported cost increases of electricity, we have all become acutely aware of the need for energy independence, to prevent our basic societal need for energy being controlled by any unstable/unreliable state.

 

With volatile and challenging markets comes reflection on the best route for the Group to achieve its objective of delivering on its manufacturing plan and delivering value for shareholders. We note, in particular, that investor sentiment has also evolved to reflect the greater volatility in the global financial and energy markets, with the need being to demonstrate commercial viability sooner.

 

Drive for commercialisation

 

Following our IPO there was a gear change taking the development out of the laboratory of the University of Sydney and delivering a product. The IPO was a strong platform to raise our profile resulting in a clear demand to accelerate commercialisation. This combined with the challenging macroeconomic and geopolitical conditions led the Board to make management changes early in the year to reposition the business, ensuring it would be more focused on driving commercial production of its leading technology, the zinc-bromide battery, and to do so locally in Australia in response to increasing costs, timelines and uncertainties associated with off-shore manufacturing. Greater control of the manufacturing implementation of the initial 'first-of-a-kind' line is viewed to reduce risk and increase agility.

 

Hannah McCaughey was appointed interim CEO in March 2022 to review and drive the commercialisation plan. Since then, the Company and the Board have reviewed each aspect of the business and have formulated a plan to deliver production capacity and customer traction. There is no better demonstration of a breakthrough technology than having a credible paying customer and this is a key objective for the next year ahead. Hannah has now completed her interim engagement with the Group and resigned as Director with effect from 28 October 2022. I would like to thank Hannah for her hard work in supporting the Company in executing its production plans.

 

The recent announcement of the commissioning of the manufacturing plant was a major milestone for Gelion. We can now start to build field experience and establish presence with the current generation of product from this plant while continuing in parallel to invest in our technology and process development further. These initiatives are geared towards establishing performance optimisation and validation, and the cost reductions that will underpin the global competitive foundation for our next stage of scaling.

 

With the above objectives to be achieved, I am pleased to announce that we have appointed John Wood as the new Group Chief Executive Officer to take Gelion through to the next phase.

 

John is an experienced and successful CEO of private and public companies who has led businesses both in the technology and energy industry over a 30-year career. He is also a proven sector specialist with significant commercial, scaling and manufacturing experience and under his leadership, we firmly believe we can take Gelion to the next level of growth. Importantly for Gelion, John has a deep experience in the lead-acid sector having established Ecoult which gained recognition as one of the 100 Global Cleantech in 2013 and he implemented many seminal projects after its acquisition by East Penn Manufacturing.

 

ESG

We take our responsibilities to successfully transitioning to a sustainable economy seriously and we expect to be playing a key role in powering this global transition.

 

Gelion is committed to driving real-world impacts. Our battery technology supports this global energy transition by offering a readily scalable solution to the current renewable energy storage dilemma. We were delighted to receive the London Stock Exchange's Green Economy Mark, for our contribution to the global green economy.

 

We have adopted the Quoted Companies Alliance Corporate Governance Code (QCA Code) and have an experienced Board of Directors who govern the business and all its key risk elements. Talented people are core to our business, and we seek to hire and maintain the best people regardless of their background. Our diverse team of 50 people is currently made up of 18 nationalities, speaking 15 languages.

 

Our core market is represented by installations in combination with renewable energy to enable greater penetration of clean power. Our operational robustness means that we are a great fit in harsh locations, allowing us to power remote or poorly served communities. Our product is unequivocally enabling the decarbonisation of electricity networks. In addition, we have reviewed the impacts of our own operations and are shown to be significantly less resource intensive than other technologies, such as lead-acid, lithium-ion or vanadium redox flow.

 

Future development and outlook

 

The decisions taken by the Board in the last year have been geared towards demonstrating Gelion's path to scale. The key development during the year has been the transition to production.

 

We are already seeing strong interest from potential customers around the world in our batteries. Following the initial manufacturing deal with Battery Energy, and the appointment of a new CEO, experienced in global manufacturing, those customers now have a clear view of our route to commerciality as well as a manufacturing path to scale up and we expect further strengthening of their interest in our technologies.

 

 

Dr Steve Mahon

Chairman

8 November 2022

 

 

Operational update

The Gelion Board is pleased to be presenting the first financial results following the IPO in November 2021.

Gelion's core strategy remains focused on developing the Company to be a leading provider of safe, robust and scalable renewable energy storage solutions to the global market and we are focused on commercial solutions for the successful transition to a sustainable economy through the storage of renewable energy. The delivery of Gelion's innovative battery technology will play a pivotal role in enabling that transition while providing value for both our customers and investors.

Given the geopolitical and macroeconomic environment not only during this period, but also expected going forward, the Board conducted a comprehensive review of the business including strategy around the product offering, business model, development plan and efficient deployment of funds to ensure we are able to capitalise on the opportunities presented to us.

The focus since the IPO has been clear - to deliver a commercial product. Since year end, we have achieved a significant milestone in September 2022 with the first industrial production of Gelion's zinc-bromide battery at Battery Energy Power Solutions.

Having now successfully transitioned the battery manufacturing from laboratory to industrial production, it is time for the business to bring in a highly experienced CEO who brings over a decade of experience across cleantech and battery technology including manufacturing. John Wood will help Gelion plan for scale and at the same time exploit the ever-increasing commercial opportunities that continue to rapidly emerge in the energy storage sector.

Market opportunity / Supply and demand

Customers are actively seeking longer-duration storage and Gelion has undertaken a significant amount of work in planning for the scaled-up production of its zinc-bromide battery to ensure it is well placed to meet growing customer demand for renewable energy storage technologies. By way of background, while lithium-ion batteries currently dominate much of the stationary energy battery market. Market commentators such as Bloomberg indicate that there are several key concerns and issues around the limited availability and supply of lithium-ion batteries for stationary energy storage application.

Gelion recently conducted a review of the current energy storage market, with the purpose to understand and strengthen Gelion's position in a highly competitive market. The key findings of this in-depth critical analysis were:

·    The underlying technology of Gelion's battery is clearly differentiated from other products in the market and provides a distinct competitive advantage. Gelion's battery encompasses our proprietary gel technology coupled to an inherently lower fire risk, a wide temperature operating range, and an ability to be completely charged or discharged without loss in lifetime or performance.

·    Gelion's zinc-bromide battery is ideally suited to fill the gap in the stationary energy storage long-duration storage market. The modular design, which makes use of 70% of existing lead- acid production processes, ensures that industrial production of the product is highly scalable by simplifying manufacturing processes and use of standard industrial equipment.

·    Gelion will focus on three core customer applications. Gelion's revised strategy is to initially develop a single standardised storage system to drive commercial efficiencies. There is often a debate on the merits of optimisation or standardisation. For us, and with several use cases we have rightly chosen standardisation. The system has been designed to provide access to three core application markets: utility-scale grid-connected applications; commercial and industrial (C&I) behind-the-meter; and green mining.

Following first industrial production, Gelion is seeing significant interest from companies in the energy, resource, mining as well as oil & gas sectors resulting in advanced discussions with various global players for trials, off-take and partnerships.

Commercialisation and manufacturing strategy

Scale is key, and Gelion has developed strong relationships with industrial partners and has made substantial progress towards commercialisation of the Gelion zinc-bromide battery, including:

Delivering industrial production at an industrial site

Gelion has now developed a 2 MWh capacity manufacturing line at our commercial partner Battery Energy. This partnership was the manufacturing proof-point with the commissioning of the plant in Western Sydney being completed ahead of schedule.

The Battery Energy facility is an end-to-end line with a repeatable manufacturing process, reusing more than 70% of the standard lead-acid battery production processes, providing a proven basis for the commercial scale-up of Gelion's manufacturing capacity. The production of cells on the manufacturing line at Battery Energy is an important achievement as it will inform our studies both toward scaling production and toward cost reduction of design, materials and manufacturing process of our products.

This manufacturing plant is designed to optimise unit operations and, while currently quite manual in operations to enable quick adaptation of improved operations, it will enable the design of a much more automated set-up as quickly and as effectively as possible.

This is a significant step for Gelion, as it demonstrates that our batteries can be built in a pre-existing industrial environment with established industrial processes. This is a major factor in being able to prove how production can be scaled up at locations around the world using existing battery manufacturing infrastructure. The battery is robust and through our partnership with Battery Energy we have proven we can both integrate our technology with brownfield infrastructure and partner with lead-acid manufacturers; the next step then for the Group is to deliver at scale.

The first industrially manufactured cells rolled off the line in September 2022 and will be used in the Acciona trials, including the Phase 1 simulation and Phase 2 onsite testing, and will be exported to Spain as part of the trial contract with Acciona Energia, one of Europe's largest sustainable energy companies.

Balancing battery performance and cost competitiveness

During the process of commissioning of the manufacturing plant at Battery Energy, it became apparent that we must retain the benefits of close association between our technology / process engineering development activities and the preparation for our next stage of scaling.

The challenges with transferring technology to large scale production across different continents proved less efficient than we expected. After careful analysis of the costs and benefits, including the ability to protect our IP, we decided that our resources are better allocated to continue to first utilize the availability of the manufacturing plant in Australia. The proximity of the manufacturing plant to our development team, to progress both performance optimization and cost reduction, in the most efficient way is more valuable than reaching for immediate scale. As such, we are not currently progressing discussions with HBL in India.

