Final Results for the year ended 30 April 2022
Helium Ventures Plc
(“Helium Ventures” or the “Company”)
Final Results for the year ended 30 April 2022
Helium Ventures (Aquis Exchange: HEV), a London based investment company focused on opportunities within the helium sector, is pleased to present its audited final results for the year ended 30 April 2022.
CHAIRMAN’S STATEMENT
It is my pleasure to submit the first Chairman’s Statement for the Company covering the twelve months to 30th April 2022, which included the initial public offering (“IPO”) on the Growth Market segment of the London AQSE on 8th July 2021. The Company was incorporated as a Special Purpose Investment Company with the aim of investing in low carbon, pure play, helium projects internationally. Following listing in London, a secondary listing on the US OTC market was agreed in order to make the Company’s shares more accessible to an American investment audience. This was completed on 4 January 2022.
The helium market fundamentals have remained strong with prices for spot pure helium being recorded at above US$1,000 per mcf. The market has tightened further in 2022 as post pandemic demand has risen but a major explosion and delays in the commissioning of Amur in Russia, combined with outages at various plants in the USA, have reduced available supply. The situation has been further complicated by the Russian invasion of Ukraine which has led to some producers, notably Algeria, seeking to ship as much LNG as possible and as a consequence reducing the extraction of helium so as not to slow production of natural gas destined for the European market. As a result, US pundits have declared Helium Shortage 4.0, which seems set to continue for the short into medium term regardless of the outcome of the conflict in Ukraine. The outlook remains strong and as investors move away from traditional hydrocarbon projects, the need for low carbon sources of helium will continue to grow.
The global market has responded dramatically to Helium Shortages 1.0, 2.0 and 3.0 and the parallel belief that non-hydrocarbon associated resources would be key to future helium growth. The result is a high number of new helium-oriented start-ups; private and public, many based in the USA, Canada, and Australia. To date only Helium One Global Ltd with its Tanzanian project, has listed on the London market. Several of the North American helium companies have seen major valuation increases as they have reported positive drilling results. Many of the new entrants have yet to raise funding for their drilling activities and these present opportunities for the Company.
Against this backdrop, the Company embarked on a comprehensive review of potential projects across North America, Europe and Africa. In total over 40 investment opportunities were reviewed in the USA, Canada, Europe, and in South and East Africa. An initial screening methodology has been used and where appropriate a thorough technical assessment was conducted. In one case commercial and legal due diligence was conducted, however, we have so far not identified a suitable project for the Company to get involved in.
Following a technical assessment of the underlying helium prospectivity within the Blue Star Helium Limited (“Blue Star”) portfolio of helium acreage in the USA it was agreed to participate in a funding round ahead of drilling. As a result, AUD$400,000 was invested from cash reserves in Blue Star shares on the ASX. The full drilling programme has yet to complete, although initial indications continue to be positive, and we await results to indicate the extent of trapped helium resources within their acreage.
Given the continued lack of a suitable helium project which meets the investment criteria set out by the Company, the Board decided in early second quarter 2022 to consider a potential change in Investment Strategy and to review projects in industries outside the helium sector. The Company intends to communicate any potential changes in strategy to shareholders if a suitable transaction is identified, the Board will seek shareholder approval to proceed with such an investment.
The Board remains fully committed to finding a project of the appropriate scale which will deliver value to shareholders in the long-term and we look forward to updating shareholders as and when such an opportunity arises; within or potentially outside the helium sector. I would like to thank our shareholders, my fellow directors and our colleagues at Orana Corporate for their ongoing support.
