Proposed Acquisition

RNS Number : 3302D

Technology Minerals PLC

19 October 2022

 

NOT FOR PUBLICATION OR RELEASE IN OR INTO THE UNITED STATES OR AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF IRELAND OR THE REPUBLIC OF SOUTH AFRICA, OR ANY PROVINCE OR TERRITORY THEREOF OR TO OR FOR THE ACCOUNT OF ANY NATIONAL, RESIDENT OR CITIZEN OF THE UNITED STATES OR ANY PERSON RESIDENT IN AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF IRELAND OR THE REPUBLIC OF SOUTH AFRICA. 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (596/2014/EU) AS THE SAME HAS BEEN RETAINED IN UK LAW AS AMENDED BY THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

19 October 2022

Technology Minerals Plc

("Technology Minerals" or the "Company")

Proposed Acquisition

Technology Minerals Plc (LSE: TM1), the first listed UK company to focus on creating a sustainable circular economy for battery metals, is pleased to announce that it has signed binding Heads of Terms ("HoTs") to acquire the remaining issued share capital of Recyclus Group Limited ("Recyclus") for new shares in the Company (the "Proposed Transaction"). The Company currently holds 48.35% of the issued share capital of Recyclus.

Subject to the completion of due diligence, which is imminent, the Proposed Transaction will be satisfied by the allotment and issue to the shareholders of Recyclus on completion of 921,544,596 new ordinary shares of £0.001 each in the capital of the Company ("Consideration Shares"). For this purpose, the value of each Consideration Share will be 4.32 pence. The Consideration Shares will be allotted to the Sellers in proportion to their respective holdings of Recyclus shares.  Post-acquisition, Recyclus will be accounted for on a consolidated basis.

Overview

· Recyclus is the UK's first industrial-scale lithium-ion ("Li-ion") battery recycler leveraging sustainable, next generation, recycling technologies.

· Recyclus is well positioned to take advantage of the growing demand for Li-ion and lead-acid batteries through retrieval, recycling, and repurposing of used batteries.

· The combination of the two businesses offers a differentiated, IP protected exposure to battery processing, aligning the enlarged business with the energy transition taking place and the circular economy.

· The primary revenue stream is expected to be direct sales of recovered materials, driving a cashflow and value chain lock-in to support leadership positioning. Other revenue generating opportunities include finite material extraction and battery reuse.

· The Directors believe there is an estimated US$6bn opportunity from lithium battery recoverable materials by 2030, and US$45bn second-life battery applications market.

· Recyclus plans to open ten battery recycling plants, five Li-ion and five lead-acid, over the next six years, with the first two expected to open in the UK once final EA approval comes through.

· Recyclus' first Li-ion recycling plant is located in Wolverhampton, West Midlands, and is capable of recycling 8,300 tonnes of Li-ion per year. Using UK manufactured technology and physical separation processes, Recyclus is able to accept the five key lithium-ion chemistries, for recycling and processing into 'black mass'.

· The first lead-acid plant, located in Tipton, West Midlands, is capable of recycling 16,000 tonnes in the first full year of production. The Environment Agency has awarded Recyclus an environmental permit at the Tipton plant, allowing for on-site treatment and processing of lead-acid batteries, providing the critical legal foundation to complete the sub-licences and enable full scale automated operations to commence.

· In addition, Recyclus recently received a UN-standard certification for its industry-leading Halo battery boxes for the transportation of Li-ion batteries, opening a new revenue stream in domestic and international markets.

· The Proposed Transaction, if completed, will result in the shareholders of Recyclus having a significant minority interest in the enlarged group.

Recyclus summary of operations and rationale for the Proposed Transaction

Recyclus provides a national recycling initiative that supports the transition to carbon neutrality. Recyclus' battery recycling capacity will prove essential in the shift from fossil fuels to electric transportation. Through its strategic support, Recyclus is an integral component to the recycling of Li-ion and lead-acid batteries and is a significant contributor towards the circular economy of battery metals.