The launch of the manufacturing plant has benefitted us immensely and another outcome has been the recognition of the high overlap in the production processes and equipment for Gelion's zinc-bromide batteries and the production processes and equipment used by lead-acid manufacturers across the industry. Alongside our work on technology and process with the experience we are now gaining at the manufacturing plant, we can now also commence relationship outreach to the process automation equipment leaders that supply that industry to consult together on optimal ways to introduce Gelion products into and/or alongside their manufacturing solutions. While this is very subjective until achieved, we anticipate that paths exist to make beneficial use of this commonality in process automation in effective ways to scale very quickly once the foundation is set. We believe this strategy will strongly contribute to establishing industry manufacturing partnerships at scale.

Securing manufacturing capabilities is clearly a core part of Gelion's growth strategy. The foundation for that strategy lies in commercialising the patented technology contained within the Gelion zinc-bromide battery. At the time of our IPO, we set ourselves ambitious targets to further develop and refine that technology with a view that our product would be competitive with lithium-ion technologies on a Levelised Cost of Energy within two years. The process of enhancing our technology has taken longer than we had anticipated 12 months ago, albeit we have taken strong steps forward.

Gelion has now identified the appropriate trade-offs required to balance battery performance with cost competitiveness to ensure that the technology performance meets customer expectations.

Clear cost reduction pathways have been identified for manufacturing that will enable Gelion's technology to become competitive with relevant energy storage applications in the time window that customers need to ramp up to meet decarbonisation targets.

Performance additives

There is a push to develop new materials with higher energy densities to continue to drive down the price, weight and size of lithium-based battery packs.

At IPO, Gelion was in discussions to co-develop low-cost technology for the manufacture of silicon nanoparticles. However, the lithium-silicon market is now highly competitive with multiple companies competing to develop silicon-based anodes. Gelion has concluded that it can effectively purchase nanoparticulate silicon at an attractive price rather than develop this technology itself. Gelion will instead focus solely on the development of a lithium-silicon-sulfur (LiSiS) battery.

Gelion has been granted exclusive licence to a sulfur additive technology that can be incorporated into the cathode. Sulfur-based materials are one potential alternative to more traditional cathode materials.

Sulfur-based cathodes provide several advantages over traditional materials including utilising an abundant and low-cost raw material, higher energy densities and improved safety. However, there is a need to trap the sulfur to prevent rapid cell death. Gelion's sulfur additive has been proven to be capable of reversibly trapping the sulfur, enhancing lifetimes substantially. Gelion believes that our sulfur-based additive technology will provide a competitive advantage over current technologies.

In a breakthrough, Gelion has demonstrated that with graphite-free lithium-silicon anodes it is possible to employ a sulfur cathode compatible electrolyte that enables the design of a high energy density LiSiS battery. This development accelerates milestones in the IPO timetable and represents a major upside.

Outlook

There is no question the demand for energy storage continues to accelerate. The increasing penetration of renewable energy has led to growing demand for long-duration energy storage systems (>6 hours), which is less cost effective for lithium-ion storage systems. With six-hour blackouts being predicted in parts of Europe this winter, long-duration battery storage such as Gelion's zinc-bromide battery will play an important part of grid stabilisation and energy security. Gelion's battery technology and industrial partnerships provide the foundation for effective scaling of product to the market at a time where customers are seeking energy storage solutions to meet the rapid decarbonisation target. With our strong ESG credentials, Gelion can provide a meaningful battery energy solution to meet the three demands of the energy transition - security, cost effectiveness and sustainability.

CFO Statement

This CFO review should be read in conjunction with the consolidated financial statements of the Company and Gelion Technologies Pty Ltd (together the 'Group') and the notes thereto. The consolidated financial statements are presented under international accounting standards. The financial statements of the Company continue to be prepared in accordance with UK-adopted International Accounting Reporting Standards and International Accounting Standards as issued by the International Accounting Standards Board (IASB) and Interpretations in conformity with the requirements of the Companies Act 2006.

Overview

FY22 has been a transformational year for the Group due to the successful fundraising and IPO on the AIM in November 2021. We enter the new fiscal year with an exciting platform from which to continue to drive organic growth and a strong balance sheet which will enable the Group to continue to deploy our capital allocation strategy.

In FY22, we raised a total of £22.0m, £6.0m from the Pre IPO round and gross proceeds of £16.0m from the IPO enabling the Group to fund development programmes, commission the manufacturing plant and strengthen the team to prepare for future growth.

At year end, our cash position (cash & cash equivalents and term deposits) was £17.0m (2021: £1.9m) which renders the Group well capitalised to fund future growth. Funds raised in the IPO have been used to invest in our people primarily for development of chemistry (scientists and chemical engineers), manufacturing expertise (mechanical engineers), and the executive team.

Despite the significant challenges due to COVID-19 impacting businesses globally, we have managed to continue with product development and managed the cost base. However, these challenges continue and have resulted in delayed deliveries and increased lead time in securing materials and equipment, increased labour, material, and logistical costs such as freight.

In September 2022, we reached a significant milestone in our development process as we announced the opening of our manufacturing plant in Western Sydney, Australia. This is an important achievement as this will assist us in planning towards scaling production and reducing costs.

Trading performance

Total income for the year ended 30 June 2022 was £1.75m (2021: £1.6m) primarily from R&D tax incentives from the Australian Taxation Office which supports the ongoing development programmes of the business. In FY21, Gelion generated revenue of c. £0.3m from supply and installation of mobile lights and solar photovoltaic building battery systems. This revenue stream was not expected to be repeated.

Operating losses increased to £9.1m (2021: (£1.8m)) as a result of both non-recurring items £4.7m (2021: nil) and increase in operating costs.

Operating losses before listing and other associated costs (non-recurring items) increased to £4.4m (2021: £1.8m) primarily due to:

·	£1.0m increase in research and development spend, a significant proportion of which relates to staff costs due to the number of staff (average FTE) being employed by the Group increasing from 15 in FY21 to 26 in FY22;
·	£1.7m increase in administrative costs reflecting the additional costs of being a public company and an increase in staff costs due to the number of staff (average FTE) being employed by the Group increasing from 4 in FY21 to 11 in FY22; and
·	partially offset by an increase in other income.

 

Adjusted EBITDA loss (defined as the Earnings Before Interest, Tax, Depreciation, Amortisation, listing & other associated costs) increased to £4.1m (2021: £1.5m).

The Company reported non-recurring items of £4.7m in FY22 which represent one-off expenses in relation to the IPO.

There was no corporate tax payable on earnings as the business is currently loss making. The basic and diluted loss per share for the year to 30 June 2022 was 9.20 pence (2021: 2.0 pence). The increase in loss per share was due to the increased operating costs of the business primarily driven by the non-recurring costs.

Statement of financial position and cash flows

At 30 June 2022, current assets amounted to £19.2m (2021: £3.2m), including cash & cash equivalents and term deposits of £17.0m (2021: £1.9m). The principal contributors to the increase in cash & cash equivalents and term deposits of £15.1m were:

·	fundraise of £19.7m (net including pre-IPO fund raise) in the year;
·	operating cash outflow of £4.5m (2021: £1.3m); and
·	capital expenditure on intangible development costs, property, plant and equipment of £0.8m (2021: £0.4m) which largely relates to the commissioning of the new manufacturing plant and other lab equipment.

Prior to the IPO, on 3 September 2021, the Group decided to undertake a capital reduction and £11.2m has been recognised in distributable reserves (more details in note 19).

Research and development

Development formed a material part of the Group's activities this year, with a significant portion relating to the development of the main product of the Group being, the zinc-bromide battery. The Group expensed most of its development costs of £3.0m for the year (2021: £1.9m) in relation to its products. The Group had qualifying research and development costs of £3.9m (2021: £2.8m) against which it expects to receive the R&D tax incentives of £1.7m from the Australian Taxation Office.

Foreign currency exposure

The Group currently faces relatively modest currency exposure on its foreign currency transactions; however, it does expect this to increase in the future as exposure to both foreign currency translation risk and transaction risk increases resulting from plans to scale. A large majority of the Group operating overheads are in Australian dollars whereas procurement of materials and equipment in other foreign currencies. The Group expects to maintain a natural hedge to transactional exposure by invoicing in foreign currencies where appropriate to minimise the difference between cash inflows and outflows in the respective currencies.

Outlook

Despite the ongoing disruptions due to COVID-19, there are increasing signs of a return to global normality albeit at a cost. Global inflation is approaching its ten-years' highest level followed by increased interest rates, labour shortages and supply chain disruptions causing significant delays in sourcing, delivery timeframes, increased freight costs resulting in an increase in overall cost of doing business. These macroeconomic and operational factors have increased the complexity of running a business. Return to any level of normalcy will take time however to manage cash burn, we are being very prudent in decisions around efficient capital deployment. We are therefore well capitalised to continue to deliver on our strategy.

 

The world has changed significantly since becoming a public company in November 2021 with the top agenda item for most countries being energy security and targets to net zero driven by geopolitical events. These energy challenges have resulted in a search for alternative non-lithium technologies, which are safe, long duration and highly recyclable such as the Gelion zinc-bromide batteries. We believe that a combination of these factors will assist in reducing the gap between expected sale price and production costs as we scale in time and generate the corresponding revenue growth at a suitable margin.