Neil Ritson, Non-Executive Chairman
28 September 2022
STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 APRIL 2022
| Period ended 30 April 2022 | ||
| Note | £ | |
| Continuing Operations | ||
| Administrative expenses | (452,160) | |
| Fair value loss on financial asset at fair value through profit and loss | 12 | (63,510) |
| Operating loss | 4 | (515,670) |
| Foreign exchanges losses | (504) | |
| Loss before taxation | (516,174) | |
| Taxation on loss of ordinary activities | 7 | - |
| Loss for the year from continuing operations | (516,174) | |
|
Total loss for the year attributable to shareholders from continuing operations |
(516,174) | |
| Basic & dilutive earnings per share - pence | 8 | (3.54) |
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
STATEMENT OF FINANCIAL POSITION AS AT 30 APRIL 2022
| Note |
As at 30 April 2022
£ |
|
|
CURRENT ASSETS
Cash and cash equivalents |
9 |
344,312 |
| Trade and other receivables | 10 | 16,380 |
| Investments held at fair value through profit or loss | 12 | 156,439 |
| TOTAL CURRENT ASSETS | 517,131 | |
| TOTAL ASSETS | 517,131 | |
|
EQUITY
Share capital |
13 | 168,400 |
| Share premium account | 13 | 810,005 |
| Share based payment reserve | 14 | 18,615 |
| Retained deficit | (516,174) | |
| TOTAL EQUITY | 480,846 | |
|
CURRENT LIABILITIES
Trade and other payables |
11 | 36,285 |
| TOTAL CURRENT LIABILITIES | 36,285 | |
| TOTAL LIABILITIES | 36,285 | |
| TOTAL EQUITY AND LIABILITIES | 517,131 |
The financial statements were approved by the board on 28 September 2022 by:
Neil Ritson, Non-Executive Chairman
STATEMENT OF CHANGES IN EQUITY AS AT 30 APRIL 2022
| Ordinary Share capital |
Share Premium |
Share Based Payment Reserves |
Retained deficit |
Total equity |
|
| £ | £ | £ | £ | £ | |
| Comprehensive income for the period | |||||
| Loss for the period | - | - | - | (516,174) | (516,174) |
| Total loss for the period | - | - | (516,174) | (516,174) | |
| Transactions with owners | |||||
| Ordinary Shares issued | 168,400 | 831,600 | - | - | 1,000,000 |
| Warrants issued | - | (10,095) | 18,615 | - | 8,520 |
| Share Issue Costs | - | (11,500) | - | - | (11,500) |
| Total transactions with owners | 168,400 | 810,005 | 18,615 | - | 997,020 |
| As at 30 April 2022 | 168,400 | 810,005 | 18,615 | (516,174) | 480,846 |
STATEMENT OF CASH FLOW FOR THE PERIOD ENDED 30 APRIL 2022
| Period ended 30 April 2022 | ||
| Note | £ | |
|
Cash flow from operating activities
Loss for the period |
(516,174) |
|
|
Adjustments for:
Share based payments |
14 | 8,520 |
| Fair value losses | 12 | 63,510 |
|
Changes in working capital:
(Increase) in trade and other receivables |
10 | (16,380) |
| Increase in trade and other payables | 11 | 36,285 |
| Net cash outflow from operating activities | (424,239) | |
|
Cash flows from investing activities
Investment in Blue Star Helium |
12 | (219,949) |
| Net cash flow from investing activities | (219,949) | |
|
Cash flows from financing activities
Proceeds from Issue of Shares net of share issue costs |
13 | 988,500 |
| Net cash flow from financing activities | 988,500 | |
| Net increase in cash and cash equivalents | 344,312 | |
| Cash and cash equivalents at beginning of the period | - | |
| Cash and cash equivalents at end of period | 9 | 344,312 |
Non-cash transactions
A share based payment charge of £18,615 has been recognised, which consists of £8,520 included in the profit and loss account for advisor warrants and £10,095 included in share premium in relation to broker warrants. See notes 13 and 14 for further information on the warrants issued during the period.
The accompanying notes on pages 33 to 48 form part of these financial statements
NOTES TO THE FINANCIAL STATEMENTS
1. General Information
Helium Ventures plc was incorporated on 23 April 2021 in England and Wales and remains domiciled there with Registered Number 13355240 under the Companies Act 2006.
The address of its registered office is Eccleston Yards, 25 Eccleston Place, London SW1W 9NF, United Kingdom.
The principal activity of the Company is to seek suitable investment opportunities primarily in potential companies, businesses or asset/(s) that have operations in the natural gas exploration, development and production sector, with a particular focus on helium.
The Company listed on the Aquis Stock Exchange (“AQSE”) on 8 July 2021. The Company began dual trading on the US OTCQB Market on 4 January 2022.
2. Accounting policies
The principal accounting policies applied in preparation of these financial statements are set out below. These policies have been consistently applied unless otherwise stated.
2.1. Basis of preparation
The financial statements for the period ended 30 April 2022 have been prepared by Helium Ventures plc in accordance with the requirements of the AQSE Rules and UK adopted International Accounting Standards (‘IFRS’). The financial statements have been prepared under the historical cost convention, as modified by financial assets and financial liabilities (including derivative instruments) at fair value.
