TIDMONDO
RNS Number : 2193G
Ondo InsurTech PLC
14 November 2022
14 November 2022
Ondo Insurtech Plc
("ONDO", the "Company")
Interim Results for the six months ended 31 August 2022
Ondo Insurtech Plc is pleased to announce its unaudited results
for the six-month period ended 31 August 2022. A copy of the
Interim Results is available on the Company's website,
www.ondoplc.com
FINANCIAL HIGHLIGHTS
-- Revenue of GBP1 million for the six-month period ended 31(st)
August 2022, which is 55% higher than for the same period a year
ago (6 months to end 31(st) Aug 2021: GBP0.6 million)
-- GBP0.4m was from recurring Software and Services +59% growth
(6 months to end 31(st) Aug 2021: GBP0.2 million) and GBP0.6m of
turnover was from one-off Hardware and Set-up fees +50% growth (6
months to end 31(st) Aug 2021: GBP0.4 million)
-- Gross Contribution for the period was GBP0.5m +188% (6 months
to end 31(st) Aug 2021: GBP0.2 million) therefore illustrating a
Gross Margin for the period of 49% achieving the strong unit
economics of the business.
-- Approximately GBP0.9 million cash received from customers
during the period, 120% growth vs. the same period a year ago (6
months to end 31(st) Aug 2021: GBP0.4 million).
-- Period end cash and cash equivalents of c. GBP1.87million,
1.7 times growth vs the same period a year ago (6 months to end
31(st) Aug 2021: GBP1.06 million)
OPERATIONAL HIGHLIGHTS (including post-period updates)
-- Consumer Intelligence Research published showing LeakBot
delivers 70% reduction in claims costs
-- 15,887 L eakBot units were shipped or sold and awaiting
shipment to insurance companies during the period, 2.7 times higher
vs the same period a year ago (H1 FY 2021: 5,908)
-- Total registered customers on platform at period end were
approximately 46,000 , +43% growth ( H1 FY 2021: 32,000) .
-- New contract signed with Admiral (20,000 unit), LB Forsikring
(10,000 units), Privatsikring and new entry into New York State
launched in April.
-- Green Economy Mark awarded to Ondo by the London Stock Exchange
-- Management team further strengthened with CFO Kevin
Withington and CTO Chris Jelley hired, and Jim Strickland hired as
General Manager for newly formed LeakBot USA Inc
Craig Foster - CEO of Ondo InsurTech Plc - commented: "We are
thrilled to release our first set of results as a public company,
showing our investors that we are on plan, doing exactly what we
said we would do and are on the way to building the market leading
company in claims prevention technology for home insurers".
CEO Craig Foster will be providing a live company presentation
and Q&A on Monday, 21st November at 2pm (GMT).
The event will be hosted virtually by the London Stock Exchange
on its Spark Live Platform and open to shareholders, prospective
investors, journalists and financial analysts.
Please register interest here:
https://www.lsegissuerservices.com/spark/ONDOINSURTECH/events/068ec42f-589e-40f1-9f9e-14533986c198
The presentation will subsequently be available on ONDO's
company page on the London Stock Exchange website:
https://www.londonstockexchange.com/stock/ONDO/ondo-insurtech-plc/company-page
For more information, please contact:
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No. 596/2014, as
it forms part of UK Domestic Law by virtue of the European Union
(Withdrawal) Act 2018. Upon the publication of this announcement,
this inside information is now considered to be in the public
domain.
For further information, visit www.ondoplc.com contact:
Chairman's Report
We publish today our unaudited interim financial statements
which are the first accounts published by Ondo InsurTech Plc
("Company" or "Group" or "Ondo") following the acquisition of
LeakBot Limited and the admission to trading of the enlarged group.
They therefore provide us with the first opportunity to publish
consolidated financial statements for the Group. Together with the
information in our prospectus of 14 March 2022, these financial
statements provide shareholders with a clear picture of the
business and its impressive progress since admission.