 

Amit Gupta

CFO

8 November 2022

 

Consolidated Statement of Comprehensive Income

	Notes	30 June 2022 £'000	30 June 2021 £'000
Revenue from contracts with customers	4	-	351
Other income	5	1,745	1,280
Total income		1,745	1,631
Administrative expenses		(3,204)	(1,503)
Research and development expenditure		(2,970)	(1,926)
Operating loss before listing and other associated costs	6	(4,429)	(1,798)
Listing and other associated costs	7	(4,658)	-
Operating loss		(9,087)	(1,798)
Finance costs		(73)	(8)
Finance income		3	8
Loss on ordinary activities before taxation		(9,157)	(1,798)
Tax on loss on ordinary activities	9	-	-
Loss on ordinary activities after taxation		(9,157)	(1,798)
Total loss for the year attributable to equity holders of the parent
Other comprehensive income:
Items that may be reclassified to profit or loss
-       Exchange gains/(losses) arising on translation of foreign operations	10	713	(106)
Total comprehensive loss for the year attributable to equity holders of the parent		(8,444)	(1,904)
Loss per share (basic and diluted) attributable to the equity holders (pence)	12	(9.20)	(2.00)

The above results relate entirely to continuing activities.

There were no acquisitions or disposals of businesses in the period.

The accompanying notes form part of this financial information.

 

Consolidated Balance Sheet

	Notes	30 June 2022 £'000	30 June 2021 £'000
Assets
Non-current assets
Intangible assets	13	362	313
Property, plant and equipment	14	1,050	553
Current assets
Cash and cash equivalents	16	16,024	1,913
Short-term investments	17	1,017	-
Other receivables	17	2,153	1,250
Total Assets		20,606	4,029
Liabilities
Current liabilities
Trade and other payables	15, 18	854	435
Non-current liabilities
Trade and other payables	15, 18	31	7
Total liabilities		885	442
Net assets		19,721	3,587
Equity
Issued capital	19	107	33
Share premium account	19	20,662	11,251
Other non-distributable reserves	19	5,148	691
Capital reduction reserve	19	11,194	-
Accumulated losses		(17,390)	(8,389)
Total equity		19,721	3,587

The financial statements of Gelion Plc, company registration number 09796512, were approved by the Directors and authorised for issue on 8 November 2022.

 

Consolidated Statement of Cash Flows

	Notes	30 June 2022 £'000	30 June 2021 £'000
Cash flow from operating activities
Loss for the year before exchange losses		(9,157)	(1,798)
Adjustments for:
-      depreciation		296	220
-      amortisation		12	41
-      finance costs		6	8
-      finance income		(2)	(8)
-      loss on disposal of intangible assets		-	55
-      loss on disposal of property, plant and equipment		8	-
-      share-based payments expense		3,902	75
-      lease interest paid		(4)	(8)
-      transaction costs of issue of shares		805	-
Changes in operating assets/liabilities
-      Decrease / (increase) in receivables		(740)	75
-      Decrease / (increase) in prepayments		(162)	36
-      Increase / (decrease) in payables		507	31
Net cash used in operating activities		(4,529)	(1,273)
Cash flows from investing activities
Purchase of intangible assets		(48)	(100)
Purchase of tangible property, plant and equipment		(733)	(288)
Short-term investments (term deposits)		(1,017)	-
Interest received		2	8
Net cash used in investing activities		(1,796)	(380)
Cash flows from financing activities
Proceeds from issue of shares		16,222	-
Proceeds on issue of convertible loan notes that were subsequently converted		5,999	-
Transaction costs of issue of shares		(2,346)	-
Repayment of leasing liabilities		(126)	(126)
Net cash used in financing activities		19,749	(126)
Net increase/(decrease) in cash held		13,424	(1,779)
Cash and cash equivalents at beginning of financial year		1,913	3,778
Effect of exchange rate changes		687	(86)
Cash and cash equivalents at end of financial year	16	16,024	1,913

 

 

Consolidated Statement of Changes in Equity

	Share capital	Share premium	Accumulated losses	Capital reduction reserve	Other non-distributable reserves	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 July 2020	33	11,251	(6,593)	-	723	5,415
Loss on ordinary activities after taxation	-	-	(1,796)	-	-	(1,796)
Other comprehensive income	-	-	-	-	(107)	(107)
Total comprehensive loss for the year	-	-	(1,796)	-	(107)	(1,903)
Contributions by and distributions to owners:
Share-based payments charge	-	-	-	-	75	75
Total contributions by and distributions to owners:	-	-	-	-	75	75
Balance at 30 June 2021	33	11,251	(8,389)	-	691	3,587
Balance at 1 July 2021	33	11,251	(8,389)	-	691	3,587
Loss on ordinary activities after taxation	-	-	(9,157)	-	-	(9,157)
Other comprehensive income	-	-	-	-	713	713
Total comprehensive loss for the year	-	-	(9,157)	-	713	(8,444)
Contributions by and distributions to owners:
Bonus issue	57	(57)	-	-	-	-
Capital reduction	-	(11,194)	-	11,194	-	-
Share-based payment charge	-	-	-	-	3,902	3,902
Shares issued during the period	11	16,032	-	-	-	16,043
Shares issued during the period through a convertible loan	6	5,993	-	-	-	5,999
Costs of shares issued	-	(1,541)	-	-	-	(1,541)
Exercise of share options	-	178	158	-	(158)	178
Total contributions by and distributions to owners:	74	9,411	158	11,194	3,744	24,581
Balance at 30 June 2022	107	20,662	(17,390)	11,194	5,148	19,721

The accompanying notes part of this financial information.

 

Notes to The Consolidated Financial Statements

 

1.    General Information

Gelion Plc ('Gelion' or the 'Company') is a 100% owner of an Australian subsidiary that conducts research and development in respect of an innovative battery system and associated industrial design and manufacturing. 

Gelion is a public limited company, limited by shares, incorporated and domiciled in England and Wales. The Company was incorporated on 26 September 2015. The registered office of the Company is at 3^rd Floor, 141-145 Curtain Road, London, EC2A 3BX. The registered company number is 09796512.

Gelion Plc was incorporated as Gelion UK Ltd. On 12 November 2021, the Company was re-registered as a public limited company under the Companies Act and its name was changed to Gelion plc. 

The Board, Directors and management referred to in this document refers to the Board, Directors and management of Gelion.

2.    Accounting Policies

2.1          Basis of preparation

The principal accounting policies applied in the preparation of the Group financial statements are set out below. These policies have been consistently applied to the period presented, unless otherwise stated.

These financial statements have been prepared in accordance with UK-adopted International Accounting Reporting Standards and International Accounting Standards as issued by the International Accounting Standards Board (IASB) and Interpretations.

The preparation of financial statements in compliance with UK-adopted International Accounting Standards requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies. The areas where significant judgements and estimates have been made in preparing the financial statements and their effect are disclosed in note 2.20.

These financial statements are presented in Great British Pounds (GBP) unless otherwise stated, which is the Company's presentational currency and the parent company's functional currency. Amounts are rounded to the nearest thousand, unless otherwise stated. The functional currency of the subsidiary is Australian Dollars (AUD). Some numerical figures included in this Annual Report have been subject to rounding adjustments. Any discrepancies between totals and sums of components in tables contained in this Annual Report are due to rounding. The policies adopted for translation of the subsidiary's assets, liabilities, income and expenses are set out in note 2.17.

2.2          Basis of consolidation

The consolidated financial statements consolidate the financial statements of Gelion Plc and of its subsidiary undertaking drawn up to each reporting date.

Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of the elements of control.

Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of the Group. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group's accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

The following was a subsidiary undertaking of the Group:

Name	Registered office	Class of shares	Holding
Gelion Technologies Pty Limited	Australia	Ordinary A	100%

 

The shareholding is held directly.

The registered office of Gelion Technologies Pty Limited is Level 16, 101 Miller Street, North Sydney, NSW 2060.

2.3          First-time adoption of IFRS

The financial information for the year ended 30 June 2019 disclosed in the Admission Document represented the first time that the Group has prepared consolidated financial information under IFRS. A Consolidated Statement of Financial Position as at 1 July 2018, the date of transition to IFRS, was disclosed in that Admission Document. The Directors considered that the Consolidated Statement of Financial Position at that date would be the same if prepared under previous GAAP as prepared under IFRS and that transition to IFRS does not require adjustment to any of the figures stated in the Consolidated Statement of Comprehensive Income. On this basis a full reconciliation of Group equity at the transition date was not prepared.

The parent company had transitioned to adoption of IFRS as of July 2020. The subsidiary undertaking prepares statutory accounts under Australian Accounting Standards which have no differences from IFRS, therefore no adjustments are required in the consolidation of this entity. IFRS 1 allows first-time adopters certain exemptions from the retrospective application of certain requirements under IFRS.

2.4          Going concern

The Directors have prepared a cash flow forecast for the period ending 31 December 2023. This forecast indicates that the Group and parent company would expect to remain cash positive without the requirement for further fund raising based on delivering the existing pipeline, for a period of at least 12 months from the date of approval of these financial statements. The Group meets its day-to-day working capital requirements through existing cash resources (cash and cash equivalents including term deposits) which, at 30 June 2022, amounted to £17.0m (2021: £1.9m). By the end of the period analysed, the Group will still hold a reasonable proportion of the monies from the fund raise in the year. This should give the business sufficient funds to operate in a similar way beyond the forecast period.

