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Share Name Share Symbol Market Type Share ISIN Share Description
Spinnaker Opportunities Plc LSE:SOP London Ordinary Share GB00BYQCS703 ORD 2.5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 4.65 0.00 00:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Nonequity Investment Instruments 0.0 -0.4 -1.2 - 1

Spinnaker Opportunities PLC Half Yearly Report (Unaudited)

30/07/2020 7:00am

UK Regulatory (RNS & others)


Spinnaker Opportunities (LSE:SOP)
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RNS Number : 5283U

Spinnaker Opportunities PLC

30 July 2020

30 July 2020

Spinnaker Opportunities plc

Half Yearly Report (Unaudited)

For the Period Ended 30 June 2020

Spinnaker Opportunities plc ("Spinnaker" or the "Company") announces today its preliminary financial results for the period ended 30 June 2020.

Period Highlights

-- During the period Spinnaker has been await ing confirmation of the overall listing requirements for cannabis-related companies by the appropriate UK regulatory bodies so the Company can co mplete its proposed acquisition of the entire issued share capital of Kanabo Research Ltd ("Kanabo")

-- Advanced a further sum of GBP200,000 to Kanabo under the terms of the existing Loan Facility Agreement to enable Kanabo to grow sales and invest in future development

   --      Raised GBP165,000 through the i ssue of convertible loan notes 
   --      ash of approximately GBP 510,000 on 30 June 2020 

Post-Period Highlights

   --      Acquisition and admission of enlarged group remains on course 

-- Indications received in July 2020 that UK review of regulatory requirements for cannabis-related companies is nearly complete which could then allow the transaction to proceed

For further information, please visit http://www.spinnakeropportunities.uk/ or contact the following:

 
 Peterhouse Capital (Financial adviser and joint broker) 
 Tel: +44 (0)20 7469 0930 
  Guy Miller/ Lucy Williams/ 
  Eran Zucker 
  SI Capital (Joint broker) 
   Tel: +44 (0)1483 413 500 / 
   +44 (0) 203 871 4038 
   Nick Emerson / Greg Mahoney 
  Blytheweigh (Financial PR) 
   Tel: +44 (0) 207 138 3553 
   Tim Blythe/ Camilla Horsfall/ Madeleine Gordon-Foxwell 
 

Chairman's Statement

I am pleased to present the interim financial statements to shareholders for the six months ending 30 June 2020.

The Company remains focused on the delivery of the acquisition of Kanabo and along with its management team, we very much look forward to bringing the business to the London market to enable Kanabo to achieve its growth potential. The transaction has taken longer than expected and is still not completed, but the Company remains positioned to be one of the first cannabis-related businesses to list on the London Stock Exchange.

Whilst the terms of the acquisition have been agreed, completion remains subject to the satisfaction of certain conditions, including inter alia:

-- The transaction will constitute a reverse takeover under the Listing Rules and will be subject to approval by shareholders of the Company at a general meeting

-- The Company having obtained a waiver from the Takeover Panel under Rule 9 of the Takeover Code

-- The successful completion of fundraising activities to be undertaken by way of a placing and direct subscriptions by new and existing investors

   --      Re-listing of the enlarged group on the London Stock Exchange 

Accordingly, there can be no absolute certainty that the transaction will proceed.

The period under review was spent waiting for confirmation of the overall listing requirements for cannabis-related companies by the appropriate UK regulatory bodies. A Share Purchase Agreement for the transaction was executed on 2 December 2019 and the Company has been ready to proceed since then. In the second half of July 2020, the Company received indications that a resolution is at last being actively sought. The Boards of both Spinnaker and Kanabo remain optimistic and both companies continue to press for a satisfactory conclusion to the current regulatory processes.

A prospectus setting out final details of the acquisition and re-admission transaction is expected to be published shortly, together with a notice of meeting convening and setting out the resolutions required to be endorsed by members at a general meeting in order to complete the transaction.

In order to facilitate the execution of Kanabo's business plan while waiting for completion of the acquisition and re-admission to trading, the Company supplied two further tranches each of GBP100,000 to Kanabo during the period, under its Loan Facility Agreement, secured against the intellectual property of the business. Financing for the additional loan tranches came from internal funds together with GBP165,000 raised through convertible loan notes issued to new and existing subscribers to the Company.