The process leading up to the acquisition of LeakBot Limited
were described in the audited annual report dated 28 July 2022,
along with a description of the transaction itself as a post-period
matter. Following amendments to the sale and purchase agreement
made on 28 January 2022, 15 February 2022 and 28 February 2022, the
aggregate consideration of GBP9,799,548 was finalised, split as
follows:
-- payment to HomeServe Assistance Limited ("Seller") of GBP1,599,548 in cash;
-- issue and allotment of 13,628,275 and 1,363,392 Consideration
Shares to the Seller and Gregory Mark Wood CBE respectively at
GBP0.12 per share, representing an aggregate amount of
GBP1,799,000; and
-- granting of secured loan notes of the Buyer with a redemption value equal to GBP6,401,000.
In conjunction with the completion of the acquisition of LeakBot
Limited, and readmission of its shares to trading on 14 March 2022,
the Company raised GBP3,427,500 through the issue of 28,562,508
Shares at a price of 12 pence each and the grant of 14,281,252
warrants to subscribe for Shares at an exercise price of 25 pence
each pursuant to a placing by SI Capital Limited as placing agent
for the Company and a private subscription carried out by the
Company.
Upon completion, Leakbot Limited became a wholly owned
subsidiary of Ondo.
The total commissions and other estimated fees and expenses in
connection with the acquisition of LeakBot Limited and the
associated fundraise were approximately GBP592,000 plus VAT.
Through ownership of its l subsidiary LeakBot Limited, Ondo has
become a B2B InsurTech business which has developed and patented
the underlying technologies for a propriety leak detection system.
The Group's primary business is the manufacture (through
third-party manufacturers) of the LeakBot device and supply of the
LeakBot device and the provision of underlying claims mitigation
services to its household insurer partners. The integrated system
enables household insurers to mitigate the cost of claims arising
due to an escape of water. This is achieved through the
installation of a proprietary technology at insured households and
the provision of claims mitigation services such as find-and-fix
plumbing repairs and data to assess risk. The unique technology is
now protected by 29 different patents, issued and granted, and has
been proven by 3(rd) party research to be capable of reducing water
damage claims costs for insurers by 70%. Insurers in the UK,
Denmark, Sweden, Ireland and the US pay for the LeakBot system and
derive the benefit of claims mitigation through the prevention of
leaks at insured households.
I am pleased to be able to note that Ondo has made an
encouraging start to life as a public company during the period
under review and to date. Under the challenging macro-economic
conditions that we have experienced since admission, the Board is
very much focused on the achievement of financial breakeven, and I
am pleased to note that through strong business growth and
financial discipline we are making good progress towards this
important milestone. Our Chief Executive Officer Craig Foster
expands on our strategy, our achievements to date and the outlook
for the Group in his accompanying review.
We were very pleased to welcome Jim Strickland (GM North
America), Dr Chris Jelley (Chief Technology Officer, CTO) and Kevin
Withington to the management team during and shortly after the
period, with Kevin Withington being further appointed to the Board
as Finance Director from 26 September 2022. These experienced
resources position the Group for further growth and strong
governance.
Following the period end, Ondo announced that the accounting
reference date, adding one month to the current financial year to
align it to the nearest calendar quarter end. Our next audited
results will therefore be presented for the 13-month period until
31 March 2023.
Together with my colleagues on the board and with our talented
management, I look forward with confidence to being able to report
on further progress.
Gregory Mark Wood CBE
Chairman
14 November 2022
Chief Executive Officer's Report
I am very pleased to announce our interim results for the period
ending 31(st) August 2022 - our first set of consolidated results
as Ondo InsurTech Plc.
Since arriving on London Stock Exchange in March 2022 we have
announced a whole raft of new partnerships. For the first time
today, our shareholders can see how quickly those announcements can
be turned into trading results for the company.
