12 December 2023

Gelion plc

("Gelion" or the "Company")

 

Final results to 30 June 2023

Solid progress against our roadmap to commercialisation, delivering on major milestones

 

Gelion plc (AIM: GELN), the Anglo-Australian energy storage innovator, announces its audited final results for the year ended 30 June 2023.

 

FY23 Operational highlights

-	Acquired a lithium battery IP portfolio from Johnson Matthey for a net consideration of £3.0m to accelerate the development Lithium-Sulfur (Li-S) technology.
-	John Wood appointed as CEO in November 2022, a battery, clean-tech and innovation specialist, bringing over 30 years of significant commercial and manufacturing expertise and C-Suite experience.
-	Manufactured 1,200 zinc-bromide cells from our pilot manufacturing line, and migrated to a zinc hybrid technology.

FY23 Financial highlights

-	Total income (R&D tax incentives) for the year of £2.1m, 17% ahead of market expectations1.
-	Adjusted EBITDA2 loss of £5.9m, 8% lower than the market expectations1.
-	Implemented cost control measures (in H2 23) resulting in estimated annualised cost savings of £1m.
-	Well capitalised with cash and cash equivalents on the balance sheet of £7.3m and nil debt as at 30 June 2023.

 

Post period highlights

-	In July 2023, the Group identified a path towards the development of a zinc-based solution, following the successful match-to-market study and the Group is now developing a zinc hybrid cell.
-	Signed agreements with the University of Sydney and Professor Yuan Chen for Gelion's Advanced Cathode Project, accelerating progress towards a zinc-based energy storage solution. Gelion expects to validate the potential of this technology in Q1 2024.
-	Raised £4.1 million via a placing, subscription and retail offer in November 2023, demonstrating support from existing and new investors.
-	Successful acquisition of OXLiD Ltd, a UK based Li-S battery technology developer to accelerate progress towards commercialisation and position Gelion as a global leader in this expanding market.
-	Signed JDA with Ionblox, a US silicon oxide anode developer, to develop high performance, next-generation LiSiS cells, initially for the global electric vehicle (EV), electrical vertical-takeoff-and-landing (eVTOL) and drone markets, before progressing to the stationary energy storage market.
-	New Li-S Research and Development facility now fully operational, to optimise development and accelerate market readiness of this technology by producing more advanced cell prototypes.

 

¹ Analyst estimates - total income - £1.7 million and Adjusted EBITDA loss of £6.4m

² Excludes non-recurring expenses such as net loss on sales of fixed assets, transaction costs, listing and other associated costs and share based payments. These costs are either considered non-recurring or are non-cash items and therefore are separately disclosed to assist the user of the financial information to understand and compare the underlying results of the Company.

 

John Wood, CEO of Gelion, commented: "We made solid progress during the year against our roadmap to commercialisation where the Group delivered major milestones on both the Li-S and zinc battery technologies. With a strong team of experts, Gelion has unique technical capabilities and we have now identified where the business needs to focus to become a global leader in the provision of safe, robust, and scalable energy storage solutions with real-world impacts.

"We have started H1 FY24 in a robust position with momentum toward LiS leadership coming out of the acquisition of OXLiD in the UK, and the joint development agreement with leading SiOx anode partner Ionblox in the US.  Our Zinc team continued the development of our hybrid cell that is designed to be readily scalable. With a good financial footing and strong underlying market drivers as clean technologies are increasingly recognised as fundamental to the transition to a green economy, I am confident that we will achieve success for both of our technologies, with Gelion playing a significant role in providing relevant energy storage solutions."

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

 

Gelion plc John Wood, CEO Amit Gupta, CFO Thomas Maschmeyer, Founder and Principal Technology Advisor	via Alma
Cavendish Securities plc (Nominated Adviser and Sole Broker) Corporate Finance Neil McDonald Seamus Fricker Fergus Sullivan   ECM Barney Hayward	+44 207 220 0500
Alma Strategic Communications Justine James    Hannah Campbell Will Ellis Hancock	+44 20 3405 0205 gelion@almastrategic.com

 

About Gelion

Gelion ("gel: ion") is a global -energy storage innovator, supporting the transition to a more sustainable economy by commercialising two globally important next generation technologies: Lithium-Sulfur (LiS) and Zinc-based (Zn) hybrid cells to electrify mobile and stationary applications. Gelion plc (the Group) is listed on the London Stock Exchange's Alternative Investment Market and wholly owns Australia based Gelion Technologies Pty Ltd.  Gelion is designing and delivering innovative battery technology to enable that transition and return value for its customers and investors.

Lithium Sulfur

Gelion's effort is directed at the potential for the LiS chemistry to deliver double the gravimetric energy density of standard Lithium-ion chemistries whilst at the same time reducing cost and increasing safety targeting the EV and e-aviation market, helping to make global transport, energy consumption and storage more sustainable.

Gelion is developing a product for its high energy density sulfur cathode at its expanded R&D facilities in Sydney, enabling it to integrate with a variety of anodes ranging from graphite to silicon to lithium metal, depending on the targeted application.

Gelion recently also expanded in the UK by acquiring OXLiD Ltd, significantly increasing Gelion's capability in cathode improvement thereby accelerating path to commercial partners and commercialisation.

Zinc

Gelion is adapting its zinc technology to comprise an alternate cathode technology, a zinc hybrid cell to develop complementary next-generation batteries for the lead-acid eco-system. Early testing indicates that this solution has the potential to maintain good energy density levels with enhanced cost and safety aspects. Once fully developed, Gelion intends for our zinc technology to provide a durable and sustainable market extension within the ecosystem that supports lead-acid batteries.

Chairman's Statement

 

Overview

 

FY23 was another year of strategic progress for Gelion, where we made significant advancements and achieved key milestones towards commercialising our next generation battery technologies. We are beginning to experience good traction on both the Lithium Sulfur and zinc hybrid cells technologies, a testament to the efforts made throughout the year. The Board has been actively engaged to ensure we have the right leadership in place and we are now 12 months into the tenure of our CEO, John Wood, and we are seeing the outcomes of his revised strategy with greatly strengthened IP and an accelerated route to market. I am confident that Gelion will be able to fast-track the development and commercialisation of our Li-S and Zinc based technologies, achieved in conjunction with our strategic partners.

 

The Company's commitment to global leadership was reinforced by strategic acquisitions, notably the IP portfolio from Johnson Matthey and Oxis Energy and The University of Sydney (USyd) IP, solidifying our standing in Lithium Sulfur (Li-S) technology. Li-S is a potential next generation of Lithium batteries with approximately twice the energy density of current incumbent commercial lithium-ion technology. Similarly, the pilot production of Gen 4 zinc-bromide cells and the match-to-market analysis, identified the applications best suited for the technology and a market ready to be targeted.

 

The aim to become a global leader in Li-S battery technology has already been reinforced in H1 24 by:

-	The £4.1m fundraise and the recent acquisition of OXLiD Ltd, a UK based Li-S battery technology developer and the provision of a UK footprint for Gelion as well as the addition of OXLiD's six highly skilled scientists.
-	The joint development agreement (JDA) with Ionblox Inc., a US based silicon oxide anode developer.

 

These strategic steps have been taken to accelerate progress towards commercialisation, position Gelion at the forefront of this expanding market and demonstrate the continued progress the Group is making. The above advancements, coupled with our focus on establishing ourselves as a leading provider of safe, robust, and scalable renewable energy storage solutions, underscore Gelion's commitment to addressing the pressing global need for sustainable energy solutions. These successes could not be achieved without our passionate team, and as a Board, we are privileged to have attracted a high-performing, dedicated team of seasoned professionals in commercial, science and engineering disciplines, who are guided by our leaders.

 

Strategy

 

Gelion remains committed to delivering long-term value to our stakeholders through the development of its cutting-edge battery technologies, that will be of critical importance to the world of tomorrow. A key focus for our CEO, John, since his arrival in November 2022 has been to understand how best to achieve this commitment and has resulted in the evolution of the Group's strategy.

 

In terms of our Zinc technology, we are confident that the migration of our Zinc technology path (from zinc-bromide) will lead to the manufacturing of safer, more cost-effective solutions, with energy densities that will make them suitable for applications in the existing lead-acid ecosystem. Satisfying all three requirements is extremely rare and we are confident that this will set us apart from other players in the market and make our solution highly desirable, enabling us to compete directly with lead-acid incumbents.

