Medcaw Investments Plc Half-year Report

 
TIDMMCI 
 
MEDCAW INVESTMENTS PLC 
 
CONDENSED INTERIM FINANCIAL STATEMENTS 
 
FOR THE HALF YEAR PERIODED 30 JUNE 2023 
 
CHAIRMAN'S STATEMENT 
 
Operational Review 
 
Following its successful listing on the Standard Main Market of the London Stock 
Exchange, having raised £637,000 in December 2022, the company commenced its 
search for a suitable acquisition target with the potential to return real value 
to shareholders. 
 
The directors reviewed several opportunities before, subsequent to the period 
end, agreeing on 7th July 2023 to enter into a conditional implementation 
agreement with Abyssinian Metals Limited ("AML"), a company incorporated in 
Australia and developing the Kenticha lithium project located in Oromia State, 
Southern Ethiopia. Subject to the Company being satisfied with technical, legal, 
accounting, tax, financial, commercial and environmental due diligence on AML 
the Company will consider making an offer to acquire up to 100% of the entire 
issued share capital of AML. 
 
The Proposed Acquisition constitutes a reverse takeover under the Listing Rules. 
The Company is currently unable to provide full disclosure under Listing Rule 
5.6.15 in relation to AML and subsequently requested a suspension of trading in 
its shares with effect from 7th July. The trading of the Company's shares will 
remain suspended until such time as a prospectus is published in relation to the 
Proposed Acquisition. 
 
Medcaw Investments will make an offer to AML shareholders to acquire up to 100% 
of the issued share capital of AML.  Consideration will be made through the 
issue of new shares in Medcaw to accepting shareholders of AML.  The Proposed 
Acquisition is conditional on approval by shareholders of Medcaw Investments 
making a code-compliant offer for shares in Australia, which requires a minimum 
of 51% acceptance followed by a reverse transaction on the London Stock 
Exchange, which will be completed in due course. 
 
The Proposed Acquisition remains subject, amongst other things, to completion of 
customary due diligence, negotiation of transaction details, and admission of 
the enlarged company on theLondon Stock Exchangeand therefore, there is no 
certainty that the Proposed Acquisition will complete. 
 
Kenticha is a highly evolved, rare element, Lithium Caesium Tantalum (LCT) 
pegmatite project comparable to other major rare-element pegmatites such as 
Greenbushes, Tanco, Wodgina, Volta Grande and Altai No.3.  Kenticha is a late 
stage development asset which AML intends to develop with the production of 
spodumene concentrate planned in stages, with near-term production through a 
Dense Medium Separation (DMS) modular plant. 
 
Recent progress of the Kenticha site includes initial camp construction to 
accommodate the operating team and security personnel, provisions of services to 
the local community, and civil works including roads, water, and power. There 
have been discussions and provisional agreements with port authorities for port 
access and freight forwarding arrangements, as well as mobilisation of 
contractors and equipment for the start-up of operations including drilling 
programmes which recently commenced. The construction and fabrication of the DMS 
modular plant for the Stage 1 Near Term Production has been custom-built in 
Johannesburg and is in the process of being packed up and shipped to Ethiopia. 
It is anticipated that the Stage 1 (a) DMS will be in-situ at the Kenticha site 
in August 2023 and commissioning will start thereafter with the first SC5.5 
being produced by the end of 2023. 
 
Additionally, the Company raised gross proceeds of £400,000 via the issue of a 
total of 5,000,000 new Ordinary Shares in the Company.  These shares rank pari 
passu with the existing Ordinary Shares in the Company. Alongside the equity 
raise, 300,000 broker warrants at the placing price of 8p per share and 
1,600,000 warrants at 4p were also issued to a third-party consultant for 
transactional services. 
 
Board Changes 
 
Marcus Yeoman and Charles Wood were appointed directors of the Company with 
effect from 3 March 2023.  At the same time, Fungai Ndoro and Daniel Maling 
resigned as directors of the Company.  With effect from 17 April 2023, Marcus 
assumed the role of Non-Executive Chairman, Charles Wood as Executive Director 
and Sarah Cope as Non-Executive Director. 
 
