Interim Results to 31 October 2023

Psych Capital PLC

30 January 2024

 

30 January 2024

PSYCH CAPITAL PLC

("Psych", "Psych Capital", or "the Company")

Unaudited Interim Results for the Six Months Ended 31 October 2023

We are pleased to present the unaudited interim results for Psych Capital plc (AQSE: PSY) for the period to 31 October 2023.

During the period, as the first listed pure-play psychedelic company in London, the Company continued to pursue its strategy of raising awareness and investing in the field of innovative psychedelic-based drug development and treatments for mental health.

The Company's diligent research and assessment of potential disruptive psychedelic healthcare delivery models and opportunities for acquisition continued throughout the past year with the vetting of over 100 projects, companies and a variety of deal flow, culminating on 7 November 2023, in the acquisition of Short Wave Pharma Inc ("SWP") a bio-pharmaceutical company developing innovative drug combinations and delivery methods for patients suffering from critical unmet mental health conditions.

With the acquisition of SWP the Company has bolstered its executive management and directorship team with expertise in drug-development and in scaling of innovation towards high-value creation possibilities.

The Company completed the acquisition of SWP on November 7, 2023.  Shortwave Pharma Inc. is a Ontario registered company with operations based in Israel, which develops breakthrough therapies to address unmet medical needs in the field of mental health, with focus on the area of eating disorders. This strategic acquisition aligns with Psych Capital's commitment to improving patient care and advancing mental healthcare through innovative treatments.

Shortwave Pharma's initial program is a transformative therapy for anorexia nervosa, the most fatal eating disorder, a complex and often underserved area of healthcare with no approved pharmacological treatment. Eating disorders, including anorexia nervosa, bulimia nervosa, and binge-eating disorder, affect millions of individuals worldwide. According to the World Health Organization, it is estimated that approximately 9% of the global population suffers from an eating disorder, highlighting the significant market opportunity for effective treatments.

Shortwave Pharma developed a novel delivery method and drug combination for its initial eating disorders programme for anorexia nervosa. It has completed the preliminary early-stage activities that demonstrate the chemistry, manufacturing and controls ("CMC") and preclinical abilities of its drug delivery product. The final product meets regulatory requirements for the early phases of the clinical studies. The preclinical programme has so far demonstrated not only the safety profile of the drug, but also the ability of the Shortwave Pharma's product to bring the active ingredients to the blood flow without the first pass metabolism, which, Shortwave Pharma believes, will dramatically improve the efficacy of the drug, and will allow a better safety profile.

Shortwave Pharma is continuing with pre-clinical studies to complete the profiling of the drug, which should support the design of the clinical studies coming up later this year.

In its pursuit of leadership in the field of eating disorders, Shortwave Pharma has partnered with the Sheba Medical Centre, Israel's leading medical institution and eating disorders centre, in an investigator-initiated, open-label, phase II study of the safety and feasibility of psilocybin-assisted psychotherapy for the treatment of anorexia nervosa. Shortwave Pharma will obtain access to all data and a right of first refusal for commercializing IP generated from the study. The parties aim to cooperate in the future, in conducting a follow-on study using Shortwave Pharma's psilocybin-based formulation and buccal film delivery system.

Concurrently with the Acquisition, Shortwave Pharma has raised US$510,00 (including the US$120,000 cash payment by the Company) through a simple agreement for future equity ("SAFE").

The acquisition of Shortwave Pharma by Psych Capital PLC positions the combined entity as a leading player in the field of eating disorder treatments. By leveraging Shortwave Pharma's expertise in drug development, coupled with Psych Capital's extensive resources and global network, as well as its commitment to innovation in the field of mental health, the combined entity aims to accelerate the development of novel therapies and address the urgent needs of patients suffering from these critical illnesses. 

Following the acquisition, the Company intends to pursue a strategy further enabling innovative drug-development in the realm of mental health helping to operate and navigate high-potential projects and companies towards fruition. 

The Company held its second PSYCH Symposium at the British Museum on 5 July 2023 in London, generating approx. £60,000 in revenue, and with over 350 delegates in attendance, bringing together for the second time thought leaders from science, advocacy, regulation, and finance.

Board Appointments

Following the acquisition completion, Rivki Stern Youdkevich of Shortwave Pharma joined as CEO of the Company and, together with SWP director Roy Kait, as board members of Psych Capital. Following completion, the Company's non-executive Chairman Joseph Colliver stepped down. The Company is in the process of re-aligning its advisory team towards its strategy and goals of incubating and investing in innovative drug-development in the field of mental health care.