 

The awareness around the benefits of Li-S batteries and their improved performance is already large and continuing to grow. Li-S is going to be fundamental in the enhancement of the next generation of batteries for electric mobility and as such, it has the potential to power the future of transport. Gelion's existing IP portfolio combined with the post period end OXLiD acquisition and the JDA with Ionblox means Gelion is already a global player with presence in Australia, the UK and the US. Furthermore, the Group is in a fantastic position to begin to test and subsequently evidence the effectiveness of its solutions to industry players, a crucial stage in the development of any technology.

While this shift in Gelion's commercialisation approach will require time and investment, the Board is confident this approach will provide the fastest pathway to commercialisation.

 

Market opportunity

 

Global demand for energy storage solutions continues to grow exponentially, supported by the implementation of government policies aimed towards achieving net-zero commitments. The global battery market share of Li-S technologies is expected to grow significantly in the coming years, driven by their high performance and the continuing acceleration in demand for batteries, a market our technologies will be able to be sold directly into.

 

Our match to market analysis identified that Gelion's zinc-based technologies are well-matched to performance requirements for many traditional lead- acid battery applications. While representing a smaller market than lithium technologies, the global lead-acid market is still substantial and growing, presenting significant opportunity for Gelion, with our zinc-based technologies offering several key competitive advantages over well entrenched lead-acid batteries.

 

The opportunities for Gelion are expanding and the storage solutions we are developing will be pivotal to the lead-acid and lithium-ion storage market transformations.

 

The Board / Our people

 

At Gelion, our diverse and dedicated team is instrumental in achieving our goal of a greener, cleaner future. Under John's leadership, our team is energized and motivated, guided by our core values: Environmental consciousness, cutting-edge innovation, a scientific ethos, realism and a clear vision of where and how shareholder value can be created.

 

Our people, from senior leadership to every team member, embody these values and drive our success. Cementing our reputation as an employer of choice, we have continued to recruit some of the sharpest business and scientific minds, who continuously add key contributions to our story.

 

I am delighted to say that post period end, we have welcomed Louis Adriaenssens to our team. Louis brings considerable battery experience and was most recently the supervisor of chemistry at the Panasonic lithium-ion plant at the Tesla Gigafactory. Louis' appointment comes at the right time for Gelion, as we take further steps towards commercialisation.

 

 

ESG

 

We take our responsibility to successfully transition to a sustainable economy seriously and we expect to be playing a key role by developing low-impact and safe technologies. Both of our energy storage platforms are comprised of abundant materials, contributing towards a low environmental impact, sustainability, and recyclability.

 

In Gelion's organisational structure, internal governance processes are not isolated components but are intricately integrated into the overarching business strategy ensuring that the Group consistently adheres to all pertinent laws and regulations. To bolster this commitment to good governance, Gelion has adopted the Quoted Companies Alliance Corporate Governance Code (QCA Code), a framework consisting of 10 guiding principles.

 

Summary and outlook

 

As Gelion moves forward, our technologies are aimed at driving the green energy transition. Our progress in Lithium Sulfur and zinc-based hybrid cells positions us to make a tangible impact. We remain cognisant of the wider macroeconomic climate and have taken prudent steps to manage our cost base and maintain the financial health the Company.

 

As the Group continues to execute against the clearly defined strategy laid out by John since his arrival, we take further steps towards building shareholder value. With a clear strategy, a team with domain experience, and innovative products, we look to the future with confidence in building shareholder value.

 

Dr Steve Mahon

Chairman

12 December 2023

 

Chief Executive Officer's Statement

Introduction

 

It gives me great pleasure to present my first full year financial results statement as CEO of Gelion. H1 FY23 saw Gelion deliver several milestones, including the pilot production of zinc-bromide batteries in a commercial partner setting in Sydney, and progressive advancements in the development of lithium-sulfur (Li-S) additive and electrolyte technologies.

 

Since my appointment in November 2022, my primary focus has been on the identification and prioritisation of development pathways that will enable the Group to deliver commercially viable and scalable, next-generation battery chemistries.

 

 This involved extensive planning, fostering team development, with a particular focus on rigorous market analysis and a comprehensive assessment of both of our technologies relative to a rapidly evolving global landscape, enabling the identification of potential routes for their pervasive adoption. This work has significantly influenced the Group's current strategic and commercialisation approaches, and has reinforced my view that Gelion is on the right track to deliver pioneering, cutting-edge technologies that will underpin the company's goal of establishing a leading position in the highly competitive energy storage sector.

 

A primary motivation for me to join Gelion was the opportunity to collaborate with Professor Thomas Maschmeyer, an extraordinary scientist who established the company, offering truly innovative technological solutions, and the exceptional team of highly talented and dedicated employees that has formed around him.

It is incredibly motivating to lead the Gelion team in our shared mission to deliver value to our shareholders by bringing our two globally significant next-generation technologies to market.

 

Technology overview

 

The first technology, based on combinations of Lithium (Li) and Sulfur (S), yields very high gravimetric energy densities, and the second uses Zinc (Zn) in combination with our new cathode technology to yield robust, long-life storage solutions. Together, we believe these technologies will play a pivotal role in facilitating the global transition toward sustainable energy solutions for both mobile and stationary storage applications.

 

Gelion has clearly defined objectives to establish itself as a company of global relevance in both technologies and in FY23, the Group made crucial steps towards achieving these goals.

 

Lithium Sulfur

To accelerate our Li-S effort, Gelion acquired a lithium IP portfolio from Johnson Matthey. This will help us advance the development of our Li-S technology on a path that is intended to be compatible with a variety of lithium anode materials, including those based on mostly either graphite, silicon, silicon oxide or lithium metal.

 

Zinc

To enhance the cost-efficiency and adoption potential of our Zinc technology, we have realigned our focus toward the development of a next-generation zinc-based hybrid cell. This innovative approach is designed to complement the existing lead-acid ecosystem, to fit within existing battery standards, and to capitalise on the technological advancements and insights gained from our earlier zinc-bromide research program, thereby lowering barriers to adoption.

 

Post-period end

 

The new financial year has commenced on a robust note, marked by a successful fundraise of approximately £4.1m and subsequent acquisition of OXLiD Ltd, a UK based Li-S battery technology developer. This strategic acquisition serves to accelerate progress towards commercialisation and to underpin Gelion's move towards a global leadership position in this expanding market.

 

In our Zinc technology, we recently signed two agreements with The University of Sydney and Professor Yuan Chen for Gelion's Advanced Cathode Project, facilitating progress towards our zinc-based energy storage solution and we expect to validate the potential of this technology by Q1 2024.

 

We have also announced the joint development agreement (JDA) with Ionblox Inc., a US based silicon oxide anode developer. Gelion and Ionblox will jointly aim to develop high performance, next-generation LiSiS cells, initially for the global electric vehicle (EV), electrical vertical-takeoff-and-landing (eVTOL) and drone markets, before progressing to the stationary energy storage market.

 

Our operational achievements in FY23 have set a solid foundation, and we are witnessing this momentum rolling over into the new fiscal year coupled with continued strong customer interest in our technologies.

On top of the Ionblox agreement, we are working towards developing a range of strategic partnerships that will assist in fast-tracking our commercialisation path, while supporting the Board's confidence in the Group's ability to deliver long-term growth.

 

Evolution of our strategy

 

Li-S Batteries

Based on the very high gravimetric energy densities, Li-S-based energy storage continues to be elevated in the industry as its enormous potential in the mobility markets becomes widely understood.

 

Our extensive network across the industry will be key to our ability to establish the required supply chains and commercialise our products, while we expand and mature as a participant in the global community.

The technology has historically been held back by challenges including the poor conductivity of sulfur, which results in limited charging rates, and low cycle life associated with the so-called "polysulfide shuttle". There is growing confidence within the industry that viable solutions to overcome these key challenges have been identified.

 

In H2 FY23, we acquired the Li-S battery patent portfolio from Johnson Matthey (including solid and liquid electrolytes, disordered rock salt, electrode formulation and battery materials recycling) for a net cost of ~£3.0 million (gross cost of £4.25 million less sale of non-core IP portfolio for £1.2 million). This acquisition is of significant strategic importance to the business and is facilitating the acceleration of our technology development. The IP portfolio includes more than 350 patents across 65 patent families as well as development programs, technology transfer packages, market and portfolio analyses, manufacturing design and cost models for our Li-S technology.