With the uncertainty created for the economy by various events (COVID-19, Ukraine war, inflation and supply chain issues), this cash flow forecast has also been sensitised. As a worst-case scenario, if all committed payments had to continue as forecast while receipts were not received at all, the business would still have cash for the full 12 months from the date of approval of these financial statements. The accounts have therefore been prepared on a going concern basis.

The Directors have considered all of the above factors and believe that as the potential opportunities are announced to the market including the scale and prospects, the Group will be able to raise any funds required to enable it to continue to trade and grow towards self-sufficiency.

2.5          Revenue recognition

The Group recognises revenue as follows:

Revenue from Contracts with Customers (IFRS 15)

Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.

The Group's revenue from contracts with customers comprises revenue from supply and installation of mobile lights and solar photovoltaic building battery systems pursuant to a contract with the University of Sydney and has been recognised under IFRS 15.

Rendering of services

Revenue from a contract to provide services is recognised over time as the services are rendered based on either a fixed price or an hourly rate.

2.6          Other income

Grants and other benefits received from the government are recognised in the Statement of Comprehensive Income at the fair value of the cash received. Government grants are primarily research and development incentives. This represents a refundable tax offset that is available on eligible research and development expenditure incurred by the Group.

Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable.

2.7          Taxation

The income tax expense or benefit for the period is the tax payable on the current periods taxable income based on the national income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and adjustments recognised for prior periods where applicable.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.

Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

2.8          Earnings per share

Basic earnings/loss per share

Basic earnings/loss per share is calculated by dividing:

•      the profit or loss attributable to owners of Gelion Plc, excluding any costs of servicing equity other than Ordinary Shares; by

•      the weighted average number of Ordinary Shares outstanding during the financial year, adjusted for bonus elements in Ordinary Shares issued during the financial year.

Diluted earnings/loss per share

Diluted earnings/loss per share adjusts the figures used in the determination of basic earnings/loss per share to take into account:

•      the after-income tax effect of interest and other financing costs associated with dilutive potential Ordinary Shares; and

•      the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential Ordinary Shares.
 

2.9          Cash and cash equivalents and short-term investments

Cash and cash equivalents

For the purpose of presentation in the Statement of Cash Flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Term deposits that are held for a period of less than three months form a part of cash and cash equivalents.

Short-term investments

Short-term investments comprise of term deposits held by UK licensed banks for a period greater than three months, over which it can be converted to known amounts of cash with insignificant risk of change in value. The amounts are measured at amortised cost using the effective interest method in line with IFRS 9.

2.10        Property, plant and equipment

Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment (excluding land) over their expected useful lives as follows:

Plant and equipment                                           3-7 years

Office furniture and equipment                       3 years

Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets, whichever is shorter.

The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.

An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.

2.11        Right-of-use assets

A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.

Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is calculated over its estimated useful life. Right-of-use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.

The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less. Lease payments on these assets are expensed to profit or loss as incurred.

2.12        Intangible assets

Research and development

Research and development expenditure is recognised as an expense as incurred. No research and development costs have been capitalised to date given the stage of the business.

Development expenditure is recognised as an expense except those costs incurred on development projects can be capitalised as intangible assets to the extent that such expenditure is expected to generate future economic benefits.

Patents and trademarks

Separately acquired trademarks and patents are recognised at historical cost. Patents have a finite life and are subsequently carried at cost less accumulated amortisation. Separately acquired trademarks are shown at historical cost. They are considered to have infinite lives and are assessed for impairment at each year end. The Group amortises intangible assets with a limited useful life using the straight-line method over their expected useful lives as follows:

Patents                   15-20 years

2.13        Impairment of non-financial assets

Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.

To date all impairments that have been recognised have been due to patent costs capitalised in respect of patent applications that have subsequently lapsed or been rejected. When this occurs, the Group fully impairs the carrying amount of the patent at that date.

2.14        Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which are unpaid. Due to their short-term nature, they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.

2.15        Financial instruments

IFRS 9 requires an entity to address the classification, measurement and recognition of financial assets and liabilities.

a)   Classification

The Group classifies its financial assets in the following measurement categories:

•      those to be measured at amortised cost.

The classification depends on the Group's business model for managing the financial assets and the contractual terms of the cash flows.

The Group classifies financial assets as at amortised cost only if both of the following criteria are met:

•      the asset is held within a business model whose objective is to collect contractual cash flows; and

•      the contractual terms give rise to cash flows that are solely payment of principal and interest.

b)   Recognition

Purchases and sales of financial assets are recognised on trade date (that is, the date on which the Group commits to purchase or sell the asset). Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

c)   Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset.

Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

d)   Tax receivables

Management has assessed that tax receivables arising from a refundable tax offset from Australian Taxation Office, for eligible R&D expenditure, are recognised at its par value. These receivables are expected to be collected in a short-term period and the Directors have assessed there is no need for impairment of these receivables. This is based on Australian government credit rating (AAA) and successful historical collection of tax receivables.

2.16        Share-based payments

The Group provides benefits to its employees in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions) in the parent entity.

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black- Scholes model. This calculation is completed by the parent entity.

The cost of these equity-settled transactions is recognised as an expense, with a corresponding increase in equity, over the period in which the service conditions are fulfilled (the vesting period), ending on the date on which the relevant employees become fully entitled to the award (the vesting date).

At each subsequent reporting date until vesting, the cumulative charge to profit and loss is the product of:

•      the grant date fair value of the award;

•      the current best estimate of the number of awards that will vest;

•      the expired portion of the vesting period; and

•      the removal of any fair value attributable to share options that have contractually lapsed or expired.

The charge to profit and loss for the period is the cumulative amount as calculated above less the amounts already charged in previous periods. There is a corresponding entry to the share-based payment reserve in equity.

If a share-based payment arrangement is modified, the minimum expense recognised over the vesting period is the original fair value. If the modification increases fair value, the additional fair value is recognised over the remaining vesting period.

Share-based payments deemed non-recurring

The Group operated a share option plan whereby employees and key service providers were granted options over shares in Gelion UK Limited. Due to the Company's admission to trading on AIM which took place on 30 November 2021 all unvested options were vested triggering an accelerated share-based payment expense.

In addition to the existing share option plan the Group agreed to grant options over Ordinary Shares pursuant to obligations under the service agreements with the relevant individuals. These service agreement obligations were triggered by admission to trading on AIM. The service condition was to be employed with a company in the Group at vesting. 

Both the acceleration of option vesting and additional options granted pursuant to service agreement obligations are triggered by the Company's admission to AIM and therefore can be considered as part of the same non-recurring event.

2.17        Foreign currency translation

The functional currency of each company in the Group is that of the primary economic environment in which the entity operates. Monetary assets and liabilities denominated in foreign currencies are translated into GBP at the rates of exchange ruling at the period end. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction.

All differences are taken to the Statement of Comprehensive Income. On consolidation, the assets and liabilities of the Group entities that have a functional currency different to the presentational currency are translated into GBP at the closing rate at the date of the Statement of Financial Position. Income and expenses for each statement of profit or loss are translated at average exchange rates for the period. Exchange differences are recognised in other comprehensive income and accumulated in a foreign exchange translation reserve.

2.18        Contributed equity

Ordinary Shares are classified as equity. Incremental costs directly attributable to the issue of new shares are deducted from the share premium account.

When the Group issues a hybrid instrument consisting of a debt host liability and a non-closely related embedded derivative (the conversion feature) and the Group accounts for the debt host at amortised cost and the embedded derivative at FVTPL, when conversion takes place, no gain or loss on conversion is recognised. The equity issued is measured by reference to the sum of the carrying amount of the host debt liability plus the carrying amount of the embedded derivative at the date of conversion, rather than the fair value of the shares issued. This approach is in line with the policy followed for conversion of compound instruments.

Retained losses includes all current and prior period results.

2.19        Sales taxes

Revenues, expenses and assets are recognised net of the amount of associated goods and services tax (GST) in Australia or value added tax (VAT) in the UK, unless the sales tax incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of sales tax receivable or payable. The net amount of sales tax recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

Cash flows are presented on a net basis. The sales tax components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.

2.20        Critical accounting judgements and key sources of estimation uncertainty

The preparation of the financial information requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in the process of applying the Group's accounting policies. The areas involving a high degree of judgement or complexity, or areas of assumptions and estimates are:

Critical accounting judgements

-       R&D tax incentives

From 1 July 2011 the Australian Taxation Office has provided a tax incentive, in the form of a refundable tax offset of 43.5%, for eligible research and development expenditure. Management has assessed its research and development activities and expenditure and applied judgement in determining which expenses are likely to be eligible under the scheme. For the period ended 30 June 2022 the Group has recorded other income of £1,719,000 (2021: £1,210,000) based on expected tax refunds to be received from the government (recognised under Other receivables at 30 June 2022).

-       Recognition of a deferred tax asset

The Group has incurred tax losses in both Australia and the UK in each of the periods reported in these financial statements. No deferred tax asset has been recognised in respect of these losses, as the Directors believe that there is not sufficient certainty over future profits that would utilise them.

Key sources of estimation uncertainty

 

-       Estimation of useful lives of property, plant and equipment and intangible assets

The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life of intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down.

Patents are recognised at cost. Management believes this is the best estimate at the current time, during the research and development phase. The key assumption for amortisation is the useful life which is determined by the life of the patent (grant to expiration date - usually 15-20 years). The Directors do not believe that a future change in the useful life of patents is probable in the foreseeable future.