Our mission - A world leader in claims prevention tech for home
insurers - solving a $17bn problem
Our mission is to become a world leader in claims prevention
technology for home insurers. Our first set of results show how we
are on our way to fulfilling this vision. The reason I am confident
we will be successful is that we have the only patented and proven
solution to one of the most significant perils in home insurance -
claims caused by water damage. In the US and UK there are 1.6m
claims a year caused by water damage, costing insurers $17bn
annually. With our flagship product LeakBot we have a patented and
proven solution to this significant industry problem.
Operational Highlights
In the first Half year, we have announced a raft of new
partnerships all contributing towards our goal of becoming the
leader in claims prevention technology for home insurers.
In May we published a landmark study based on research by
Consumer Intelligence, who delved into the claims experience of our
customer base, which at the time spanned 56,000 device-years of
data. That study showed that in the UK where our model is the most
mature, we can reduce water damage claims costs by 70% - giving us
new statistics which underpin the value of the business model for
our insurance partners.
In August we were also proud to announce that Ondo had received
the London Stock Exchange's Green Economy Mark. The Mark identifies
companies that derive a significant amount of their sales from
green economy products and services, and Ondo received the award in
recognition of LeakBot's ability to save significant amounts of
water by resolving leaks in homes.
In July we announced a new landmark contract with Admiral in the
UK. Admiral are the first mainstream UK insurer to adopt the
LeakBot system. Admiral are one of the biggest home insurers in the
UK with 1.3 million customers and are the fastest growing home
insurer with 11% growth in the last year. Admiral have begun a
rollout of 20,000 LeakBots over a 6 month period on their Platinum
cover product, using the results to scope out the opportunity for a
larger scale roll-out across the Admiral book.
In August we announced our 3(rd) partner in Denmark, disclosing
that LB Forsikring were rolling out LeakBot after a successful
trial where they saw a 50% reduction in claims costs. LB Forsikring
have committed to roll out at least 10,000 devices to their 126,000
home insurance customers in Denmark, with 3,000 devices being
distributed before the end of 2022.
In North America we are now concluding a pilot with Mapfre in
Massachusetts, recently announced in April an expansion into the
State of New York and have presented alongside Hiscox to many US
carriers at the Society of Insurance Research Annual Conference to
explain our model in detail. Based on robust pipeline we are
bullish about prospects in the USA.
Back in the UK - building on the green credentials bestowed by
the Green Economy Mark we signed a new deal with our first water
utility. Portsmouth Water are running our first water utility pilot
to test whether LeakBot can be used to help reduce what water
companies refer to as "customer side leakage". Complementary to our
Home Insurance go-to-market model, water utilities could open up a
whole new route to market for LeakBot.
Financial Results
Although many of these contracts are newly signed , our strong
set of financial results demonstrate the growing momentum of the
business.
1H Revenue was GBP1m over the 6 months 55% growth vs year ago.
For the first time we have disclosed how this revenue is made up
from ongoing Software and Services to insurers, compared to set-up
fees and hardware fees. This revenue is made up of GBP0.6m of
one-off device and set-up fees (+50% growth), and GBP0.4m of
revenue from ongoing Services and Subscriptions (+59% growth). This
underlines the recurring revenue aspect of our business model)
showing the strong growth through the period as we onboard new
partnerships.
This revenue growth was driven by a growth in registered devices
to 46,000 +43% up on the prior year and more encouraging these
customers continue to generate ongoing Services and Subscription
revenues, a strong indicator of the good lifetime value of these
customers.
Cash received from our insurance partners totalled GBP0.9m in
the 6 months, up 120% on the previous year .
The gross margin on this business during the half year was 49%
demonstrating the strong unit economics of the LeakBot
business.
With revenue up 55%, it is important to keep control on
Operating Expenditure which I am pleased to report has only
increased by 7% despite adding the additional overheads of being a
PLC, adding three senior executives to the team (CFO, CTO and
General Manager for North America) and adding additional costs of
replacing some of the group services when we separated from
HomeServe PLC.
Tackling Tough Times Head On
While today's economic situation is challenging, we are well
placed to weather the storm. Upward cost pressures on water damage
claims costs actually create more of an incentive for insurers to
try and mitigate these costs. We are managing upward cost pressures
on our hardware costs successfully, and although we have seen some
cost increases, we have managed to pass these on to our customers
creating no material difference in the life time value of a
customer.
