AUDITED RESULTS FOR THE YEAR ENDED 30 APRIL 2023
PSYCH CAPITAL PLC
("Psych", "Psych Capital", or "the Company"),
AUDITED ANNUAL REPORT AND ACCOUNTS
FOR THE YEAR ENDED 30 APRIL 2023
Psych Capital Plc (AQUIS: PSY), the first listed pure-play psychedelic company in London, is pleased to announce its results for the year ended 30 April 2023.
Highlights:
· The successful inaugural PSYCH Symposium was held at The National Gallery on the 11 May 2022, with leaders from science, advocacy, regulation, and finance in attendance, generating over £150,000 in revenues.
· Admission to the Aquis Growth Market on 09 June 2022, listing the first pure-play psychedelic company in London, raising gross proceeds of £810,000.
· Investee company Awakn announces Phase III clinical trial approved for CA$2.5m, with the National Institute for Health and Care Research (NIHR) covering 66% of the costs.
· In November 2022, PSYCH published the fourth 'Psychedelics as a Medicine Report', the flagship information source for the industry, and hosted an event in London for 'Emerging Innovations in Psychedelic Healthcare', generating a combined £25,000 in revenue.
· The PSYCH platform grew the subscriber base by 2.3% to 38,000, an effective growth rate of 8% - 10% when taking account of standard industry churn metrics.
Post year end:
· In June 2023, the Company announced the agreement to acquire 100% of the issued share capital of Shortwave Pharma Inc. ("Shortwave Pharma"), a biopharmaceutical drug-development company, developing breakthrough therapies to address unmet medical needs in the field of mental health, with focus on the area of eating disorders, for £3.5m through a combination of cash and new ordinary shares.
· Hosted the second PSYCH Symposium at The British Museum on 6th July 2023, with over 300 delegates in attendance, with Shortwave Pharma CEO Rivki Stern joining Christian Angermayer, Robin Carhart-Harris, Charlotte Nichols, MP and Mikuláš Peksa MEP on stage. The event was supported by Cybin, Compass Pathways, Clerkenwell Health, FTI Consulting and Negev Capital.
DIRECTORS' STATEMENT
We are pleased to present the results for Psych Capital Plc for the year ended 30 April 2023.
Psych's mission is to support and operate a new wave of scientific innovations that challenge the status quo and revolutionise how society deals with mental health conditions, and during the year the Company has continued to focus on two core strategies.
· Identify, fund, and support the building of future companies conducting clinical research programs to develop psychedelic drug development and therapeutic treatments; and
· Develop its business-to-business media and content platform (PSYCH) for the psychedelic science and healthcare industry.
Overview
During the year, the management team and the Psychedelic Medicines Technical Advisory Board ("PMTAB"), have invested significant time and resources in analysing potential disruptive psychedelic healthcare delivery models in the UK and Europe, and assessed M&A opportunities via the Company's network of experts, proprietary market intelligence, and access to deal flow. This range of expertise allowed the Company to critically evaluate the viability of potential target in terms of the strength of their scientific offering, intellectual property strategy, and operational viability within the UK and European regulatory frameworks. With delay in regulation that would pave the way for greater patient access, combined with rising costs of running patient centric business models, Psych Capital focused its efforts on early-stage drug development leveraging it's global scope for deal flow.
As part of this exercise, the Company signed an exclusivity agreement in November 2022 with
Shortwave Pharma Inc. ("Shortwave Pharma"), a biopharmaceutical drug-development company, developing breakthrough therapies to address unmet medical needs in the field of mental health, and subsequently conducted extensive due-diligence process and commercial negotiations. The conclusion of the deal was announced by the Company post year end.
