THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU, WHICH IS PART OF DOMESTIC LAW OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND ("UK") PURSUANT TO THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

29 September 2023

Supply@ME Capital plc

(the "Company", "Supply@ME" or "SYME" and, together with its subsidiaries, the "Group")

Unaudited interim results for the six months ended 30 June 2023 and entry into Top-Up Shareholder Loan Agreement and Side Letter Agreement

SYME, the fintech business which provides an innovative fintech platform (the "Platform") for use by manufacturing and trading companies to access Inventory Monetisation© ("IM") solutions enabling their businesses to generate cashflow, announces its unaudited results for the six months ended 30 June 2023 ("H1 2023") and entry into Top-Up Shareholder Loan Agreement and Side Letter Agreement - details of which are set out in Appendices 1 and 2 to this announcement, respectively.

Highlights from the H1 2023 interim results:

Operational Highlights

Summary of H1 2023 financial results

The below unaudited consolidated financial summary of the Group's income statement is presented to distinguish the continuing operations (being the Group's IM segment) and the discontinued operations consisting of TradeFlow and its subsidiaries (the "TradeFlow Group"). The unaudited consolidated financial summary of the Group's balance sheet includes the total assets and liabilities from both continuing and discontinued operations as at 31 December 2022, however, no longer includes the assets and liabilities of the TradeFlow Group as at 30 June 2023, following SYME's disposal of 81% of the TradeFlow Group on 30 June 2023.

Consolidated financial summary:

¹ Adjusted operating loss is the operating (loss) from continuing operations before impairment charges.

² Discontinued operations relate to the operations of the TradeFlow Group, and these have been presented in line with IFRS 5 ("Non-current Assets Held for Sale and Discontinued Operations"). The prior period's income statement has been restated to aid comparability in line with the standard. Revenue from discontinued operations in H1 2023 was £0.7m (H1 2022: £0.2m).

Operational KPI

The pipeline KPI shown above represents the current potential value of warehoused goods inventory to be monetised rather than pipeline revenue expected to be earned by the Group (being the Company and its subsidiaries). As such, this provides a good indicator of the level of demand for the Group's warehoused goods monetisation services. This pipeline represents the value as at most practical date possible prior to the issue of this interim report (being 22 September 2023). The Company expects that the increase of the pipeline will be reflected in new due diligence activities over the coming months and, accordingly, additional due diligence fees for the Group's subsidiaries. In the case of positive due diligence outcomes, such pipeline would then be expected to move into IM phase at which stage the Group's subsidiaries will be able to charge its IM fees (including origination fees, fees for the usage of the Platform and IM servicing fees).

Entry into Top-Up Shareholder Loan Agreement and Side Letter Agreement

On 28 September 2023, the Company and TAG entered into an English law governed top-up unsecured shareholder loan agreement (the "Top-Up Shareholder Loan Agreement"), pursuant to which The AvantGarde Group S.p.A. (an entity ultimately beneficially wholly-owned and controlled by Alessandro Zamboni, Chief Executive Officer of the Company) ("TAG") agreed to provide the Company with a further facility of up to £3,500,000 to cover the Company's working capital and growth needs up to 30 June 2025 (the "Top-Up Facility").

As disclosed in the Company's second supplementary prospectus published on 30 June 2023 (the "Secondary Supplementary Prospectus"), the Company entered into an English law governed share purchase agreement with Dr. Thomas (Tom) James and John Collis, former Directors (the "Buyers") on 30 June 2023, pursuant to which, the Company sold 81% of the issued share capital of TradeFlow Capital Management Pte. Limited. The £2,000,000 TAG Amount (as defined in the Second Supplementary Prospectus) was novated from the Buyers to TAG on the terms of an English law governed debt novation deed entered into between the Company, the Buyers and TAG on 30 June 2023 (the "Debt Novation Deed"). Pursuant to the Debt Novation Deed, TAG agreed with the Company to settle the TAG Amount in three tranches: £500,000 on 30 June 2023 (which, as at the date of this announcement, has been paid to the Company by TAG); £1,000,000 on 30 September 2023; and £500,000 on 31 January 2024. On 28 September 2023, the Company and TAG entered into an English law governed side letter agreement ("Side Letter Agreement"), cast as a deed, in relation to the outstanding TAG Amount, pursuant to which TAG agreed to pay to the Company £1,000,000 on 31 October 2023, and £500,000 on 31 January 2024.