 

We are encouraged by the progress being made toward realising the potential of this IP when combined with Gelion's existing technologies. As a result, we have now expanded the testing capacity of our research and development facilities by 50% to ensure we can optimise development and accelerate market readiness of this technology. Based in Sydney, the site has the capability to increase Gelion's prototyping toward cell development and the progressive commissioning of the capability commenced in October 2023.

 

Although the market for new battery technologies is very competitive and both our zinc hybrid and Li-S cell technologies have, and will continue to have, competition from other energy storage innovators aiming at similar performance and market segments, we are confident in our strategy leading to market impact.

 

In that context, Gelion is developing and securing IP with the objective of establishing freedom-to-operate and a protective buffer around our technology to prevent infringement and to retain our competitive advantage. We are also growing our team of technology experts and partnering to maximise our IP advantage and opportunity for success. This is perfectly illustrated by our recent acquisition of OXLiD.

 

Zinc-based energy storage

Zinc is a very important battery element, primarily owing to its abundance, non-toxic nature, and cost-effectiveness. Since joining Gelion, a key priority has been to align our exceptional technological capabilities with consumer expectations. From this process (started in March 2023), we concluded that to commercialise our zinc-bromide technology we would need to overcome significant challenges around safety under forcing conditions (e.g., external temperatures above 130ºC) and associated regulation.

 

Based on these insights, we initiated the 12-month zinc-bromide research (R&D) programme. Building on the progress we had made already, we realised that by adjusting our technology direction away from bromide towards a hybrid chemistry target there are paths to both lower cost (increased competitiveness), and easier scaling (earlier achievement of safety and regulation compliance validation) referred to as Gen5 hybrid technology. These elements receive further strength because of their compatibility with existing global supply chains.

 

This hybrid Gen5 cell is designed to deliver features highly sought after in the market, including robustness, wide temperature tolerance, adaptability to a broad range of state-of-charge levels, and the ability to be stored and transported in a discharged state.

 

Nonetheless, technology risk remains until we achieve a sufficient level of development and testing. Battery science is complex, with all aspects and components of the cell (e.g., anode, cathode, and electrolyte) impacting each other.

 

Therefore, any alterations in the design elements require a re-evaluation of all advancements. Consequently, we are reviewing carefully before accelerating. We anticipate validating the potential of this technology by Q1 2024 and will provide a comprehensive update to our shareholders consistent with the previously communicated timelines for the current programme.

 

Acquisition of OXLiD

With our clearly defined ambition to grow rapidly into a company with a global profile we are delighted to have concluded the strategic acquisition of OXLiD in November 2023, which delivers a significant increase in capability, a UK footprint and accelerates our path in the commercialisation of Li-S technology. The UK and European battery technology market presents a growing opportunity for the Group. The UK government is supporting battery science development; stewardship of the academic technology effort is being led by the Faraday Institution (https://www.faraday.ac.uk/faraday- battery-challenge/) and its Li-S focused consortium LiSTAR.

 

Adding the acquisition of OXLiD to our Johnson Matthey IP acquisition gives Gelion a strong opportunity to work within the UK research and industry community, expand our network of contacts, and strengthen our overall position in the UK market. Modern technology and supply chain development is now best achieved by establishing global reach, while utilising local regional incentives.

 

JDA with Ionblox

 

We signed the JDA with Ionblox in November, with the aim to deliver safe, high-energy density, lower cost lithium silicon sulfur (LiSiS) cells for the global electric vehicle (EV), electrical vertical-takeoff- and-landing (eVTOL) and drone markets, before progressing to the stationary energy storage market.

The EV and eVTOL industries are in need of highly competitive next-generation battery technologies to underpin the transition to net-zero emissions. The International Energy Agency estimates that approximately 300 million EVs will be required by 2030, compared with 10 million EVs in 2022, a 2900% increase. Technologies the ones we will jointly be developing, will be integral to servicing this exponential increase in demand.

 

Summary and Outlook

We made good progress during FY23 against our roadmap to commercialisation, covering the strategic lithium battery IP portfolio acquisition, expansion of the Li-S R&D facility, pivoting from zinc-bromide to a zinc-based hybrid cell solution, and further collaboration with the University of Sydney.

 

We have started H1 FY24 in a strong position with:

 

-	the development toward a zinc hybrid cell that is designed to be readily scalable and to deliver features important to the market. We intend to update further on the progress and the validation of our zinc hybrid technology and preparations for market readiness during Q1 2024;
-	the recently completed expansion of our R&D laboratory for our Li-S technology;
-	the successful acquisition of OXLiD;
-	£4.1m capital raise demonstrating support of our existing and new investors;
-	JDA with Ionblox in the US, which will enable Gelion to produce lithium silicon sulfur batteries
-	a strong focus on strategic relationships including ongoing discussions toward important partnerships to further accelerate our path.

 

It is in the combination of these factors that success and delivery of value to our stakeholders and customers will be found. I am highly optimistic for the future of our business.

 

I am also confident that we will achieve success for both of our technologies, with Gelion playing a significant role in providing relevant energy storage solutions as the world continues its transition to cleaner energy.

We are very grateful for what we have been able to accomplish with your help and support but are even more excited about what the future holds. I therefore thank you again for your investment in Gelion and look forward to reporting positive developments in 2024.

 

John Wood

CEO

12 December 2023

 

Chief Financial Officer's Review

 

Overview

 

FY23 was another busy year for Gelion, a year filled with accomplishments, inorganic activities, strategic reflection and direction and realignment of priorities.

 

In FY23, we invested in our people, primarily scientists, chemical and mechanical engineers, further strengthening our human capital to drive innovation towards commercialisation, manufacturing at pilot scale, and growing our IP moat to further establish our market-leading position in the global Li-S battery ecosystem.

 

Despite the significant macroeconomic challenges in FY23, we have successfully accomplished product development while maintaining the cost base within original plans. These challenges continue and the Group has been proactive in reducing discretionary expenditure to ensure efficient capital deployment.

 

 

Li-S technology

 

The Group made huge strides in progressing our Li-S technology ahead of original plans, facilitated by the strategically important acquisition of the Johnson Matthey/Oxis Energy IP portfolio in March 2023 for £3.0m (net costs post sale of the silicon anode IP and exclusive licence back for Li-S technology), placing Gelion among the top global players in the Li-S battery market.

 

This IP portfolio potentially also provides additional commercialisation opportunities (development or licensing), in the areas of lithium battery recycling and alternative electrode technologies. It was identified that quick action was required to exploit the IP and, therefore, decided to expand the R&D capability of the team by increasing team members and facilities which became operational in September 2023.

 

Post year-end, we also acquired OXLiD Ltd, a UK based Li-S business with roots back to Oxis Energy, to target the Europe and UK market while doubling our effort to achieve technical milestones to target our near-term target applications. The acquisition was for a total consideration of approximately £4.2m (£1.25m cash on completion, £0.4m deferred cash consideration and £2.5m in shares escrowed for 18 months) and was funded from the recently concluded capital raise of £4.1m in November 2023.

 

We recently also signed a JDA with the US based Ionblox Inc., a leader of silicon oxide anode developer with an aim to develop lithium silicon-sulfur batteries.

 

Zinc-based energy storage solution

 

Our primary focus during the past year has been on advancing our zinc battery solution. We successfully set up the pilot facility and manufactured 1,200 zinc-bromide batteries. Rigorous testing of these batteries and validation processes have provided critical insights, which resulted in Gelion choosing to pivot to the Gen5 zinc hybrid cell (bromine free). This technology will incorporate learnings from the past eight years into a new system design, which the Group expects will result in development efficiencies to help achieve improved cell performance against the metrics of cost, safety, and performance.

 

We recognise the importance of collaboration in a dynamic and competitive industry and, as a result, have developed further partnerships with the University of Sydney to assist in the Gen5 zinc hybrid battery research. The board believes this will not only validate the viability of Gelion's technology, but also open doors to future product development collaborations from suppliers and other like stakeholders. We are actively working on translating our innovative solutions into market- ready products. Our strategy involves carefully targeted product launches and pilot programs to validate market demand and gather valuable customer feedback.

 

This was achieved whilst maintaining a focus on value creation and strategic growth. As part of the Company's commitment to enhancing shareholder value and ensuring long-term financial resilience, from March 2023 efforts have been made to pursue initiatives to manage costs whilst continuing to deliver solutions that the world really needs.