• The acquisition strengthens Technology Minerals' balance sheet and provides early cashflow from recycling operations controlled by Technology Minerals.

• Recyclus has developed a proprietary Li-ion battery processing plant and has a patent application in progress for de-sulphurising lead paste.

• With battery recycling expertise ahead of competitors which provides Technology Minerals with first mover advantage in the UK.

• Positions Technology Minerals to expand recycling operations in Europe and the USA.

Recyclus Group Structure

Recyclus Group Limited

Recyclus is focusing on the delivery of national end-to-end recycling of Li-ion and lead-acid batteries, to drive the move towards electrification, and more environmentally friendly consumption. Recyclus has two subsidiaries, Libatt Recycling Ltd and Halo Battery Recycling Ltd. 

Libatt Recycling Ltd

LiBatt, a Recyclus group company, is the UK's first industrial-scale Li-ion battery recycler. LiBatt's ambition is to support the circular economy, increase efficiencies, and reduce the carbon footprint within the Li-ion battery industry.

Halo Battery Recycling Ltd

Halo, a Recyclus group company, is committed to increasing efficiencies within the lead-acid recycling industry, to enable resources to be kept in use for longer to minimise waste and reduce environmental impacts of spent batteries. As part of the Recyclus group service, Halo manufacture cutting-edge, ADR compliant storage and transportation boxes for the safe and secure movement of hazardous spent Li-ion batteries.

James Cable, Chief Financial Officer of Technology Minerals, said: "The acquisition of Recyclus marks an important strategic move for the business with the potential to deliver significant shareholder value to both sets of shareholders. The combination of the two businesses offers a differentiated, IP protected exposure to battery processing, aligning the enlarged business with the energy transition taking place and the circular economy. Our plan is to expand its commercial footprint in the UK and also the EU and US markets where we see the prospect for growth in line with the exponential growth in the electric vehicle markets and other battery-based sectors.

"We are excited by the opportunity to acquire Recyclus, taking a significant step in the next stage of Technology Minerals' development and its circular economy strategy for battery metals. Our confidence in Recyclus is clear from our 48.35% stake in the business and this transaction is a logical progression that aligns perfectly with our twin-track strategy to create a circular economy for battery metals through both the raw material supply, and the reprocessing and re-use of end-of-life batteries.

"We believe the industrial scale opportunity for Recyclus is immense as the world transitions from fossil fuels to electrification. Recyclus aims to become a leading player in the recycling of Li-ion and lead-acid batteries to help overcome a critical lack of domestic industrial scale recycling. The business is well placed to ramp up its growth with cutting-edge technology, a first mover advantage, and two plants ready to come online when final approval from the Environment Agency comes through, with eight more planned over the next six years to meet the bourgeoning demand."

Further details on the Proposed Transaction

The Company and Recyclus have agreed to proceed as quickly as possible with the Proposed Transaction and to negotiate in good faith with a view to signing and exchanging a detailed and legally binding share purchase agreement incorporating all the terms of the Proposed Transaction as soon as practicable.

Upon completion, a listing application will be made for the 921,544,596 Consideration Shares, which will rank pari passu in all respects with the existing ordinary shares of the Company, to be admitted to the Standard List segment of the Official List and to trading on the main market of the London Stock Exchange plc ("Listing"). Upon Listing, the total number of issued shares and the total number of voting rights in the Company will be 2,192,968,189.

Expected Timetable and Conditions

The Proposed Transaction is subject, inter alia, to the completion of due diligence, documentation and compliance with all regulatory requirements, including the Listing and Prospectus Rules (the "Conditions"). The Company will update shareholders as to progress made in relation to the Proposed Transaction, as and when appropriate.

The Proposed Acquisition is subject to formal shareholder approval by the Company's shareholders at a General Meeting to be held in due course, as well as the successful listing of the Consideration Shares onto the Standard List segment of the Official List and to trading on the main market of the London Stock Exchange plc. The Company currently expects the Proposed Transaction to complete at the December AGM.