Trademarks are recognised at cost. Management believes this is the best estimate at the current time. The key assumption for trademarks is they have an infinite life as they do not have an expiration date.

-      Impairment of patents and trademarks

The Group assesses impairment of patents and trademarks at each reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. To date the only impairments recognised have been due to patent costs capitalised in respect of patent applications that have subsequently lapsed or been rejected. In these instances the Group fully impairs the carrying amount of patent at that date.

-      Derecognition of intangible assets (patents and trademarks)

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.

-      Recognition of equity-settled share-based payments

The cost of equity-settled share-based payment transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black-Scholes model. The Group applies a straight-line vesting approach, whereby the instruments are split into tranches according to the vesting conditions applied. Please refer to note 20 for the key assumptions and inputs used in the model to determine the fair values at each measurement date.

2.21       Standards, amendments and interpretations to existing standards that are effective for the first time in the financial year

During the year ended 30 June 2022, Gelion has adopted the following new IFRSs (including amendments thereto) and IFRIC interpretations that became effective for the first time.

Standard	Effective date, annual period beginning on or after
Amendments to IFRS 4, IFRS 9, IFRS 16, IAS 39 and IFRS 7 - Interest Rate Benchmark Reform	1 July 2021
IFRS 16 Leases: Covid-19-Related Rent Concessions beyond 30 June 2021	1 April 2021

 

Their adoption has not had any material impact on the disclosures or amounts reported in the financial information.

Standards issued but not yet effective:

There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the Group has decided not to adopt early.

Standard	Effective date, annual period beginning on or after
Annual Improvements to IFRSs - 2018-2020 cycle	1 January 2022
IAS 16 Property, Plant and Equipment (Amendment - Proceeds before Intended Use)	1 January 2022
IAS 37 Provisions, Contingent Liabilities and Contingent Assets (Amendment - Onerous Contracts - Cost of Fulfilling a Contract)	1 January 2022
IFRS 3 Business Combinations (Amendment - Reference to the Conceptual Framework)	1 January 2022

All of the above standards issued but not yet effective have been endorsed by the UK Endorsement Board.

The Directors are evaluating the impact that these standards will have on the financial information of Gelion.

3.    Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.

The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board as a whole.

In the opinion of the Directors, during each of the three-years ended 30 June, Gelion operated in the single business segment of battery production and development.

	UK	Australia	30 June 2022 £'000	UK	Australia	30 June 2021 £'000
Non-current assets
Intangible assets	-	362	362	-	313	313
Property, plant and equipment	-	1,050	1,050	-	553	553
Total income
Revenue from contracts with customers	-	-	-	-	351	351
Other income	26	1,719	1,745	-	1,280	1,280
Depreciation and amortisation	-	(308)	(308)	-	(261)	(261)
Finance income (interest)	-	2	2	-	8	8
Operating loss
Operating loss	(574)	(8,513)	(9,087)	(63)	(1,735)	(1,798)

 

4.    Revenue

	2022 £'000	2021 £'000
Revenue from contracts with customers	-	351

 

5.    Other Income

	2022 £'000	2021 £'000
R&D tax concessions	1,719	1,210
Recovery of VAT	26	-
Government grants	-	70
	1,745	1,280

 

The subsidiary incurs R&D expenditure which qualifies for relief under a tax incentive scheme provided by the Australian Taxation Office. Management estimates the expenditure each year relevant to approved R&D activities in respect of which a claim can be made at each reporting date. The accounting policy in respect of recognition of this income is detailed in note 2.6 and the key accounting judgements applied are detailed in note 2.20.

Government grants reported in the year to June 2021 relate to non-repeatable COVID-19 stimulus funding from the Australian government.

6.    Operating Loss Before Listing and Other Associated Items

Operating loss is stated after the following specific income and expenses:

	Note	2022 £'000	2021 £'000
R&D tax concessions	5	1,719	1,210
Depreciation and amortisation	13, 14	(308)	(261)
Employee benefits	11	(3,212)	(1,621)
R&D expenses		(1,391)	(863)
Out of which:
External R&D services		(669)	(476)
R&D materials and consumables		(681)	(356)
Administration and other expenses		(1,263)	(692)

 

7.    Listing and Other Associated Items

	2022 £'000	2021 £'000
Non-recurring items - listing costs	411	-
Non-recurring items - share-based payments accelerated due to listing	3,853	-
Non-recurring items - key management bonus due to listing	394	-
Total non-recurring items - listing and other associated costs	4,658	-

 

Certain costs were incurred in the period relating to the Company converting from a private to public limited company, its subsequent admission to AIM, issuance and sale of shares and associated professional costs.

As set out in the Admission Document, 11,063,679 new Ordinary Shares were issued and 2,068,966 existing shares were sold. The Company's conversion and subsequent admission to AIM is a one-off event and therefore considered 'non-recurring'.

These listing and other associated costs include:

•      transaction costs representing the expensed portion of the listing costs;

•      share-based payments which were accelerated due to listing. Details are outlined in note 20; and

•      key management bonuses representing a one off payment made to senior management for successfully completing the Company's listing and fundraising. This is not reflective of standard management incentive arrangements and was fully contingent upon the successful admission of the Company to AIM and subsequent fundraising.

For these reasons these costs are considered 'non-recurring' and separately disclosed to assist the user of the financial information to understand and compare the underlying results of the Company.

8.    Auditors' Remuneration

	2022 £'000	2021 £'000
Fees payable to the Company's auditors for the statutory audit of the Company's annual financial statements	52	15
Fees payable to the Company's auditors and its associates for the audits of the Company's subsidiaries	24	11
Non-audit services
Reporting accountant services	278	-
Taxation and other services	31	-
	385	26

 

9.    Taxation

	2022 £'000	2021 £'000
The charge/credit for the year is made up as follows:
Corporation taxation on the results for the year	-	-
Taxation (charge)/credit for the year	-	-
Numerical reconciliation of income tax expense to accounting loss:
Profit/(loss) for the year before income tax	(9,158)	(1,797)
Prima facie tax benefit on loss from ordinary activities before income tax at 25% (2021: 26%)	(2,290)	(467)
Add/(less) tax effect of:
Non-deductible expenditure	2,200	1,046
Non-assessable income	-	(322)
R&D tax offsets	(430)	(315)
Tax losses incurred but not recognised	506	53
Difference in tax rates applied	14	5
Income tax expense	-	-

 

Non-deductible expenses includes share based payments and expenditure subject to R&D tax incentive.

Estimated tax losses of £4,138,000 (2021: £1,929,000) are available for relief against future profits. No deferred tax asset has been provided for in the accounts based on the estimated tax losses. The estimated tax losses per jurisdiction is as follows and don't have an expiry date in each of these jurisdictions:

	2022 £'000	2021 £'000
Estimated tax losses arising in the UK	793	437
Estimated tax losses arising in Australia	3,345	1,492
Total tax losses available to carry forward	4,138	1,929

 

The standard rate of corporation tax in Australia, where the subsidiary is based, is 25% (2021: 26%).

As per note 2.7, deferred tax assets have not been recognised on the basis the Company is not forecasted to make a profit for the foreseeable future.

10.  Exchange Gains and Losses Arising on Translation of Foreign Operations

Gelion Technologies Pty Limited, a battery manufacturing business incorporated in Australia, was merged into Gelion UK Limited in 2016 so as to maximise operational synergies and generate further cost savings.

A gain or loss through other comprehensive income arises on translation of the subsidiary's assets and liabilities from Australian Dollars to Great British Pounds at each year end.

11.  Employee Benefit Expenses and Numbers

Employee benefit expenses (including Directors) comprise:

	2022 £'000	2021 £'000
Recurring costs:
Salaries and wages including taxes	2,957	1,429
Defined contribution pension cost	206	117
Share-based payment expense - recurring	49	75
Total employee benefits expense (note 6) - recurring	3,212	1,621
Non-recurring costs:
Salaries and wages including taxes	394	-
Defined contribution pension cost	-	-
Share-based payment expense	3,853	-
Total employee benefits expense (note 7) - non-recurring	4,247	-

 

Refer to note 20 for details of classification of share-based payments expense between recurring and non-recurring costs.

	2022 number	2021 number
R&D	26	15
Administration	11	4
Average number of employees	37	19

 

Key management personnel

Directors and key management personnel compensation

 

The total remuneration paid (including bonus accruals) to the Directors and key management personnel of the Group during the year are as follows:

	2022 £'000	2021 £'000
Recurring costs:
Salaries and wages including taxes	1,059	434
Defined contribution pension cost	48	33
Share-based payment expense	10	2
Total key management personnel costs - recurring	1,117	469
Non-recurring costs:
Salaries and wages including taxes	394	-
Defined contribution pension cost	-	-
Share-based payment expense	3,378	-
Total key management personnel costs - non-recurring	3,772	-
Total key management personnel costs	4,889	469

 

The Directors and senior management represent key management personnel. Further details of Directors' remunerations are given in the Directors' Remuneration Report. The highest paid Director during the year received total remuneration (recurring and non-recurring) of £584,900 (2021: £94,153).

Refer to note 20 for details of classification of share-based payments expense between recurring and non-recurring costs. 