 

Focused cost saving efforts

 

Balancing efficiency and innovation

Our cost control measures have been thoughtfully implemented to strike a balance between maximising efficiency and fostering innovation. These measures resulted in annualised cost savings of c. £1.0m across staff, consultants, and other overheads. By streamlining certain processes and optimising resource allocation, we have remained steadfast in our commitment to invest in research and development, ensuring that we continue to innovate and, at the right time, offer cutting-edge products to our customers.

 

Prioritising sustainable savings

Our approach to cost control is rooted in sustainability. While certain savings reflect a temporary reduction in costs, which were important to be undertaken to match the Group's current needs and development status, we have also made efforts to identify and address areas where costs can be reduced without compromising the quality and integrity of our offerings. These efforts have not only yielded immediate financial benefits and reduced cash burn but have also positioned us for sustainable growth over the long term.

 

This disciplined approach has allowed us to redirect resources towards high-impact projects that align with our strategic goals; for example, IP portfolio management, fostering a more agile and competitive organisation.

 

In conclusion, our commitment to cost control is a pivotal aspect of our overall financial strategy. While our efforts to date have resulted in immediate improvement in cash burn, they are underpinned by a broader vision of sustainable growth, innovation, and value creation. It is the board's belief that by striking the right balance between managing costs and strategic investments, we will be well-positioned to navigate dynamic market environments and deliver sustainable returns to our valued investors.

 

Financial highlights

 

 

Income statement

 

Total income for the year ended 30 June 2023 was £2.1m (2022: £1.7m) primarily from R&D tax incentives resulting from the ongoing development programmes of the business for both technologies.

 

Adjusted EBITDA loss (defined as the Earnings Before Interest, Tax, Depreciation, Amortisation, listing and other non-recurring costs and share based payment charges), increased to £5.9m (2022: £4.1m) reflecting FY23 being the first full year post listing. Refer to the note 25 to the financial statement for a reconciliation to IFRS measures.

 

Operating losses before non-recurring items and share based payments expense increased to £6.4m (2022: £4.4m) primarily due to:

 

-	£1.2m increase in research and development spend, a significant proportion of which relates to staff costs resulting from the increase in the average number of R&D staff from 26 in FY22 to 36 in FY23 and pilot manufacturing project
-	£1.0m increase in administrative costs reflecting additional costs of being a public company
-	partially offset by an increase in other income

 

Statement of financial position and cash flows

 

At 30 June 2023, current assets amounted to £9.4m (2022: £19.2m), including cash and cash equivalents and term deposits of £7.3m (2022: £17.0m) primarily driven by:

 

-	operating cash outflow of £6.0m (2022: £5.3m); and
-	IP acquisition and management expenses of £3.0m (2022: £0.05m), property, plant, and equipment of £0.5m (2022: £0.7m) largely relating to the commissioning of the pilot manufacturing plant and other lab equipment

 

Research and development

 

Research and Development continues to form a material part of the Group's activity this year, with a significant portion relating to pilot manufacturing of our zinc-bromide battery. The Group expensed most of its development costs of £4.1m for the year (2022: £3.0m). The Group had qualifying research and development costs against which it expects to receive the R&D tax incentives of £2.05m from the Australian Taxation Office.

 

Foreign currency exposure

 

The Group currently does not face any significant currency exposure; 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 are in other foreign currencies.

 

We have signed a FX hedging contract with a financial institution however there weren't any outstanding hedging contracts as of June 2023. The Group expects to maintain a natural hedge to transactional exposure by invoicing in foreign currencies where appropriate to minimise the 

 

Outlook

 

Over the past year, we have faced both challenges and opportunities, and I am proud to say that we have not only navigated these waters successfully but have also made significant strides toward our strategic goals.

While innovation remains a cornerstone of our Group's strategy, we are conscious of the fact the industry is changing rapidly, and strategic moves need to be made to shorten the time to market. As such, we not only continued to invest in research and development, but we also acquired global patent portfolios and OXLiD to enable us to capitalise on the Li-S momentum. The Board believes our prospects remain promising as our internal development and inorganic activities have placed Gelion at the forefront of this rapidly evolving industry while managing risk, reward, and efficient use of shareholder funds at the same time.

 

Our research indicates the adoption of renewable energy sources is accelerating, creating a higher demand for reliable energy storage solutions. With governments and businesses alike committing to ambitious sustainability targets, we are poised to capitalise on this trend. Our pipeline of innovative products is robust, and we are committed to bringing these advancements to market in a timely manner.

 

Our technologies aim to cater to both mobile and stationary storage applications and our strategy specifically targets markets and opportunities that Gelion can pursue in the near term and then expand into in the medium to long term.

 

 

We extend our gratitude to our shareholders, partners, and employees for their unwavering support as we embark on this exciting journey towards a more sustainable energy future.

 

Amit Gupta

CFO

12 December 2023

Consolidated Statement of Comprehensive Income

		Year ended 30 June
	Notes	2023 £'000	2022 £'000
Other income	4	2,054	1,745
Total income		2,054	1,745
Administrative expenses		(3,841)	(2,847)
Research and development expenses		(4,147)	(2,970)
Share-based payments expense		(894)	(49)
Depreciation and amortisation		(463)	(308)
Operating loss before non-recurring items	6	(7,291)	(4,429)
Non-recurring items:	5
Listing and other associated costs		-	(4,658)
Loss on sale of assets		(186)	-
Advisory costs related to purchase and sale of the IP		(80)	-
Total non-recurring items		(266)	(4,658)
Operating loss		(7,557)	(9,087)
Finance costs		(3)	(73)
Finance income		153	3
Loss on ordinary activities before taxation		(7,407)	(9,157)
Tax on loss on ordinary activities	8	-	-
Loss on ordinary activities after taxation		(7,407)	(9,157)
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	9	(695)	713
Total comprehensive loss for the year attributable to equity holders of the parent		(8,102)	(8,444)
Loss per share (basic and diluted) attributable to the equity holders (pence)	11	(6.90)	(9.20)

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

		As at 30 June
	Notes	2023 £'000	2022 £'000
Assets
Non-current assets
Intangible assets	12	3,349	362
Property, plant and equipment	13	957	1,050
Current assets
Cash and cash equivalents	15	7,268	16,024
Short-term investments	16	-	1,017
Other receivables	16	2,114	2,153
Total Assets		13,688	20,606
Liabilities
Current liabilities
Trade and other payables	14, 17	1,057	854
Non-current liabilities
Trade and other payables	14, 17	27	31
Total liabilities		1,084	885
Net assets		12,604	19,721
Equity
Issued capital	18	108	107
Share premium account	18	20,752	20,662
Other non-distributable reserves	18	5,328	5,148
Capital reduction reserve	18	11,194	11,194
Accumulated losses		(24,778)	(17,390)
Total equity		12,604	19,721

The financial statements of Gelion Plc, company registration number 09796512, were approved by the Directors and authorised for issue on 12 December 2023.

The accompanying notes form part of this financial information.

 

 

 

 

 

 

 

Consolidated Statement of Cash Flows

		Year ended 30 June
	Notes	2023 £'000	2022 (Restated) £'000
Cash flow from operating activities
Loss for the year before exchange losses		(7,407)	(9,157)
Adjustments for:
-      depreciation		409	296
-      amortisation		54	12
-      net finance loss / (income)		(147)	-
-      loss on disposal of property, plant and equipment		127	8
-      impairment of intangible assets		48	-
-      share-based payments expense		894	3,902
Changes in operating assets/liabilities
-      Decrease / (increase) in receivables		24	(740)
-      Decrease / (increase) in prepayments		15	(162)
-      Increase / (decrease) in payables		(45)	507
Net cash used in operating activities*		(6,028)	(5,334)
Cash flows from investing activities
Purchase of intangible assets		(3,982)	(48)
Sale of intangible assets		1,189	-
Purchase of tangible property, plant and equipment		(456)	(733)
Short-term investments (term deposits)		1,017	(1,017)
Interest received		146	2
Net cash used in investing activities		(2,086)	(1,796)
Cash flows from financing activities
Proceeds from issue of shares		18	16,222
Proceeds on issue of convertible loan notes that were subsequently converted		-	5,999
Transaction costs of issue of shares*		-	(1,541)
Repayment of leasing liabilities		(46)	(126)
Net cash used in financing activities*		(28)	20,554
Net increase/(decrease) in cash held		(8,142)	13,424
Cash and cash equivalents at beginning of financial year		16,024	1,913
Effect of exchange rate changes		(614)	687
Cash and cash equivalents at end of financial year	15	7,268	16,024

The accompanying notes form part of this financial information.