Financial Review

The Company achieved £51,465 of revenue in the period, due to the success of hosting the inaugural PSYCH Symposium. A pre-tax loss of £284,734 was reported, compared to a pre-tax loss of £929,932 in the prior period.

The Company's cash position at the end of the period was £133,167, excluding £92,743 (US Dollars 120,000) held in escrow to satisfy the cash element of the acquisition of Shortwave Pharma Inc.

The unaudited interim results to 31 October 2023 have not been reviewed by the Company's auditor.

Williams Potts

Director

The Directors of the Company accept responsibility for the contents of this announcement.

Enquiries:

Company:

William Potts: [phone]

Rivki Stern: [phone]

[e-mail]

https://psych.capital

Peterhouse Capital Limited:

Corporate Adviser:
Guy Miller /Narisha Ragoonanthun: + 44 (0) 20 7469 0930

Corporate Broker

Lucy Williams: [phone]
Duncan Vasey: [phone] (Direct)

Psych Capital Plc
Statement of Comprehensive Income
For the six months ended 31 October 2023
	6 Months ended	6 Months ended	Year ended
	31-Oct-23	31-Oct-22	30-Apr-23
	Unaudited	Unaudited	Audited
	£	£	£
Revenue	51,465	157,021	188,882
Cost of sales	(52,139)	(59,322)	(55,944)
Gross profit	(674)	97,699	132,938
Administrative expenses	(252,140)	(356,301)	(678,957)
Exceptional operating items		(83,459)	(83,459)
Share-based payments - share options		(334,277)	(334,277)
Operating loss	(252,814)	(676,338)	(963,755)
Fair value gains/(losses) on fixed asset investments	(31,920)	(253,594)	(247,037)
Impairment less on intangible assets			(49,507)
Profit/(Loss) on ordinary activities before taxation	(284,734)	(929,932)	(1,260,299)
Income tax	-	-	-
Total comprehensive profit/(loss) for the financial period	(284,734)	(929,932)	(1,260,299)
Basic profit/(loss) per share attributable to owners of the parent	(0.0010)	(0.0035)	(0.0045)
Weighted average number of shares	290,033,335	267,293,991	278,632,513

Statement of Financial Position
	As at	As at	As at
	31-Oct-23	31-Oct-22	30-Apr-23
	Unaudited	Unaudited	Audited
	£	£	£
Non-current Assets
Intangible assets	231,434	350,000	262,993
Investments	59,585	84,948	91,505
Total Non-current Assets	291,019	434,948	354,498
Current Assets
Cash and cash equivalents	133,167	780,095	479,491
Restricted cash in escrow to purchase Shortwave Pharma shares	92,743
Other receivables	47,566	23,615	64,266
Total Current Assets	273,476	803,710	543,757
Current Liabilities
Trade and other payables	43,784	102,846	92,810
Total Current Liabilities	43,784	102,846	92,810
Net Current Assets/(Liabilities)	229,692	700,864	450,947
Net Assets	520,711	1,135,812	805,445
Equity
Issued share capital	290,033	290,033	290,033
Share premium	1,680,832	1,680,832	1,680,832
Share options reserve	638,812	638,812	638,812
Retained earnings	(2,088,966)	(1,473,865)	(1,804,232)
Total Equity	520,711	1,135,812	805,445

Statement of Changes in Equity
	Share	Share	Share	Retained	Total
	capital	premium	options	Earnings	equity
			reserve
	£	£	£	£	£
Transactions with equity owners
At incorporation - issue of share capital
2 ordinary shares at £0.0001 each	4	-			4
Ordinary Shares issued	183,329	866,667			1,049,996
Less owed by shareholders	(6,666)	(93,334)			(100,000)
Transaction costs		(30,000)			(30,000)
Total comprehensive income
Total comprehensive income
for the period ended 31 October 2021				136,003	136,003
As at 31 October 2021	176,667	743,333	-	136,003	1,056,003
Transactions with equity owners
Ordinary Shares paid	6,666	93,334			100,000
Total comprehensive income
Total comprehensive income
for the 6 months ended 30 April 2022				(679,936)	(679,936)
As at 30 April 2022	183,333	836,667	-	(543,933)	476,067
Transactions with equity owners
Share-based payments	90,500	384,500			475,000
Ordinary Shares issued	16,200	793,800			810,000
Transaction costs		(29,600)			(29,600)
Share options/warrants issued		(304,535)	638,812		334,277
Total comprehensive income
Total comprehensive income
for the period ended 31 October 2022				(929,932)	(929,932)
As at 31 October 2022	290,033	1,680,832	638,812	(1,473,865)	1,135,812
Total comprehensive income
for the period ended 30 April 2023				(330,367)	(330,367)
As at 30 April 2023	290,033	1,680,832	638,812	(1,804,232)	805,445
Total comprehensive income
for the period ended 31 October 2023				(284,734)	(284,734)
As at 31 October 2023	290,033	1,680,832	638,812	(2,088,966)	520,711