During the COVID-19 pandemic, Kanabo has implemented appropriate policies to protect the health of its staff and to manage costs. In the meantime, business development activities directed towards expanding the list of qualified suppliers of raw materials and sales through its distributor network in the target markets have continued in line with Kanabo's business plan.

We continue to believe that helping to open the new and exciting medicinal cannabis sector to investors in London will be worthwhile. The consumer demand for alternative healthcare has never been higher, and the sector, therefore, offers a valuable growth platform as the UK and the world overcome the COVID-19 crisis.

I would like to take this opportunity to thank my board colleagues, retained advisers and the transaction advisory team for their dedication and hard work which has brought the Company within sight of a ground-breaking transaction. We look forward to updating shareholders through to completion and beyond.

Results for the 2020 interim financial period

A summary of the key financial results is set out in the table below:

 
                        Unaudited   Unaudited      Audited 
                        30.6.2020   30.6.2019   31.12.2019 
                          GBP'000     GBP'000      GBP'000 
---------------------  ----------  ----------  ----------- 
 Revenue                        -           -            - 
 Operating expenses         (111)       (157)        (365) 
---------------------  ----------  ----------  ----------- 
 Operating loss             (111)       (157)        (365) 
 Finance income                10           1            2 
---------------------  ----------  ----------  ----------- 
 Loss before tax            (101)       (156)        (363) 
 Taxation                       -           -            - 
 
 Loss for the period        (101)       (156)        (363) 
 
 

Interest

The net interest cost for the company for the period was GBPnil.

Loss before tax

Loss before tax for the period was GBP101,000.

Taxation

Taxation charge was GBPnil for the period.

Earnings per share

Basic and diluted earnings per share for the period was 0.35p loss.

Financial position

The Company's unaudited balance sheet as at 30 June 2020 can be summarised as set out in the table below:

 
                                        Assets   Liabilities   Net assets 
                                         GBP'm         GBP'm        GBP'm 
                                       GBP'000       GBP'000      GBP'000 
------------------------------------  --------  ------------  ----------- 
 Non-current assets and liabilities          -             -            - 
 Current assets and liabilities            834         (231)          603 
 Total as at 30 June 2020                  834         (231)          603 
------------------------------------  --------  ------------  ----------- 
 

Cash flow

Net cash outflow for 2020 was GBP81,000.

Interim Condensed Income Statement

Six month period ended 30 June 2020

 
                                     Unaudited   Unaudited 
                                      6 months    6 months       Audited 
                                         ended       ended    Year ended 
                                      30.06.20    30.06.19      31.12.19 
                              Note     GBP'000     GBP'000       GBP'000 
 Revenue                                     -           -             - 
 Cost of sales                               -           -             - 
---------------------------  -----  ----------  ----------  ------------ 
 Gross profit                                -           -             - 
 Operating expenses                      (111)       (157)         (365) 
---------------------------  -----  ----------  ----------  ------------ 
 Operating loss                          (111)       (157)         (365) 
 Net finance income                         10           1             2 
 Loss before tax                         (101)       (156)         (363) 
 Taxation                                    -           -             - 
---------------------------  -----  ----------  ----------  ------------ 
 Loss for the period                     (101)       (156)         (363) 
 Loss attributable to the 
  Company                                (101)       (156)         (363) 
---------------------------  -----  ----------  ----------  ------------ 
 
  Loss per share expressed 
   in pence per share 
 From continuing and total 
  operations: 
 Basic & diluted loss per 
  share, pence                   5      (0.35)       (0.5)         (1.2) 
 
 

The Company has no items of other comprehensive income.

Interim Condensed Balance Sheet

As of 30 June 2020

 
                                                     Unaudited              Unaudited                 Audited 
                                                       30 June                30 June             31 December 
                                                          2020                   2019                    2019 
                                 Note                  GBP'000                GBP'000                 GBP'000 
 Assets 
 Non-current assets 
 Other receivables                                           -                      -                     100 
------------------------------  -----  -----------------------  ---------------------  ---------------------- 
 Total non-current assets                                    -                      -                     100 
------------------------------  -----  -----------------------  ---------------------  ---------------------- 
 Current assets 
 Receivables and prepayments                               318                     10                      13 
 Cash                                                      516                    883                     597 
------------------------------  -----  -----------------------  ---------------------  ---------------------- 
 Total current assets                                      834                    893                     610 
 Total assets                                              834                    893                     710 
------------------------------  -----  -----------------------  ---------------------  ---------------------- 
 Liabilities 
 Current liabilities 
 Trade and other payables                                   66                     12                      36 
 Convertible loan                                          165                      -                       - 
 Total current liabilities                                 231                     12                      36 
 Net current assets                                        603                    881                     574 
 Net Assets                                                603                    881                     674 
 