* FY22 has been restated for transaction costs related to the issue of shares, more details have been provided in the note 2.3.

 

 

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 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
Balance at 1 July 2022	107	20,662	(17,390)	11,194	5,148	19,721
Loss on ordinary activities after taxation	-	-	(7,407)	-	-	(7,407)
Other comprehensive income	-	-	-	-	(695)	(695)
Total comprehensive loss for the year	-	-	(7,407)	-	(695)	(8,102)
Contributions by and distributions to owners:
Bonus issue	-	-	-	-	-	-
Capital reduction	-	-	-	-	-	-
Share-based payment charge	-	-	-	-	894	894
Shares issued during the period	1	73	-	-	-	74
Shares issued during the period through a convertible loan	-	-	-	-	-	-
Costs of shares issued	-	-	-	-	-	-
Forfeited / cancelled options	-	-	19	-	(19)	-
Exercise of share options	-	17	-	-	-	17
Total contributions by and distributions to owners:	1	90	19	-	875	985
Balance at 30 June 2023	108	20,752	(24,778)	11,194	5,328	12,604

The accompanying notes form 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 c/o Armstrong, Level 4 LDN:W, 3 Noble Street London EC2V 7EE. 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 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. The policies adopted for translation of the subsidiary's assets, liabilities, income and expenses are set out in note 2.18.

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          Restatement of comparatives

Where required by accounting standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. These restatements do not impact the net result of the business reported in FY22.

Prior Period Restatements of Financial Statements

Management has made one restatement in the company's previously issued consolidated financial statements for the year ended 30 June 2022. This was identified post the release of results and therefore has been restated within the financial statements for the year ended 30 June 2023.

This restatement is a reallocation and therefore does not impact either the reported losses or cash position, and does not impact the financial performance or financial position of the Company.

- Transaction costs on Share Issue - Restatement

Transaction costs related to the issue of shares in FY22 of £805k have been restated from financing activities to operating activities in the Cash Flow Statement given these were not directly attributable to the initial capital raise in November 2021.

The net effect of this reclassification for the financial year 2022 is a decrease of £805k in cash flow from operating activities and an increase in cash flow from financing activities by the same amount. There is no impact on cash position at closing of FY22 (30 June 2022).

2.4          Going concern

The financial statements have been prepared on a going concern basis which assumes that the Group will have sufficient funds available to enable it to continue to trade for the foreseeable future. In making their assessment that this assumption is correct, the Directors have undertaken an in-depth review of the business, its current prospects, and cash resources as set out below.

The Directors have prepared a cash flow forecast for the period ending 31 December 2024. The Group meets its normal working capital requirements through existing cash resources (cash and cash equivalents including term deposits) which, at 30 June 2023, amounted to £7.3m (2022: £17.0m) with another £2.1m expected to be received from the R&D tax incentives in or around December 2023. The going concern period includes a receipt of further R&D tax incentives and grants of £2.2m. In addition, the Group recently completed a capital raise of £3.7m net of transaction costs, of which c. 1.6m was utilised towards the acquisition of OXLiD Ltd including associated transaction costs.

After due consideration of these forecasts and current cash resources, the Directors consider that the Group has adequate financial resources to continue in operational existence for the foreseeable future (being a period of at least twelve months from the date of this report), and for this reason the financial statements have been prepared on a going concern basis.

By the end of the period analysed, the Group will still hold a reasonable proportion of the monies which should give the business sufficient funds to operate in a similar way beyond the forecast period.

The Directors have also considered reasonably plausible down side scenarios, including a further 5% increase in salaries (payment of which is within the Directors control) and a 5% reduction in grant income. Under this scenario the business would still have adequate financial resources to continue for at least 12 months from the date of approval of these financial statements. In addition, if required to due to other unforeseen reasons, the Directors could take further mitigating action to reduce cash outflows by reducing uncommitted capital expenditure. 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.

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 in FY22 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 were measured at amortised cost using the effective interest method in line with IFRS 9.

2.10       Property, plant and equipment

Plant and equipment are 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

 

Disposal of intangible assets

When an intangible asset, such as a patent, is disposed of or no longer expected to generate future economic benefits, it is derecognized from the financial statements. The profit or loss on disposal is determined as the difference between the carrying amount of the asset at the time of disposal and the proceeds from its disposal.

The Group may dispose of intangible assets through various methods, including but not limited to sale, abandonment, or expiration of the asset's legal rights. The method of disposal is chosen based on the circumstances at the time of disposal. Any gain or loss on the disposal of an intangible asset is recognized in the statement of profit or loss in the period in which the disposal occurs.

 

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.

2.17       Non-Recurring Items

The Group considers certain unusual or infrequent items that either because of their size or their nature, or relevance to the business as are non-recurring and disclose separately to report the underlying performance of the business. For an item to be considered as a separate item, it must initially meet at least one of the following criteria:

·      It is a significant item, which may cross more than one accounting period.

·      It has been directly incurred as a result of either an acquisition / divestment or funding related  or arises from a major business change.

·      It is unusual in nature, e.g. outside the normal course of business.

If an item meets at least one of the criteria, the Board, through the Audit and Risk Committee, then exercises judgement as to whether the item should be classified as an allowable adjustment to IFRS performance measures and disclosed separately.

 

2.18       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.

2.19       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.

2.20       Input 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.

2.21       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 2023 the Group has recorded other income of £2,049,000 (2022: £1,719,000) based on expected tax refunds to be received from the government (recognised under Other receivables at 30 June 2023).

-       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 19 for the key assumptions and inputs used in the model to determine the fair values at each measurement date.

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

During the year ended 30 June 2023, 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 IAS 1, IAS 8, IAS 12 and IFRS Practice Statement 2	1 January 2023
IFRS 17 Insurance Contracts	1 January 2023

 

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
Lease Liability in a Sale and Leaseback (Amendment to IFRS 16)	1 January 2024
IAS 1 Presentation of Financial Statements (Amendment - Classification of Liabilities as Current or Non-Current)	1 January 2024
IAS 1 Presentation of Financial Statements (Amendment - Non-current Liabilities with Covenants)	1 January 2024
IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures (Amendment - Supplier Finance Arrangements)	1 January 2024

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 two-years ended 30 June, Gelion operated in the single business segment of battery production and development.

	UK	Australia	As at 30 June 2023 £'000	UK	Australia	As at 30 June 2022 £'000
Non-current assets
Intangible assets	-	3,349	3,349	-	362	362
Property, plant and equipment	-	957	957	-	1,050	1,050
Total income
Other income	5	2,049	2,054	26	1,719	1,745
Depreciation and amortisation	-	(463)	(463)	-	(308)	(308)
Finance income (interest)	98	55	153	-	2	2
Operating loss
Operating loss	(966)	(6,591)	(7,557)	(574)	(8,513)	(9,087)

 

 

4.    Other Income

	Year ended 30 June
	2023 £'000	2022 £'000
R&D tax concessions	2,049	1,719
Recovery of VAT	5	26
	2,054	1,745

 

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 2.21.

 

5.    Non-Recurring Items

	Year ended 30 June
	2023 £'000	2022 £'000
Listing costs	-	411
Share-based payments accelerated due to listing	-	3,853
Key management bonus contingent on listing	-	394
Net loss on sales of fixed assets	186	-
Transaction costs incurred for IP acquisition and divestment	80	-
Total non-recurring items	266	4,658

 

Certain costs were incurred in FY22 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. For more details on these expenses please refer to FY22 Annual Report on our website: https://gelion.com/wp-content/uploads/2022/11/Gelion-Annual-Report-and-Financial-Gelion-Statements-for-the-year-ended-30-June-2022.pdf#page=71

Non-recurring costs in FY23 include one-off loss on sales of fixed assets and advisory costs incurred in relation to the purchase and sale of the IP portfolio that were non-recurring in nature. These have been separately disclosed to assist the user of the financial information to understand and compare the underlying results of the Company.