12.  Loss Per Share

	2022	2021
Loss after tax	£9,157,000	£1,798,000
Weighted average number of shares (number)	99,888,579	89,883,920
Loss per share (pence)	9.2p	2.0p

 

The calculation of the loss per share is based on the loss for the financial period after taxation of £9,157,000 (2021: £1,798,000) and on the weighted average of 99,888,579 (2021: 89,883,920) Ordinary Shares in issue during the period.

In September 2021, the parent company carried out a bonus issue and share reorganisation with the aggregate effect of increasing the number of shares in issue by 85,389,724. This increase in the number of Ordinary Shares has been applied retrospectively to the prior period presented in these financial statements by increasing the weighted average number of shares in the year to June 2021 by 85,389,724.

There were 7,554,360 share options outstanding at 30 June 2022 (2021: 5,100,000). The impact of these options would be to reduce the diluted loss per share and therefore they are antidilutive. Hence, the diluted loss per share reported for the periods under review is the same as the earnings per share.

13.  Intangible Assets

	Patents £'000	Trademarks £'000	Total £'000
At 30 June 2020	300	18	318
Cost
Additions	100	-	100
Disposals	(55)	-	(55)
Difference on foreign exchange	(11)	1	(10)
At 30 June 2021	334	19	353
Additions	39	9	48
Disposals	-	-	-
Difference on foreign exchange	14	1	15
At 30 June 2022	387	29	416
Amortisation
At 30 June 2020
Amortisation	41	-	41
Difference on foreign exchange	(1)	-	(1)
At 30 June 2021	40	-	40
Amortisation	12	-	12
Difference on foreign exchange	2	-	2
At 30 June 2022	54	-	54
Carrying amount
At 30 June 2021	294	19	313
At 30 June 2022	333	29	362

 

The Company is party to an agreement whereby it licences intellectual property in respect of an experimental mobile additive technology from a third party. Upon achieving certain financial performance measures in respect of this technology, the Company is due to pay a milestone fee by issuing Ordinary Shares. At this stage, it is uncertain if this financial performance will be achieved.

14.  Property, Plant and Equipment

	Office furniture and equipment	Plant and equipment	Right-of-use assets	Leasehold improvements	Total
	£'000	£'000	£'000	£'000	£'000
Cost
At 30 June 2020	30	303	298	-	631
Additions	10	227	52	51	340
Difference on foreign exchange	(2)	(13)	(9)	(1)	(25)
At 30 June 2021	38	517	341	50	946
Additions	34	649	54	50	787
Disposals	-	(11)	-	-	(11)
Difference on foreign exchange	3	22	15	2	42
At 30 June 2022	75	1,177	410	102	1,764
Depreciation
At 30 June 2020	22	59	102	-	183
Charge for the year	8	67	120	25	220
Difference on foreign exchange	(2)	(3)	(5)	0	(10)
At 30 June 2021	28	123	217	25	393
Charge for the year	11	131	124	30	296
Accumulated depreciation on disposal	-	(3)	-	-	(3)
Difference on foreign exchange	1	10	15	2	28
At 30 June 2022	40	261	356	57	714
Carrying amount
At 30 June 2021	10	394	124	25	553
At 30 June 2022	35	916	54	45	1,050

 

15.  Leases

The Group has lease contracts in respect of leasehold property used in its operations. These leases have lease terms of between two and three years.

There is no leasehold property recognised by the Group in the two years ended 30 June presented in these financial statements other than those recognised as right-of-use assets. Therefore, for the carrying amount of right-of-use assets at each reporting date and movements in each year ended refer to note 14.

Set out below are the carrying amounts of lease liabilities (included under trade and other payables) and the movements during each year ended 30 June:

	2022 £'000	2021 £'000
Balance as at 1 July	122	200
Additions	54	52
Interest	4	8
Payments	(130)	(134)
Difference on foreign exchange	6	(4)
Balance as at 30 June	56	122

 

The maturity analysis of lease liabilities is disclosed in note 21.

The following are the amounts recognised in profit or loss:

	2022 £'000	2021 £'000
Depreciation expense of right-of-use assets	124	120
Interest expense on lease liabilities	4	8
Total amount recognised in profit or loss	128	128

 

16.  Cash and Cash Equivalents

	2022 £'000	2021 £'000
Cash at bank	16,024	1,913
	16,024	1,913

 

Cash at bank comprises balances held by Gelion Plc and Gelion Technologies Pty Limited current bank accounts. Cash deposits greater than three months are recorded within short-term investments as per note 17. The carrying value of these approximates to their fair value. See note 21 for further discussion of these balances.

17.  Short-term Investments and Other Receivables

	2022 £'000	2021 £'000
Short-term investments:
Term deposits	1,017	-
Total short-term investments	1,017	-
Other receivables:
Government grants receivable	1,784	1,183
Prepayments	187	25
Other debtors	182	42
Total other receivables	2,153	1,250

 

Term deposits comprise cash deposits held by UK licensed banks for a period of greater than three months, over which there is no recall during the term of the deposit. The amounts are measured at amortised cost using the effective interest method in line with IFRS 9.

Government grants receivable are made up of R&D tax concessions granted by the Australian Taxation Office in the form of tax offsets. Also, Gelion received 'cash boosts' for COVID-19 from the Australian Taxation Office and payroll tax rebate income. The key judgements applied in the recognition of this receivable are detailed in note 2.20.

The Directors consider that the carrying value of short-term investments and other receivables approximates to their fair value. 

18.  Trade and Other Payables

Due within one year

	2022 £'000	2021 £'000
Trade payables	312	179
Accruals	360	66
Employee liabilities including employment taxes	157	75
Lease liabilities	25	115
	854	435

 

Due in more than one year

	2022 £'000	2021 £'000
Lease liabilities	31	7
	31	7

 

Trade payables and accruals principally comprise amounts outstanding for trade purchases and continuing costs. The Directors consider that the carrying value amount of trade and other payables approximates to their fair value. Please refer to note 21 for further details.

19.  Issued Capital and Reserves

Share capital and premium

		Number of shares on issue	Share capital	Share premium
			£'000	£'000
Balance as at 1 July 2020		4,494,196	33	11,251
Shares issued during the period		-	-	-
Balance as at 30 June 2021	a	4,494,196	33	11,251
Bonus issues and reorganisation	b	85,389,724	57	(57)
Capital reduction	c	-	-	(11,195)
Shares issued during the period	d	11,063,679	11	16,032
Loan notes converted to equity	e	5,516,240	6	5,993
Cost of shares issued	f	-	-	(1,541)
Exercise of share options		671,000	-	178
Balance as at 30 June 2022		107,134,839	107	20,662

 

a) Gelion had two classes of share at 1 July 2021 - A Ordinary and B Ordinary which ranked pari passu.

At 30 June 2021 there were 3,335,196 A Ordinary Shares of £0.01 each.

At 30 June 2021 there were 1,159,000 B Ordinary Shares of £0.0000086 each.

b) On 2 September 2021, the Company consolidated the 1,159,000 B Ordinary Shares of £0.0000086 each into 1,000 B Ordinary Shares of £0.01 each, on the basis of one B Ordinary Share of £0.01 for every 1,159 B Ordinary Shares of £0.0000086 held on the record date (the 'B Share Consolidation').

On 2 September 2021, following the B Share Consolidation, the Company issued 1,158,000 new B Ordinary Shares of £0.01 each by way of a bonus issue to the holders of such shares on the basis of 1,158 B Ordinary Shares for each one B Ordinary Share held on the record date (the 'First Bonus Issue').

On 3 September 2021, following completion of the First Bonus Issue, the Company issued 3,335,196 A Ordinary Shares of £0.01 each and 1,159,000 B Ordinary Shares of £0.01 each pursuant to a bonus issue of such shareholders on the basis of one A Ordinary Share for each A Ordinary Share held and one B Ordinary Share for each B Ordinary Share held, in each case on the record date (the 'Second Bonus Issue').

c) Immediately following the Second Bonus Issue, a capital reduction was undertaken and the balance standing to the credit of the share premium account was cancelled and the amount so cancelled was credited to a distributable reserve.

On 12 November 2021, the A Ordinary Shares of £0.01 each in the capital of the Company and the B Ordinary Shares of £0.01 each in the capital of the Company then in issue were redesignated as Ordinary Shares of £0.01 each in the capital of the Company carrying the rights and subject to the restrictions attaching to the Ordinary Shares of the Company as set out in the Articles (the 'Re-designation')

On 13 November 2021, the Company sub-divided each Ordinary Share of £0.01 each arising from the Re-designation into ten new Ordinary Shares of £0.001 each.

d) Immediately prior to admission to AIM the Company had 89,883,920 shares in issue. 11,063,679 new Ordinary Shares of £0.001 each were issued in the fundraising following admission to AIM.

e) On 30 November 2021, a convertible debt instrument was fully converted into 5,516,240 Ordinary Shares of £0.001 each.

f) Transaction costs incurred in the issuing of shares in the period ended 30 June 2022 of £2,346,000 (2021: £nil) of which £1,541,000 have been offset against share premium and £805,000 have been expensed.

Nature and purpose of other reserves

Other reserves

-               Share-based payments reserve

The share-based payments reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration. Refer to note 20 for further details of these plans.

-               Foreign currency translation reserve

The subsidiary's functional currency is AUD and therefore on consolidation a foreign exchange gain or loss on translation of net assets is recognised through other comprehensive income at each reporting date. These gains or losses are accumulated in a foreign currency translation reserve.