The UK MAR offers, by way of exception to the immediate disclosure of inside information, the possibility on a case-by-case basis to delay such disclosure under certain conditions. In accordance with Article 17(4) of UK MAR, any issuer may thus delay, under its own responsibility, the public disclosure of inside information so as not to prejudice its legitimate interests provided that such omission is not likely to mislead the public and the issuer is able to ensure the confidentiality of the information. The Company relied on Article 17(4) of UK MAR and delayed the release of information in respect of the negotiation of the Heads of Terms. In the opinion of the board of directors of the Company, the delay of the publication of information on the decision to commence negotiations on the Proposed Transaction was in the Company's legitimate interest as its disclosure was likely to affect the outcome of those negotiations or their normal pattern. The decision to commence negotiations only showed the intention and the final success of those negotiations depended on many factors. In the opinion of the board of directors of the Company, the delay was not likely to mislead the public and they could ensure the confidentiality of the information.

Appointment of Broker

The Company is pleased to announce the appointment of Oberon Capital (a trading name of Oberon Investments Limited) as its joint broker with immediate effect.

Recyclus Financial Information

Financial information for Recyclus is located in the Appendix below. While the financials are not audited, the Company does not expect any material changes to the information provided.

Related Party Transactions

Robin Brundle, Executive Chairman, and Alexander Stanbury, Chief Executive Officer, each hold shares in Recyclus and Lester Kemp, Chief Operating Officer holds share options in Recyclus; therefore, the Proposed Transaction is a related party transaction under Disclosure and Transparency Rule 7 ('RTP'). The Board has established procedures to ensure that RTPs are approved by independent board members. Accordingly, the directors of the Company, other than Robin Brundle, Alexander Stanbury and Lester Kemp (the "Independent Directors") have approved the Proposed Transaction and have appointed a committee comprising three Independent Directors to oversee the Proposed Transaction.

Enquiries:

Technology Minerals Plc
James Cable, Chief Financial Officer	[phone]
Oberon Investments Limited
Nick Lovering, Adam Pollock	[phone]
Arden Partners Plc
Ruari McGirr, George Morgan	[phone]
Gracechurch Group
Harry Chathli, Alexis Gore, John Bick	[phone]

Technology Minerals Plc

Technology Minerals is developing the UK's first listed, sustainable circular economy for battery metals, using cutting-edge technology to recycle, recover, and re-use battery technologies for a renewable energy future. Technology Minerals is focused on extracting raw materials required for Li-ion batteries, whilst solving the ecological issue of spent batteries by recycling them for re-use by battery manufacturers. With the increasing global demand for battery metals to supply electrification, the group will explore, mine, and recycle metals from spent batteries. Further information on Technology Minerals is available at www.technologyminerals.co.uk.

Recyclus Group Limited

The demand for the raw materials used in battery manufacturing is anticipated to substantially increase . Recyclus provides a national recycling initiative that supports the transition to carbon neutrality. Recyclus' battery recycling capacity will prove essential in the shift from fossil fuels to electric transportation. Through its strategic support, Recyclus is an integral component to the recycling of Li-ion and lead-acid batteries and is a significant contributor towards the circular economy of battery metals. Further information on Recyclus is available at www.recyclusgroup.com.

The Directors of the Company accept responsibility for this announcement.

FORWARD-LOOKING STATEMENTS

This announcement contains forward-looking statements which reflect the Company's or, as appropriate, the Directors' current views, interpretations, beliefs or expectations with respect to the Company's financial performance, business strategy and plans and objectives of management for future operations. These statements include forward-looking statements both with respect to the Company and the sector and industry in which the Company proposes to operate. Statements which include the words "expects", "intends", "plans", "believes", "projects", "anticipates", "will", "targets", "aims", "may", "would", "could", "continue", "estimate", "future", "opportunity", "potential" or, in each case, their negatives, and similar statements of a future or forward-looking nature identify forward-looking statements.

All forward-looking statements address matters that involve risks and uncertainties because they relate to events that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. Accordingly, there are or will be important factors that could cause the Company's actual results, prospects and performance to differ materially from those indicated in these statements. In addition, even if the Company's actual results, prospects and performance are consistent with the forward-looking statements contained in this announcement, those results may not be indicative of results in subsequent periods.