TAG has agreed to pay a 15% per annum compounding rate of interest on the £1,000,000 of principal amount of the TAG Amount for the period of 30 September 2023 to 31 October 2023, and shall incur a 15% per annum compounding rate of interest on any outstanding principal amount of the TAG Amount following the agreed payment dates.

The entry by (i) the Company and TAG into the Top-Up Shareholder Loan Agreement and (ii) the Company and TAG into the Side Letter Agreement each constituted a material related party transaction for the purposes of DTR 7.3 and were, accordingly, voted upon by the independent Directors (excluding Alessandro Zamboni, who, in each case, constituted a "related party" (as such term is defined in IFRS)), and such independent Directors consider each such material related party transaction in respect of the Top-Up Shareholder Loan Agreement and the Side Letter Agreement to be fair and reasonable from the perspective of the Company and its Shareholders who are not a related party.

Alessandro Zamboni, CEO, Supply@ME Capital plc, said:

"The past six months have been productive for Supply@ME, with our team working tirelessly on several key development workstreams. I am delighted with the progress we have made. We've started to build our track record on IMs which have unlocked a significant increase in engagement and interest in the Supply@ME Platform, both in our core markets and further afield. Our pipeline is strong and the experience we have gained continues to streamline the onboarding process. The launch of the Swiss Trading Hub will be a key development which provides the long-term framework for Inventory Monetisations and sends a clear and positive message to potential Inventory Funders, in both traditional and digital asset classes.

"We have also made further significant progress in building the fundamentals for a scalable business model. The security token framework is close to being launched - which is in line with future trends of the crypto bond market - and, critically, on the formalisation of our first white label partnership together with a first transaction, which we expect to prove an effective working relationship from day one. The new agreed funding facility gives us a clear platform from which to pursue the exciting opportunities that lie ahead.

"The SYME Board and I are positive about the prospects for the Group, given the operational and strategic progress being made, and we look forward to providing further business updates to the market in due course."

- Ends -

For the purposes of UK MAR, the person responsible for arranging release of this announcement on behalf of SYME is Alessandro Zamboni, CEO.

Enquiries

Investors & analysts:

Alessandro Zamboni, CEO, Supply@ME Capital plc, investors@supplymecapital.com

Media:

MHP Group, Supplyme@mhpgroup.com

APPENDIX 1 - CEO REPORT AND INTERIM FINANCIAL STATEMENTS

Chief Executive's report

Business model summary

The Group provide its innovative fintech Platform for use by manufacturing and trading companies to access IM solutions enabling their businesses to generate cashflow, via a non-credit approach and without incurring debt. This is achieved by their existing eligible inventory being added to the Platform and then monetised via purchase by third party Inventory Funders ("IM Transactions"). 

The completion of the TradeFlow Restructuring on June 2023 was an important step for the Group. When we acquired TradeFlow in July 2021, we had a clear goal to support businesses at every stage of the inventory lifecycle. We remain committed to this and will continue to explore opportunities to integrate in-transit and cross-border inventory programmes. John Collis and Tom James made a valuable contribution to our business and our board, but this was a necessary restructuring which removes any potential or perceived conflict of interest. It will enable both businesses to better realise their potential by providing greater commercial opportunities through the clear differentiation of responsibilities of the individual entities. With the completion of the TradeFlow Restructuring we can now redouble our efforts and focus on our core business lines.

