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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Cellular Goods Plc | LSE:CBX | London | Ordinary Share | GB00BK964W87 | ORD GBP0.001 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.375 | 0.35 | 0.40 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Catalog, Mail-order Houses | 67k | -3.31M | -0.0055 | -0.40 | 1.32M |
From Apr 2022 to Apr 2024
TIDMCBX
RNS Number : 6812K
Cellular Goods PLC
23 December 2022
The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014, as retained as part of the law of England and Wales. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.
Press release
23 December 2022
Cellular Goods PLC
('Cellular Goods' or 'the Company')
Annual results
Cellular Goods (LSE: CBX), a UK-based wellness company providing premium consumer products formulated with lab-produced cannabinoids, announces its audited results for the year ended 31 August 2022.
Summary:
Hot Features
Premium
-- Created and developed the UK's first fully validated and
legally compliant cannabigerol ("CBG") based skincare 'Look
Better' product line, launched on 1 December 2021, less
than a year after operations began;
-- Launched the Rejuvenating Cannabinoid Face Serum, the UK's
only CBG-based serum to prevent the signs of ageing caused
by UV-light exposure and inflammation, as part of the Company's
'Look Better' product range;
-- Accelerated marketing strategy and retail partnerships by
introducing the 'Look Better' range on Amazon Marketplace,
the biggest retailer in the UK, on 21 February 2022;
-- Launched a broad-scale brand awareness and marketing campaign,
between March and May 2022, including a two-city outdoor
poster advertising, public relations, influencer, and content
partnership with Condé Nast;
-- Filed the first UK patent application related to the use
of cannabinoids for skin brightening;
-- Published three scientific white papers to raise awareness
of the skincare and sustainability benefits of cannabinoids
and to support the Company's differentiated and premium
quality product line;
-- Pre-tax loss of GBP5.99m (2021: GBP3.33m), principally reflecting
higher operating costs due to ramp-up of commercial operations,
investment in marketing and brand building as well as the
impact of slower than expected product sales due to challenging
industry and regulatory conditions;
-- Net cash amounted to GBP4.37m as at 31 August 2022 (net
cash of GBP10.3m as at 31 August 2021).
Post-period highlights:
-- Implemented a major streamlining programme reducing the
Company's annual cost base by 56%, or GBP3.2m, and refocused
Company marketing expenditure from brand advertising to
targeted online promotional activity to drive revenue growth;
-- Announced intention to acquire Cannaray Brands Ltd ("Cannaray
Brands") in a reverse takeover to create a stronger consumer
cannabidiol ("CBD") company with significant growth opportunities,
scale benefits and an enhanced market presence with established
brands. Following discussions with Cannaray Limited, the
Company is no longer going to acquire Love CBD Health Ltd
as part of the transaction;
-- Expanded product range with the introduction of three new
rejuvenating skincare products on 21 September 2022, followed
by launch of a gift set collection for the festive season;
-- Signed international supermodel Helena Christensen to be
the face of the Company's 'Rejuvenating Skincare Campaign'
with more than one million social media followers;
-- Strengthened retail strategy with a product launch on Debenhams.com;
-- Entered a new market with Cellular Goods' products shipping
to the USA from September 2022.
Current trading and outlook
-- Trading in the first quarter of the 2022/23 financial year
has improved significantly from a low base and the Company
has seen three straight months of sequential growth in revenue
during this period and therefore the Board looks to the
future with cautious optimism.
Darcy Taylor, Chairman of Cellular Goods, commented: "Despite achieving major operational milestones during the year, significant investment in new products and a broad-scale marketing campaign that meaningfully boosted our brand awareness, it did not translate to our revenue growth expectations due to a challenging market and regulatory environment that is affecting the growth of both the industry and the Company.
"In response, we have halved our annual cost base and continue to look for further cost optimisation as we invest in the business to position it for a significant turnaround when trading conditions normalise. We are also in negotiations for an acquisition to provide greater scale in a highly fragmented market, accelerate growth and generate long-term value for shareholders."
The Company's annual report and accounts will be uploaded to its website www.cellular-goods.com later today.
For further information please contact:
Cellular Goods
Darcy Taylor via Tancredi +44 207 887 7633
Chairman
Neil Thapar +44 787 645 5323
Investor Relations
------------------------------
Tennyson Securities
------------------------------
Corporate Broker & Adviser
Peter Krens
Alan Howard +44 207 186 9030
------------------------------
Novum Securities
------------------------------
Corporate Broker
Colin Rowbury
Jon Belliss +44 207 399 9427
------------------------------
Tancredi Intelligent Communication
------------------------------
Media Relations
Helen Humphrey
Gabriela Amaya Garcia +44 744 922 6720
Charlie Hobbs +44 791 503 5294
cellulargoods@tancredigroup.com +44 789 755 7112
------------------------------
About Cellular Goods PLC:
Cellular Goods is a UK-based wellness company that provides premium products based on lab-made cannabinoids. It was established in August 2018 to develop efficacy-led and research-backed cannabinoid-powered wellness products. The initial focus is on three product verticals: Feel Better, Look Better and Function Better. These three verticals encompass Cellular Goods' premium CBG skincare and CBD wellness with the first products launched in December 2021. The Company's shares are listed on the main market of the London Stock Exchange. www.cellular-goods.com .
CHAIRMAN'S STATEMENT
Introduction
Despite an encouraging start to the year ended 31 August 2022, several regulatory and operational headwinds contributed to a difficult full year for the Company. Our inaugural range of innovative 'Look Better' skincare and 'Feel Better' ingestible products went on sale in the UK on 1 December 2021, less than 12 months after Cellular Goods joined the London Stock Exchange as a start-up. It was a major milestone in our mission to establish the Company as a premium British brand in the cannabinoid wellness space.