The Company held its inaugural PSYCH Symposium at the National Gallery on 11 May 2022 in London, generating over £150,000 in revenue, and with over 350 delegates in attendance, incorporating thought leaders from science, advocacy, regulation, and finance. In November PSYCH published the fourth 'Psychedelics as a Medicine Report', and hosted a PSYCH event in London for 'Emerging Innovations in Psychedelic Healthcare', attended by 60 industry leaders to evaluate milestones in the commercialisation of psychedelic medicine. The event and fourth edition of the report generated a combined £25,000 in corporate sponsorship revenue. The PSYCH platform grew the gross subscriber base by 2.3% to 38,000, equating to an effective growth rate of 8% - 10% when taking account of standard industry churn metrics.
Our investee company, Awakn Life Sciences Corp. ("Awakn"), obtained approval of Phase III of its Ketamine assisted therapy for alcohol use disorder program, with the National Institute for Health and Care Research (NIHR) providing funding of CA$2.5m. At 30 January 2023, the Company held a stake of approximately 1.3% in Awakn.
We strengthened the depth and experience of our management and advisory teams; with the appointment of an independent non-executive director and a CFO, and the appointment of the Conservative Party Drug Policy Reform Group ("CDPRG"), to the Company's Psychedelic Medicines Technical Advisory Board ("PMTAB").
Post year end
On 19th June 2023, the Company announced the agreement to acquire 100% of the issued share capital of Shortwave Pharma Inc. ("Shortwave Pharma"), a biopharmaceutical drug-development company, developing breakthrough therapies to address unmet medical needs in the field of mental health, with focus on the area of eating disorders, for £3.5m through a combination of cash and new ordinary shares. Details are outlined in the announcement of 19 June 2023.
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. 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.
The terms of the deal incorporated an initial consideration of 71,170,131 new Ordinary Shares, 9,015,100 new Ordinary shares pursuant to deferred consideration shares 9,015,100, new Ordinary Shares of 7,499,998 pursuant to deferred guarantee shares of 7,499,998, and a cash payment of US$120,000. The consideration shares are due to be issued for trading on the AQSE Growth imminently, subject to the completion of regulatory filings with the tax authorities in Israel.
As part of the deal, Rivki Stern Youdkevich will join as CEO of the Company, and Shortwave have the right to appoint an additional board director to the Company within six months of the Completion Date. The management team of the enlarged group look forward to updating the market in the coming weeks.
Outlook and prospects
The Psychedelic industry, alongside the biotech sector as a whole, faces headwinds in terms of access to capital and associated wider macroeconomic pressures. The sector has experienced early sign of consolidation, such as Cybin Inc.'s acquisition of Small Pharma Inc., as management teams look to share resources and cut overhead; however inward investment continues to flow into the emerging sector, ranging from traditional pharma (exemplified by Otsuka Pharmaceutical's acquisition of Mindset Pharma Inc.), to multimillion positions from activist investors such Steve Cohen and Antonio Gracias supporting further research and clinical trials.
The directors are confident that the investment in Shortwave Pharma futureproofs the Company's strategy and is set to benefit from the growth in the psychedelic industry that is expected to grow from US$650 million in 2022 and exceed US$3 billion by 2026 according to the 4th Edition of The Psychedelics as Medicine Report.
Financial Review
Psych Capital Plc is pleased to announce the Company's annual results for the year to 30 April 2023.
Revenues of £188,882 were reported in the year, representing an increase of over 200% on the prior year (2022: £62,228), relating to ticket sales and sponsorship of the PSYCH Symposium, the fourth edition of the "The Psychedelics as a Medicine Report", and other PSYCH events, derived from clients in the United States of America, UK, Europe and the rest of the world. The gross profit margin increased by 6.2 basis points to 70.4% (2022: 64.2%). Administrative expenses increased by £164,022 to £678,957 (2022: £514,935), incorporating a full-year of expenditure on areas such as advertising and marketing, legal and audit, and a non-cash charge of £75,000 (2022: £62,500) relating to the amortisation of intangible assets. Expenditure on exceptional items of £83,459 (2022: £107,510) related to professional fees on the Admission to the AQSE. A share based payment non-cash charge of £334,277 (2022: £nil) was recorded in the year, due to the award of share options to directors, senior management and advisors in May 2022 prior to Admission.
