TIDMSOP
RNS Number : 6331G
Spinnaker Opportunities PLC
25 July 2019
25 July 2019
Spinnaker Opportunities plc
("Spinnaker" or the "Company")
Half Yearly Report (Unaudited)
For the Period Ended 30 June 2019
Spinnaker Opportunities plc announces today its preliminary
financial results for the period ended 30 June 2019.
Period Highlights
-- The Company requested suspension of trading of its shares
with effect from 27(th) February 2019, following the signing of a
non-binding Heads of Terms to acquire the entire issued share
capital of Kanabo Research Ltd ("Kanabo").
-- Preparations and documentation for acquisition and re-admission of enlarged group continued satisfactorily.
-- Cash of approximately GBP0.88 million as at 30 June 2019.
Post-Period Highlights
-- GBP1.4 million funding pre-commitment signed for cornerstone
funding required for enlarged group, conditional on admission.
-- Acquisition and admission of enlarged group remains on course.
For further information, please visit
http://www.spinnakeropportunities.uk/ or contact the following:
Peterhouse Capital (Financial adviser and joint broker)
Tel: +44 (0)20 7469 0930
Guy Miller/ Lucy Williams/
Eran Zucker
SI Capital (Joint broker)
Tel: +44 (0)1483 413 500 /
+44 (0) 203 871 4038
Nick Emerson / Greg Mahoney
Blytheweigh (Financial PR)
Tel: +44 (0) 207 138 3553
Tim Blythe/ Julia Tilley/ Fergus Cowan/ Jane Lenton
Chairman's Statement
I am pleased to present the interim financial statements to
shareholders for the six months ending 30 June 2019.
The period under review was dominated, as far as the Company was
concerned, by three priorities: the negotiation and due diligence
required to get to the point of signing non-binding Heads of Terms;
the significant work with the transaction advisory team involved in
turning the Heads of Terms into a suite of definitive documents;
finally, preparing the enlarged group for re-admission to trading.
A lot of this activity is necessarily invisible to investors until
it is published in its final form as a prospectus. We were,
however, pleased to announce earlier this month that we had
received a GBP1.4 million funding pre-commitment which is a
significant milestone on our journey. This should give
encouragement to shareholders, just as it does to the board and
wider team at Spinnaker. The focus now is on completing the
re-admission process as efficiently as possible.
There has been has seen a significant heightening of public
interest in Europe in the medicinal benefits of chemicals derived
from cannabis year to date 2019. Hardly a day goes by without
commentary in the mainstream press. Conferences that in previous
years attracted medicinal cannabis enthusiasts in the low hundreds
were this year attended by thousands of people, including high
ranking politicians, medical pioneers and the professional
investment community. Through its proposed acquisition of Kanabo,
Spinnaker is at the forefront of efforts to bring the medicinal
benefits of cannabis to European consumers, while at the same time
enabling investors to participate in the growth of the sector
through a public market vehicle.
I would like to take this opportunity to thank my board
colleagues, retained advisers and the transaction advisory team for
their dedication and hard work which has brought the Company within
sight of a ground-breaking transaction. We look forward to updating
shareholders through to completion and beyond.
Andy Morrison
Chairman
Results for the 2019 interim financial period
A summary of the key financial results is set out in the table
below:
Unaudited Unaudited Audited
30.6.2019 30.6.2018 31.12.2018
GBP'000 GBP'000 GBP'000
--------------------- ---------- ---------- -----------
Revenue - - -
Operating expenses (157) (92) (161)
--------------------- ---------- ---------- -----------
Operating loss (157) (92) (161)
Finance income 1 1 2
--------------------- ---------- ---------- -----------
Loss before tax (156) (91) (159)
Taxation - - -
Loss for the period (156) (91) (159)
Interest
The net interest cost for the Company for the period was
GBPnil.
Loss before tax
Loss before tax for the period was GBP156,000.