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant in the financial statements, are disclosed in note 2.9.
2.2. Going concern
The financial statements have been prepared on a going concern basis, which assumes that the Company will continue to meet its liabilities as they fall due.
The Directors have prepared detailed projected cash flow information for the period to end 29 February 2024, taking into account expected expenditure. In addition, the Board believes that it has certain levers at its disposal to further improve the cash position of the Company if this becomes necessary, such as suspending Directors’ fees, renegotiating the fees of certain advisors, selling down the Company’s stake in Blue Star Helium and encouraging warrant holders to exercise their warrants.
Having regard to the existing working capital position, the Directors are of the opinion that the Company has adequate resources and has a number of levers to enhance the cash within the business, in order to continue operating for the next twelve months.
In the event the Company were to embark on a reverse takeover transaction, such a transaction would be accompanied by a fundraising exercise in order to ensure adequate funding for this process and beyond. Accordingly, the Directors continue to adopt the going concern basis in preparing the financial statements.
2.3. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, and demand deposits with banks and other financial institutions.
2.4. Equity
Share capital is determined using the nominal value of shares that have been issued.
The Share premium account includes any premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from the Share premium account, net of any related income tax benefits.
Equity-settled share-based payments are credited to a share-based payment reserve as a component of equity until related options or warrants are exercised or lapse. See note 2.7.
Retained losses includes all current and prior period results as disclosed in the income statement.
2.5. Foreign currency translation
The financial statements are presented in Sterling which is the Company’s functional and presentational currency.
Transactions in currencies other than the functional currency are recognised at the rates of exchange on the dates of the transactions. At each balance sheet date, monetary assets and liabilities are retranslated at the rates prevailing at the balance sheet date with differences recognised in the Statement of comprehensive income in the period in which they arise.
2.6. Financial instruments
IFRS 9 requires an entity to address the classification, measurement and recognition of financial assets and liabilities.
a) Classification
The Company classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value (either through OCI or through profit or loss);
• those to be measured at amortised cost; and
• those to be measured subsequently at fair value through profit or loss.
The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will be recorded either in profit or loss or in OCI. For investments in equity instruments that are not held for trading, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI).
b) Recognition
Purchases and sales of financial assets are recognised on trade date (that is, the date on which the Company commits to purchase or sell the asset). Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.
During the period the Company acquired an investment in Blue Star Helium Limited. This is an equity investment which is held for trading, and as such it has been classified as a current financial asset at fair value through profit or loss.
c) Measurement
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
For Blue Star Helium Limited the initial investment was recognised at the fair value of the consideration paid in AUD of $400,000 translated into GBP of £219,949 at the date of acquisition. See note 12.
Debt instruments
Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the statement of profit or loss.
Equity instruments
The Company subsequently measures all equity investments at fair value. Where the Company’s management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss as other income when the Company’s right to receive payments is established. Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the statement of profit or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.
At the year end the Company has recognised a fair value loss in the investment in Blue Star Helium Limited. This loss has been determined by reference to the closing share price of Blue Helium Limited at 30 April 2022. See note 12.
d) Impairment
The Company assesses, on a forward-looking basis, the expected credit losses associated with any debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the Company applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
2.7. Equity instruments
Share capital is determined using the nominal value of shares that have been issued.
The Share premium account includes any premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from the Share premium account.
Share based payments reserves represent the value of equity settled share-based payments provided to employees, including key management personnel, and third parties for services provided.
In accordance with IFRS 2, for equity-settled share-based payment transactions, the entity shall measure the goods or services received, and the corresponding increase in equity, directly, at the fair value of the goods or services received, unless that fair value cannot be estimated reliably. The fair value of the service received in exchange for the grant of options and warrants is recognised as an expense, other than those warrants that were issued in relation to the listing which have been recorded against share premium in equity. If the entity cannot estimate reliably the fair value of the goods or services received, the entity shall measure their value, and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments granted.
Retained deficit represents the cumulative retained losses of the Company at the reporting date.
2.8. Taxation
Tax currently payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the income statement because it excludes items of income and expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial information and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
2.9. Critical accounting judgements and key sources of estimation uncertainty
The preparation of the financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed below:
· Share Based Payments: warrants valued using Black Scholes method
The Company has made awards of warrants on its unissued share capital to certain parties in return for services provided to the Company. The valuation of these warrants involved making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and interest rates. These assumptions have been integrated into the Black Scholes Option Pricing model in this instance to derive a value for any share-based payments. These judgements and assumptions are described in more detail in note 14.