An operating loss of £963,755 (2022: 582,474) was recorded in the year. Non-cash fair value loss on the investment in Awakn Life Sciences Corp of £247,037 (2022: gain of £38,541), combined with an impairment charge of £49,507, results in a statutory pre-tax loss of £1,260,299 reported in the year (2022: 543,933), and a basic loss per share of £0.0045 (2022: £0.0035).
Net assets totalled £805,445 at 30 April 2023 (2022: £476,067), incorporating £479,491 in cash and cash equivalents (2022: £322,634). The fair value of the investment in Awakn declined by £247,037 to £91,505 at the year end (2022: £338,542). Intangible assets, relating to the acquisition of the PSYCH platform, had a net book value of £262,993 (2022: £387,500), after amortisation and impairment. Trade and other receivables declined to £64,266 (2022: £150,568), predominately relating to reduction in prepayments for the PSYCH Symposium event in the prior year. Trade and other payables reduced significantly to £92,810 (2022: £723,177), predominantly due to a balance of £450,000 in the prior year relating to shares issued to Prohibition Holdings Ltd upon the Company's Admission to AQSE, in relation to the acquisition of the PSYCH assets, and lower deferred revenues due to the timing of the Symposium.
The Company incurred net cash outflows from operations of £623,543 (2022: £397,365), an increase of £226,178, as the Company incurred a full-year of directors salaries, outsourced bookkeeping function, and higher advertising costs. The Company raised net proceeds from the issue of shares of £780,400, net of £29,600 in transaction costs.
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 Company has over 290 million shares in issue.
Going concern
The Company's business activities, together with the factors likely to affect its future development, performance and position, are set out in the Company financial review, together with the financial position of the Company, its cash flows, liquidity position and borrowing facilities. The Independent Auditor's Report was unqualified. We draw attention to Note 2.3 on going concern in the financial statements, which indicates that the Company is looking to raise funds in the coming months to continue its operations over the foreseeable future. Whilst there are no guarantees of the Company being able to raise such funds, the directors are confident of obtaining further funding or investments. Accordingly, the directors consider that it is appropriate to continue to prepare the financial statements on a going concern basis. However, in the absence of the required funding being in place these conditions indicate the existence of a material uncertainty which may cast significant doubt over the company's ability to continue as a going concern.
Media inquiries: PsychSymposium@fticonsulting.com
The Directors of the Company accept responsibility for the contents of this announcement.
Enquiries:
Company:
Joseph Colliver: +44 20 3838 7621
William Potts: +44 20 3838 7621
Peterhouse Capital Limited:
Corporate Adviser:
Guy Miller / Narisha Ragoonanthun: + 44 (0) 20 7469 0930
Corporate Broker
Lucy Williams: +44 (0) 20 7469 0930
Duncan Vasey: +44 (0) 20 7220 9797 (Direct)
PSYCH CAPITAL PLC
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2023
|
|
|
Year ended 30 April 2023 |
Year ended 30 April 2022 |
|
|
|
£ |
£ |
|
|
|
|
|
|
Revenue |
|
188,882
|
62,228 |
|
Cost of sales |
|
(55,944) |
(22,257) |
|
Gross profit |
|
132,938 |
39,971 |
|
|
|
|
|
|
Administrative expenses |
|
(678,957) |
(514,935) |
|
Exceptional operating items |
|
(83,459) |
(107,510) |
|
Share based payments |
|
(334,277) |
|
|
Operating loss |
|
(963,755) |
(582,474) |
|
|
|
|
|
|
Fair value (loss)/gain on fixed asset investments |