Our immediate focus - more of the same
We are on a mission to become the world leader in claims
prevention technology for home insurers. Our immediate focus is to
do more of the same - sign more partnerships, install more units in
homes, driving continued year-on-year savings for carriers and
delivering year-on-year recurring returns for our shareholders.
We are really pleased to be able to announce these first results
to the market and to demonstrate that we are delivering exactly
what we set out to do in the Prospectus. Likewise, we have good
line of site for the 2HY results and are equally looking forward to
making more announcements soon and showing further progress for the
full year period.
Thank you to all the team who make it happen every day, to our
homeowners for doing their bit and to the insurers and investors
who have been early adopters and believers in our mission - we are
just getting started.
Craig Foster
CEO Ondo InsurTech Plc
14 November 2022
INCOME STATEMENT AND STATEMENT OF COMPRENSIVE INCOME
U naudited U naudited Audited
S ix months ended S ix months ended Year
ended
Note 31 August 2022 31 August 2021 30 September 2021
GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 1,004 646 944
Cost of sales (511) (475) (390)
Gross profit 493 171 554
Administrative expenses (1,844) (1,725) (4,608)
Operating loss (1,351) (1,554) (4,054)
Reverse acquisition expenses 6 (706) - -
Loss before tax (2,057) (1,554) (4,054)
Tax credit - 247 831
Loss for the period a nd total comprehensive loss (2,057) (1,307) (3,223)
================== ================= =================
Earnings per share attributable to equity owners
Basic and diluted (loss) per share (pence) 5 (3.3) (4.6) (11.41)
------------------ ----------------- -----------------
STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
As at As at As at
31 August 31 August 30 September 2021
2022 2021
Note GBP GBP GBP
GBP'000 GBP'000 GBP'000
Non-current Assets - - -
----------- ---------- ---------------------
Current assets
Cash and cash equivalents 1,872 - -
Inventories 225 279 11
Trade and other receivables 829 800 448
----------- ---------- ---------------------
Total current assets 2,926 1,079 459
----------- ---------- ---------------------
Total assets 2,926 1,079 459
=========== ========== =====================
Current liabilities
Trade and other payables (774) (826) (452)
Bank overdraft - (1,344) (1,726)
----------- ---------- ---------------------
Total current liabilities (774) (2,170) (2,178)
----------- ---------- ---------------------
Net-current liabilities 2,152 (1,091) (1,719)
----------- ---------- ---------------------
Non-current liabilities
Loans and borrowings 8 (6,401) - -
----------- ---------- ---------------------
Total non-current liabilities (6,401) - -
----------- ---------- ---------------------
Total liabilities (7,175) (2,170) (2,178)
----------- ---------- ---------------------
Net liabilities (4,249) (1,091) (1,719)
----------- ---------- ---------------------
Equity
Share capital 3,408 28,250 28,250
Share premium 3,902 - -
Share based payments reserve 215 - -
Reverse acquisition reserve 20,261 - -
Retained deficit (32,035) (29,341) (29,969)
----------- ---------- ---------------------
Total equity (4,249) (1,091) (1,719)
=========== ========== =====================
STATEMENT OF CHANGES IN EQUITY
Share based
Reverse payments reserve
Share Share acquisition Retained
capital premium reserve earnings Total
GBP GBP GBP GBP GBP GBP
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 01 March 2022 32,530 955 - 165 (32,022) 1,628
Issue of ordinary
shares 2,277 3,146 - - - 5,423
Cost of share
issued - (192) - - - (192)
Total comprehensive
loss for the
period - - - (2,057) (2,057)
Leakbot acquisition (31,399) - 20,261 - 2,044 (9,094)
Share based payment - (7) 50 - 43
--------- --------- ------------------- ------------------- ---------- --------
At 31 August 2022 3,408 3,902 20,261 215 (32,035) 4,249
========= ========= =================== =================== ========== ========
Share Share Other reserves Retained
capital premium earnings Total
GBP GBP GBP GBP GBP
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 01 March 2021 28,250 - - (28,034) 216
Issue of ordinary shares
Total comprehensive loss for the period - - - (1,307) (1,307)