Financial Review 
 
The Company incurred administrative expenses of £135,975 during the six months 
to 30 June 2023.  At the end of the period the Company had cash and trade and 
other receivables of £533,730. 
 
Outlook 
 
The directors are working with the Company's advisers on the acquisition of AML 
and the re-admission of the Company's shares to trading on the London Stock 
Exchange with the aim of completing this transformational and value enhancing 
transaction in as short a time frame as possible. 
 
Principal Risks and Uncertainties 
 
The principal risks and uncertainties for the remaining six months of the 
financial year remain the same as those contained within the annual report and 
accounts as at 31 December 2022. 
 
Related Party Transactions 
 
No related party transactions have taken place in the first six months of the 
current financial year. There have been no changes in the related party 
transactions described in the last annual report that could have a material 
effect on the financial position or performance of the Company in the first six 
months of the current financial year. 
 
Statement of Directors' Responsibilities 
 
The directors confirm that these condensed interim financial statements have 
been prepared in accordance with UK adopted International Accounting Standard 
34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency 
Rules sourcebook of the United Kingdom's Financial Conduct Authority and that 
the interim management report includes a fair review of the information required 
by DTR 4.2.7 and DTR 4.2.8, namely: 
 
  · an indication of important events that have occurred during the first six 
months and their impact on the condensed set of financial statements, and a 
description of the principal risks and uncertainties for the remaining six 
months of the financial year; and 
 
  · material related-party transactions in the first six months and any material 
changes in the related-party transactions described in the last annual report. 
 
Marcus Yeoman 
 
Non-Executive Chairman 
 
29 September 2023 
 
                         Unaudited        Unaudited        Audited 
                         6 months ended   6 months ended   12 months 
                         30 June 2023     30 June 2022     ended 31 Dec 
                                                           2022 
                 Note    £                £                £ 
Revenue                  -                - 
Administrative           (135,975)        -                (194,006) 
expenses 
Operating                (135,975)        -                (194,006) 
result 
Finance                  -                -                - 
income/(expense 
) 
Loss before              (135,975)        -                (194,006) 
taxation 
Income tax               -                -                - 
Loss for the             (135,975)        -                (194,006) 
period and 
total 
comprehensive 
income for the 
period 
 
Basic and        3       (0.77)           (-)              (1.90) 
diluted loss 
per 
ordinary share 
(pence) 
 
                                     Unaudited      Unaudited      Audited 
                                     As at          As at          As at 31 
 
                                     30 June 2023   30 June 2022   December 2022 
                               Note  £              £              £ 
ASSETS 
Current assets 
Other current assets           4     171,475        -              187,160 
Cash and cash equivalents            362,255        220,499        643,872 
Total assets                         533,730        220,499        831,032 
 
Liabilities 
Current liabilities 
Trade & other payables         5     79,382         32,000         240,709 
Total liabilities                    79,382         32,000         240,709 
 
Net assets                           454,348        188,499        590,323 
 
EQUITY AND LIABILITIES 
Equity attributable to owners 
Ordinary share capital         6     171,320        102,500        171,320 
Share premium                  6     679,110        152,100        679,110 
Accumulated losses                   (396,082)      (66,101)       (260,107) 
Total equity                         454,348        188,499        590,323 
 
                      Ordinary  Share    Retained earnings  Total equity 
                      share     premium 
                      capital 
                      £         £        £                  £ 
 
Profit for the        -         -        (2,685)            (2,685) 
period 
Total comprehensive   -         -        (2,685)            (2,685) 
income for the 
period 
As at 31 December     97,500    137,100  (66,101)           168,499 
2021 
 
Profit for the        -         -        -                  - 
period 
Total comprehensive   -         -        -                  - 
income for the 
period 
 