Business model canvas: structural market drivers making business more and more relevant

Corporates in our core markets and globally have taken a multilayered approach to improving their supply chain resilience. These steps have included increasing inventory levels, with the incumbent cost of storing this inventory also increasing. The impact on cashflow and the demand for funding to alleviate this has never been greater. The dual drivers of inflation and climate linked changes to seasonality of inventories has also prompted reassessments and crystalised focus. There is now an abundance of highly profitable, long-established manufacturing and trading businesses which present an opportunity for investors, particularly those comfortable with receivables, to generate strong returns by monetising their inventories via the Platform.

Traditional financial institutions are not specialists in inventory. Historically, the difficulties in evaluating the inventories and the risk of fraud due to infrequent and imprecise monitoring combined with the unattractive prospect of disposing of unsold inventory have reduced engagement with this asset class, with lenders offering restrictive terms and unattractive rates. However, the need for a commercial facility for inventory is clear. Supply@ME has developed the systems and technology which remove the barriers to entry and provide certainty and security for Inventory Funders. We also have now begun to establish a track record of completed IM transactions supported by different funding routes.

Supply@ME's onboarding process for clients has been honed and is now demonstrably straightforward. We have, and are continuing to, invest heavily in our inventory ingestion, rule processing, and monitoring technology and expertise to ensure that it plugs seamlessly into existing systems and enhances monitoring.

We are confident in our ability to attract and convert client companies in our core markets and to add to this list of countries. For Inventory Funders, we are now progressing several paths and have commenced discussions to secure a cornerstone funder. This type of partnership will unlock a new level of momentum for the business. In tandem with this, the completion of the next stage of the security token framework will, alongside traditional funding, ensure we are increasingly well placed to furnish the demand in our pipeline.

New funding structure

Supply@ME's acquisition of TradeFlow Capital had, as one of its central goals, the creation of an independent trading business, the Stock Companies, owned by a regulated fund, which would use Supply@Me's IM Platform to facilitate the IM transactions. The regulated fund GIF also served to raise equity capital for IM Transactions. The restructuring of our relationship with TradeFlow was driven by an evolution in the regulation of the fund management industry, in particular, the direction from the Monetary Authority of Singapore, that TradeFlow should separate its licensed fund management activities from the rest of its business.

Since then, Supply@ME has been collaborating with a group of private investors and subject matter experts in working capital solutions, to launch an independent Swiss-based trading business ("CH Trading Hub") to replace the GIF, previously advised by TradeFlow.

Switzerland is traditionally an important trading hub (in particular for raw materials and commodities) and one of the more advanced jurisdictions regarding the regulation over the digital asset industry.

The CH Trading Hub, owned by Société Financière Européenne S.A. ("SFE"), will invest its equity capital to build up a dedicated internal structured financing team. It is expected that SFE will assume the control of the independent Stock Companies from the GIF once this restructure is completed, to manage the overall trading businesses using the platform and the services provided by the Group from this point.

Finally, the CH Trading Hub will handle the token route including progressing the strategic agreement with VeChain. In this regard, the Group is working with the CH Trading Hub on the launching of a security token framework which will see up to US$100m issued which is expected to be subscribed mostly by institutional investors active in the digital asset markets. The security token will be issued by a vehicle sponsored by SFE and it will be tradeable on authorised digital asset exchanges.

Updates to the Platform

Over the past six months, the Group has continued to improve its Platform to ensure that it is and will continue to be best-in-class and that it has the capabilities to scale with the business and diversification of the required monetisation portfolios, both in terms of geographies and industries.

We have continued to leverage the enhanced expertise we brought onto our team via key hires in 2022, and to leverage and further build out the vital partnerships with our software factory and information and commercial technology ("ICT") partners.

To that end the key areas of more recent development can be broken down into five modules.

1.   Onboarding Module

In order to more efficiently & effectively manage the pipeline of client prospects for Inventory Monetisation, a dedicated Onboarding Module has been implemented. This module allows:

With the above information, it allows the Platform to represent clients to prospective Inventory Funders and finalise the commercial agreements governing the IM transaction.

2.   Data Module

Data and analyses are core to our business model and what makes the Platform distinct.