Share based payment - - - -
--------- --------- -------------- ---------- ----------
At 31 August 2021 28,250 - - (29,341) (1,091)
========= ========= ============== ========== ========
Share Share Other reserves Retained
capital premium earnings Total
GBP GBP GBP GBP GBP
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 01 October 2020 250 - - (26,746) (26,496)
Issue of ordinary shares 28,000 - - - 28,000
Loss for the period and total comprehensive
expense - - - (3,223) (3,223)
At 30 September 2021 28,250 - - (29,969) (1,719)
========= ========= ============== ========== =========
STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
Year
S ix months ended S ix months ended ended
31 August 31 August
2022 2021 3 0 September 2021
GBP GBP GBP
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Loss before income tax (2,057) (1,307) (4,054)
Adjustments:
Share based payments 42 - -
R everse acquisition share based payment expense 706 - -
Movement in working capital
(Increase)/Decrease in trade and other receivables (119) (280) 35
(Increase)/Decrease in Inventories (225) (800) 345
Increase/(Decrease) in trade and other payables (143) 826 (424)
------------------ ----------------- ------------------
Cash used from operations (1,796) (1,561) (4,098)
Group tax relief received - 1,814
------------------ ----------------- ------------------
Net cash used in operations (1,796) (1,561) (2,284)
Cash flow from investing activities
C ash acquired with subsidiary 1,679
Purchase of investments (1,600) - -
------------------ ----------------- ------------------
Net cash flow from investing activities (79) - -
Cash flows from financing activities
Issue of ordinary shares 3,432 - 28,000
Net cash flows from financing activities 3,432 - 28,000
------------------ ----------------- ------------------
Net increase in cash and cash equivalents 1,715 (1,561) 25,716
Cash and cash equivalents at beginning of period 157 217 (27,442)
Cash and cash equivalents at end of period 1,872 (1,344) (1,726)
================== ================= ==================
The accounting policies and notes form an integral part of these
financial statements.
NOTES TO THE FINANCIAL INFORMATION
For the six months ended 31 August 2022
1. Basis of preparation
The interim condensed consolidated financial statements for the
six months ended 31 August 2022 have been prepared in accordance
with IAS 34 Interim Financial Reporting. The Group has prepared the
financial statements on the basis that it will continue to operate
as a going concern. The Directors consider that there are no
material uncertainties that may cast significant doubt over this
assumption. They have formed a judgement that there is a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future, and not less than
12 months from the end of the reporting period.
On 21 March 2022, Ondo Insurtech Plc completed the acquisition
of Leakbot Limited ("Leakbot") via a reverse takeover which
resulted in the Company becoming the ultimate holding company of
the Group. The transaction was accounted for as a reverse
acquisition since it did not meet the definition of a business
combination under IFRS 3. In accordance with IFRS 2, a share based
payment expense equal to the deemed cost of the acquisition less
the fair value of the net assets of the Company at acquisition was
recognised. The comparatives within the interim accounts therefore
represent that of the legal subsidiary and accounting acquirer,
Leakbot. The annual accounts of Leakbot have been disclosed for the
most recent financial year end which was for the year ended 30
September 2021.
The interim accounts have been prepared in accordance with
accounting policies that are expected to be applied in the Group
Annual Report and Accounts for the year ended 31 March 2023.
The comparative financial information for the year ended 30
September 2021 in this interim report does not constitute statutory
accounts for that period under 435 of the Companies Act 2006.
Statutory accounts for the year ended 30 September 2021 have been
delivered to the Registrar of Companies.
The auditors' report on the accounts for 30 September 2021 was
unqualified, did not draw attention to any matters by way of
emphasis, and did not contain a statement under 498(2) or 498(3) of
the Companies Act 2006.