Taxation
Taxation charge was GBPnil for the period.
Earnings per share
Basic and diluted earnings per share for the period was 0.5p
loss.
Financial position
The Company's unaudited balance sheet as at 30 June 2019 can be
summarised as set out in the table below:
Assets Liabilities Net assets
GBP'm GBP'm GBP'm
GBP'000 GBP'000 GBP'000
-------------------------------- -------- ------------ -----------
Non-current assets - - -
Current assets and liabilities 893 (12) 881
Loans and provisions - - -
Total as at 30 June 2019 893 (12) 881
-------------------------------- -------- ------------ -----------
Cash flow
Net cash outflow for 2019 was GBP158,000.
This inflow reflects the net placing for the Company during the
period.
Interim Condensed Income Statement
6 month period ended 30 June 2019
Unaudited Unaudited
6 months 6 months Audited
ended ended Year ended
30.06.19 30.06.18 31.12.18
Note GBP'000 GBP'000 GBP'000
Revenue - - -
Cost of sales - - -
--------------------------- ----- ---------- ---------- ------------
Gross profit - - -
Operating expenses (157) (92) (161)
--------------------------- ----- ---------- ---------- ------------
Operating loss (157) (92) (161)
Net finance income 1 1 2
Loss before tax (156) (91) (159)
Taxation - - -
--------------------------- ----- ---------- ---------- ------------
Loss for the period (156) (91) (159)
Loss attributable to the
Company (156) (91) (159)
--------------------------- ----- ---------- ---------- ------------
Loss per share expressed
in pence per share
From continuing and total
operations:
Basic & diluted loss per
share, pence 5 (0.5) (0.3) (0.5)
The Company has no items of other comprehensive income.
Interim Condensed Balance Sheet
As at 30 June 2019
Unaudited Unaudited Audited
30 June 30 June 31 December
2019 2018 2018
Note GBP'000 GBP'000 GBP'000
Assets
Current assets
Receivables and prepayments 10 9 13
Cash 883 1,128 1,041
------------------------------ ----- ----------------------- --------------------- ----------------------
Total current assets 893 1,137 1,054
Current liabilities
Trade and other payables 12 31 17
Net current assets 881 1,106 1,037
Net Assets 881 1,106 1,037
Share capital 3 735 735 735
Share premium 3 592 592 592
Share based payments reserve 4 59 60 59
Retained earnings (505) (281) (349)
Total equity attributable
to equity holders of the
Company 881 1,106 1,037
------------------------------ ----- ----------------------- --------------------- ----------------------
Interim Condensed Statement of Changes in Equity
6 months ended 30 June 2019
Share based
payments Retained
Share capital Share premium reserve earnings Total equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ------------- ------------- ----------- --------- ------------
Balance at 1 January
2018 650 510 58 (190) 1,028
Loss for the period - - - (159) (159)
Total comprehensive
loss - - - (159) (159)
Shares issued 85 85 - - 170
Share issue costs - (3) 1 - (2)
Balance at 31 December
2018 735 592 59 (349) 1,037
Loss for the period - - - (156) (156)
Total comprehensive
loss - - - (156) (156)
Balance at 30 June
2019 735 592 59 (505) 881
----------------------- ------------- ------------- ----------- --------- ------------
Interim Condensed Cash Flow Statement
6 months ended 30 June 2019
Unaudited Unaudited Audited
30 June 30 June 31 December
2019 2018 2018
GBP'000 GBP'000 GBP'000
--------------------------------------
Loss for the period (156) (91) (159)
Adjustment for:
(Increase)/decrease in receivables 3 (5) (9)
Increase/(decrease) in payables (5) (27) (41)
Net cash used in operating activities (158) (123) (209)
Cash flows from financing activities
Shares issued (net of costs) - 169 168
Net cash from/(used in) financing
activities - 169 168
-------------------------------------- --------- --------- ---------------------
Net increase/(decrease) in cash
and cash equivalents (158) 46 (41)
-------------------------------------- --------- --------- ---------------------
Cash and cash equivalents brought
forward 1,041 1,082 1,082
-------------------------------------- --------- --------- ---------------------
Cash and cash equivalents carried
forward 883 1,128 1,041
-------------------------------------- --------- --------- ---------------------
Notes to the interim condensed financial statements
For the 6 month period ended 30 June 2019
1. General information
Spinnaker Opportunities plc (the Company) is a company
incorporated and domiciled in England and Wales. It is a cash shell
company listed on the standard list of the London Stock
Exchange.