As previously discussed in the Annual Report and Accounts for the year ended 31 December 2022, the 'data factory' software module allows for the required level of data ingestion we have envisaged alongside API management and the automated application of key business rules. We have continued to enhance this module, utilising "Test & Learn" methodologies that have enabled us to augment our analysis models and interact with our key partners more effectively.

The inventory data-lake continues to be enhanced, hitting key milestones, to enable advanced inventory data analytic metrics such as seasonality, obsolescence risk, critical components, margin and sales trends, inventory risk scores, and to enable robust and accurate monitoring and reporting.

3.   Trading Module

Leveraging the feedback from the first IM transactions with existing clients, we continue to improve both our processes (from efficiency and client focussed points of view), security protocols, and user experience of the Trading Module.

4.   Monitoring & Reporting Module

We have achieved key checkpoints in developing the key controls and KPIs that need to be monitored for each Inventory Monetisation and believe that these are key to providing Inventory Funders comfort against the risk of potential fraud.

We continue to build out the suite of reports for the various audiences, such as Client Companies, Stock Companies, Inventory Funders, in a robust and auditable manner.

5.   Web3 Module

The Group continues to leverage its relationship with VeChain and to enhance on the Web3 solution. Integrating the technology to the Platform ready for Web3 will help us to introduce the IM as a new asset class to a broader range of investors. It also means the Group is able to harness the developments in this nascent sector at pace, including the ability to explore the issuance of non-fungible tokens (NFTs), participating in digital ownership and business-to-business (B2B) marketplaces, decentralised finance and tokenised governance protocol. In this space, the Group and the CH Trading Hub will continue to explore further collaborations with digital asset investment banks and exchanges.

Update on the Group's Operational KPIs

Client company origination

Origination of client companies with inventory suitable for Inventory Monetisation has seen a significant increase both in the quality of businesses we are engaging and the strength of initial discussions. The first IM Transactions already have positively changed the tone and we are now operating at a more optimal level at each stage of client engagement. Our business in Italy is at a more advanced stage, however the impact of the UK IM has been significant, and we expect business in that market to follow a similar timeline as we have already experienced in Italy.

Pipeline of client companies now stands at £404.5m as at 22 September 2023. The drivers for inventory solutions are also diversifying, with supply chain frustrations, the impact of inflation and climate all prompting enquiries. We are confident in the appeal of the Platform to client companies in our core markets and also expect to expand, the list of territories in which we operate, due to a combination of market factors and demand from potential clients.

Italy

The group now has the track record of two IM Transactions, in markedly different sectors, being industrial vehicles and tyre retreading, which serves to emphasise the value of our Platform to a deeper pool of prospective clients. Our existing businesses are also now vital advocates and reference points for those wishing to engage with Inventory Monetisation. The benefits of this are significant. This third-party endorsement of our unique and innovative model is also helping us to attract larger businesses with significant portfolios of monetisable inventory.

The Group is now in advanced stages of formalising a White-Label IM agreement with the WL Inventory Funder to execute an initial IM transaction with an inventory value to be monetised of up to €10m, which involves an existing client of the WL Inventory Funder. This White-Label IM agreement (which remains subject to contract) will allow the Group to scale its revenue in Italy, leveraging the balance sheet and the client base of the WL Inventory Funder in specific supply chains. This first transaction will likely see us expanding the IM footprint in the agrifood sector, focusing on those goods which retain long-term value and high demand.

Formalising our first White Label partnership, much like our first IM Transaction, has required significant discussion and due diligence, including the involvement of a Big 4 consultancy firm. It is a new product for our partners and their customer base, without precedent, but we are confident that completing our initial white label agreement will provide a template for similar partnerships in Italy, the UK and other territories.

United Kingdom

Our first IM transaction using traditional funding in the UK represented a key milestone, providing proof of concept in the market, a tangible track record and a template for IMs being managed within an existing floating charge facility, confirming the ability to work alongside existing financing arrangements as a commercial facility. Since the announcement of this transaction, momentum has increased, and we feel confident in our stated goal of securing white label and self-funding agreements. Origination in the UK has also been gathering pace and we have a strong growing pipeline of prospective clients. The triggers which prompt businesses to contact us have also broadened and we are seeing a growing number of businesses affected by supply chain issues and climate related impacts seeking to offset increased costs. In the UK, the next milestones will be aligning long-term funding partnerships and White Label alliances.