The expense charged to the Statement of Comprehensive Income during the year in relation to share based payments was £8,520. A further £10,095 was offset from the share premium account.
2.10 New standards and interpretations not yet adopted
At the date of approval of these financial statements, the following standards and interpretations which have not been applied in these financial statements were in issue but not yet effective (and in some cases have not yet been adopted by the UK):
| Standard | Impact on initial application | Effective date |
| Annual Improvements | 2018-2020 Cycle | 1 January 2023 |
| IFRS 17 | Insurance Contracts | 1 January 2023 |
| IAS 1 | Classification of liabilities as Current or Non-current | 1 January 2023 |
| IAS 8 | Accounting estimates | 1 January 2023 |
| IAS 12 | Deferred tax arising from a single transaction | 1 January 2023 |
The effect of these new and amended Standards and Interpretations which are in issue but not yet mandatorily effective is not expected to be material.
The directors are evaluating the impact that these standards may have on the financial statements of Company.
3. Segmental analysis
The Company manages its operations in one segment, being seeking a suitable investment specifically in the natural gas sector. The results of this segment are regularly reviewed by the board as a basis for the allocation of resources, in conjunction with individual investment appraisals, and to assess its performance.
4. Operating Loss
Operating loss for the company is stated after charging:
|
Period ended
30 April 2022 £ |
|
| Directors’ fees | 57,976 |
| Professional fees | 220,167 |
| Listing expenses | 99,222 |
| Other administrative expenses | 66,275 |
| Share based payments | 8,520 |
| 452,160 |
5. Employees
The average number of persons employed by the Company (including executive directors) during the period ended 30 November 2021 was:
| No. of employees | |
| Management | 3 |
| 3 |
The aggregate payroll costs of these persons were as follows:
|
Period ended
30 April 2022 £ |
|
| Directors’ fees | 57,600 |
| Employers NI | 376 |
| 57,976 |
6. Auditor’s Remuneration
|
Period ended
30 April 2022 £ |
|
| Fees payable to the Company’s auditor for the audit of the Company | 27,500 |
| Fees payable to the Company’s auditor for other services: | |
| Audit related assurance services | 1,500 |
| Corporate finance services | 15,000 |
| 44,000 |
The period covers from incorporation to 30 April 2022 and includes accrued expenses relating to the 2022 audit.
7. Taxation
|
Period ended
30 April 2022 £ |
|
| Current tax | - |
| Deferred tax | - |
| Income tax expense | - |
Income tax can be reconciled to the loss in the statement of comprehensive income as follows:
|
Period ended
30 April 2022 £ |
|
| Loss before taxation | (516,174) |
| Tax at the UK Corporation rate of 19% | (98,073) |
| Tax effect of amounts which are not deductible | 13,686 |
| Tax losses on which no deferred tax asset has been recognised | 84,387 |
| Total tax (charge)/credit | - |
| UK | - |
| Overseas | - |
| Total tax (charge)/credit) | - |
The Company has accumulated tax losses of approximately £84,000 that are available, under current legislation, to be carried forward indefinitely against future profits.
A deferred tax asset has not been recognised in respect of these losses due to the uncertainty of future profits. The amount of the deferred tax asset not recognised is approximately £84,000.
On 11 March 2020 it was announced (and substantively enacted on 17 March 2020) that the UK corporation tax rate would remain at 19% and not reduce to 17% (the previously enacted rate) from 1 April 2020. On 3 March 2021, the Chancellor announced that the corporation tax rate will be increasing to 25% from 1 April 2023.
8. Earnings per share
The calculation of the basic and diluted earnings per share is calculated by dividing the profit or loss for the year by the weighted average number of ordinary shares in issue during the year.
|
|
Period ended 30 April 2022 £ |
| Loss attributable to shareholders of Helium Ventures plc | (516,174) |
| Weighted number of ordinary shares in issue | 14,587,882 |
| Basic & dilutive earnings per share from continuing operations - pence | (3.54) |
There is no difference between the diluted loss per share and the basic loss per share presented. Share options and warrants could potentially dilute basic earnings per share in the future but were not included in the calculation of diluted earnings per share as they are anti-dilutive for the year presented. See note 14 for further details.