-               Capital reduction reserve

Immediately following the Second Bonus Issue, the balance standing to the credit of the share premium account was cancelled and the amount so cancelled was credited to a distributable reserve called the 'capital reduction reserve'.

Other non-distributable reserves:

	Share-based payment reserve	Foreign currency translation reserve	Total other reserves
	£'000	£'000	£'000
Balance at 1 July 2020	817	(94)	723
Foreign currency translation reserve movement	-	(107)	(107)
Share-based payment charge	75	-	75
Balance at 30 June 2021	892	(201)	691
Balance at 1 July 2021	892	(201)	691
Foreign currency translation reserve movement	-	713	713
Share-based payment charge	3,902	-	3,902
Exercise of options	(158)	-	(158)
Balance at 30 June 2022	4,636	512	5,148

 

20.  Share-Based Payments

The Directors recognise the role of the Group's staff in contributing to its overall success and the importance of the Group's ability to incentivise and motivate its employees. Therefore, the Directors believe that certain employees should be given the opportunity to participate and take a financial interest in the success of the Company.

The Group therefore operated a share option plan whereby employees and key service providers were granted options over shares in Gelion UK Limited. Due to the Company's admission to trading on AIM which took place on 30 November 2021 all unvested options were vested triggering an accelerated share-based payment expense.

In addition to the existing share option plan the Group agreed to grant options over Ordinary Shares pursuant to obligations under the service agreements with the relevant individuals. These service agreement obligations were triggered by admission to trading on AIM. The service condition is to be employed with a company in the Group at vesting. 

In the year to 30 June 2022, 3,600,000 options were granted of which 3,290,000 were pursuant to obligations under the service agreements with the relevant individuals.

All options were granted with the exercise price equalling the market value of the shares at the time of grant.

Both the acceleration of option vesting and additional options granted pursuant to service agreement obligations are triggered by the Company's admission to AIM and therefore can be considered as part of the same non-recurring event.

To incentivise and motivate the Group's executives and employees, the Board introduced a new bonus and share-based incentive scheme applicable for the year ending 30 June 2023 (FY23). They are designed to motivate and incentivise key talent to assist the Group in achieving its strategic aims whilst remaining consistent with its tolerance for risk, all set within delegated limits set out during the recent IPO.

	2022 £'000	2021 £'000
Recurring share-based payment expense recognised	49	75
Non-recurring share-based payment expense recognised	3,853	-
Total share-based payment expense	3,902	75

 

The below tables have been prepared after revising original share option numbers and values to account for the share reorganisation and subsequent share option modifications that took place in September 2021. These modifications to the share options were made so that there was no impact upon share option scheme fair value. A comparison of the previously reported share options and the equivalent values following the share reorganisation is shown below.

	Absolute value previously reported			Equivalent values following share reorganisation and option scheme modifications
	2021 Number previously reported '000s	2021 Weighted average exercise price £		2021 Number '000s	2021 Weighted average exercise price £
Outstanding at 1 July	254	5.09		5,080	0.25
Granted	14	6.63		280	0.33
Forfeited	(13)	5.45		(260)	0.27
Exercised	-	-		-	-
Expired	-	-		-	-
Outstanding at 30 June	255	5.15		5,100	0.26
Exercisable at 30 June	239	5.06		4,780	0.25

 

 

	2022 Number '000s	2022 Weighted average exercise price £		2021 Number '000s	2021 Weighted average exercise price £
Outstanding at 1 July	5,100	0.26		5,080	0.25
Granted	3,600	0.39		280	0.33
Forfeited	(466)	0.33		(260)	0.27
Exercised	(671)	0.25		-	-
Expired	-	-		-	-
Outstanding at 30 June	7,563	0.32		5,100	0.26
Exercisable at 30 June	7,402	0.34		4,780	0.25

 

The range of exercise prices for options outstanding at the end of the year was £0.22 to £1.45 (2021: £0.22 to £0.33).

The weighted average remaining contractual life for the share options outstanding as at 30 June 2022 was 0.92 years (2021: 1.97 years).

Of the total number of options outstanding at 30 June 2022, 7,402,000 (2021: 4,780,000) had vested and were exercisable. The remaining options will vest over the 18 months following the Company's admission to AIM subject to employees' continued service.

The weighted average fair value of the options granted in the year was £1.23 (2021: £0.25).

The Black-Scholes option pricing model was used to value the share-based payment awards granted in the year as it was considered that this approach would result in materially accurate estimate of the fair value of options granted. The following table lists the inputs to the models used for share option plans:

	2022	2021
Weighted average fair values at the measurement date	£1.23	£0.25
Weighted average share price	£1.45	£0.33
Dividend yield (%)	-	-
Expected volatility (%)	62.8	100
Risk-free interest rate (%)	1.3	2.2
Expected life of share options (years)	10	5

 

The Company has revised its estimation of the risk-free interest rate and expected volatility in the period to reflect changing market circumstances and revised volatility to benchmark with the historic volatilities of comparable entities listed on AIM.

In the year ended 30 June 2022 3,600,000 options (2021: 275,000) were granted at an exercise price of £0.39 (2021: £0.33). The total share-based payment expense for the year was £3,902,000 (2021: £75,000). 

21.  Financial Instruments and Risk Management

Capital risk management

The Group manages its capital to ensure it will be able to continue as a going concern while maximising the return to stakeholders. The overall strategy of the Group is to minimise costs and liquidity risk.

The capital structure of the Group consists of equity attributable to equity holders of the Group, comprising issued share capital, and retained earnings as disclosed in the Consolidated Statement of Changes of Equity.

The Group is exposed to a number of risks through its normal operations, the most significant of which are credit, currency and liquidity risks. The management of these risks is vested to the Board of Directors.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group's receivables from customers. Indicators that there is no reasonable expectation of recovery include, amongst others, failure to make contractual payments for a period of greater than 120 days past due. There were no receivables from customers as at end of June 2022.

The carrying amount of financial assets represents the maximum credit exposure.

The principal financial assets of the Group are bank balances including short-term deposits. The Group deposits surplus liquid funds with counterparty banks that have high credit ratings and the Directors consider the credit risk to be minimal.

The Group's maximum exposure to credit by class of individual financial instrument is shown in the table below:

	2022 Carrying value	2022 Maximum exposure	2021 Carrying value	2021 Maximum exposure
	£'000	£'000	£'000	£'000
Cash and cash equivalents	16,024	16,024	1,913	1,913
Short-term deposits - term deposits	1,017	1,017	-	-
	17,041	17,041	1,913	1,913

 

	2022 Rating	2022 Cash at bank	2022 Term deposits	2021 Rating	2021 Cash at bank	2021 Short-term deposits
		£'000	£'000		£'000	£'000
Royal Bank of Scotland	A+	6,899	1,017	A+	123	-
Commonwealth Bank of Australia	A+	9,125	-	A+	1,790	-
		16,024	1,017		1,913	-

 

The Group monitors the credit ratings of counterparties regularly and at the reporting date does not expect any losses from non-performance by the counterparties. For all financial assets to which the impairment requirements have not been applied, the carrying amount represents the maximum exposure to credit loss.

Currency risk

The Group operates in a global market with income and costs possibly arising in a number of currencies (USD, EUR) and is exposed to foreign currency risk arising from commercial transactions, acquiring fixed assets and raw materials, as well as translation of net investment in foreign subsidiaries. Exposure to commercial transactions arise from sales or purchases by operating companies in currencies other than the companies' functional currency. Currency exposures are reviewed regularly. The Group has signed an agreement with financial institution post end of FY22, to set forward exchange rate contracts to provide certainty in terms of cash flow forecasts.

The Group has a limited level of exposure to foreign exchange risk through their foreign currency denominated cash balances and a portion of the Group's costs being incurred in Australian Dollar. Accordingly, movements in the Great British Pounds exchange rate against these currencies could have a detrimental effect on the Group's results primarily for reporting purposes.

Currency risk is managed by maintaining some cash deposits in currencies other than Great British Pounds, particularly those currencies where future expenditure is forecast. The table below shows the currency profiles of cash and cash equivalents:

	2022 £'000	2021 £'000
Cash, cash equivalents and term deposits
Great British Pounds	2,471	123
Australian Dollars	14,570	1,790
	17,041	1,913

 

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

The Group seeks to manage liquidity risk by regularly reviewing cash flow budgets and forecasts to ensure that sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. The Group deems there is sufficient liquidity for the foreseeable future.

The Group had cash and cash equivalents at period end as below:

	2022 £'000	2021 £'000
Cash and cash equivalents	16,024	1,913
	16,024	1,193

 

The table below sets out the maturity profile of the Group's financial liabilities at each year end:

Year ended 30 June 2022

	Due in less than one month	Due between one and three months	Due between three months and one year	Due between one year and five years	Total
	£'000	£'000	£'000	£'000	£'000
Trade and other payables	829	-	-	-	829
Lease liabilities	4	10	11	31	56
	833	10	11	31	885

 

 

Year ended 30 June 2021

	Due in less than one month	Due between one and three months	Due between three months and one year	Due between one year and five years	Total
	£'000	£'000	£'000	£'000	£'000
Trade and other payables	320	-	-	-	320
Lease liabilities	10	21	84	7	122
	330	21	84	7	442

 

22.  Capital Commitments

There were no capital commitments as at 30 June 2022 and 30 June 2021.