Statement of Cash Flows
	6 Months ended	6 Months ended	Year ended
	31-Oct-23	31-Oct-22	30-Apr-23
	Unaudited	Unaudited	Audited
	£	£	£
Cash flows from operating activities
Loss before tax	(284,734)	(929,932)	(1,260,299)
Adjusted for:
Fair value (gain) / loss on investments	31,920	253,594	247,037
Amortisation of intangible assets	31,559	37,500	75,000
Impairment of intangible assets			49,507
Share-based payments		334,277	334,277
(Increase) / Decrease in trade and other receivables	16,700	126,953	86,302
Increase / (Decrease) in trade and other payables	(49,026)	(145,331)	(155,367)
Net cash used in operating activities	(253,581)	(322,939)	(623,543)
Cash flows from investing activities
Purchase of investments	(92,743
Net cash used in investing activities	(92,743)	-	-
Cash flows from financing activities
Proceeds from the issue of shares		780,400	780,400
Net cash generated from financing activities		780,400	780,400
Net increase in cash and cash equivalents	(346,324)	457,461	156,857
Cash and cash equivalents at beginning of the period	479,491	322,634	322,634
Cash and cash equivalents at end of year	133,167	780,095	479,491

1.        GENERAL INFORMATION

The Company was incorporated on 22 April 2021 in England and Wales with Registered Number 13351629 under the Companies Act 2006. The principal activity of the business will be to identify, fund and build future leaders in psychedelic science and healthcare, with a focus in UK and Europe.

The registered address of the Company is 17 Hanover Square, London, England, W1S 1BN.

2.        BASIS OF PREPARATION

These condensed interim financial statements for the period ended 31 October 2022 have been prepared in accordance with the AQSE rules for Companies.  As permitted, the Company has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing this interim financial information. The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 30 April 2023, which have been prepared in accordance with UK-adopted International Financial Reporting Standards (IFRS).

The directors are satisfied that, at the time of approving the condensed interim financial statements, it is appropriate to adopt a going concern basis of accounting and in accordance with the recognition and measurement principles of UK-adopted International Financial Reporting Standards (IFRS) adopted for use in the United Kingdom ("IFRS").

In reaching this conclusion the directors have prepared a cashflow forecast which indicates that additional funds will be required during the year to continue to operate as per the forecast.  There are ongoing activities to raise the necessary funds but in the absence of the required funding being in place this condition indicates the existence of a material uncertainty which may cast significant doubt over the company's ability to continue as a going concern.

The interim financial information set out above does not constitute statutory accounts as defined by Section 434 of the Companies Act 2006.  Statutory financial statements for the year ended 30 April 2023 were approved by the Board of Directors on 30 October 2023 and delivered to the Registrar of Companies. The report of the independent auditor on those financial statements was unqualified.

3.        EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the earnings attributable to shareholders by the weighted average number of ordinary shares ("WANS") outstanding in the period. Diluted loss per share has not been calculated as the options and warrants have no dilutive effect given the loss arising in the period.

4.            SHARE CAPITAL AND RESERVES

No further shares were issued in the 6 months ended 31 October 2023, the total number of shares remaining at 290,033,335.

Share options and broker warrants

On 23 May 2022, the Company granted 31,835,832 share options to 10 of its directors, consultants, and advisors. The options lapse on 9 June 2024. 15,917,916 share options are exercisable at a strike price of 5p, 7,958,958 are exercisable at a strike price of 6p and 7,958,958 are exercisable at 8p.

On 23 May 2022, the Company granted 14,501,667 warrants to its brokers at a strike price of 5p. The options lapse on 9 June 2027.

 

END