9. Cash and cash equivalents
|
Period ended
30 April 2022 £ |
|
| Cash at bank | 344,312 |
| 344,312 |
10. Trade and other receivables
|
Period ended
30 April 2022 £ |
|
| Prepayments | 16,380 |
| 16,380 |
11. Trade and other payables
|
Period ended
30 April 2022 £ |
|
| Trade creditors | 4,506 |
| Accruals | 31,779 |
| 36,285 |
12. Investments held at fair value through profit or loss
| £ | |
| Cost at 23 April 2021 | - |
| Addition – Blue Star Helium Limited | 219,949 |
| Cost at 30 April 2022 | 219,949 |
| Fair value loss at 23 April 2021 | - |
| Fair value losses | (63,510) |
| Fair value loss at 30 April 2022 | (63,510) |
| Fair value of Investment at 23 April 2021 | - |
| Fair value of Investment at 30 April 2022 | 156,439 |
On 3 November 2021, the Company acquired an investment in Blue Star Helium Limited. The investment totalled AUD $400,000 at AUD 5.6 cents per share and was part of a AUD $15 million fundraise. The Company holds 7,142,858 shares in Blue Star Helium Limited representing 0.45% of the total issued shares in that company.
The investment was recognised as a financial asset held at fair value through profit and loss. It is classified as a current asset as the Company views this as an asset which is likely to be held for the short term only.
During the period a fair value loss was recognised in the income statement reflecting the fall in value from the initial purchase price of AUD 5.6 cents per share at acquisition to AUD 3.9 cents per share at the date of these accounts.
Accounting standards, including IFRS 13, prescribe a three-level hierarchy for fair valuing financial instruments. The investment in Blue Star Helium Limited has been measured and recognised in the financial statements at Level 1 as the entity is publicly quoted. The three levels are described below:
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (e.g. over-the- counter derivatives) is determined using valuation techniques that maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
13. Share capital and share premium
| Ordinary Shares | Share Capital | Share Premium | Total £ | |
| # | £ | £ | £ | |
| Issue of ordinary shares on incorporation1 | 5,000,000 | 50,000 | - | 50,000 |
| Issue of ordinary shares 2 | 2,600,000 | 26,000 | - | 26,000 |
| Issue of ordinary shares 3 | 9,240,000 | 92,400 | 831,600 | 924,000 |
| Share issue costs | - | - | (21,595) | (21,595) |
| At 30 April 2022 | 16,840,000 | 168,400 | 810,005 | 978,405 |
1 On incorporation on 23 April 2021 the Company issued 5,000,000 ordinary shares of £0.01 at their nominal value of £0.01.
2 On 15 June 2021, the Company issued 2,600,000 ordinary shares at their nominal value of £0.01.
3 On admission to the Aquis Stock Exchange Growth Market on 8 July 2021, 9,240,000 shares were issued at a placing price of £0.10.
14. Share based payment reserves
|
Total £ |
|
| Advisor warrants Issued 1 | 8,520 |
| Broker warrants issued 2 | 10,095 |
| At 30 April 2021 | 18,615 |
1 On 1 May 2021, the board of directors entered into an agreement to issue 200,000 Advisor Warrants to Cairn subject to and conditional on Admission. The Advisor Warrants are exercisable at the price of £0.1 per Ordinary Share and are exercisable either in whole or part for a period of five years from the date of admission.
2 On 8 June 2021, the board of directors entered into an agreement to issue 300,000 Broker Warrants to Pello subject to and conditional on Admission. The Broker Warrants are exercisable at the price of £0.1 per Ordinary Share and are exercisable either in whole or part for a period of three years from the date of admission.
On 16 June 2021, 7.6 million founder warrants were issued linked to existing shares. Each warrant entitles the holder to subscribe for one share at a price of £0.05 for a period of three years from grant.
The estimated fair values of warrants which fall under IFRS 2, and the inputs used in the Black-Scholes model to calculate those fair values are as follows:
| Date of grant | Number of warrants | Share Price | Exercise Price | Expected volatility | Expected life | Risk free rate | Expected dividends |
| 8 July 2021 | 200,000 | £0.10 | £0.10 | 50.00% | 5 | 15.00% | 0.00% |
| 8 July 2021 | 300,000 | £0.10 | £0.10 | 50.00% | 3 | 15.00% | 0.00% |
The total number of warrants issued during the period:
| Number of Warrants | Exercise Price | Expiry date | |
| On incorporation | |||
| Issued on 1 May 2021 | 200,000 | £0.10 | 8 July 2026 |
| Issued on 8 June 2021 | 300,000 | £0.10 | 8 July 2024 |
| Issued on 16 June 2021 | 7,600,000 | £0.05 | 16 June 2024 |
| At 30 April 2022 | 8,100,000 | £0.05 |
The weighted average exercise price of the warrants exercisable at 30 April 2022 is £0.05.