Following the product launches, steady progress was made throughout the year to expand our skincare range, invest in our sales infrastructure and our customer relationship management capability to build a strong foundation for long-term growth. We also sharpened our focus with a major investment in a broad-scale marketing and brand building campaign. This initiative was supported by the publication of three white papers aimed at highlighting the benefits of cannabinoids and differentiating our products in a highly fragmented market that is characterised by a myriad of products and brands of variable quality and provenance.
While such investment is essential to fostering brand recognition and loyalty for long-term growth, it takes time for these types of marketing activities to translate into significant revenues and product sales within the premium beauty segment due to entrenched consumer habits.
In addition, the Company was adversely affected by a ruling from the Food Standards Agency ("FSA") in March this year concerning the sale of our CBD ingestibles, forcing us to withdraw from that market segment for the foreseeable future.
We were also hampered by CBD category marketing bans by global online platforms including Facebook/Meta and Google from promoting our skincare products directly to consumers, even though the products are formulated to be fully compliant for sale under English law. While the Company made changes to its media mix to work around these bans, and worked independently and with the industry players to educate the platforms on our category to lift these bans, sales growth was below our expectations. We are optimistic that Facebook/Meta and Google will eventually align with English law, though that timing is unknown. This has negatively impacted our direct-to-consumer channel customer acquisition, increased acquisition costs and reduced the ability to scale this traditionally high return-on-investment channel.
We believe that the operating environment for CBD and CBG-infused beauty products in the UK is also being impacted by a glut of niche brands and products from many companies with subscale operations and resources. This has prompted fierce competition for both online and offline retail space as well as for consumer 'mindspace', leading to cannabinoid confusion, fragmentation and fatigue, thereby slowing adoption of new products.
As a result of these factors, revenues grew at a slower pace than expected. Full-year revenue increased to GBP0.03m (2021: GBPnil) while the pre-tax loss rose to GBP5.99m, up from GBP3.33m in the previous year.
In the light of the prevailing headwinds, the Company has taken remedial measures to significantly reduce its cash burn and improve performance. These actions include a 56% reduction in the overall cost base, achieved through lower management and staff costs, consultancy fees and administrative expenses. Following a broad-scale marketing and brand building campaign during the second half, which has established Cellular Goods' name in the sector, the Company has now streamlined its media spend down from previous levels. Media however remains vital to our long-term prospects as it increases consumer awareness of our brand which rose from negligible levels to parity with, or above, key competitors who have been in the market considerably longer than the Company.
Strategy and Operational Review
Proposed acquisition and rationale of the deal
As part of our long-term strategy, we entered discussions to acquire Cannaray Brands in a transaction that would constitute a reverse takeover of Cellular Goods. The initial consideration is to be determined, with an announcement to be made in due course. These discussions, which are subject to an application being made to the Financial Conduct Authority, are progressing and we will provide an update in due course.
The Cannaray subsidiary is a leading consumer CBD brand in the UK and offers a range of high-quality ingestibles CBD products (such as oils, gummies, capsules) which are sold in the UK and sold through 1,500 retailer outlets including leading high street supermarkets and direct-to-consumer branded websites. Their ingestible products also fill an important gap in our own portfolio and will strengthen our product offering in ingestibles, which is one of the largest and fastest growing segments of the CBD consumer goods sector. Cannaray has also developed a leading marketing approach via a partnership with TV and Radio presenter Claudia Winkleman, and national TV advertising on Channel 4. Following discussions with Cannaray Limited, the Company is no longer going to acquire Love CBD Health Ltd as part of the transaction.
The proposed acquisition, if completed, is intended to create long-term value for shareholders by bringing together complementary businesses to provide growth opportunities, scale benefits and an enhanced market presence. The deal will also help to achieve a key medium-term intention of the Company to expand its product range to include a complementary range of grown CBD containing products. Given the headwinds in the cannabinoid sector, the Directors consider it prudent to accelerate the Company's plans with the proposed acquisition, which will provide existing recognisable brands and a diverse range of grown CBD products to complement the Company's own lab-produced cannabinoid consumer products.
CBD market opportunity
Notwithstanding the near-term challenges faced by the Company, the UK is the world's second-largest CBD market, behind the United States. Demand for CBD grew during the COVID-19 pandemic, with the market now estimated as worth GBP690 million per annum, up from GBP400 million in 2020 and more than twice the estimate of GBP300 million in 2019. The market is estimated to surpass GBP1bn annually by 2025 with an anticipated CAGR of 40.4% throughout 2020-2025. The CBD market is now worth more than both the Vitamin C and D markets in the wellness sector, with products generally available on the shelves in retail stores and online. (Source: New Frontier Data)
I would also like to thank our many shareholders for their support and patience while we navigate the current challenges and look to improvement in our performance in the year ahead.
Operational review
The Company's initial focus was on three product verticals: a premium CBG skincare range and CBD-based ingestibles range, and a topical athletic recovery products range, which will launch in 2023.
The inaugural range of skincare products and ingestibles was launched on 1 December 2021 via the Company's online ecommerce platform. Customer order intake for the face oil and after shave moisturiser commenced immediately followed by the face serum in March 2022. The Look Better range was launched on Amazon Marketplace in late February 2022, thereby enabling our products to be sold through the UK's largest retailer for the first time.
The launch generated much media and consumer interest including in leading publications such as Vogue and Men's Health. However, it did not convert into customer orders at the rate envisaged by the Company. A major factor for the disappointing revenue performance was a decision by leading online platforms including Facebook and Google to prohibit advertising of cannabinoid infused products on their platforms. As part of a wider industry effort, we continue to lobby these US-based platforms for the ban to be lifted, but progress has been slow even as, ironically, many US states relax their laws governing the sale of cannabis and CBD infused products under their jurisdictions.
In April 2022 we also took the decision to withdraw our ingestibles range, supplied by Chanelle McCoy Health, from sale in the UK following the imposition of new rules governing the sale of novel foods by the FSA.