Transactions with 
owners 
Ordinary shares       5,000     15,000   -                  20,000 
issued during period 
Total transactions    5,000     15,000   -                  20,000 
with owners 
As at 30 June 2022    102,500   152,100  (66,101)           188,499 
 
Comprehensive loss 
for the year 
Loss for the year    -        -         (194,006)  (194,006) 
Total comprehensive  -        -         (194,006)  (194,006) 
loss for the year 
 
Transactions with 
owners 
Ordinary shares      68,820   588,712   -          657,532 
issued during year 
Share issue costs    -        (61,702)  -          (61,702) 
Total transactions   68,820   527,010   -          595,830 
with owners 
As at 31 December    171,320  679,110   (260,107)  590,323 
2022 
 
Comprehensive loss 
for the period 

Loss for the period  -        -         (135,975)  (135,975) 
Total comprehensive  -        -         (135,975)  (135,975) 
loss for the period 
 
Transactions with 
owners 
Ordinary shares      -        -         -          - 
issued during the 
period 
Share issue costs    -        -         -          - 
Total transactions   -        -         -          - 
with owners 
As at 30 June 2023   171,320  679,110   (396,082)  454,348 
 
                            6 months       6 months       12 months 
                            ended 30 June  ended 30 June  ended 31 Dec 
                            2023           2022           2022 
                            £              £              £ 
Cash flows from operating 
activities 
Loss before income tax      (135,975)      -              (194,006) 
Adjustments for: 
Share based payments        -              -              9,422 
Increase in other           (21,565)       -              - 
receivables 
Decrease in other payables  (161,327)      -              - 
Net cash from operating     (318,867)      -              152,675 
activities 
 
Cash flows from financing 
activities 
Cash received from issue    187,250        20,000         475,282 
of ordinary Shares 
Issue of loan               (150,000)      -              - 
Net cash inflow from        37,250         20,000         475,282 
financing activities 
 
Net (decrease)/ increase    (281,617)      20,000         443,373 
in cash and cash 
equivalents 
Cash and cash equivalents   643,872        200,499        200,499 
at beginning of period 
Cash and cash equivalents   362,255        220,499        643,872 
at end of period 
 
1         General information 
 
The Company was incorporated on 11 December 2020 as a public company in England 
and Wales with company number 13078596 under the Companies Act, 2006. 
 
The address of its registered office is Central Working Victoria Eccleston 
Yards, 25 Eccleston Place London SW1W 9NF United Kingdom. 
 
The principal activity of the Company is to pursue one or more acquisitions in 
the natural resources field. 
 
2         Accounting policies 
 
IAS 8 requires that management shall use its judgement in developing and 
applying accounting policies that result in information which is relevant to the 
economic decision-making needs of users, that are reliable, free from bias, 
prudent, complete and represent faithfully the financial position, financial 
performance and cash flows of the entity. 
 
2.1                Basis of preparation 
 
The Interim Financial Statements of the Company are unaudited condensed 
financial statements for the six month period ended 30 June 2023. 
 
The accounting policies applied by the Company in these Interim Financial 
Statements, are the same as those applied by the Company in its  financial 
statements and have been prepared on the basis of the accounting policies 
applied for the financial year to 31 December 2022 which have been prepared in 
accordance with IFRS as adopted by UK for. The Company Financial Statements have 
been prepared using the measurement bases specified by IFRS each type of asset, 
liability, income and expense. 
 
The functional currency for the Company is determined as the currency of the 
primary economic environment in which it operates.  The functional and 
presentational currency of the Company is Pounds Sterling (£). 
 
The business is not considered to be seasonal in nature. 
 
The comparative figures have been presented as theCompanyFinancial Statements 
coverthe 6 month period ended 30 June 2022 andthe 12month period ended 31 
December 2022. 
 
New standards, amendments and interpretations adopted 
 
During the current period the Company adopted all the new and revised standards, 
amendments and interpretations that are relevant to its operations and are 
effective for accounting periods beginning on 1 January 2023.  This adoption did 
not have a material effect on the accounting policies of the Company. 
 