2. Summary of significant accounting policies
The principal accounting policies adopted in the preparation of
these financial results are set out below. These policies have been
consistently applied to all financial periods presented, unless
otherwise stated.
Basis of preparation and going concern basis
The interim condensed financial statements for the 6 months
ended 30 June 2019 have been prepared in accordance with IAS 34
Interim Financial Reporting.
The interim financial information set out above does not
constitute statutory accounts within the meaning of Companies Act
2006. It has been prepared on a going concern basis in accordance
with the recognition and measurement criteria of International
Financial Reporting Standards (IFRS) as adopted by the European
Union (adopted IFRS).
The financial statements have been prepared under the historic
cost convention.
The Company was incorporated on 17 November 2016 and in 2017 was
admitted to Standard List of London Stock Exchange, the period
under review represents the third interim set of accounts. The
interim financial information for the 6 months ended 30 June 2019
has not been reviewed or audited. The interim financial report has
been approved by the Board on 24 July 2019.
The Company's business activities, together with the factors
likely to affect its future development, performance and position
are set out in this review. The financial position of the Company,
its cash flows and liquidity position are described in this
business review. In addition, the below notes to the financial
results include the Company's objectives, policies and processes
for managing its capital; its financial risk management objectives;
details of its financial instruments; and its exposure to credit
risk and liquidity risk. As highlighted below, the Company meets
its day to day working capital requirements through its on-going
cash flows.
Segment reporting
The Company is currently a cash shell and the directors believe
that there is no benefit to show any segmental reporting until a
new strategy is undertaken.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held
at call with banks and other short-term highly liquid investments
with maturities of three months or less. Bank overdrafts that are
repayable on demand and form an integral part of the Company's cash
management are included as a component of cash and cash equivalents
for the purpose of the cash flow statement.
Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares and share
options are recognised as a deduction from equity, net of any tax
effects.
Taxation
Income tax payable is provided on taxable profits using tax
rates enacted or substantively enacted at the balance sheet
date.
Deferred taxation is provided in full, using the liability
method on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the
consolidated financial results. Deferred tax is determined using
tax rates (and laws) that have been enacted or substantively
enacted at the balance sheet date and are expected to apply when
the related balance sheet tax asset is realised or the deferred
liability is settled. Deferred income tax assets are recognised to
the extent that it is possible that future taxable profit will be
available against which temporary differences can be utilised.
Income tax is recognised in the consolidated income statement
except to the extent that it relates to items recognised directly
in equity, in which case it is recognised in equity.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
The Company makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial period are discussed below.
Going concern basis of preparation
The Company has approximately GBP0.88 million cash at the period
end and has recently secured a contractual investment commitment of
GBP1.4 million conditional on the completion of the acquisition of
Kanabo and re-admission of its shares to trading. Accordingly, the
Directors have prepared the accounts on a going concern basis as
they consider that the Company has adequate funding.