The Group has not early adopted any standard, interpretation or
amendment that has been issued but is not yet effective. Several
amendments apply for the first time in 2022, but do not have an
impact on the interim condensed consolidated financial statements
of the Group.
2. Estimates and judgements
The preparation of interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates. In preparing
these condensed consolidated interim financial statements, the
significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were:
Share based payments
The estimates of share-based payment costs require that
management selects an appropriate valuation model and makes
decisions on various inputs into the model, including the
volatility of its own share price, the probable life of the options
before exercise, and behavioral consideration of employees. A
significant element of judgement is therefore involved in the
calculation of the charge.
3. Going concern
As at 31 August 2022, the Group's cash position totalling
GBP1,872,000 and it was in a strong net current asset position.
Based on the Group's current cash reserves and detailed cash
forecasts produced, the Directors are confident that the Group will
be able to meet its obligations as they fall due over the course of
the next 12 months and that the Group will continue to remain a
going concern.
4. Operating expenses by nature
Unaudited Unaudited Audited
Six months Six months Year
Ended ended ended
31 August 31 August
2022 2021 3 0 September 2021
GBP GBP GBP
GBP'000 GBP'000 GBP'000
Directors' remuneration 1 64 - -
Professional fees 251 330 1,067
Share based payments 42 - -
Staff cost 737 1,028 2,536
Bad debts - 309 712
Sundry expenses 650 58 293
1,844 1,725 4,608
------------ ----------- ------------------
5. Earnings per share
The basic earnings per share is calculated by dividing the loss
attributable to equity shareholders by the weighted average number
of shares in issue.
The Company had in issue 68,169,612 ordinary shares at 31 August
2022 & 28,250 ordinary shares at 31 August 2021. The loss
attributable to equity holders and weighted average number of
ordinary shares for the purposes of calculating diluted earnings
per ordinary share are identical to those used for basic earnings
per ordinary share.
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 August 31 August
2022 2021 3 0 September 2021
GBP GBP GBP
GBP'000 GBP'000 GBP'000
Loss for the period attributable to equity holders (2,057) (1,307) (3,223)
Weighted average number of shares in issue 63,000,257 28,250,000 28,250,000
Basic and diluted (l oss) per share (p ence ) (3.3) (4.6) (11.41)
============ ============ ==================
6. Reverse acquisition
On 21 March 2022, Ondo Insurtech Plc ("Company") formerly known
as Spinnaker Acquisitions Plc, acquired through a share for share
exchange the entire share capital of Leakbot Limited, whose
principal activity is to act on the B2B insurance tech sector.
Although the transaction resulted in Leakbot becoming a wholly
owned subsidiary of the Company, the transaction constituted a
reverse acquisition, as the substance of the transaction was that
Leakbot Limited gained effective control of Ondo Insurtech plc.
As the Company's activities prior to the acquisition were purely
the maintenance of the London Stock Exchange Listing, acquiring
Leakbot and raising equity finance to provide the required funding
for the operation of the acquisition, it did not meet the
definition of a business in accordance with IFRS 3.
Accordingly, this reverse acquisition does not constitute a
business combination and was accounted for in accordance with IFRS
2 "Share-based Payments" and associated IFRIC guidance. Although,
the reverse acquisition is not a business combination, the Company
has become a legal parent and is required to apply IFRS 10 and
prepare consolidated financial statements. The Directors have
prepared these financial statements using the reverse acquisition
methodology, but rather than recognising goodwill, the difference
between the equity value given up by Leakbot's shareholders and the
share of the fair value of net assets gained by these shareholders,
is charged to the statement of comprehensive income as a
share-based payment on reverse acquisition and represents in
substance the cost of acquiring an London Stock Exchange
listing.
On 21 March 2022, the Company issued 14,991,667 ordinary shares
to acquire the 31,398,986 ordinary shares of Leakbot. Based on a
share price of GBP0.12 (which was used for the fund-raising on the
same date). In addition, a payment of GBP1,599,548 was made in cash
and loan notes with a value of GBP6,401,000 were issued to the
vendor. T he Company's investment in Leakbot was therefore valued
at GBP9,799,548.