These forward-looking statements speak only as of the date of this announcement. Subject to any obligations under the Prospectus Rules, the Market Abuse Regulation, the Listing Rules and the Disclosure and Transparency Rules and except as required by the FCA, the London Stock Exchange, the City Code or applicable law and regulations, the Company undertakes no obligation publicly to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All subsequent written and oral forward-looking statements attributable to the Company or individuals acting on behalf of the Company are expressly qualified in their entirety by this paragraph.

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

Appendix

Recyclus Group Ltd - Historic Financial Information

Unaudited Consolidated Statement of Financial Position

As at 30 June 2022

		Unaudited 30 June 2022	Unaudited 31 December 2020
	Notes	£000	£000
Non-current assets
Property, plant and equipment	9	3,305	-
Intangible assets	10	51	-
Total non-current assets		3,356	-
Current assets
Inventory	11	27	-
Trade and other receivables	12	295	193
Cash and cash equivalents	13	170	8
Current assets		492	201
Total assets		3,848	201
Current liabilities
Trade and other payables	14	605	5
Lease liability		103	-
Borrowings	15	207	-
Total current liabilities		916	5
Non-current liabilities
Borrowings	15	4,578	344
Lease liability		1,071	-
Total non-current liabilities		5,649	344
Total liabilities		6,565	349
Net assets		(2,716)	(148)
Equity attributable to owners of the parent
Share capital	16	1	-
Share Premium	16	-	-
Accumulated deficit		(2,717)	(148)
Total equity		(2,716)	(148)

The accompanying notes form an integral part of this consolidated financial statements

Unaudited Consolidated Statement of Changes in Equity

For the period ended 30 June 2022

		Share Capital	Share Premium	Retained Earnings	Total
		£000	£000	£000	£000
At April 2020		-	-	-	-
Loss for the period		-	-	(148)	(148)
Total comprehensive loss for the period		-	-	(148)	(148)
Balance at 31 December 2020		-	-	(148)	(148)

Loss for the period		-	-	(2,569)	(2,569)
Total comprehensive loss for the period		-	-	(2,569)	(2,569)
Issue of share capital		1	-	-	1
Balance at 30 June 2022		1	-	(2,717)	(2,716)

The accompanying notes form an integral part of this consolidated financial statements.

Unaudited Consolidated Statement of Cash Flows

For the year ended 30 June 2022

		Unaudited 30 June 2022	Unaudited 31 December 2020
		£000	£000
Cash flows from operating activities
Loss before taxation		(2,569)	(148)
Adjustments for:
Depreciation		91	-
Finance costs		79	-
Lease rental payments		(124)	-
Net cashflow before changes in working capital		(2,523)	(148)
Increase in inventory		(27)	-
Movement in receivables		(127)	(193)
Movement in payables		539	12
Net cash (used in)/from operating activities		(2,138)	(329)
Cash flows from investing activities
Purchase of intangible assets		(51)	-
Purchase of property, plant and equipment		(2,129)	-
Net cash used in investing activities		(2,180)	-
Cash flows from financing activities
Finance costs		(48)	-
Proceeds of borrowing		4,528	337
Net cash generated from financing activities		4,480	337
Net change in cash and cash equivalents during the period		162	8
Cash at the beginning of period		8	-
Cash and cash equivalents at the end of the period		170	8

The accompanying notes form an integral part of this consolidated financial statements.

Notes to financial statements

1.  General information

Recyclus Group Ltd (the 'Company') is a private limited company incorporated and domiciled in England under the Companies Act with registration number 12350758. The Company's registered office is 18 Savile Row, Floor 2, London, W1S 3PW.

2.  Basis of preparation

The Group's financial statements have been prepared in accordance with UK-adopted International Accounting Standards (IFRSs) in conformity with the requirements of the Companies Act 2006 and in accordance with the requirements of the Companies Act 2006.

The financial information does not constitute statutory accounts within the meaning of section 434 of

the Companies Act 2006.