The weighted average time to expiry of the warrants as at 30 April is 2.14 years.
The 7,600,000 warrants issued on 16 June 2021 were issued alongside the placing of ordinary shares and as such are not fair valued separately, as they fall outside of the scope of IFRS 2.
No warrants were exercised or expired in the period.
15. Financial Instruments and Risk Management
Principal financial instruments
The principal financial instruments used by the Company from which the financial risk arises are as follows:
Financial Assets
|
Period ended
30 April 2022 £ |
|
| Investment held at fair value through profit or loss (note 12) | 156,439 |
| Cash at bank and in hand | 344,312 |
| 500,751 |
Financial Liabilities
|
Period ended
30 April 2022 £ |
|
| Trade and other payables | 36,285 |
| 36,285 |
The financial liabilities are payable within one year.
General objectives and policies
As alluded to in the Directors report the overall objective of the Board is to set policies that seek to reduce risk as far as practical without unduly affecting the Company’s competitiveness and flexibility. Further details regarding these policies are:
Policy on financial risk management
The Company’s principal financial instruments comprise cash and cash equivalents, other receivables, trade and other payables. The Company’s accounting policies and methods adopted, including the criteria for recognition, the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are set out in note 2 – “Accounting Policies”.
The Company does not use financial instruments for speculative purposes. The carrying value of all financial assets and liabilities approximates to their fair value.
Derivatives, financial instruments and risk management
The Company does not use derivative instruments or other financial instruments to manage its exposure to fluctuations in foreign currency exchange rates, interest rates and commodity prices.
Foreign currency risk management
The Company operates in a global market with income and costs possibly arising in a number of currencies and is exposed to foreign currency risk arising from commercial transactions, translation of assets and liabilities and net investment in foreign subsidiaries. Exposure to commercial transactions arise from sales or purchases by operating companies in currencies other than the Company’s functional currency. Currency exposures are reviewed regularly.
Due to the minimal amount of transactions in AUD, the Company does not consider hedging its investment in Blue Star Helium Limited beneficial because the cash flow risk created from such hedging techniques would outweigh the risk of foreign currency exposure.
The Group has a limited level of exposure to foreign exchange risk through their foreign currency denominated cash balances.
Accordingly, movements in the Sterling exchange rate against these currencies could have a detrimental effect on the Group’s results and financial condition.
Currency risk is managed by maintaining some cash deposits in currencies other than Sterling. The table below shows the currency profiles of cash and cash equivalents:
|
Period ended
30 April 2022 £ |
|
| Cash and cash equivalents GBP | 344,312 |
| 344,312 |
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties. The Company’s exposure and the credit ratings of its counterparties are monitored by the Board of Directors to ensure that the aggregate value of transactions is spread amongst approved counterparties.
The Company applies IFRS 9 to measure expected credit losses for receivables, these are regularly monitored and assessed. Receivables are subject to an expected credit loss provision when it is probable that amounts outstanding are not recoverable as set out in the accounting policy. The impact of expected credit losses was immaterial.
The Company’s principal financial assets are cash and cash equivalents. Cash equivalents include amounts held on deposit with financial institutions.
The credit risk on liquid funds held in current accounts and available on demand is limited because the Company’s counterparties are banks with high credit-ratings assigned by international credit-rating agencies.
No financial assets have indicators of impairment.
The Company’s maximum exposure to credit risk is limited to the carrying amount of financial assets recorded in the financial statements.
Borrowings and interest rate risk
The Company currently has no borrowings. The Company’s principal financial assets are cash and cash equivalents. Cash equivalents include amounts held on deposit with financial institutions. The effect of variable interest rates is not significant.
Liquidity risk
During the period ended 30 April 2022, the Company was financed by cash raised through equity funding. Funds raised surplus to immediate requirements are held as cash deposits in Sterling.
In managing liquidity risk, the main objective of the Company is to ensure that it has the ability to pay all of its liabilities as they fall due. The Company monitors its levels of working capital to ensure that it can meet its liabilities as they fall due.