Outlook

In the coming months Supply@ME will look to finalise its first White Label Partnership in Italy, implement the security token funding route and secure the backing of international Inventory Funders. These three initiatives will form the basis of the next phase of growth for our business, as we target the Group's revenue growth and opening the scale-up momentum. The new CH Trading Hub will provide the backbone for these initiatives and future transactions, providing a new layer of long-term certainty for Inventory Funders and corporates. This is a formative period for the business, and we are confident in our ability to deliver against these stated objectives to ultimately deliver greater value for our clients, investors and shareholders.

Financial review

The Group's unaudited condensed consolidated interim financial statements for the six-month period ended 30 June 2023 ("H1 2023") have been prepared in line with International Accounting Standard IAS 34 ("Interim Financial Reporting"). The TradeFlow operations continued to be classified as discontinued operations and assets held for resale in line with the requirements of IFRS 5 ("Non-current Assets Held for Sale and Discontinued Operations") from 1 January 2023 until the date of completion of the TradeFlow Restructuring, being 30 June 2023. The prior period income statement has been restated to aid comparability in line with the standard.

As shown in the financial summary above, the TradeFlow operations contributed a loss of £185,000 (inclusive of the gain of £718,000 recognised in connection with the TradeFlow Restructuring) in H1 2023.

Revenue from continuing operations

The table above provides a break down of the Group's revenue from Inventory Monetisation activities during H1 2023. Revenue is recognised in accordance with IFRS 15 ("Revenue from Contracts with Customers") and more details on the Group's revenue recognition policies can be found in the note 2 to the Group's condensed consolidated financial statements for the year ended 31 December 2022 (the "2022 Annual Report").

During H1 2023, the Group recognised £77,000 (H1 2022: nil) of Inventory Monetisation revenue, which it split 52% related to due diligence fees, and the remaining 48% relating to Inventory Monetisation fees.

In line with IFRS 15 ("Revenue from Contracts with Customers") the Group recognised the due diligence revenues when the due diligence services have been delivered and the Group's performance obligation has been satisfied. During H1 2023, the Group has continued to carry out, and charge for due diligence activities, and the £40,000 recognised as revenue reflects the value of those due diligence activities completed during H1 2023.

Following the announcement of the first Italian IM transactions during 2022 and H1 2023, which were facilitated using the Group's Platform, the Group recognised Inventory Monetisation fees of £37,000. These fees related to the following activities:

1)   Origination fees - the origination of the contracts between the client company wishing to have their inventory monetised and the independent Stock (trading) Company that purchased the inventory from the client company. In line with IFRS 15 ("Revenue from Contracts with Customers") the Group recognised these revenues at the point in time they are due to be received from the client;

2)   IM Platform usage fees - usage of the Group's IM Platform, under a Software as a Service ("SaaS") contract, by the independent Stock (trading) Company to facilitate the purchase of the inventory from the client company. In line with IFRS 15 ("Revenue from Contracts with Customers") the Group recognised these revenues over the time period they related to; and

3)   IM service fees - the support and administration activities, such as the monitoring of the inventory purchased, that the Group performs in connection with the use of the Group's IM Platform. In line with IFRS 15 ("Revenue from Contracts with Customers") the Group recognised these revenues over the time period they related to.

These revenues are expected to grow in future accounting periods in line with expected growth in both the number of IM transactions that are facilitated using the Group's IM Platform and, the quantum of inventory monetised by the independent Stock (trading) Companies per transaction, increases.

Operating loss from continuing operations before impairment charges

During H1 2023, the Group was focused on securing the binding commercial agreements in terms of the first IM transactions to use traditional funding in both Italy and the UK, the latter of these being announced in early July 2023. In conjunction with this, efforts have also been directed to building and continually reevaluating the Group's Inventory Monetisation pipeline following the announcement of the inaugural IM transactions. In addition, progress has made in terms of the Group's White-Label initiative, and in terms of securing new sources of inventory funding. Further details of this progress has been set out earlier in this announcement.