The consolidated financial statements have been prepared on the historical cost basis, except for the measurement to fair value of assets and financial instruments as described in the accounting policies below, and on a going concern basis.

The principal accounting policies, methods of computation and presentation used in the preparation of the consolidated financial information are shown below. The policies have been consistently applied to all the years presented, unless otherwise stated.

Financial year ending 30 June 2022 covers the periods from 1 January 2021 to 30 June 2022 as the Company has extended its financial year. The comparison period is for the year ended 31 December 2020. 

Recyclus Group Ltd's consolidated financial statements are presented in Pounds Sterling (£), which is also the functional currency of the parent company.

There have been no changes to the reported figures as a result of any new reporting standards or interpretations.

Going Concern and COVID-19

The Company has received loan finance from time to time from its largest shareholder, Technology Minerals Plc, and has also raised new equity of £0.6 million and other funding from third party lenders of £0.5 million to finance the working capital requirements of the Group. Additional plans are in place to raise further working capital as required and the directors believe that they will be able to access such finance to meet planned expenditures. In addition, the Group's first two recycling plants have been completed and are ready for production as soon as requisite permits are obtained from the Environmental Agency, and therefore the directors are confident that revenue will commence in the short term. In the opinion of the Directors, based on the Group's financial projections, they have satisfied themselves that the business is a going concern and therefore the accounts are prepared on a going concern basis.

The Board continues to monitor the impact of COVID-19 on the ability of the Group to pursue its strategy and will make appropriate changes should they be required.  There is not considered to be any material impacts on the financial position or results of the Group as a result of COVID-19 at this reporting date.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company its subsidiaries as if they formed a single entity. Subsidiaries are entities over which the Group has control. Control exists when the Company:

• has power over the investee;

• is exposed, or has rights, to variable returns from its involvement with the investee; and

• has the ability to use its power to affect its returns.

On acquisition, in the statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date on which control ceases. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the Group financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

Investments in subsidiaries are accounted for at cost less impairment within the Company financial statements. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by other members of the Group

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation.

3.  Significant accounting policies

New standards, amendments and interpretations adopted by the Company

The following IFRS or IFRIC interpretations were effective for the first time for the financial year beginning 1 January 2021. Their adoption has not had any material impact on the disclosures or on the amounts reported in this financial information:

Standards/interpretations	Application	Effective from
IFRS 1 amendments	First-time Adoption of International Financial Reporting Standards	1 January 2022
IFRS 3 amendments	Business Combinations	1 January 2022
IAS 16 amendments	Property, Plant and Equipment	1 January 2022
IAS 37 amendments	Provisions, Contingent Liabilities and Contingent Assets	1 January 2022
IFRS 9 amendments	Annual Improvements to IFRS Standards 2018-2020 (fees in the 10 percent test for derecognition of financial liabilities).	1 January 2022
IAS 1	Presentation of Financial Statements	1 January 2023
IFRS 17 amendments	Insurance Contracts	1 January 2023
IAS 8 amendments	Definition of accounting estimates	1 January 2023
IAS 12 amendments	Income taxes	1 January 2023

Financial instruments

Financial assets

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

• those to be measured subsequently at fair value through profit or loss; and

• those to be measured at amortised cost.

The classification depends on the business model for managing the financial assets and the contracted terms of the cash flows. Financial assets are classified 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 contracted cash flows; and

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

Financial assets, including trade and other receivables and cash and bank balances, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period, financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in the consolidated income statement.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in the consolidated income statement.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions

Financial liabilities

Basic financial liabilities, being trade and other payables, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires. The Company does not hold or issue derivative financial instruments.

Investment in subsidiaries

Investments in subsidiaries are initially measured as cost and reviewed for impairment at each reporting period. An investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control is obtained up to the date that control ceases.

Intra-group balances and any unrealised gains, losses, income or expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements.

Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the date of the consolidated statement of financial position are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss.

Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated at foreign exchange rates ruling at the dates the fair value was determined.