Although our products are high quality, safe and identical to other products that are permitted for sale, these are not included in the FSA-approved list for sale. Although we and our supplier have requested the FSA to reconsider the ban, the matter remains in deadlock. We have therefore written down the value of that stock to nil.
Even so, ingestibles accounted for approximately 43% of unit sales and 32% by value for the period up to the time they were pulled from the market, demonstrating their market potential.
In addition to the proposed acquisition of Cannaray Brands Limited, Cellular Goods is also considering overseas markets for its ingestibles as part of its plans to diversify into new territories next year. However, no firm decision has been made at present and, as stated above, the stock value has been written off.
Marketing refocus on sales growth
During the second half of the year, a broad-scale marketing and advertising campaign was undertaken to raise consumer awareness of our brand to engender long-term demand for our products. It is an essential part of establishing a new brand and widely used strategy to gain market share in the consumer brands industry. Although the campaign generated disappointingly low revenue growth during the year, the greater brand awareness created in 2022 has paved the way for the Company to renew focus on delivering near-term sales growth through a more targeted online marketing strategy. This involves marketing initiatives to improve customer experience, loyalty and retention programmes, repeat business, improved email communications as well as more online content marketing to drive engagement and follower growth. A new customer relation management system, brought in during the year to power this revenue drive, is now fully operational.
Marketing channels for promotional spend have been selected carefully to drive strong returns on investment, which include public relations, paid social, affiliate marketing, search engine optimisation, retail partnerships, email and onsite marketing.
UK patent application
As announced previously, a UK priority patent application was filed on 26 April 2022 concerning the use of CBG for skin brightening purposes. Skin brightening is a novel application for CBG and point of difference compared to CBD. It is also a top-line consumer concern across both cosmetic and clinical segments and our filing includes claims for both segments. We are making good progress to respond to follow-up searches/enquiries from the Intellectual Property Office before final submission by Q2 2023.
Post-balance sheet milestones
Our growth plans have advanced further with the achievement of several milestones since the year end. On 21 September 2022, the Look Better range was expanded, as planned, with the introduction of three Rejuvenating products, fronted by international supermodel Helena Christensen, who has been appointed as the 'Face of Cellular Goods'.
The launch has generated a positive response in the UK as well as the US where Christensen is based, resulting a notable uptick in sales orders. Our ecommerce website has been opened to US consumers to capitalise on Christensen's popularity there, and US consumers can now place orders for selected items from the skincare range for shipment to the US.
The Company will assess online traffic and sales to assess potential market demand for selected territories' entry next year to expand its addressable market and revenue base if viable. However, these moves are likely to require further investment in product packaging, marketing and sales support and fulfilment infrastructure. No decision will be taken until the Company is confident of generating a suitable return on its capital.
Our retail strategy received a major boost on 24 October 2022 with the launch of eight skincare products on Debenhams.com, a UK retailer. This is our first major retail distribution deal after Amazon and provides a significant validation of our premium product strategy. It also has the potential to open other retail opportunities in the UK. We are working closely with Debenhams.com to develop new marketing activities to drive sales.
Current trading and outlook
Trading in the first quarter of the 2022/2023 financial year has improved significantly as our brand investment and marketing strategy, together with an expanded skincare range, generate increasing sale momentum from a low base.
As a result, the Company has seen three straight months of sequential growth in revenues during the first quarter. Online sales through our website also continue to grow steadily and accounted for close to 50% of total sales by volume and value during the quarter, driven by strong uptake of our Rejuvenating skincare range. Sales through Amazon are also expected to receive a fillip from our seasonal range during the festive season. We also have seen an encouraging start to US orders, which commenced in early October, followed by our product launch with Debenhams on 24 October 2022.
With the current year off to a positive start, and a streamlined operational structure and a revenue-focused marketing strategy in place, the Board looks to the future with cautious optimism.
Darcy Taylor
Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARED 31 AUGUST 2022
2022 2021
Note GBP GBP
Revenue 3 28,904 -
Cost of sales (10,787) -
------------- ---------------------
Gross profit 18,117 -
Administrative expenses 5 (6,009,375) (3,334,439)
------------- ---------------------
Operating loss (5,991,258) (3,334,439)
Finance income 1,301 522
------------- ---------------------
Loss before taxation (5,989,957) (3,333,917)
Corporation tax 9 - -
------------- ---------------------
Loss for the year (5,989,957) (3,333,917)
Other comprehensive gain/(loss) 1,284 (2,584)
------------- ---------------------
Total comprehensive loss for
the year (5,988,673) (3,336,501)
------------- ---------------------
Earnings per share
Basic earnings per share - continuing
and total
operations 10 (1.183p) (0.962p)
------------- ---------------------
The consolidated statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
The Accounting Policies and notes below form part of these consolidated financial statements.
The Company has elected to take exemption under section 408 of the Companies Act 2006 not to present the parent company Statement of Comprehensive Income.
The loss of the parent company for the year was GBP5,991,009 (2021: loss of GBP3,334,439).