3. Share capital and share premium
Ordinary shares of 2.5p Number of Share capital Share premium
shares GBP'000 GBP'000
Shares issued brought forward 29,400,120 735 592
------------------------------- ----------- -------------- --------------
At 30 June 2019 29,400,120 735 592
------------------------------- ----------- -------------- --------------
4. Share based payments
Share based payments reserve
Movements in the share based payments reserve in the period
relate to:
GBP'000
---------------------- --------
At the beginning
of the period 59
Warrants issued -
Share options issued -
---------------------- --------
At 30 June 2019 59
----------------------- --------
Warrants
Weighted
average
Number exercise
of awards price
------------------------------- ----------- ----------
At the beginning of the period 26,590,500 GBP0.074
Granted -
------------------------------- ----------- ----------
Exercisable at 30 June 2019 26,590,500 GBP0.074
The warrants outstanding at 30 June 2019 have a weighted average
remaining contractual life of 0.8 years.
At 30 June 2019, the Company had the following warrants in
issue:
Broker Broker
Warrants Warrants Warrants Warrants
-------------------- ----------- ---------- ---------- ----------
Date of grant 17-May-17 17-May-17 3-Jan-18 3-Jan-18
Number granted 24,000,000 790,500 1,700,000 100,000
Contractual life 3 years 3 years 2.5 years 2.5 years
Exercise price GBP0.075 GBP0.05 GBP0.075 GBP0.05
The estimated fair
value Nil GBP0.017 Nil GBP0.017
The Warrants were granted to the subscribers and placees as part
of the share subscription and placing. These warrants fall outside
the scope of IFRS 2 and the share price that was paid by the
subscribers reflected any fair value of these warrants.
The Broker Warrants were issued to the Company's brokers and
others for their services in connection with the placing.
All the warrants vested at the date of the agreement.
The fair value of warrants issued during the period determined
using the Black-Scholes valuation model and a share based payment
charge of GBPnil (year ended 31 December 2018: GBP1,700) has been
recognised in the financial statements as a deduction from the
share premium account as the warrants were issued in connection
with share subscriptions.
Other significant inputs into the model are:
Broker
Warrants
warrantsBroker
Warrants Warrants
---- ------------------------ --------------------
Issue date share price 5p 5p
Risk free rate 0.4% 0.4%
Expected volatility 50% 50%
The average volatility has been calculated by using the average
volatility for the Company and other similar companies.
4. Share based payments (continued)
Share options
Weighted
average
Number exercise
of awards price
------------------------------- ----------- ----------
At the beginning of the period 2,440,000 GBP0.05
Granted - -
------------------------------- ----------- ----------
Exercisable at 30 June 2019 2,440,000 GBP0.05
The options outstanding at 30 June 2019 have a weighted average
remaining contractual life of 0.8 years.
At 30 June 2019, the following options were issued to directors
of the Company under the share option incentive scheme:
Date of grant 17-May-17
Number granted 2,440,000
Contractual life 3 years
Exercise price GBP0.05
The estimated fair
value GBP0.017
All options vested at the date of the agreement.
The fair value of the options issued during the period
determined using the Black-Scholes valuation model and a share
based payment charge of GBPnil (year ended 31 December 2018:
GBPnil) has been recognised in the income statement.
Other significant inputs into the model are:
Issue date share price 5p
Risk free rate 0.4%
Expected volatility 50%
The average volatility has been calculated by using the average
volatility for the Company and other similar companies.
5. Earnings per share
Basic and diluted
The basic earnings per share is calculated by dividing the
(loss)/profit attributable to the ordinary shareholders of the
Company by the weighted average number of Ordinary shares in issue
during the period, excluding Ordinary shares purchased by the
Company and held as treasury shares.
Half year Half year
ended ended Year ended
30.06.19 30.06.18 31.12.18
(Loss)/profit attributable to equity
holders of the Company (GBP'000) (156) (91) (159)
Weighted average number of shares in
issue 29,400,120 29,400,120 29,381,490
(Loss)/earnings per share (pence) (0.5) (0.3) (0.5)
------------------------------------- ---------- ---------- ----------
There are no diluted earnings per share as the share warrants
and options currently in issue do not have a dilutive effect.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR CKQDNABKDQOB
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July 25, 2019 02:00 ET (06:00 GMT)
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