Current and deferred income tax

Current income tax is calculated on the basis of the tax laws enacted or substantively enacted at the statement of financial position date in the country where the Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate119on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax 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 financial information. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is settled. Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised

Loss per share

The Group presents basic and diluted loss per share ("LPS") data for its ordinary shares. Basic LPS is calculated by dividing the profit or loss attributable to shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted LPS is determined by adjusting the profit or loss attributable to shareholders and the weighted average number of ordinary shares outstanding for the effects of all potentially dilutive ordinary shares, which could comprise warrants, share options and the conversion of loan notes into shares.

Property, plant and equipment

Property, plant and equipment are initially stated at cost less accumulated depreciation.

Depreciation starts when the asset is available for use. Depreciation is charged on a straight-line basis to the income statement. The useful lives of the assets are estimated as follows:

Plant and machinery  20 years

Fixtures and fittings  3-5 years

Leasehold improvements  10 years

Right-of-use assets  10 years

Leases

As lessee, the Group assesses whether a contract contains a lease at inception of the contract. The Group recognises a right-of-use asset and corresponding lease liability in the statement of financial position for all lease arrangements where it is the lessee, except for short-term leases with a term of twelve months or less and leases of low value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The lease liability is presented as a separate line in the consolidated statement of financial position

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation. Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are presented within property plant and equipment in the consolidated statement of financial position.

Intangible assets

Capitalised intangible assets consist of costs directly attributable to bringing the battery storage and transportation box to the location and condition necessary for it to be capable of operating in the manner intended by management. These include cost of obtaining licenses, site preparation costs, assembly and installation costs and professional fees.

These costs are amortised over there useful economic life. The carrying values of intangible assets are reviewed for impairment when events or changes in circumstances indicate that the carrying values may not be recoverable. If impaired, they are written down to the higher of fair value less costs to sell and value in use.

Impairment of non-financial assets

The carrying amounts of the Group's assets are reviewed at the date of each consolidated statement of financial position to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. Impairment is measured by comparing the carrying values of the asset with its recoverable amount. The recoverable amount of the asset is the higher of the assets' fair value less costs to sell and its value-in-use, which is measured by reference to discounted future cash flow.

An impairment loss is recognised in the income statement immediately.

When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the income statement immediately, unless the asset is carried at its revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Inventories

Inventories consist of raw materials and consumables and are measured at the lower of cost and net realisable value. Cost is calculated using the 'first in first out' method. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

Trade and other receivables  

Trade and other receivables are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.  

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. The carrying amount of these assets approximates their fair value.

Trade and other payables  

Trade and other payables are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.  

Borrowings

Interest bearing debt facilities are initially recognised at fair value, net of directly attributable transaction costs. Transaction costs are recognised in the income statement on a straight-line basis over the term of the facility.

Share capital and share premium

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction against share premium, net of tax, from the proceeds.

4.  Financial risk

The following represent the key financial risks that the Company faces:

Financial risk factors

The Company's operations exposed it to a variety of financial risks that had included the effects of credit risk, liquidity risk and interest rate risk. The Company had in place a risk management programme that attempted to limit the adverse effects on the financial performance of the Company by monitoring levels of debt finance and the related finance costs. The Company did not use derivative financial instruments to manage interest rate costs and as such, no hedge accounting was applied.

Given the size of the Company, the directors did not delegate the responsibility of monitoring financial risk management to a sub-committee of the Board. The policies set by the board of directors were implemented by the Company's finance department

(a) Credit risk

The Company's credit risk was primarily attributable to its trade receivables balance. The amounts presented in the statement of financial position are net of allowances for impairment

(b) Liquidity risk

Liquidity risk was the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Company's financial liabilities included its trade and other payables shown in Note 13

(c) Interest rate cash flow risk

The Company had interest-bearing assets. Interest bearing assets comprised cash balances and unsecured loans, which earned interest at floating rates

Capital risk management

The Company monitors capital which comprises all components of equity (i.e., share capital, share premium and retained earnings/losses).