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 AUGUST 2022
Consolidated Consolidated Company Company
2022 2021 2022 2021
Note GBP GBP GBP GBP
ASSETS
Non-current assets
Investment in
subsidiary 13 - - 1 1
Current assets
Cash and cash
equivalents 4,376,134 10,332,476 4,376,134 10,332,476
Inventory 14 504,127 57,178 504,127 57,178
Trade and other
receivables 12 251,104 368,347 250,830 367,442
------------ ------------------- ------------------ ----------------
Total Assets 5,131,365 10,748,001 5,131,092 10,747,096
============ =================== ================== ================
EQUITY AND
LIABILITIES
Equity attributable
to owners
Share capital 15 507,250 504,750 507,250 504,750
Share premium 15 12,513,101 12,490,601 12,513,101 12,490,601
Accumulated losses (9,730,889) (3,740,931) (9,732,462) (3,741,453)
Share-based payment
reserve 17 1,564,070 1,295,918 1,564,070 1,295,918
Foreign translation
reserve (1,300) (2,584) - -
------------ ------------------- ------------------ ----------------
Total Equity and
Reserves 4,852,232 10,547,754 4,851,959 10,549,816
============ =================== ================== ================
LIABILITIES
Current Liabilities
Trade and other
payables 16 279,133 200,247 279,133 197,280
------------ ------------------- ------------------ ----------------
279,133 200,247 279,133 197,280
============ =================== ================== ================
Total Equity and
Liabilities 5,131,365 10,748,001 5,131,092 10,747,096
============ =================== ================== ================
The Accounting Policies and Notes below form part of the financial statements
The consolidated and company financial statements were approved and authorised for issue by the Board of Directors. Signed on behalf of the Board of Directors by:
Bruna Nikolla
Director
23 December 2022
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 31 AUGUST 2022
Share Share Foreign Share-based Retained Total equity
capital Premium currency payment earnings
translation reserve
GBP GBP GBP GBP GBP GBP
As at 1 September
2020 128,750 195,025 - - (407,014) (83,239)
Loss for the
year - - - - (3,333,917) (3,333,917)
Exchange difference
on translation - - (2,584) - - (2,584)
--------- ------------ ------------- ------------ ------------ -----------------------
Total comprehensive
loss for the
year - - (2,584) - (3,333,917) (3,336,501)
--------- ------------ ------------- ------------ ------------ -----------------------
Issue of ordinary
shares (21/10/2020) 21,750 195,750 - - - 217,500
Issue of ordinary
shares (27/11/2020) 10,000 90,000 - - - 100,000
Issue of ordinary
shares (18/12/2020) 9,000 81,000 - - - 90,000
Issue of ordinary
shares (12/01/2021) 30,000 270,000 - - - 300,000
Issue of ordinary
shares (28/01/2021) 32,750 294,750 - - - 327,500
Issue of ordinary
shares (01/02/2021) 10,000 90,000 - - - 100,000
Issue of ordinary
shares (02/02/2021) 2,500 22,500 - - - 25,000
Issue of ordinary
shares (26/02/2021) 260,000 12,740,000 - - - 13,000,000
Share issue
costs - (1,099,849) - - - (1,099,849)
Share-based
payments - (388,575) - 1,295,918 - 907,343
--------- ------------ ------------- ------------ ------------ -----------------------
Total transactions
with owners
recognised
in equity 376,000 12,295,576 - 1,295,918 - 13,967,494
--------- ------------ ------------- ------------ ------------ -----------------------
As at 31 August
2021 504,750 12,490,601 (2,584) 1,295,918 (3,740,931) 10,547,754
========= ============ ============= ============ ============ =======================
Share Share Foreign Share-based Retained Total equity
capital Premium currency payment earnings
translation reserve
GBP GBP GBP GBP GBP GBP
As at 1 September
2021 504,750 12,490,601 (2,584) 1,295,918 (3,740,931) 10,547,754
Loss for the
year - - - - (5,989,957) (5,989,957)
Exchange difference
on translation - - 1,284 - - 1,284
--------- ----------- ------------- ------------ ------------ --------------------
Total comprehensive
loss for the
year - - 1,284 - (5,989,957) (4,559,081)
--------- ----------- ------------- ------------ ------------ --------------------
Issue of ordinary
shares (04/03/2022) 2,500 22,500 - - - 25,000
Share-based
payments - - - 268,152 - 268,152
--------- ----------- ------------- ------------ ------------ --------------------
Total transactions
with owners
recognised
in equity 2,500 22,500 - 268,152 - 293,152
--------- ----------- ------------- ------------ ------------ --------------------
As at 31 August
2022 507,250 12,513,101 (1,300) 1,564,070 (9,730.889) 4,852,232
========= =========== ============= ============ ============ ====================
The Accounting Policies and Notes below form part of the financial statements.
COMPANY STATEMENT OF CHANGES IN EQUITY AS AT 31 AUGUST 2022
Foreign Share-based
Share Share currency payment Retained Total
capital Premium translation reserve earnings equity
GBP GBP GBP GBP GBP GBP
As at 1 September
2020 128,750 195,025 - - (407,014) (83,239)
Loss for the year - - - - (3,334,439) (3,334,439)
Total comprehensive
loss
for the year - - - - (3,334,439) (3,334,439)
--------- ------------ ------------- ------------ ------------ -----------------------
Issue of ordinary
shares (21/10/2020) 21,750 195,750 - - - 217,500
Issue of ordinary
shares (27/11/2020) 10,000 90,000 - - - 100,000
Issue of ordinary
shares (18/12/2020) 9,000 81,000 - - - 90,000
Issue of ordinary
shares (12/01/2021) 30,000 270,000 - - - 300,000
Issue of ordinary
shares (28/01/2021) 32,750 294,750 - - - 327,500
Issue of ordinary
shares (01/02/2021) 10,000 90,000 - - - 100,000
Issue of ordinary
shares (02/02/2021) 2,500 22,500 - - - 25,000
Issue of ordinary
shares (26/02/2021) 260,000 12,740,000 - - - 13,000,000
Share issue costs (1,099,849) - - - (1,099.849)
Share-based payments - (388,575) - 1,295,918 - 907,343
Total transactions
with owners recognised
in equity 376,000 12,295,576 - 1,295,918 - 13,967,494
--------- ------------ ------------- ------------ ------------ -----------------------
As at 31 August
2021 504,750 12,490,601 - 1,295,918 (3,741,453) 10,549,816
========= ============ ============= ============ ============ =======================
Foreign Share-based
Share Share currency payment Retained Total
capital Premium translation reserve earnings equity
GBP GBP GBP GBP GBP GBP
As at 1 September
2021 504,750 12,490,601 - 1,295,918 (3,741,453) 10,549,816
Loss for the year - - - - (5,991,009) (5,991,009)
Total comprehensive
loss
for the year - - - - (5,991,009) (5,991,009)
--------- ----------- ------------- ------------ ------------ --------------------
Issue of ordinary
shares (04/03/2022) 2,500 22,500 - - - 25,000
Share-based payments - - - 268,152 - 268,152
--------- ----------- ------------- ------------ ------------ --------------------
Total transactions
with owners recognised
in equity 2,500 22,500 - 268,152 - 293,152
--------- ----------- ------------- ------------ ------------ --------------------
As at 31 August
2022 507,250 12,513,101 - 1,564,070 (9,732,462) 4,851,959
========= =========== ============= ============ ============ ====================
The Accounting Policies and Notes below form part of the financial statements.
CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS
FOR THE YEARED 31 AUGUST 2022
Consolidated Consolidated Company Company
2022 2021 2022 2021
GBP GBP GBP GBP
Cash flows from operating
activities
Loss for the year (5,989,957) (3,333,917) (5,991,009) (3,334,439)
------------- ------------- ------------ ------------
Share-based payment charge 268,152 907,343 268,152 907,343
Increase in inventory (446,950) (57,178) (446,950) (57,178)
Decrease/ (Increase) in debtors 117,243 (278,519) 116,612 (263,080)
Increase in creditors 78,886 17,956 81,853 456
Foreign exchange differences 1,264 (2,584) - -
Finance income (1,301) (522) (1,301) (522)
------------- ------------- ------------ ------------
Net cash flow used in operating
activities (5,972,643) (2,747,421) (5,972,643) (2,747,421)
============= ============= ============ ============
Cash flows from investing
activity
Finance income 1,300 522 1,301 522
------------- ------------- ------------ ------------
Net cash flow generated from
investing activity 1,300 522 1,301 522
============= ============= ============ ============
Cash flows from financing
activity
Issue of ordinary shares,
net of issue costs 25,000 13,060,151 25,000 13,060,151
------------- ------------- ------------ ------------
Net cash generated from financing
activity 25,000 13,060,151 25,000 13,060,151
------------- ------------- ------------ ------------
Net increase in cash and
cash equivalents (5,946,342) 10,313,252 (5,946,342) 10,313,252
Cash and cash equivalents
at beginning of year 10,322,476 9,224 10,332,476 9,224
------------- ------------- ------------ ------------
Cash and cash equivalents
at end of year 4,376,134 10,322,476 4,376,134 10,322,476
============= ============= ============ ============
The Accounting Policies and Notes below form part of the financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 AUGUST 2022
1. General Information
The Company was incorporated in England and Wales on 25 August 2018 as Leaf Studios Limited, but subsequently re-registered as a public limited company and renamed as Leaf Studios PLC. On 29 September 2020, the Company's name was changed to Cellular Goods PLC
The registered office is 9(th) Floor, 16 Great Queen Street, London, WC2B 5DG. The principal activity of the Company is establishing a biosynthetic CBD retail business. The Company gained admission to the Official List (by way of a Standard Listing under Chapter 14 of the Listings Rules) and trading on the London Stock Exchange on 26 February 2021.
The company has one subsidiary, CBX Cellular Goods Canada Limited, which was incorporated in Canada.
2. Accounting Policies
The Directors consider that in the proper preparation of the financial statements there were no critical or significant areas which required the use of accounting estimates and exercise of judgement by management while applying the Company's accounting policies, with the exception of share-based payment calculations and inventory valuations.
There is no material difference between the fair value of financial assets and liabilities and their carrying amount.
The functional and presentational currency is Pounds Sterling ("GBP").
2.1 Basis of preparation
These financial statements have been prepared in accordance with UK-adopted international accounting standards in accordance with the requirements of the Companies Act 2006. The financial statements have been prepared under the historical cost convention. There is no material difference between the fair value of financial assets and liabilities and their carrying amount.
Amounts in the financial statements have been rounded to the nearest pound.
2.2 Revenue recognition
Revenue from the sale of goods is recognised when a group entity sells a product to a customer. Sales are mostly made via online portals, paid by credit card, at which point revenue is recognised. For sales made in traditional retail shops, revenue is recognised when consumers buy each product (goods held by retail outlets are not treated as sales by Cellular Goods).
2.3 Inventory
Inventory is valued at lower of cost and net realisable value. Cost is based on the purchase price of the manufactured products, materials and transport costs. Net realisable value is based on the estimated selling price less estimated selling costs. Stock considered to have no value has been written down to nil.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 AUGUST 2022 (CONTINUED)
2. Accounting Policies (Continued) 2.4 Basis of consolidation
The Group financial statements consolidate those of the Company and its subsidiary as of 31 August 2022. The subsidiary has a reporting date of 31 August and is an entity over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the entity. The subsidiary has been fully consolidated from the date on which control was transferred to the Group.
Inter-company transactions, unrealised gains and losses on intra-group transactions and balances between Group companies are eliminated on consolidation.
New and Revised Standards
There were no new and amended standards adopted for the first time which had a material impact on the Group or Company.
IFRS in issue but not applied in the current financial statements
The following IFRS and IFRIC Interpretations have been issued but have not been applied by the Group or Company in preparing these financial statements, as they are not yet effective. The Group or Company intends to adopt these standards and interpretations when they become effective, rather than adopt them early.
-- Classification of Liabilities as Current or Non-current (Amendments to IAS 1).
-- Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction (Amendments to IAS 12).
-- Disclosure of Accounting Policies (Amendments to IAS 1). -- Definition of Accounting Estimates (Amendments to IAS 8). -- IFRS 3 amendments - Business Combinations (effective: 1 January 2022).
-- IAS 37 amendments - Provisions, Contingent Liabilities and Contingent Assets (effective: 1 January 2022).