23.  Related Party Transactions

Other than the remuneration to key management personnel outlined in note 11 of these financial statements, there are the following related party transactions:

Management fees of £89,089 (2021: £146,850) and arrangement fees of £39,821 (2021: nil) were paid to Armstrong Energy Limited, a company with a common director (Steve Mahon).

Arrangement fees, representing fees paid to related parties for raising capital pre-IPO and the IPO, of £79,643 (2021: nil), were paid to Progressive Strategic Solutions LLP, a limited liability partnership with a common director (Robin Chamberlayne) for part of the year.

Management and R&D service fees of £104,848 (2021: £107,395) were paid to Perinato Pty. Ltd, a company with a common director (Prof Thomas Maschmeyer). 

Remuneration of key management personnel

The remuneration of the Directors, who are the key management personnel of the Group, is set out in aggregate in note 11 for each of the categories specified in IAS 24.

24.  Events Subsequent to Year End

Post 30 June 2022, 1,026,515 Ordinary Shares of 0.1 pence were issued in the Company to Andrew Grimes, ex-CEO of the Company in exchange for Andrew Grimes relinquishing 1,830,000 options over Ordinary Shares that had vested in accordance with the disclosures made at the time of the Company's IPO.

25.  Control

In the opinion of the Directors there is no single ultimate controlling party.          

Parent Company Balance Sheet

	Notes	30 June 2022 £'000	30 June 2021 £'000
Assets
Non-current assets
Investment in subsidiary	4	28,233	11,424
Current assets
Cash and cash equivalents		6,899	123
Other receivables	5	1,145	110
Total assets		36,277	11,657
Liabilities
Current liabilities
Trade and other payables	6	616	15
Total liabilities		616	15
Net assets		35,661	11,642
Equity
Issued capital	7	107	33
Share premium account	7	20,662	11,251
Share-based payment reserve	7	4,635	892
Capital reduction reserve	7	11,194	-
Accumulated losses		(937)	(534)
Total equity		35,661	11,642

 

As permitted by Section 408 of the Companies Act 2006, no income statement or statement of comprehensive income is presented for the Company.

The financial statements of Gelion Plc, company registration number 09796512, were approved by the Directors and authorised for issue on 8 November 2022.

Parent Company Statement of Changes in Equity

	Share capital	Share premium	Accumulated Losses	Capital reduction reserve	Share-based payment reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 July 2020	33	11,251	(472)	-	892	11,704
Total comprehensive loss for the period	-	-	(62)	-	-	(62)
Contributions by and distributions to owners:
Share-based payments charge	-	-	-	-	-	-
Total contributions by and distributions to owners:	-	-	-	-	-	-
Balance at 30 June 2021	33	11,251	(534)	-	892	11,642
Balance at 1 July 2021	33	11,251	(534)	-	892	11,642
Total comprehensive loss for the period	-	-	(561)	-	-	(561)
Contributions by and distributions to owners:
Bonus issue	57	(57)	-	-	-	-
Capital reduction	-	(11,194)	-	11,194	-	-
Share-based payment charge	-	-	-	-	3,902	3,902
Shares issued during the period	11	16,032	-	-	-	16,043
Shares issued during the period through a convertible loan	6	5,993	-	-	-	5,999
Costs of shares issued	-	(1,541)	-	-	-	(1,541)
Exercise of share options	-	178	158	-	(158)	178
Total contributions by and distributions to owners:	74	9,411	158	11,194	3,744	24,581
Balance at 30 June 2022	107	20,662	(937)	11,194	4,635	35,661

 

 

1.    General Information

Gelion Plc ('Gelion' or the 'Company') is a 100% owner of an Australian subsidiary that conducts research and development in respect of an innovative battery system and associated industrial design and manufacturing. 

Gelion is a public limited company, limited by shares, incorporated and domiciled in England and Wales. The Company was incorporated on 26 September 2015. The registered office of the Company is at 3rd Floor, 141-145 Curtain Road, London, EC2A 3BX. The registered company number is 09796512.

Gelion Plc was incorporated as Gelion UK Ltd. On 12 November 2021, the Company was re-registered as a public limited company under the Companies Act and its name was changed to Gelion plc. 

The Board, Directors and management referred to in this document refers to the Board, Directors and management of Gelion.

2.    Accounting Policies

2.1.  Basis of preparation

These separate financial statements have been prepared in accordance with Financial Reporting Standard 101, 'Reduced Disclosure Framework' (FRS 101). The financial statements have been prepared under the historical cost convention and in accordance with the Companies Act 2006.

The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies. The areas where significant judgements and estimates have been made in preparing the financial statements and their effect are disclosed in note 2.20 of the consolidated financial statements.

The parent company previously prepared statutory accounts under Section 1A of FRS 102. The Directors considered that the Statement of Financial Position at that date would be the same if prepared under previous GAAP as prepared under FRS 101 and that transition to FRS 101 does not require adjustment to any of the figures stated in the Statement of Comprehensive Income. On this basis a full reconciliation of Company equity at the transition date was not prepared.

The following exemptions from the requirements of IFRS have been applied in the preparation of these financial statements, in accordance with FRS 101:

•      Paragraphs 45(b) and 46 to 52 of IFRS 2 - Share Based Payment

•      IFRS 7 - Financial Instruments (Disclosures)

•      Paragraphs 91 to 99 of IFRS 13 - Fair Value Measurement

•      The following paragraphs of IAS 1 - Presentation of Financial Statements

·      10(d) - Statement of cash flows

·      16 - Statement of compliance with all IFRS

·      38A - Requirement for minimum of two primary statements, including cash flow statements

·      38B-D - Additional comparative information

·      111 - Statement of cash flows information

·      134-136 - Capital management disclosures

•      IAS 7 - Statement of cash flows

•      Paragraph 17 of IAS 24 - Related party disclosures relating to key management personnel

•      The requirement of IAS 24 - Related party transactions relating to transactions between group members

These financial statements are presented in Great British Pounds (GBP) unless otherwise stated, which is the Company's presentational and functional currency. Amounts are rounded to the nearest thousand, unless otherwise stated.

2.2.  Significant accounting policies

The accounting policies of the Company are the same as those of the Group which are set out in the relevant Notes to the Consolidated Financial Statements, except that it has no policy in respect of consolidation and investments in subsidiaries are carried at historical cost, less any provisions for impairment.

2.3.  Critical judgements and key sources of estimation uncertainty

As noted in note 2.20 to the consolidated financial statements the preparation of the financial statements requires management to make estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities. Company specific critical judgements are as follows:

      - Impairment of investments in subsidiaries.

The Company is making a significant investment into Gelion Technologies Pty to assist with the development and deployment of its technologies. The Directors have considered the long-term expectation of positive future cash flows once the development stage is complete and have not impaired the carrying amount of the investment and is carried on the balance sheet at cost.

2.4.  Share-based payments

The Group provides benefits to its employees in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions) in the parent entity as per note 2.16 of the consolidated financial statements. The only difference to that policy is that the costs relating to share-based payments is capitalised in the parent as part of the investment in the Group's subsidiary.

Share-based payments deemed non-recurring

The Group operated a share option plan whereby employees and key service providers were granted options over shares in Gelion UK Limited. Due to the Company's admission to trading on AIM which took place on 30 November 2021 all unvested options were vested triggering an accelerated share-based payment expense.

In addition to the existing share option plan the Group agreed to grant options over Ordinary Shares pursuant to obligations under the service agreements with the relevant individuals. These service agreement obligations were triggered by admission to trading on AIM.

Both the acceleration of option vesting and additional options granted pursuant to service agreement obligations are triggered by the Company's admission to AIM and therefore can be considered as part of the same non-recurring event.

3.    Profit for the Year

The Company recorded a loss for the financial year ended 30 June 2022 of £560,000 (2021: £63,000). The auditors' remuneration for audit and other services is disclosed in note 8 to the consolidated financial statements.

4.    Investment in Subsidiary

The following was a subsidiary undertaking of the Group:

Name	Registered office	Class of shares	Holding
Gelion Technologies Pty Limited	Australia	Ordinary A	100%

 

The shareholding is held directly.

The registered office of Gelion Technologies Pty Limited is Level 16, 101 Miller Street, North Sydney, NSW 2060.

 

	2022 £'000	2021 £'000
Balance as at 1 July	11,424	11,376
Additions - equity subscription	12,907	-
Additions - share-based payment charge	3,902	48
Balance as at 30 June	28,233	11,424

 

Share-based payment charges capitalised relate to the share-based payment charges incurred by the parent company for options granted by the parent to the employees of the subsidiary.

5.    Trade and Other Receivables

	2022 £'000	2021 £'000
Short term deposits	1,017	-
Prepayments	63	-
Other debtors	65	-
Amounts owed by group undertaking	-	110
	1,145	110

 

6.    Trade and Other Payables

Due within one year

	2022 £'000	2021 £'000
Trade payables	19	2
Amounts owed to Group companies	342	-
Accruals	255	13
	616	15

 

7.    Share Capital

Details of the Company's share capital are as set out in note 19 to the consolidated financial statements.

Details of the Company's share premium account and other reserves are as set out in note 19 to the consolidated financial statements.

Details of the movements in retained earnings are set out in the parent company Statement of Changes in Equity.

8.    Related Party Transactions

	2022 £'000	2021 £'000
Management fees	89,089	146,850
Arrangement fees	119,464	-
	208,553	146,850