 

6.    Operating Loss Before Listing and Other Non-Recurring Items

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

		Year ended 30 June
	Note	2023 £'000	2022 £'000
R&D tax concessions	4	2,049	1,719
Depreciation and amortisation	12, 13	(463)	(308)
Employee benefits	10	(5,223)	(3,212)
R&D expenses		(1,553)	(1,391)
Out of which:
External R&D services		(925)	(669)
R&D materials, consumables & other		(628)	(722)
Administration and other expenses		(1,212)	(1,214)
Share-based payments (recurring)		(894)	(49)

 

7.    Auditors' Remuneration

	Year ended 30 June
	2023 £'000	2022 £'000
Fees payable to the Company's auditors for the statutory audit of the Company's annual financial statements	70	52
Fees payable to the Company's auditors and its associates for the audits of the Company's subsidiaries	33	24
Non-audit services
Reporting accountant services	-	278
Taxation and other services	9	31
Total auditors' remuneration	112	385

 

8.    Taxation

	Year ended 30 June
	2023 £'000	2022 £'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	(7,407)	(9,157)
Prima facie tax benefit on loss from ordinary activities before income tax at 25% (2022: 25%)	(1,852)	(2,290)
Add/(less) tax effect of:
Non-deductible expenditure	1,435	2,200
Non-assessable income	-	-
R&D tax offsets	(512)	(430)
Tax losses incurred but not recognised	878	506
Difference in tax rates applied	51	14
Total income tax expense	-	-

 

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

Estimated tax losses of £7,452,000 (2022: £4,138,000) 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:

	Year ended 30 June
	2023 £'000	2022 £'000
Estimated tax losses arising in the UK	1,664	793
Estimated tax losses arising in Australia	5,788	3,345
Total tax losses available to carry forward	7,452	4,138

 

The standard rate of corporation tax in Australia, where the subsidiary is based, is 25% (2022: 25%).

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.

9.    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.

10.  Employee Benefit Expenses and Numbers

Employee benefit expenses (including Directors) comprise:

	Year ended 30 June
	2023 £'000	2022 £'000
Recurring costs:
Salaries and wages including taxes	4,005	2,957
Defined contribution pension cost	324	206
Share-based payment expense - recurring	894	49
Total employee benefits expense (note 6) - recurring	5,223	3,212
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.

Average Employee Numbers

	2023 (#)	2022 (#)
R&D	36	26
Administration	17	11
Average number of employees	53	37
Employee headcount at period end	47	51

Increase in the average number of employees from FY22 to FY23 is primarily impacted by:

·      the full year impact of new hires who commenced in late FY22; and

·      the inclusion of temporary staff who assisted in the pilot manufacturing plant during FY23.

The actual closing headcount decreased to 47 at 30 June 2023 (51 at 30 June 2022) due to cost saving measures implemented by management where only selected roles were replaced, rather than filling all vacant positions.

 

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:

	Year ended 30 June
	2023 £'000	2022 £'000
Recurring costs:
Salaries and wages including taxes	873	1,059
Defined contribution pension cost	44	48
Share-based payment expense	691	10
Total key management personnel costs - recurring	1,608	1,117
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	1,608	4,889

 

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 £189,014 (2022: £584,900). No share options were exercised by Directors during the financial year ended 30 June 2023 or 30 June 2022.

Refer to note 19 for details of classification of share-based payments expense between recurring and non-recurring costs. 

11.  Loss Per Share

	Year ended 30 June
	2023	2022
Loss after tax	£7,407,000	£9,157,000
Weighted average number of shares (number)	107,944,951	99,888,579
Loss per share (pence)	6.9p	9.2p

 

The calculation of the loss per share is based on the loss for the financial period after taxation of £7,407,000 (2022: £9,157,000) and on the weighted average of 107,944,951 (2022: 99,888,579) Ordinary Shares in issue during the period.

In FY23, the parent company issued:

·      1,101,516 shares, majority of which relates to a share issue to ex-CEO Andrew Grimes (1,026,516) in lieu of cancelled options;

·      171,396 ordinary shares to the University of Sydney in exchange for acquisition of Lithium Sulfur IP ($130,000).

This increase in the number of Ordinary Shares has resulted in the weighted average number of shares in the year to June 2023 to increase to 107,944,951 (2022: 99,888,579).

There were 8,478,535 share options outstanding at 30 June 2023 (2022: 7,554,360). 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.

 

 

12.  Intangible Assets

	Patents £'000	Trademarks £'000	Total £'000
At 30 June 2021	334	19	353
Cost
Additions	39	9	48
Disposals	-	-	-
Difference on foreign exchange	14	1	15
At 30 June 2022	387	29	416
Additions	4,298	4	4,302
Disposals	(1,189)	-	(1,189)
Impairment	(37)	(11)	(48)
Difference on foreign exchange	(29)	(2)	(31)
At 30 June 2023	3,430	20	3,450
Amortisation
At 30 June 2021	40	-	40
Amortisation	12	-	12
Difference on foreign exchange	2	-	2
At 30 June 2022	54	-	54
Amortisation	54	-	54
Difference on foreign exchange	(7)	-	(7)
At 30 June 2023	101	-	101
Carrying amount
At 30 June 2022	333	29	362
At 30 June 2023	3,329	20	3,349

 

On 9 March 2023, Gelion acquired an IP portfolio in a range of next generation battery material technologies from Johnson Matthey, a British multinational chemicals and sustainable technologies company. The Company acquired the LiSiS patent portfolio for £4.3 million and has immediately sold part of portfolio to a third party for a cash consideration of £1.2 million.

On 13 March 2023, Gelion acquired the University of Sydney's Lithium Sulfur IP for a total consideration of AUD$130,000, which was satisfied by the issue of 171,396 ordinary shares.

13.  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 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
Additions	12	416	47	28	503
Disposals	0	(160)	0	0	(160)
Difference on foreign exchange	(6)	(87)	(30)	(8)	(131)
At 30 June 2023	81	1,346	427	122	1,976
Depreciation
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
Charge for the year	18	310	49	32	409
Accumulated depreciation on disposal		(29)			(29)
Difference on foreign exchange	(3)	(36)	(29)	(7)	(75)
At 30 June 2023	55	506	376	82	1,019
Carrying amount
At 30 June 2022	35	916	54	45	1,050
At 30 June 2023	26	840	51	40	957

 

 

14.  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 13.

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:

	2023 £'000	2022 £'000
Balance as at 1 July	56	122
Additions	47	54
Interest	3	4
Payments	(46)	(130)
Difference on foreign exchange	(4)	6
Balance as at 30 June	56	56

 

The maturity analysis of lease liabilities is disclosed in note 20.

The following are the amounts recognised in profit or loss:

	Year ended 30 June
	2023 £'000	2022 £'000
Depreciation expense of right-of-use assets	46	124
Interest expense on lease liabilities	3	4
Total amount recognised in profit or loss	49	128

 

15.  Cash and Cash Equivalents

	As at 30 June
	2023 £'000	2022 £'000
Cash at bank	7,268	16,024
	7,268	16,024

 

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 16. See note 20 for further discussion of these balances.

 

16.  Short-term Investments and Other Receivables

	As at 30 June
	2023 £'000	2022 £'000
Short-term investments:
Term deposits	-	1,017
Total short-term investments	-	1,017
Other receivables:
R&D tax incentive	1,934	1,784
Prepayments	172	187
Other debtors	8	182
Total other receivables	2,114	2,153

 

Term deposits in FY22 comprised 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. There were no term deposits for a period greater than three months as of June 2023.

R&D tax incentives are granted by the Australian Taxation Office in the form of tax offsets. The key judgements applied in the recognition of this receivable are detailed in note 2.21.

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

17.  Trade and Other Payables

Due within one year

	As at 30 June
	2023 £'000	2022 £'000
Trade payables	228	312
Accruals	584	360
Employee liabilities including employment taxes	171	157
Lease liabilities	26	25
Other payables (GST / VAT)	48	-
	1,057	854

 

Due in more than one year

	As at 30 June
	2023 £'000	2022 £'000
Lease liabilities	27	31
	27	31

 

Trade payables and accruals principally comprise amounts outstanding for trade purchases and continuing costs. Out of total £584k accruals as of June 2023, £250k relates to a deferred consideration as per contract with Johnson Matthey, for recent Lithium IP acquisition. The Directors consider that the carrying value amount of trade and other payables approximates to their fair value. Please refer to note 20 for further details.