The above standards are not expected to have a material impact on the Group or Company in future reporting periods and on foreseeable future transactions.
2.5 Going concern
The Directors have assessed the current financial position of the Group, along with future cash flow requirements, to determine whether the Group has the financial resources to continue as a going concern for the foreseeable future.
The conclusion of this assessment is that it is appropriate that the Group be considered a going concern. For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements.
2.6 Capital risk management
The Company's objectives when managing capital is to safeguard the Company's ability to continue as a going concern, in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure. The Company has no borrowings. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares. The Company monitors capital on the basis of the total equity held by the Company.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 AUGUST 2022 (CONTINUED)
2. Accounting Policies (Continued) 2.7 Financial Instruments
Initial recognition
A financial asset or financial liability is recognised in the Statement of Financial Position of the Group when it arises or when the Group becomes part of the contractual terms of the financial instrument.
Classification
Financial assets at amortised cost
The Group measures financial assets at amortised cost if both of the following conditions are met:
1. The asset is held within a business model whose objective is to collect contractual cash flows; and
2. The contractual terms of the financial asset generating cash flows at specified dates only pertain to capital and interest payments on the balance of the initial capital.
Financial assets which are measured at amortised cost, are measured using the Effective Interest Rate method ("EIR") and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
Financial liabilities at amortised cost
Financial liabilities measured at amortised cost using the EIR method include trade and other payables that are short term in nature.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in profit or loss.
Derecognition
Financial liabilities are derecognised if the company's obligations specified in the contract expire or are discharged or cancelled.
A financial asset is derecognised when:
1. The rights to receive cash flows from the asset have expired, or
2. The company has transferred its rights to receive cash flows from the asset or has undertaken the commitment to fully pay the cash flows received without significant delay to a third party under an arrangement and has either (a) transferred substantially all the risks and the assets of the asset or (b) has neither transferred nor held substantially all the risks and estimates of the asset but has transferred the control of the asset.
2.8 Impairment
The Group recognises a provision for impairment for expected credit losses regarding all financial assets. Expected credit losses are based on the balance between all the payable contractual cash flows and all discounted cash flows that the Company expects to receive. Regarding trade receivables, the Company applies the IFRS 9 simplified approach in order to calculate expected credit losses. Therefore, at every reporting date, provision for losses regarding a financial instrument is measured at an amount equal to the expected credit losses, trade receivables and contract assets have been grouped based on shared risk characteristics.
At each balance sheet date, the Directors review the carrying amounts of the Company's investments, to determine whether there are any indications that those investments have suffered an impairment loss.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 AUGUST 2022 (CONTINUED)
2. Accounting Policies (Continued) 2.9 Foreign currency translation (i) Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which entities operate ('the functional currency'). The financial statements are presented in Pounds Sterling, which is the parent company's functional and presentation currency. There has been no change in the functional
currency during the current or preceding period. (ii) Transactions and balances
Transactions in foreign currencies are translated into Pounds Sterling using monthly average exchange rates. This is permissible in this case as there are no significant fluctuations between the currencies with which the entity operates. Monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rates ruling at the Statement of Financial Position date and any exchange differences arising are taken
to profit or loss. (iii) Foreign operations
In the Group's financial statements, all assets, liabilities and transactions of Group entities with a functional currency other than GBP are translated into GBP upon consolidation. The functional currency of the entities in the Group has remained unchanged during the reporting period. On consolidation, assets and liabilities have been translated into GBP at the closing rate at the reporting date. Income and expenses have been translated into GBP at the average rate over the reporting period. Exchange differences arising from significant foreign subsidiaries are charged or credited to other comprehensive income and recognised in the currency translation reserve in equity. On disposal of a foreign operation, the related cumulative translation differences recognised in equity are reclassified to profit or loss and are recognised as part of the gain or loss on disposal.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 AUGUST 2022 (CONTINUED)
2. Accounting Policies (Continued)
2.10 Share-based payments
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.
2.11 Taxation and deferred taxation
The income tax expense or income for the year is the tax payable on the current period's taxable income. This is based on the national income tax rate enacted or substantively enacted for each jurisdiction with any adjustment relating to tax payable in previous years and changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
Current tax credits arise from the UK legislation regarding the treatment of certain qualifying
research and development costs, allowing for the surrender of tax losses attributable to such costs in return for a tax rebate.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applicable when the asset or liability crystallises based on current tax rates and laws that have been enacted or substantively enacted by the reporting date. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability.
A deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits against which to recover carried forward tax losses and from which the future reversal of temporary differences can be deducted. The carrying amount of deferred tax assets are reviewed at each reporting date.
2.12 Trade and other payables
Short-term creditors are measured at the transaction price. Other financial liabilities are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest rate method.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 AUGUST 2022 (CONTINUED)
2. Accounting Policies (Continued)
2.13 Trade and other receivables
Trade and other receivables are short-term financial assets due to the Company. Other receivables are recognised
at the transaction's price when it is probable that economic benefit will flow to the Company.
2.14 Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction from the proceeds.
The share premium account represents premiums received on the initial issuing of the share
capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.
2.15 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and demand deposits with banks and other financial institutions, that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
3. Segment information
In the prior year, to 31 August 2021, the Group generated no revenue. Sales commenced in December 2021 and, in the year to 31 August 2022, revenue was derived wholly from the sale of cannabinoid products.
Under IFRS 8 there is a requirement to show the profit or loss for each reportable segment and the total assets and total liabilities for each reportable segment if such amounts are regularly provided to the chief operating decision-maker.
The Group has one operating segment, being the establishment and operation of a biosynthetic CBD retail business, therefore all IFRS 8 disclosures are incorporated within other notes to the financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 AUGUST 2022 (CONTINUED)
4. Critical accounting estimates and judgement
In the application of the Group's and Company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The directors have applied their knowledge and experience of the industry in determining the level of provisions required in calculating inventory values. Specific estimates and judgements are required on the ageing of inventory, expiry dates, local economic conditions, increased costs and lower margins, overstocking and more. Provision estimates are forward looking and are formed using a combination of factors including management's knowledge of the industry and the overall assessment made by management of the risks in relation to inventory.