The Group recorded an operating loss from continuing operations before impairment charges for H1 2023 of £1,981,000 (H1 2022: £1,963,000 loss). There have been two main changes in the components to this figures that largely offset each other including:

Impairment charges from continuing operations

The impairment charges from continuing operations of £349,000 recognised during H1 2023 relate to the impairment of the Group's internally developed IM platform as at 30 June 2023 in line with the requirements of IAS 36 ("Impairment of Assets"). This followed the conclusion that indicators of impairment were present, which included the losses continued to be generated by the assets held by the Group's Italian operating subsidiaries. In line with the going concern statement, set out in note 4 to the unaudited condensed consolidated interim financial statements, there is currently a material uncertainty with respect to both the future timing and growth rates of the forecast cash flows arising from the use of the internally developed IM Platform intangible asset. As such, the Directors have prudently decided to continue to impair the full carrying amount of this asset of £349,000 as at 30 June 2023.

Discontinued Operations

The revenue and operating loss of the TradeFlow operations for the period from 1 January 2023 through to the date on which the TradeFlow Restructuring was completed, being 30 June 2023, are shown in the table below. As detailed above, the TradeFlow operations have been classified as discontinued operations and assets held for resale in line with the requirements of IFRS 5 ("Non-current Assets Held for Sale and Discontinued Operations"). The comparatives show the revenue and operating loss of the TradeFlow operations for H1 2022.

TradeFlow's investment advisory revenue arose from investment advisory services provided in TradeFlow's capacity as investment advisor to its well-established USD fund and its growing EUR fund. In line with IFRS 15 ("Revenue from Contracts with Customers") these revenues were recognised when the investment advisory services have been delivered and TradeFlow's performance obligation has been satisfied.

Further details of the costs recognised in H1 2023 set out in the table above are detailed below:

As shown above there were no additional acquisition related earn-out costs recognised during H1 2023 which reflected the fact that as part of the TradeFlow Restructuring all future potential earn-out payments were offset against the initial cash consideration value.

Additionally, following the finalisation of the TradeFlow Restructuring on 30 June 2023, the assets and liabilities of TradeFlow, including the intangible assets arising as part of the original TradeFlow acquisition in July 2021, are no longer consolidated by the Group. As such no further impairment charges relating to the discontinued operations were recognised during H1 2023. Instead, a calculation was undertaken to calculate any gain or loss arising on as a result of the change in ownership structure of the TradeFlow operations. The details of this calculation set out in below and in further detail can be found in note 21 to unaudited condensed consolidated interim financial statements for the six-month period ended 30 June 2023.

New equity funding

On 28 April 2023, the Company and Venus Capital entered into a new equity subscription agreement, pursuant to which Venus Capital committed to subscribe for 4,500,000,000 new ordinary shares (the "Subscription Shares") at £0.0005 per Subscription Share (the "Subscription Agreement") over two separate tranches, both of which took place in May 2023. The total gross proceeds received by the Group in relation to this Subscription Agreement was £2,250,0000 or £2,137,500 net of the £112,500 commission that was charged be Venus Capital in connection with the subscription of the Subscription Shares. An additional £112,500 was paid to Venus Capital in respect of agreed costs and expenses incurred by Venus Capital in connection with the Subscription Agreement.

The Subscription Agreement required new warrants to be issued to Venus Capital at a ratio of one warrant for every two Subscription Shares issued. This resulted in an obligation for the Group to issue 2,250,000,000 new warrants to Venus Capital ("New Venus Warrants") which existed at 30 June 2023. The New Venus Warrants are each exercisable into one new ordinary share at a price equal to £0.00065 pence per share up to a final exercise date of 31 December 2026. As at 30 June 2023, the obligation to issue these share warrants to Venus Capital has been recognised within equity as "warrants to be issued" within the share-based payment reserve. These share warrants had a total fair value of £1,717,000. As at 30 June 2023, all of these share warrants remain outstanding.