New standards, amendments and interpretations not yet adopted by the Company. 
 
The standards and interpretations that are relevant to the Company, issued, but 
not yet effective, up to the date of these interim Financial information have 
been evaluated by the Directors and they do not consider that there will be a 
material impact of transition on the financial information. 
 
2.2                Going concern 
 
The financial statements have been prepared on a going concern basis, which 
assumes that the Company will continue in operational existence for the 
foreseeable future. 
 
The Company has based the going concern assumption on a base case, where any 
proposed transaction does not take place meaning the entity has the ability to 
meet its working capital requirements from existing cash . The existing cash, 
including the amounts raised post year end, are sufficient to meet the working 
capital requirements of the Company going forward when outgoings are reduced to 
only committed costs. This includes applying mitigation measures to reduce the 
cost base of the Company. As a result of this the directors believe that the 
going concern assumption is appropriate. 
 
Under the scenario that any proposed acquisition does take place the Company 
would secure additional funding at IPO to ensure that all future capital 
commitments would be able to be satisfied. 
 
Taking these matters into consideration, the Directors consider that the 
continued adoption of the going concern basis is appropriate having reviewed the 
forecasts for the coming 12 months from the date of signing and the financial 
statements do not reflect any adjustments that would be required if they were to 
be prepared other than on a going concern basis. 
 
2.4Cash and cash equivalents 
 
The Directors consider any cash on short-term deposits and other short-term 
investments to be cash equivalents. 
 
2.5 Financial assets and liabilities 
 
Financial assets and financial liabilities are recognised when the Company 
becomes a party to the contractual provisions of a financial instrument. 
Financial assets and financial liabilities are offset if there is a legally 
enforceable right to set off the recognised amounts and interests and it is 
intended to settle on a net basis. 
 
2.6Earnings per Ordinary Share 
 
The Company presents basic and diluted earnings per share data for its Ordinary 
Shares. Basic earnings per Ordinary Share is calculated by dividing the profit 
or loss attributable to Shareholders by the weighted average number of Ordinary 
Shares outstanding during the period. Diluted earnings per Ordinary Share is 
calculated by adjusting the earnings and number of Ordinary Shares for the 
effects of dilutive potential Ordinary Shares. 
 
2.7Equity 
 
Share capital is determined using the nominal value of shares that have been 
issued. 
 
The share premium account includes any premiums received on the initial issuing 
of the share capital. Any transaction costs associated with the issuing of 
shares are deducted from the share premium account, net of any related income 
tax benefits. 
 
Retained losses includes all current and prior period results as disclosed in 
the income statement. 
 
2.8 Critical accounting estimates and judgments 
 
In preparing the Company Financial information, the Directors have to make 
judgments on how to apply the Company's accounting policies and make estimates 
about the future. The Directors do not consider there to be any critical 
judgments that have been made in arriving at the amounts recognised in the 
interim financial information. 
 
3         Loss per Ordinary Share 
 
                       As at 30    As at 30 June 2022  As at 
 
                       June                            31 Dec 2022 
 
                       2023 
Basic loss per 
Ordinary Share 
Earnings attributable  (135,975)   -                   (66,101) 
to Shareholders 
Weighted average       17,132,095  9,894,444           9,589,610 
number of Ordinary 
Shares 
Basic and diluted      (0.79)      -                   (0.69) 
loss per share 
(pence) 
 
4                     Trade and other receivables 
 
                     As at 30   As at 30   As at 31 December 2022 
 
                     June 2023  June 2022  £ 
 
                     £          £ 
Prepayments          21,475     -          - 
Other receivables 1  150,000    -          - 
IPO Funds            -          -          187,160 
                     171,475    -          187,160 
 
1-       On 23rd June 2023 , Medcaw Investments (MCI) entered into an agreement 
whereby MCI would provide a £150,000 unsecured loan to Abyssinian Metals Limited 
(AML) to fund working capital requirements until such a time that MCI acquired 
the full share capital of AML per the RNS on 7th July 2023. The agreement is at 
arms length with interest accruing at 10% per annum. The loan is payable on 
demand and is fully convertible into ordinary shares of AML at the lenders 
discretion. 
 