 

18.  Issued Capital and Reserves

Share capital and premium

	Ref.	Number of shares on issue	Share  capital	Share premium
			£'000	£'000
Balance as at 1 July 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
Bonus issues and reorganisation		-	-	-
Capital reduction		-	-	-
Shares issued during the period	g/h	1,197,911	1	74
Loan notes converted to equity		-	-	-
Cost of shares issued		-	-	-
Exercise of share options		75,000	-	16
Balance as at 30 June 2023		108,407,750	108.00	20,752

 

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 of which £1,541,000 have been offset against share premium and £805,000 have been expensed.

g) On 19 October 2022, 1,026,515 Ordinary Shares of £0.001 each were issued to ex-CEO Andrew Grimes (related party transaction) in exchange for relinquishing 1,830,000 options that had vested.  

h) On 13 March 2023, Gelion acquired the University of Sydney's Lithium Sulfur IP for a total consideration of AUD$130,000, which was satisfied by the issue of 171,396 Ordinary Shares.

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 19 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 in FY22, 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 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
Balance at 1 July 2022	4,636	512	5,148
Foreign currency translation reserve movement	-	(695)	(695)
Share-based payment charge	894	-	894
Forfeited / cancelled options	(19)	-	(19)
Exercise of options	-	-	-
Balance at 30 June 2023	5,511	(183)	5,328

 

 

19.  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.

In prior years, 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 Original 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. 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.

In July 2022, the Board introduced a new Share Option Plan. The plan is 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.

These options are structured as nominal cost options. The options will normally vest in three equal tranches over three years, subject to continued employment.

On 21 November 2022, 255,951 options were granted that will vest in three equal tranches, the first anniversary is 31 August 2023, followed by annual vesting on 31 August 2024 and 31 August 2025. The options were granted with the exercise price of 0.1 pence and will be exercisable up to the tenth anniversary of the grant.

On 8 December 2022, 2,704,000 options granted to Mr John Wood and these will vest in three tranches as follows: 12 months from grant date 1,622,400, 24 months from grant date 540,800 and 36 months from grant date 540,800. The options were granted with the exercise price of 0.1 pence and are exercisable up to the fifth anniversary of the grant. 

	Year ended 30 June
	2023 £'000	2022 £'000
Recurring share-based payment expense recognised	894	49
Non-recurring share-based payment expense recognised	-	3,853
Total share-based payment expense	894	3,902

 

Summary of movements in awards:

	New Share Option Plan Number '000s	2021 and prior Original Share Option Plan Number '000s	Weighted average exercise price £
Outstanding at 1 July 2021	-	5,100	0.26
Granted	-	3,600	0.39
Forfeited	-	(466)	0.33
Exercised	-	(671)	0.25
Expired	-	-	-
Outstanding at 30 June 2022	-	7,563	0.32
Exercisable at 30 June 2022	-	7,402	0.34
Granted	2,960	-	0.00
Forfeited / Cancelled	(64)	(1,905)	0.32
Exercised	-	(75)	0.22
Expired	-	-	-
Outstanding at 30 June 2023	2,896	5,583	0.21
Exercisable at 30 June 2023	-	5,583	0.32

 

The range of exercise prices for options outstanding at the end of the year was £0.001 to £1.45 (2022: £0.22 to £1.45).

The weighted average remaining contractual life for the share options outstanding as at 30 June 2023 was 7.02 years (2022: 7.85 years).

Of the total number of options outstanding at 30 June 2023, 5,582,795 (2022: 7,402,000) had vested and were exercisable.

The weighted average fair value of the options granted in the year was £0.52 (2022: £1.23).

 

 

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:

	2023	2022
Weighted average fair values at the measurement date	£0.52	£1.23
Weighted average exercise price	£0.001	£1.45
Dividend yield (%)	-	-
Expected volatility (%)	n/a	62.8
Risk-free interest rate (%)	n/a	1.3
Expected life of share options (years)	10	10

*2023 Options that were granted represent nominal cost options with an exercise price of £0.001. Nominal cost options fair value, under the Black-Scholes option pricing model, equals the share price at grant date, therefore expected volatility and risk-free interest rate have no impact on the valuation. In the year ended 30 June 2023 2,959,951 options (2022: 3,600,000) were granted at an exercise price of £0.001 (2021: £0.39). The total share-based payment expense for the year was £894,000 (2022: £3,902,000). 

 

20.  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 2023.

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:

	As at 30 June
	2023 Carrying value	2023 Maximum exposure	2022 Carrying value	2022 Maximum exposure
	£'000	£'000	£'000	£'000
Cash and cash equivalents	7,268	7,268	16,024	16,024
Short-term deposits - term deposits	-	-	1,017	1,017
	7,268	7,268	17,041	17,041

 

	As at 30 June
	2023 Rating	2023 Cash at bank	2023 Short-term deposits	2022 Rating	2022 Cash at bank	2022 Short-term deposits
		£'000	£'000		£'000	£'000
Royal Bank of Scotland	A+	4,237	-	A+	6,899	1,017
Commonwealth Bank of Australia	A+	3,031	-	A+	9,125	-
		7,268	-		16,024	1,017

 

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 (AUD, 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 forecasted. The table below shows the currency profiles of cash and cash equivalents:

	As at 30 June
	2023 £'000	2022 £'000
Cash, cash equivalents and term deposits
US Dollars	317	-
Great British Pounds	1,593	2,471
Australian Dollars	5,358	14,570
	7,268	17,041

 

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:

	As at 30 June
	2023 £'000	2022 £'000
Cash and cash equivalents	7,268	16,024
	7,268	16,024

 

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

Year ended 30 June 2023

	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	1,031	-	-	-	1,031
Lease liabilities	4	9	12	27	53
	1,035	9	12	27	1,084

 

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

 

21.  Capital Commitments

There were no capital commitments as at 30 June 2023 and 30 June 2022.

22.  Related Party Transactions

Other than the remuneration to key management personnel outlined in note 10 of these financial statements, there are the following related party transactions:

Management and R&D service fees of £91,757 (2022: £104,848) were paid to Thomas Maschmeyer Consulting Pty Ltd (FY22 - Perinato Pty. Ltd), a company with a common director (Prof Thomas Maschmeyer).

Remuneration of £6,031 was paid to a fixed term employee for services provided to the company. The employee is a related person of a Group Director.

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 10 for each of the categories specified in IAS 24.

23.  Events Subsequent to Year End

 

Equity fundraising through new ordinary shares issue

On 9th November 2023, the company announced that it has successfully raised gross proceeds of £4.04 million via the placement of 16,838,358 new ordinary shares at a price of 24 pence per share. As part of the placing, the Directors subscribed for new ordinary shares which raised gross proceeds of £0.4 million in aggregate.

On 9th November 2023, the Company also announced a retail open offer and raised £0.06 million at the offer price of 24 pence per share.

On 27 November 2023, the shareholders approved both the capital raising and the acquisition in a General Meeting.

The Company has therefore raised, in aggregate, gross proceeds of approximately £4.1m through the capital raising round.

Part of net funds received were used to finance the acquisition of Oxlid Ltd, as well as to provide working capital to advance all current and new projects.

 

Acquisition of Oxlid Ltd

On 29th November 2023, the Company completed the acquisition of 100% of ordinary shares of OXLiD Ltd for a total consideration of approximately £4.2 million which consists of upfront consideration of £3.8 million and deferred consideration of £0.4 million. The deferred consideration is subject to the retention of the founder and will be payable equally over 12, 18 and 24 months.

OXLiD Ltd is a UK-based start-up lithium-sulfur battery company. The Company believes that the acquisition will enhance Gelion's presence in the UK and strategic positioning within the industry through accelerating commercialisation of our Li-S technology in several core areas.

The initial accounting for the business combination is incomplete at the time the financial statements are authorised for issue, given the proximity of the acquisition date to the date of authorisation of the financial statements. Therefore, the fair value of the acquired assets and liabilities could not be made. The expected goodwill would come primarily from technology and product synergies.

The upfront consideration was settled by 33.1% cash (£1,250,000) and 66.9% in equity (amounting to £2,522,060, with the issue of 10,508,582 shares valued at 24 pence per share on 29th November 2023).

No other matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.

 

 

24.  Control

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

               

25.  Alternative Performance Measures (APM)

The below non-IFRS performance measures have been used. These measures are additional to IFRS measures and may not be comparable with other companies. APMs should not be viewed in isolation but as a supplementary information.

In determining whether an item should be presented as an allowable adjustment to IFRS measures, the Group considers items which are significant either because of their size or their nature, and which are non-recurring. For an item to be considered as an allowable adjustment to IFRS measures, it must initially meet at least one of the following criteria:

·      It is a significant item, which may cross more than one accounting period.

·      It has been directly incurred as a result of either an acquisition / divestment, or arises from a major business change.