5.  Business and geographical reporting

The Group's chief operating decision maker is considered to be the executive directors (the 'Executive Board').  The Executive Board evaluates the financial performance of the Group by reference to its battery recycling activities - its reportable segment.

Below is a summary of the Group's results, assets and liabilities by reportable segment as presented to the Executive Board.

Unaudited			Battery recycling	Total
			£000	£000
Operating expenses and total loss for the year ended 31 December 2020			(148)	(148)
Operating expenses			(2,569)	(2,569)
Total segment operating loss for the period ended 30 June 2022			(2,569)	(2,569)
Total segment assets
At 31 December 2020			201	201
At 30 June 2022			3,874	3,874
Total segment liabilities
At 31 December 2020			349	349
At 30 June 2022			6,591	6,591

6.  Administrative expenses

	Unaudited 2022	Unaudited 2020
	£000	£000
Employee benefit expense	833	-
Legal and profession fees	438	143
Advertising and marketing	565	3
Depreciation	91	-
Other operating expenses	524	1
	2,451	147

Employee benefit expense

	Unaudited 2022	Unaudited 2020
	£000	£000
Directors and consultancy fees	281	-
Other employees	504	-
Social security	48	-
	833	-

Auditor remuneration

	Unaudited 2022	Unaudited 2020
	£000	£000
Fees payable to the auditor	15	-
	15	-

7.  Net finance charge

	Unaudited 2022	Unaudited 2020
	£000	£000
Finance costs	78	-
	78	-

8.  Loss per share

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

	Unaudited 2022	Unaudited 2020
	£000	£000
Loss from continuing operations attributable to equity holders of the company	(2,569)	(148)
Weighted average number of ordinary shares in issue	8,751	2,000
Basic and fully diluted loss per share from continuing operations in pence	(29,355)	(7,383)

9.  Property, plant and equipment - Group

(Unaudited) Cost	Plant & machinery £000	Fixtures and Fittings £000	Right-of-use & Leasehold improvements £000	Total £000
1 January 2021	-	-	-	-
Additions	1,936	12	1,449	3,397
30 June 2022	1,936	12	1,449	3,397
Depreciation
1 January 2021	-	-	-	-
Depreciation charge	-	(2)	(90)	(92)
30 June 2022	-	(2)	(90)	(92)
Net book value 30 June 2022	1,936	10	1,359	3,305

10.  Intangible assets

Cost		Unaudited Battery Box £000	Unaudited Total £000
1 January 2021		-	-
Additions		51	51
30 June 2022		51	51
Accumulated amortisation
1 January 2021		-	-
Amortisation		-	-
30 June 2022		-	-
Net book value 30 June 2022		51	51

11.  Inventories

	Unaudited Group 2022 £000	Unaudited Group 2020 £000
Raw materials and consumables	27	-
	27	-

12.  Trade and other receivables

	Unaudited Group 2022 £000	Unaudited Group 2020 £000
Trade and other debtors	239	193
VAT receivable	40	-
Prepayments	16	-
	295	193

13.  Cash and cash equivalent

	Unaudited Group 2022 £000	Unaudited Group 2020 £000
Cash and cash equivalents	170	8
	170	8

14.  Trade and other payables

	Unaudited Group 2022 £000	Unaudited Group 2020 £000
Trade and other payables	510	5
Taxation and social security	56	-
Accruals	39	-
	605	5

15.  Borrowings

	Unaudited Group 2022 £000	Unaudited Group 2020 £000
Current liabilities	207	-
	207	-
Non-current liabilities	4,578	344
	4,578	344

16.  Share capital and share premium

Group and Company (Unaudited)	Number of ordinary shares	Share capital £000's	Share premium £000's
On incorporation - April 2020	2,000	-	-
Equity funding - August 2021	8,000	1	-
At 30 June 2022	10,000	1	-

17.  RELATED PARTY TRANSACTIONS

Directors' salary information are shown in note 6.

18.  EVENTS OCCURRING AFTER THE REPORTING DATE

There are no post balance sheet events to report.

 

END

 

 

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