Estimating the fair value of share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant of share options and warrants. This estimate also requires determination of the most appropriate inputs into the valuation model including volatility and dividend yield, and making assumptions about them. The assumptions used for estimating the fair value of share-based payment transactions are disclosed in note 17.
5. Expenses by nature
2022 2021
GBP GBP
Legal and professional 374,488 325,496
Auditor's remuneration 26,500 81,000
Directors' remuneration 775,589 379,952
Share-based payment charge 268,152 907,343
Consultancy 903,426 514,944
Advertising and promotion 1,927,813 830,225
Product research and development 356,524 133,366
Other expenses 1,376,883 162,113
--------- ---------
6,009,375 3,334,439
--------- ---------
6. Auditor's remuneration
2022 2021
GBP GBP
Fees payable to the Company's auditor for
the audit of the Group's and Company's
annual financial statements 26,500 23,500
Fees payable to the Company's auditor for
corporate
finance services - 57,500
26,500 81,000
------ --------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 AUGUST 2022 (CONTINUED)
7. Directors' remuneration
Directors' remuneration amounted to GBP775,589 during the year (2021: GBP397,861), of which GBPnil (2021: GBPnil) remained outstanding at the year end. Detailed disclosure of Directors' remuneration is disclosed in the Directors' Remuneration Report.
8. Employees
The average number of employees for the Group during the year was 5 (2021: 2), apart from the Directors.
2022 2021
GBP GBP
Directors' remuneration 775,589 397,202
Wages and salaries 654,096 127,875
Social security costs 105,700 1,163
Pension 10,925 658
Share-based payments 268,152 546,616
--------- ----------
1,814,462 1,073,514
========= ==========
9. Taxation
The tax charge for the year was GBPnil (2021 - GBPnil). The Company had tax losses at the year-end of GBP8,848,182 (2021: GBP3,140,403), on which no deferred tax asset has been recognised.
Factors affecting the tax charge
The tax assessed for the year is higher (2021: higher) than the standard rate of corporation tax in the UK. The difference is explained below:
2022 2021
GBP GBP
Loss on ordinary activities before tax (5,991,009) (3,333,917)
------------ ------------
Loss for year multiplied by standard rate
of corporation tax in the UK of 19% (2021:
19%) (1,138,292) (633,645)
Effects of:
Disallowable expenditure 53,813 173,598
Unutilised losses on which no deferred
tax losses is required 1,084,479 460,047
------------ ------------
Tax charge for the year - -
============ ============
On 3 March 2021, the UK government announced that it intended to increase the main rate of corporation tax to 25% for the financial years beginning 1 April 2023. This new rate was substantively enacted by Finance Act 2021 on 10 June 2021.
10. Earnings per share
2022 2021
Loss attributable to equity holders of GBP5,989,957 GBP3,333,917
the Company
Weighted average number of Ordinary Shares
in issue (number) 505,989,726 346,475,342
Basic earnings per share (pence per share) (1.183p) (0.962p)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 AUGUST 2022 (CONTINUED)
11. Financial Instruments
2022 2021 2022 2021
GBP GBP GBP GBP
Group Group Company Company
Carrying amount of financial
assets
Financial assets measured
at amortised cost
Trade and other receivables - 905 - -
Cash and cash equivalents 4,376,134 10,322,476 4,376,134 10,322,476
-------------- ---------- --------- ----------
4,376,134 10,323,381 4,376,124 10,322,476
============== ========== ========= ==========
Carrying amount of financial
liabilities
Financial liabilities measured
at amortised cost
Trade and other payables 279,133 200,247 279,133 197,280
============== ========== ========= ==========
12. Trade and other receivables
2022 2021 2022 2021
GBP GBP GBP GBP
Group Group Company Company
VAT debtor 94,556 206,890 94,556 206,890
Prepayments 153,697 160,552 153,697 160,552
Amounts due by subsidiary
undertaking - - 2,577 -
Other debtors 2,852 905 - -
------- ------- ------- --------
251,105 368,347 250,830 367,442
======= ======= ======= ========
13. Investment in subsidiary
The investment in subsidiary companies comprises one wholly-owned subsidiary of the Company which is incorporated in Canada and has its registered office at 700-401 West Georgia Street, Vancouver, British Columbia V6B 5A1, Canada. The subsidiary undertaking is set out below.
Name Principal activity Holding
CBX Cellular Goods Canada Ltd Cannabinoid products 100%
Investments
in subsidiary
undertaking
Cost and net book value GBP
As at 1 September 2021 1
Additions -
--------------
As at 31 August 2022 1
==============
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 AUGUST 2022 (CONTINUED)
14. Inventory
2022 2021 2022 2021
GBP GBP GBP GBP
Group Group Company Company
Raw materials and packaging 363,410 57,178 363,410 57,178
Finished goods 335,150 - 335,150 -
Provision for obsolescence (194,433) - (194,433) -
504,127 57,178 504,127 57,178
---------- ------ ---------- -------
The cost of inventory recognised within cost of sales amounted to GBP10,787 (2021: nil). Write-downs of inventory to net realisable value amounting to GBP194,433 was recognised in administrative expenses in the statement of profit or loss.