5                     Trade and other payables 
 
                  As at 30   As at 30   As at 31 December 2022 
 
                  June 2023  June 2022  £ 
 
                  £          £ 
Trade payables    40,928     -          203,256 
Accruals          38,454     -          37,453 
Convertible debt  -          32,000     - 
                  79,382     32,000     240,709 
 
6                     Share Capital 
 
             Ordinary Shares  Share       Capital  Share Premium  Total 
                              £                    £              £ 
At 31        9,750,000        97,500               137,100        234,600 
December 
2021 
 
Issue of     500,000          5,000                15,000         20,000 
ordinary 
shares3 
At 30 June   10,250,000       102,500              152,100        254,600 
2022 
 
Issue of     511,275          5,113                15,338         20,451 
ordinary 
shares 
IPO shares   6,370,820        63,707               573,374        637,081 
Share issue  -                -                    (61,702)       (61,702) 
costs 

At 31        17,132,095       171,320              679,110        850,430 
December 
2022 
Movement in  -                -                    -              - 
the period 
At 30 June   17,132,095       171,320              679,110        850,430 
2023 
 
7                     Warrants 
 
                                   As at 30 June 2023 
                                   Weighted average exercise price  Number of 
 
                                                                    warrants 
Brought forward at 1 January 2023    4p                             4,000,000 
Granted in the period              -                                - 
Vested in the period               -                                - 
Outstanding at 30 June 2023          4p                             4,000,000 
Outstanding at 30 June 2023          4p                             4,000,000 
 
                  As at 31 
                  December 2022 
                  Weighted        Number of 
                  average 
                  exercise price  warrants 
Brought forward   -               - 
at 1 January 
2022 
Granted in year   4p              4,000,000 
Vested in year    4p                                    4,000,000 
Outstanding at      4p            4,000,000 
31 December 2022 
Exercisable at      4p            4,000,000 
31 December 2022 
 
The weighted average time to expiry of the warrants as at 31 December 2022 is 
1.48 years 
 
8                     Related party transactions 
 
There have been no material related party transactions in the period that 
require disclosure. 
 
9                     Events subsequent to the reporting date 
 
Signing of conditional implementation agreement with Abyssinian Metals Limited 
and Equity Fundraise 
 
On 7th July 2023 Medcaw entered into a conditional implementation agreement with 
Abyssinian Metals Limited ("AML"), a company incorporated in Australia and 
developing the Kenticha lithium project located in Oromia State, Southern 
Ethiopia. Subject to the Company being satisfied with technical, legal, 
accounting, tax, financial, commercial and environmental due diligence on AML 
the Company will consider making an offer to acquire up to 100% of the entire 
issued share capital of AML. 
 
Additionally the Company  raised gross proceeds of £400,000  via the issue of a 
total of 5,000,000 new Ordinary Shares in the Company.  These shares rank pari 
passu with the existing Ordinary Shares in the Company. Alongside the equity 
raise 300,000 broker warrants at the placing price of 8p per share and 1,600,000 
warrants at 4p were also issued to a third-party consultant for transactional 
services. 
 
10                  Financial commitments and contingent liabilities 
 
There were no financial commitments or contingent liabilities of the Company as 
at 30 June 2023. 
 
11                  Ultimate controlling party 
 
As at 30 June 2023, there was no ultimate controlling party of the Company. 
 
 
This information was brought to you by Cision http://news.cision.com 
https://news.cision.com/medcaw-investments-plc/r/half-year-report,c3845046 
The following files are available for download: 
https://mb.cision.com/Main/22525/3845046/2329157.pdf Medcaw Interim June 2023 
 
 
END 
 
 

(END) Dow Jones Newswires

September 29, 2023 09:06 ET (13:06 GMT)