The total share issue costs incurred in connection with the Subscription Agreement during H1 2023 were £1,972,000 including £1,717,000 relating to the fair value of the warrants issued, £225,000 relating the commission and other fees charged by Venus Capital and £30,000 of other share issue costs. This has been accounted for as a £1,972,000 reduction to share premium during H1 2023 given there was sufficient share premium created on the issue of the Subscription Shares.

New debt financing

On the 28 April 2023, the Company and The AvantGarde Group S.p.A ("TAG"), the Group's major shareholder, entered into a fixed term unsecured working capital loan agreement (the "TAG Unsecured Working Capital facility"). This agreement was subsequently amended on 30 June 2023 in conjunction with the TradeFlow Restructuring. Under the amended TAG Unsecured Working Capital facility, TAG shall provide, subject to customary restrictions, a facility of up to £800,000 to cover the Company's interim working capital and growth needs.

The due date for repayment by the Company of amounts (if any) drawn under the TAG Unsecured Working Capital facility is 1 February 2028. Any sums drawn under the TAG Unsecured Working Capital facility will attract a non-compounding interest rate of 10% per annum, and any principal amount (excluding accrued interest) outstanding on 1 February 2028 will attract a compounding interest rate of 15% per annum thereafter. Interest will be due to be paid annually on 31 March of each relevant calendar year.

On 30 June 2023, the Company issued a draw down notice to TAG under the amended TAG Unsecured Working Facility for the full £800,000 available. As at 30 June 2023, no funds had been received from TAG in respect of this facility, however subsequent to 30 June 2023, and prior to the release of these unaudited condensed consolidated interim financial statements, TAG had provided £245,000 of the £800,000 that had been drawn down by the Company.

Cash flow

The Group decreased its net cash balance by £465,000 (H1 2022: £797,000 decrease) due to a combination of the following cash inflows and outflows:

These net cash inflows were then offset by the following items:

Net liabilities

As at 30 June 2023 net liabilities were £2,108,000 (31 December 2022: net liabilities of £2,025,000).

The largely stable net liability position at 30 June 2023 compared to 31 December 2022 is due to the following:

This increase in assets compared to 31 December 2022 was then offset by:

Going Concern

The Board's assessment of going concern and the key considerations thereto are set out in the note 4 to the unaudited condensed consolidated interim financial statements for the six-month period ended 30 June 2023.

Related Parties

Note 22 to the unaudited condensed consolidated interim financial statements for the six-month period ended 30 June 2023 contains details of the Group's related parties.

Subsequent events

Note 23 to the unaudited condensed consolidated interim financial statements for the six-month period ended 30 June 2023 contains details of all subsequent events.

Directors' Responsibility Statement

The Directors are responsible for preparing the unaudited condensed consolidated interim financial statements in accordance with applicable law and regulations. A list of current directors is maintained on the Group's website: https://www.supplymecapital.com.

The Directors confirm that, to the best of their knowledge, the unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34 ("Interim Financial Reporting"), as issued by the International Accounting Standards Board as contained in UK - adopted International Financial Reporting Standards, and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company, or the undertakings included in the consolidation as a whole as required by DTR 4.2.4 R of the FCA's Disclosure Guidance and Transparency Rules ("DTRs").

The Directors further confirm that the unaudited condensed consolidated interim financial statements include a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R.

In accordance with the DTR Rule 4.2.9(2)R, the Directors confirm that these unaudited interim condensed consolidated financial statements have not been audited or reviewed by auditors pursuant to the Financial Reporting Council guidance on Review of Interim Financial Information.

The Directors have shared all the relevant working papers with their advisers.

By Order of the Board

Alessandro Zamboni

Chief Executive Officer

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE 6 MONTH PERIOD ENDED 30 JUNE 2023 

The above unaudited condensed consolidated statement of comprehensive income should be read in conjunction with the accompanying notes. 

The above unaudited condensed consolidated statement of financial position should be read in conjunction with the accompanying notes.