Because the legal subsidiary, Leakbot Limited, was treated on
consolidation as the accounting acquirer and the legal Parent
Company, Ondo Insurtech plc, was treated as the accounting
subsidiary, the excess of the transaction price over the fair value
of the assets and liabilities of Ondo Insurtech Plc represented a
cost for obtaining a listing.
According to IFRS 2 the value of the share-based payment is
calculated as the difference between the deemed cost and the fair
value of the net assets as the acquisition date.
GBP'000
Deemed cost 2,376
Fair value of net assets (1,670)
--------
Reverse acquisition expenses 706
--------
The difference between the deemed cost (GBP2,376k) and the fair
value of net assets (GBP1,670k) per above resulted in GBP706k being
expensed within "reverse acquisition expenses" in accordance with
IFRS 2, Share Based Payments, reflecting the economic cost to
Leakbot Limited's shareholders on acquiring the entity.
The reverse acquisition reserve which arose from the reverse
takeover is made up as follows:
GBP'000
Pre-acquisition earnings of Ondo Insurtech (570)
Pre-acquisition earnings of Leakbot (1,474)
Leakbot's share capital at acquisition 31,399
Investment in Leakbot (9,800)
Reverse acquisition expense 706
--------
20,261
--------
7. Share based payments
Equity-settled share-based payments are measured at fair value
(excluding the effect of non-market based vesting conditions) at
the date of grant.
The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Company's estimate of
shares that will eventually vest and adjusted for the effect of
non-market based vesting conditions.
On 7 March 2022, 653,333 share options were granted with an
exercise price of GBP0.12 and an expiry period of 4 years.
On 7 March 2022, two tranches of share warrants were issued:
1,864,520 warrants at an exercise price of GBP0.05 with an expiry
period of 2 years and 3,374,766 warrants at an exercise price of
GBP0.12 with an expiry period of 4 years.
The fair value of the options has been calculated using the
Black-Scholes valuation model. The assumptions used in the fair
value calculation were as follows:
Options O ptions O ptions
Date of grant 7 March 2022 7 March 2022 7 March 2022
Number 635,333 1,864,520 3,374,766
Exercise price (pence) 12p 5p 12p
Risk free interest (%) 1.18% 1.12% 0.5%
Expected volatility (%) 18% 18% 18%
Expected life (years) 3.75 2 4
Fair value 0.02 0.07 0.02
Option life 4 years 2 years 4 years
The total share-based payment expense recognised in the income
statement for the period ended 31 August 2022 in respect of the
share options granted was GBP42,180.
Volatility was determined by reference to the standard deviation
of daily share prices.
At the date of grant, the 800,000 warrants that came under the
scope of IFRS 2 Share based payments were valued based on an agreed
fee payable to the broker on completion of the fundraising. This
resulted in a charge of GBP7,394 against share premium in respect
of share issue costs.
On 7 March 2022, 14,281,252 warrants were issued at an exercise
price of 25p each to the investors. No share based payments charge
arose for these warrants as they fall outside the scope of IFRS
2.
8. Loans and borrowings
On 21 March 2022, the Company issued GBP6,401,000 loan notes to
the seller for acquisition of Leakbot Limited. The loan notes carry
a fixed interest rate of 10% per annum on the principal amount of
the notes outstanding from time to time. The first interest payment
due on this for this loan is 31 March 2024. To the extent not
previously repaid or redeemed, the lower of the principal amount
outstanding from time to time and GBP1,600,000 under the loan notes
will be repayable on or before the third anniversary of the issue
date of the loan notes and then (after the third anniversary) on
each subsequent anniversary of issue date.
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END
IR BLLFFLFLZFBV
(END) Dow Jones Newswires
November 14, 2022 02:00 ET (07:00 GMT)
Spinnaker Acquisitions (LSE:SPAQ)
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