 Share capital                      3                      735                    735                     735 
 Share premium                      3                      589                    592                     592 
 Share based payments reserve       4                       92                     59                      59 
 Retained earnings                                       (813)                  (505)                   (712) 
 Total equity attributable 
  to equity holders of the 
  company                                                  603                    881                     674 
------------------------------  -----  -----------------------  ---------------------  ---------------------- 
 

Interim Condensed Statement of Changes in Equity

Six months ended 30 June 2020

 
                                                       Share based 
                                                          payments   Retained 
                         Share capital  Share premium      reserve   earnings  Total equity 
                               GBP'000        GBP'000      GBP'000    GBP'000       GBP'000 
-----------------------  -------------  -------------  -----------  ---------  ------------ 
 
Balance at 1 January 
 2019                              735            592           59      (349)         1,037 
Loss for the period                  -              -            -      (363)         (363) 
Total comprehensive 
 loss                                -              -            -      (363)         (363) 
 
Balance at 31 December 
 2019                              735            592           59      (712)           674 
 
Loss for the period                  -              -            -      (101)         (101) 
Total comprehensive 
 loss                                -              -            -      (101)         (101) 
Commission on fund 
 raise                               -            (3)            -          -           (3) 
Grant of share options               -              -           33          -            33 
Balance at 30 June 
 2020                              735            589           92      (813)           603 
-----------------------  -------------  -------------  -----------  ---------  ------------ 
 

Interim Condensed Cash Flow Statement

Six months ended 30 June 2020

 
                                        Unaudited  Unaudited                Audited 
                                          30 June    30 June            31 December 
                                             2020       2019                   2019 
                                          GBP'000    GBP'000                GBP'000 
-------------------------------------- 
Loss for the period                         (101)      (156)                  (363) 
Adjustment for: 
Share based payment charge                     33          -                      - 
(Increase)/decrease in receivables          (205)          3                      - 
Increase/(decrease) in payables                30        (5)                     19 
 
Net cash used in operating activities       (243)      (158)                  (344) 
 
Cash flows from investing activities 
Loan advanced                                   -          -                  (100) 
Net cash from/(used in) investing 
 activities                                     -          -                  (100) 
--------------------------------------  ---------  ---------  --------------------- 
 
Cash flows from financing activities 
Convertible loan notes (net 
 of costs)                                    162          -                      - 
Net cash from/(used in) financing 
 activities                                   162          -                      - 
--------------------------------------  ---------  ---------  --------------------- 
 
Net increase/(decrease) in cash 
 and cash equivalents                        (81)      (158)                  (444) 
--------------------------------------  ---------  ---------  --------------------- 
Cash and cash equivalents brought 
 forward                                      597      1,041                  1,041 
--------------------------------------  ---------  ---------  --------------------- 
 Cash and cash equivalents carried 
  forward                                     516        883                    597 
--------------------------------------  ---------  ---------  --------------------- 
 

Notes to the interim condensed financial statements

For the six month period ended 30 June 2020

   1.         General information 

Spinnaker Opportunities plc (the Company) is a company incorporated and domiciled in England and Wales. It is a cash shell company listed on the standard list of the London Stock Exchange.

   2.         Summary of significant accounting policies 

The principal accounting policies adopted in the preparation of these financial results are set out below. These policies have been consistently applied to all financial periods presented, unless otherwise stated.

Basis of preparation and going concern basis

The interim condensed financial statements for the 6 months ended 30 June 2020 have been prepared in accordance with IAS 34 Interim Financial Reporting.

The interim financial information set out above does not constitute statutory accounts within the meaning of Companies Act 2006. It has been prepared on a going concern basis in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS) as adopted by the European Union (adopted IFRS).

The financial statements have been prepared under the historic cost convention.

The company was incorporated on 17 November 2016 and in 2017 was admitted to Standard List of London Stock Exchange, the period under review represents the third interim set of accounts. The interim financial information for the 6 months ended 30 June 2020 has not been reviewed or audited. The interim financial report was approved by the Board on 29 July 2020.