The table below shows the undiscounted cash flows on the Company’s financial liabilities as at 30 April 2022 on the basis of their earliest possible contractual maturity.
|
Total £ |
Within 2 months
£ |
Within
2-6 months £ |
|
| At 30 April 2022 | |||
| Trade payables | 4,506 | 4,026 | 480 |
| Accruals | 31,779 | 4,279 | 27,500 |
| 36,285 | 8,305 | 27,980 |
Capital management
The Company considers its capital to be equal to the sum of its total equity. The Company monitors its capital using a number of key performance indicators including cash flow projections, working capital ratios, the cost to achieve development milestones and potential revenue from partnerships and ongoing licensing activities.
The Company’s objective when managing its capital is to ensure it obtains sufficient funding for continuing as a going concern. The Company funds its capital requirements through the issue of new shares to investors.
16. Related Party Transactions
Warrants issued to Directors and Director related entities
During the year 2,600,000 Ordinary Shares of £0.01 at £0.01 per Ordinary Share were issued on 15th June. 750,000 shares for a cash consideration of £7,500 were issued to Neil Ritson and 500,000 shares for a cash consideration of £5,000 were issued to Jonathan Owen; both are Directors of the Company.
On listing on AQSE, the Company issued a further 9,240,000 Ordinary shares of £0.01 at £0.10 per Ordinary Share. 300,000 shares for a cash consideration of £30,000 were issued to Neil Ritson. All of these shares are paid up.
On 16th June 2021, the Company issued 7,600,000 Founder Warrants entitling the holder to subscribe for one share at a price of £0.05 for a period of three years from grant. Those who acted as Directors of the Company during the period were issued with the following: 1,600,000 Founder Warrants were issued to Charles Wood, 100,000 Founder Warrants were issued to Ryan Neates, 750,000 Founder Warrants were issued to Neil Ritson, and 500,000 Founder Warrants were issued to Jonathan Owen.
Provision of services
Orana Corporate LLP has a service agreement with the Company for the provision of accounting and company secretarial services. In the period Orana Corporate LLP received £25,000 for these services from the Company. Orana received an additional sum of £25,000 in connection with corporate finance work carried out at the time of the Placing onto the AQSE.
On 6 July 2021 the Company entered into a consultancy agreement with NR Global Consulting Limited (NR Global) pursuant to which NR Global agreed to provide certain services to the Company for an initial period of 12 months unless terminated earlier. Following the initial period, the agreement can be terminated by either party giving to the other not less than one month’s prior written notice. Director Neil Ritson has an interest in NR Global which has received £26,472 for its services during the period from the Company. NR Global through its principal consultant, Mr Neil Ritson, and various international associates provided detailed technical input to the evaluation of a significant number of helium prospects available to the Company for potential investment. NR Global also supplied analytical input on the helium market.
Other than these there were no other related party transactions.
17. Ultimate Controlling Party
As at 30 April 2022 there was no ultimate controlling party of the Company.
18. Capital Commitments
As at 30 April 2022 there were no capital commitments for the Company.
19. Events Subsequent to period end
There are no events of significance subsequent to the period end. The Board have located and are further investigating a project outside the helium sector which would require a change in Investment Strategy. Work on evaluating that opportunity is ongoing.
This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company accept responsibility for the contents of this announcement.
Enquiries:
Helium Ventures plc
Neil Ritson +44 (0) 20 3475 6834
Vigo Consulting (financial communications)
Ben Simons +44 (0) 20 7390 0230
Cairn Financial Advisers LLP (AQSE Corporate Adviser)
Liam Murray +44 (0) 20 7213 0880
Ludovico Lazzaretti
Note:
Certain statements made in this announcement are forward-looking statements. These forward-looking statements are not historical facts but rather are based on the Company's current expectations, estimates, and projections about its industry; its beliefs; and assumptions. Words such as 'anticipates,' 'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions are intended to identify forward-looking statements. These statements are not a guarantee of future performance and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond the Company's control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. The Company cautions security holders and prospective security holders not to place undue reliance on these forward-looking statements, which reflect the view of the Company only as of the date of this announcement. The forward-looking statements made in this announcement relate only to events as of the date on which the statements are made. The Company will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances, or unanticipated events occurring after the date of this announcement except as required by law or by any appropriate regulatory authority.
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