|
(247,037) |
38,541 |
|
Impairment loss on intangible assets |
|
(49,507) |
- |
|
Loss on ordinary activities before taxation |
|
(1,260,299) |
(543,933) |
|
|
|
|
|
|
Income tax |
|
- |
- |
|
Total comprehensive loss for the financial year |
|
(1,260,299) |
(543,933) |
|
|
|
|
|
|
|
|
|
(restated) |
|
Basic loss per share attributable to owners of the company |
|
(0.0045) |
(0.0035) |
PSYCH CAPITAL PLC
STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 APRIL 2023
|
|
|
As at 30 April 2023 |
As at 30 April 2022 |
|
|
|
|
£ |
|
Non-current Assets |
|
|
|
|
Intangible assets |
|
262,993 |
387,500 |
|
Investments |
|
91,505 |
338,542 |
|
Total Non-current Assets |
|
354,498 |
726,042 |
|
|
|
|
|
|
Current Assets |
|
|
|
|
Cash and cash equivalents |
|
479,491 |
322,634 |
|
Trade and other receivables |
|
64,266 |
150,568 |
|
Total Current Assets |
|
543,757 |
473,202 |
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
Trade and other payables |
|
92,810 |
723,177 |
|
Total Liabilities |
|
92,810 |
723,177 |
|
|
|
|
|
|
Net Current Assets/(Liabilities) |
|
450,947 |
(249,975) |
|
|
|
|
|
|
Net Assets |
|
805,445 |
476,067 |
|
|
|
|
|
|
Equity |
|
|
|
|
Issued share capital |
|
290,033 |
183,333 |
|
Share premium |
|
1,680,832 |
836,667 |
|
Share based payments reserve |
|
638,812 |
- |
|
Retained earnings |
|
(1,804,232) |
(543,933) |
|
Total Equity |
|
805,445 |
476,067 |
These financial statements were approved and authorised by the Board on 30th October 2023 and signed on its behalf by:
William Potts
Director
PSYCH CAPITAL PLC
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2023
|
|
|
Share capital |
Share premium |
Share based payments reserve |
Retained earnings |
Total equity |
|
|
|
£ |
£ |
|
£ |
£ |
|
Transactions with equity owners |
|
|
|
|
|
|
|
At incorporation - issue of share capital 2 ordinary shares at £0.0001 each |
|
- |
- |
- |
- |
- |
|
Ordinary Shares issued 39,998 shares at £0.0001 each |
|
4 |
- |
- |
- |
4 |
|
Ordinary Shares issued |
|
183,329 |
836,667 |
- |
- |
1,019,996 |
|
Total comprehensive income |
|
|
|
|
|
|
|
Total comprehensive income for the year ended 30 April 2022 |
|
- |
- |
- |
(543,933) |
(543,933) |
|
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 for the year ended 30 April 2023 |
|
- |
- |
- |
(1,260,299) |
(1,260,299) |
|
As at 30 April 2023 |
|
290,033 |
1,680,832 |
638,812 |
(1,804,232) |
805,445 |
PSYCH CAPITAL PLC
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2023
|
|
|
Year ended 30 April 2023 |
Year ended 30 April 2022 |
|
|
|
|
£ |
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
Loss before tax |
|
(1,260,299) |
(543,933) |
|
Adjusted for: |
|
|
|
|
Fair value loss/(gain) on investments |
|
247,037 |
(38,541) |
|
Amortisation of intangible assets |
|
75,000 |
62,500 |
|
Impairment of intangible assets |
|
49,507 |
- |
|
Share-based payments - share options and warrants |
|
334,277 |
- |
|
Decrease/(increase) in trade and other receivables |
|
86,302 |
(150,568) |
|
(Decrease)/increase in trade and other payables |
|
(155,367) |
273,177 |
|
Net cash used in operating activities |
|
(623,543) |
(397,365) |
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
Purchase of investments |
|
- |
(240,001) |
|
Net cash used in investing activities |
|
- |
(240,001) |
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Proceeds from the issue of shares |
|
780,400 |
960,000 |
|
Net cash generated from financing activities |
|
780,400 |
960,000 |
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
156,857 |
322,634 |
|
Cash and cash equivalents at beginning of year |
|
322,634 |
- |
|
Cash and cash equivalents at end of year |
|
479,491 |
322,634 |
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