The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in this review. The financial position of the Company, its cash flows and liquidity position are described in this business review. In addition, the below notes to the financial results include the Company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments; and its exposure to credit risk and liquidity risk. As highlighted below, the Company meets its day to day working capital requirements through its on-going cash flows.

Segment reporting

The Company is currently a cash shell and the directors believe that there is no benefit to show any segmental reporting until a new strategy is undertaken.

Cash and cash equivalents

Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments with maturities of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Company's cash management are included as a component of cash and cash equivalents for the purpose of the cash flow statement.

Share capital

Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects.

Taxation

Income tax payable is provided on taxable profits using tax rates enacted or substantively enacted at the balance sheet date.

Deferred taxation is provided in full, using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial results. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted at the balance sheet date and are expected to apply when the related balance sheet tax asset is realised or the deferred liability is settled. Deferred income tax assets are recognised to the extent that it is possible that future taxable profit will be available against which temporary differences can be utilised. Income tax is recognised in the consolidated income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are discussed below.

Going concern basis of preparation

The Company has approximately GBP510,000 cash at the period end. The Directors have prepared the accounts on a going concern basis as they consider that the company has adequate funding.

   3.         Share capital and share premium 
 
 Ordinary shares of 2.5p           Number of   Share capital   Share premium 
                                      shares         GBP'000         GBP'000 
 Shares issued brought forward    29,400,120             735             592 
-------------------------------  -----------  --------------  -------------- 
 
   At 30 June 2020                29,400,120             735             589 
-------------------------------  -----------  --------------  -------------- 
 
   4.         Share based payments 

Share based payments reserve

Movements in the share based payments reserve in the period relate to:

 
                          GBP'000 
----------------------   -------- 
 At the beginning 
  of the period                59 
 Share options issued          33 
-----------------------  -------- 
 At 30 June 2020               92 
-----------------------  -------- 
 

Warrants

 
                                                    Weighted 
                                                     average 
                                          Number    exercise 
                                       of awards       price 
--------------------------------   -------------  ---------- 
 At the beginning of the period       26,590,500    GBP0.074 
 Lapsed                             (26,590,500) 
---------------------------------  -------------  ---------- 
 Exercisable at 30 June 2020                   -           - 
 

All warrants lapsed in the period to 30 June 2020.

Share options

 
                                                   Weighted 
                                                    average 
                                         Number    exercise 
                                      of awards       price 
-------------------------------    ------------  ---------- 
 At the beginning of the period       2,440,000     GBP0.05 
 Granted                              1,960,000     GBP0.05 
 Lapsed                             (2,440,000)           - 
-------------------------------    ------------  ---------- 
 Exercisable at 30 June 2019          1,960,000     GBP0.05 
 

The options outstanding at 30 June 2020 have a weighted average remaining contractual life of 2.9 years.

At 30 June 2020, the following options were issued to directors and advisers of the Company under the share option incentive scheme:

 
 Date of grant          15-Jun-20 
 Number granted         1,960,000 
 Contractual life         3 years 
 Exercise price           GBP0.05 
 The estimated fair 
  value                  GBP0.017 
 

All options vested at the date of the agreement.

The fair value of the options issued during the period determined using the Black-Scholes valuation model and a share based payment charge of GBP33,025 (year ended 31 December 2019: GBPnil) has been recognised in the income statement.

Other significant inputs into the model are:

 
 Issue date share price      5p 
 Risk free rate            0.2% 
 Expected volatility        50% 
 

The average volatility has been calculated by using the average volatility for the Company and other similar companies.

   5.         Earnings per share 

Basic and diluted

The basic earnings per share is calculated by dividing the (loss)/profit attributable to the ordinary shareholders of the Company by the weighted average number of Ordinary shares in issue during the period, excluding Ordinary shares purchased by the Company and held as treasury shares.

 
                                        Half year   Half year 
                                            ended       ended  Year ended 
                                         30.06.20    30.06.19    31.12.19 
(Loss)/profit attributable to equity 
 holders of the Company (GBP'000)           (101)       (157)       (363) 
Weighted average number of shares in 
 issue                                 29,400,120  29,400,120  29,381,490 
 
(Loss)/earnings per share (pence)           (0.3)       (0.5)       (1.2) 
-------------------------------------  ----------  ----------  ---------- 
 

Due to the loss incurred in the period under review, the dilutive securities have no effect as at 30 June 2020.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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