TIDMPSY
RNS Number : 8929R
Psych Capital PLC
31 October 2023
PSYCH CAPITAL PLC
("Psych", "Psych Capital", or "the Company"),
AUDITED ANNUAL REPORT AND ACCOUNTS
FOR THE YEARED 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
GBP150,000 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 GBP810,000.
-- 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 GBP25,000 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 GBP3.5m through a combination of cash and new
ordinary shares.
-- Hosted the second PSYCH Symposium at The British Museum on
6(th) 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 GBP150,000 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 GBP25,000 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 19(th) 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 GBP3.5m 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 4(th) 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 GBP188,882 were reported in the year, representing
an increase of over 200% on the prior year (2022: GBP62,228),
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 GBP164,022 to GBP678,957
(2022: GBP514,935), incorporating a full-year of expenditure on
areas such as advertising and marketing, legal and audit, and a
non-cash charge of GBP75,000 (2022: GBP62,500) relating to the
amortisation of intangible assets. Expenditure on exceptional items
of GBP83,459 (2022: GBP107,510) related to professional fees on the
Admission to the AQSE. A share based payment non-cash charge of
GBP334,277 (2022: GBPnil) 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 GBP963,755 (2022: 582,474) was recorded in
the year. Non-cash fair value loss on the investment in Awakn Life
Sciences Corp of GBP247,037 (2022: gain of GBP38,541), combined
with an impairment charge of GBP49,507, results in a statutory
pre-tax loss of GBP1,260,299 reported in the year (2022: 543,933),
and a basic loss per share of GBP0.0045 (2022: GBP0.0035).
Net assets totalled GBP805,445 at 30 April 2023 (2022:
GBP476,067), incorporating GBP479,491 in cash and cash equivalents
(2022: GBP322,634). The fair value of the investment in Awakn
declined by GBP247,037 to GBP91,505 at the year end (2022:
GBP338,542). Intangible assets, relating to the acquisition of the
PSYCH platform, had a net book value of GBP262,993 (2022:
GBP387,500), after amortisation and impairment. Trade and other
receivables declined to GBP64,266 (2022: GBP150,568), predominately
relating to reduction in prepayments for the PSYCH Symposium event
in the prior year. Trade and other payables reduced significantly
to GBP92,810 (2022: GBP723,177), predominantly due to a balance of
GBP450,000 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
GBP623,543 (2022: GBP397,365), an increase of GBP226,178, 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 GBP780,400, net of
GBP29,600 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
info@psych.capital
https://psych.capital
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 YEARED 30 APRIL 2023
Year ended Year ended
30 April 2023 30 April 2022
GBP GBP
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 YEARED 30 APRIL 2023
As at As at
30 April 2023 30 April 2022
GBP
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 30(th) 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 Share Share based payments reserve Retained Total
capital premium earnings equity
GBP GBP GBP GBP
Transactions with equity owners
At incorporation - issue of
share capital
2 ordinary shares at GBP0.0001
each - - - - -
Ordinary Shares issued
39,998 shares at GBP0.0001 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 Year ended
30 April 2023 30 April 2022
GBP
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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