·      It is unusual in nature, e.g. outside the normal course of business.

If an item meets at least one of the criteria, the Board, through the Audit and Risk Committee, then exercises judgement as to whether the item should be classified as an allowable adjustment to IFRS performance measures.

Adjusted EBITDA loss

Measure: Adjusted EBITDA loss is calculated excluding initial IPO expenses (listing costs, accelerated share-based payments and key management bonuses due to the IPO listing), other non-recurring expenses in nature (net loss on sales of fixed assets, acquisition of IP legal advice and IP valuation costs) and share based payments charge.

Use: Provides a consistent measure of the profits from the core business activities. The Company believes that adjusted EBITDA is a useful measure because it is widely used by securities analysts, investors and other interested parties to evaluate the profitability of companies. This measure is closely tracked by management to evaluate the Company's operating performance and to make financial, strategic and operating decisions and because it may help investors to understand and evaluate, in the same manner as management, the underlying trends in the Company's operational performance on a comparable basis, period on period.

 

Reconciliation:

	Year ended 30 June
	2023 £'000	2022 £'000
Operating loss	(7,557)	(9,087)
Adjustments
Listing and other non-recurring costs	266	4,658
Share-based payments expense	894	49
Depreciation and amortisation	463	308
Adjusted EBITDA loss	(5,934)	(4,072)

 

Operating loss before listing and other non-recurring costs

Measure: Operating loss before listing and other non-recurring costs is calculated excluding initial IPO listing expenses (listing costs, share-based payments and key management bonuses due to the IPO listing), other non-recurring expenses in nature (net loss on sales of fixed assets, acquisition of IP legal advice and IP valuation costs).

Use: Provides a consistent measure of the profits from the core business activities. The Company believes that adjusted operating loss is a useful measure because it is widely used by securities analysts, investors and other interested parties to evaluate the profitability of companies. This measure is closely tracked by management to evaluate the Company's operating performance and to make financial, strategic and operating decisions and because it may help investors to understand and evaluate, in the same manner as management, the underlying trends in the Company's operational performance on a comparable basis, period on period.

 

Reconciliation:

	Year ended 30 June
	2023 £'000	2022 £'000
Operating loss	(7,557)	(9,087)
Listing and other non-recurring costs	266	4,658
Operating loss before listing and other non-recurring costs	(7,291)	(4,429)

 

Adjusted loss after taxation

Measure: Adjusted loss after taxation is calculated excluding initial IPO listing expenses (listing costs, share-based payments and key management bonuses due to the IPO listing), other non-recurring expenses in nature (net loss on sales of fixed assets, acquisition of IP legal advice and IP valuation costs).

Use: Provides a consistent measure of the profits from the core business activities. The Company believes that adjusted loss after taxation is a useful measure because it is widely used by securities analysts, investors and other interested parties to evaluate the profitability of companies. This measure is closely tracked by management to evaluate the Company's operating performance and to make financial, strategic and operating decisions and because it may help investors to understand and evaluate, in the same manner as management, the underlying trends in the Company's operational performance on a comparable basis, period on period.

Reconciliation:

	Year ended 30 June
	2023 £'000	2022 £'000
Loss on ordinary activities after taxation	(7,407)	(9,157)
Listing and other non-recurring costs	266	4,658
Adjusted loss after taxation	(7,141)	(4,499)

 

 

 

Parent Company Balance Sheet

		As at 30 June
	Notes	2023 £'000	2022 £'000
Assets
Non-current assets
Investment in subsidiary	4	24,589	28,233
Current assets
Cash and cash equivalents		4,237	6,899
Other receivables	5	79	1,145
Total assets		28,905	36,277
Liabilities
Current liabilities
Trade and other payables	6	172	616
Total liabilities		172	616
Net assets		28,733	35,661
Equity
Issued capital	7	108	107
Share premium account	7	20,752	20,662
Share-based payment reserve	7	5,510	4,635
Capital reduction reserve	7	11,194	11,194
Accumulated losses		(8,831)	(937)
Total equity		28,733	35,661

 

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 12 December 2023.

                                                                                          

 

 

 

 

 

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 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
Balance at 30 June 2022	107	20,662	(937)	11,194	4,635	35,661
Balance at 1 July 2022	107	20,662	(937)	11,194	4,635	35,661
Total comprehensive loss for the period	-	-	(7,894)	-	-	(7,894)
Contributions by and distributions to owners:
Bonus issue	-	-	-	-	-	-
Capital reduction	-	-	-	-	-	-
Share-based payment charge	-	-	-	-	894	894
Shares issued during the period	1	73	-	-	-	74
Forfeited / cancelled options	-	-	-	-	(19)	(19)
Exercise of share options	-	17	-	-		17
Total contributions by and distributions to owners:	1	90	-	-	875	966
Balance at 30 June 2023	108	20,752	(8,831)	11,194	5,510	28,733

 

 

 

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 c/o Armstrong, Level 4 LDN:W, 3 Noble Street London EC2V 7EE. 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 2.21 of the consolidated financial statements.

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 2.21 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 significant investments into Gelion Technologies Pty to assist with the development and deployment of its technologies. In assessing the carrying value of this asset for impairment, the Directors will at the end of each reporting period assess whether there is any indication that an asset may be impaired including the Investment in Subsidiary.  The assessment will consider indications for potential impairment and assess the impairment amount with reference to the recoverable amount and carrying amount of the asset.

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.    Results for the Year

The Company recorded a loss for the financial year ended 30 June 2023 of £7,894,000 (2022: loss £561,000). The auditors' remuneration for audit and other services is disclosed in note 7 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.

	2023 £'000	2022 £'000
Balance as at 1 July	28,233	11,424
Additions - equity subscription	2,482	12,907
Additions - share-based payment charge	894	3,902
Less - options cancelled	(19)	-
Less - impairment	(7,001)	-
Balance as at 30 June	24,589	28,233

 

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.

As for the impairment of the investment, please refer further to note 4.1.

4.1. Impairment of Investment in Subsidiary

The Company tests the net recoverable amounts of assets annually for impairment, or more frequently if there are indicators of impairment. During the year, Management considered the recoverability of its investment in subsidiary, which is disclosed in Note 4. The subsidiary continues to operate, incurring research and development activity and generates losses, which is seen as temporary. The fair value measurement of this investment is classified as Level 1 under IFRS 13.

Gelion Technologies Pty Limited (100% subsidiary of Gelion plc) is responsible for well over 95% of Group activities, along with the future revenue opportunities (currently being the only centre for R&D and the sole manufacturing entity). As such, this single cash generating unit contributes significantly to the market capitalisation of the Group (and parent company, listed on AIM).

Since the Company is pre-revenue, the directors do not think the value in use to be an appropriate measure to determine recoverable amount. The directors have therefore considered the market capitalisation less relevant adjustments as a proxy in the 'fair value less costs to sell' assessment'.

The market capitalisation of the Group on 30 June 2023 was £28.7 million (108,407,750 shares at the share price of 26.5 pence). Certain adjustments were made to the market capitalisation being the cash balance (£4.2 million) and net payables (£0.1 million) in the parent company at 30 June 2023 resulting in the indicative carrying value of £24.6 million.

In comparing the cost of the total investment (£31.59 million), the indicative carrying value of £24.6 million represents an impairment of £7.0 million to be recognised in the current year. If this exercise was undertaken on 30 November 2023, the impairment would decrease by £1.6 million to £5.4 million.

The Company will continue to assess the recoverable amount of its investment in subsidiary annually or whenever there are indications of impairment, in accordance with IAS 36. Any subsequent changes in the recoverable amount and impairment losses will be recognized in the financial statements in the periods in which they occur.

 

5.    Trade and Other Receivables

	As at 30 June
	2023 £'000	2022 £'000
Short term deposits	-	1,017
Prepayments	50	63
Other debtors	29	65
	79	1,145

Term deposits in FY22 comprised 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. There were no term deposits for a period greater than three months as of June 2023. 

 

6.    Trade and Other Payables

Due within one year

	As at 30 June
	2023 £'000	2022 £'000
Trade payables	28	19
Amounts owed to Group companies	59	342
Accruals	85	255
	172	616

7.    Share Capital

Details of the Company's share capital are as set out in note 18 to the consolidated financial statements.

Details of the Company's share premium account and other reserves are as set out in note 18 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

	Year ended 30 June
	2023 £'000	2022 £'000
Management fees	-	89
Arrangement fees	-	119
	-	208