15. Share capital and share premium
Number
of Share Share
shares capital premium Total
No. GBP GBP GBP
At 1 September 2021 504,750,000 504,750 12,490,601 12,995,351
Issue of ordinary shares
(04/03/2022) 2,500,000 2,500 22,500 25,000
At 31 August 2022 507,250,000 507,250 12,513,101 13,020,351
=========== ======== =========== ==========
16. Trade and other payables
2022 2021 2022 2021
GBP GBP GBP GBP
Group Group Company Company
Trade creditors 125,374 176,747 125,374 159,246
Accruals 84,222 23,500 84,222 23,500
Other creditors 69,537 - 69,537 -
Amount due to subsidiary
undertakings - - - 14,534
279,133 200,247 279,133 197,280
------- ------- ------- -------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 AUGUST 2022 (CONTINUED)
17. Share-based payments
The Company has issued a total of 52,960,000 warrants to subscribe for additional share capital of the Company, of which 2,500,000 were exercised in the year, leaving 50,460,000 in issue at 31 August 2022. Each warrant entitles the holder to subscribe for one ordinary equity share in the Company. The right to convert each warrant is unconditional.
In the year to 31 August 2022, the Company issued 23,050,000 share options to subscribe for additional share capital of the Company to its employees, of which 500,000 have lapsed, leaving 22,550,000 in issue. Each option entitles the holder to subscribe for one ordinary equity share in the Company. The right to convert each option is subject to the terms of each respective share option agreement.
Equity-settled share-based payments are measured at fair-value (excluding the effect of non-market- based vesting conditions) as determined through use of the Black-Scholes technique at the date of issue.
Warrants Weighted
average exercise 31-Aug-22 31-Aug-21
price Number Number
At the beginning of the year 2.95p 52,960,000 -
Issued in the year 2.95p - 52,960,000
Exercised in the year 1.00p (2,500,000) -
----------------- -------------- --------------
At the end of the year 3.05p 50,460,000 52,960,000
================= ============== ==============
Share options Weighted
average exercise 31-Aug-22 31-Aug-21
price Number Number
At the beginning of the year - - -
Issued in the year 7.47p 23,050,000 -
Lapsed in the year - (500,000) -
Exercised in the year - - -
----------------- --------------- ---------------
At the end of the year 7.47p 22,550,000 -
================= =============== ===============
The total share-based payment charge for year was GBP268,153 (2021: GBP1,295,918). An amount of GBP268,153 (2021: GBP907,343) has been charged to administrative expenses and GBPnil (2021: GBP388,575) to share premium.
The share-based payment charge was calculated using the Black-Scholes model. All warrants have a vesting period between one and three years from the date of issue and are subject to their respective lock-in conditions if exercised. All share options have an exercise period of between three and ten years.
Volatility for the calculation of the share-based payment charge in respect of the warrants issued was determined by reference to movements in share price of the Company for the period after the date of admission and by reference to the relative share prices of a selected peer group of companies listed on the London Stock Exchange up to the date of admission.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022 (CONTINUED)
17. Share-based payments continued
The inputs into the Black-Scholes model for the share options issued in the year are as follows:
31 August
2022
Share options
issued
Weighted average share price at grant date - pence 6.79
Weighted average exercise price - pence 7.47
Weighted average volatility 70.8%
Weighted average expected life in years 1.82
Weighted average contractual life in years 10.00
Risk-free interest rate 1.5 to 2.0%
Expected dividend yield 0%
Weighted average fair-value of warrants granted
(pence) 2.07
The total number of warrants held by directors at 31 August 2022 was 9,500,000 (2021: 24,000,000). The total number of share options issued to directors at 31 August 2022 was 20,000,000 (2021: Nil).
18. Contingent liabilities
There were no contingent liabilities at 31 August 2022 or 31 August 2021.
19. Capital commitments
There were no capital commitments at 31 August 2022 or 31 August 2021.
20. Controlling party
There was no ultimate controlling party as at the year-end.
21. Related-party transactions
During the year, the Company incurred fees of GBP28,812 (2021: GBP69,755) for consulting services from Headline FD Limited, a company majority-owned by Simon Walters. Of this, GBPNil (2021: GBP29,480) was included in Directors' remuneration and GBP1,750 (2021: GBP2,100) was outstanding at the year end. The Company incurred fees of GBPNil (2021: GBP45,042) from Ampersand Ventures Limited, a Canadian company controlled by Eric Chang. Of this, GBPNil (2021: GBPNil) was outstanding at the year-end.
During the year, the Company purchased GBPNil (2021: GBP45,000) of consultancy services from Toro Consulting Limited, a Canadian company owned by Jonathan Bixby, who is in joint control of Canadian-registered Durban Holdings Limited. Of this, GBPNil (2021: GBPNil) was outstanding at the year-end. In addition, the company incurred fees of GBPNil (2021: GBP17,250) during the year from Briarmount Limited, a company part-owned by Timothy Le Druillenec, while he was a director of Cellular Goods. Of this, GBPNil (2021: GBPNil) remained outstanding at the year-end.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2022 (CONTINUED)
22. Subsequent events
Subsequent to the year-end, our growth plans advanced further with the achievement of several milestones. On 21 September 2022, the Look Better range was expanded with the introduction of three Rejuvenating products, fronted by international supermodel Helena Christensen, who has been appointed as the 'Face of Cellular Goods'. Our ecommerce website has been opened to US consumers to align with Christensen's announcement, and US consumers can now place orders for selected items from the skincare range for shipment to the US.
On 26 September 2022, we announced discussions to acquire Cannaray Brands in a transaction that would constitute a reverse takeover of Cellular Goods. The initial transaction price is to be determined, for which an announcement will be made in due course. These discussions, which are subject to an application being made to the Financial Conduct Authority, are progressing and further updates on the discussions as we move through the FCA approval process will be provided as required.
On the same day, 26 September 2022, Anna Chokina stepped down as Chief Executive Officer and director of the company, and Non-Executive Chairman Darcy Taylor took on the role of Interim Chief Executive Officer.
On 24 October 2022, our online retail distribution expanded with the launch of eight skincare products on Debenhams.com, a UK retailer. We are working closely with Debenhams.com to develop new marketing activities to drive sales.
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