TIDMCHLL
RNS Number : 9634Z
Chill Brands Group PLC
28 January 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF REGULATION 11 OF THE MARKET ABUSE (AMMENT) (EU EXIT) REGULATIONS
2019/310. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE
INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
Chill Brands Group plc
("Chill Brands" or the "Company" or the "Group")
Interim Results
Chill Brands Group, the international consumer packaged goods
company, is pleased to announce its interim results for the six
months ending 30 September 2021 (the "Period").
Strong Revenue Growth
Revenues for the six-month period ended 30 September 2021
increased to GBP1,073,872, more than an 18x increase vs. the
GBP54,554 in revenues that the company reported for the same period
in 2020, and an increase of more than 230% as compared to the
GBP320,875 in revenues that the Company reported in its last full
fiscal year.
These significant increases in revenues were achieved despite
the COVID-19 pandemic, logistical issues, and challenging market
conditions which negatively affected inventory and
distribution.
Chill Attracts World Class Consumer Brand Executives and
Advisors
Chill Brands has undergone a remarkable journey of change and
development this fiscal year which has attracted to the Company
some of the leading executives in the global brands industry.
Recently, we were very fortunate to add Michael Sandore as Chief
Commercial Officer. Mr. Sandore is a CPG sales leader, having led
retail and wholesale sales programmes first at Anheuser-Busch InBev
and later at the industry leading vapour company, Juul Labs. In
leading our commercial sales business, Michael will develop
data-backed sales strategies that are focused on gaining market
share. His deep understanding of our sector and unparalleled
insight into the retail sales environment will not only take our
products to market but also equip our partners with everything they
need to improve sell-through rates.
We are also proud to welcome Mr. Scott E. Thompson who recently
joined the Chill Brands Board as an Independent Non-Executive
Director. Mr. Thompson has almost forty years of intellectual
property law experience and is recognized by the World Trademark
Reporter as one of the top 300 trademark attorneys in the world. He
was most recently General Counsel, Intellectual Property/Marketing
Properties for Mars Inc., where he oversaw the global intellectual
property/marketing properties for all of the Company's businesses,
and enhanced global licensing and compliance program for all Mars
brands, including M&M's World Stores.
Mr. Thompson served as counsel for some of the world's largest
brands including Philip Morris Companies, Colgate-Palmolive and
GlaxoSmithKline. At GlaxoSmithKline, Mr. Thompson served as Vice
President, Global Trademarks, and as global head of 50-person
tri-location trademark department responsible for trademark,
copyright, unfair competition, and Internet and Intranet matters
for world's second-largest pharmaceutical and consumer healthcare
company.
At Colgate-Palmolive, he served as Vice President and Associate
General Counsel, where he managed the department responsible for
global trademark, copyright, unfair competition, and Internet
matters.
At Philip Morris, Mr. Thompson served as Assistant General
Counsel, where he was responsible for trademark, copyright, unfair
competition, and advertising issues, and had jurisdiction over
tobacco products worldwide and food, beer, clothing, and
miscellaneous products outside of the United States.
In addition to acting as the lead lawyer for a number of the
world's largest brands, Thompson was also a partner at the global
law firm Greenberg Traurig and is currently a partner and Co-Chair
of the Intellectual Property Team at Lippes Mathias LLP. His
education includes a degree in communications from Cornell
University and a Juris Doctor degree from Brooklyn Law School.
In September 2021 we appointed the leading cannabis investment
firm, Viridian Capital Partners, as Chill Brands' chief advisors.
Viridian's impressive track record in the cannabis industry makes
them an ideal partner for Chill, while their expertise in capital
raising, M&A transactions, and business development is an
essential component of our go-forward strategy. Scott Greiper
(Viridian's founder and president) and his team have already helped
us to build the structures and processes that will enable the
Company to grow, and we are grateful for their ongoing support. Mr.
Greiper and his team are currently engaged in a number of
initiatives that will improve the Company's Corporate Governance
credentials and further announcements will be made in due
course.
We are also pleased to have appointed Rhino Marketing to help us
sculpt Chill into an iconic and memorable brand. Rhino's Thomas
Hensey and Tim Ransom are veterans of the CPG industry and are the
names behind some of the most recognisable marketing campaigns in
history. They now work together with our internal team to create
brand assets that will help Chill build a community, conquer the
relaxation space, and ultimately sell more products.
Chill now benefits from the support of CPG professionals with
the experience necessary to build a successful, self-sustaining
business. We are excited to expand our team further with
best-in-class candidates and look forward to announcing new
appointments in due course.
About Chill Brands Group PLC
Chill Brands Group plc is an international company focused on
the development, production, and distribution of best-in-class
hemp-derived CBD products, tobacco alternatives and other consumer
packaged goods (CPG) products. The Company operates primarily in
the US, where its products are distributed online and via some of
the nation's most recognisable convenience retail outlets. The
Group's strategy is anchored around lifestyle marketing that is
designed to enhance the popularity of its products, channelling
visitors to its landmark chill.com website.
Publication on website
Copies of this announcement and Chill Brands' interim financial
statements are also available on the Group's website at
http://www.chillbrandsgroup.com .
Enquiries:
Chill Brands Group plc contact@chillbrandsgroup.com
Trevor Taylor, Co-CEO
Antonio Russo, Co-CEO
Allenby Capital Limited (Financial Adviser and Broker) +44 (0) 20 3328 5656
Nick Harriss / Nick Naylor (Corporate Finance)
Kelly Gardiner (Equity Sales)
The Chill Model
As with any CPG company, Chill Brands' model is based on the
sale of its products - specifically those made via the convenience
store (c-store) and e-commerce retail channels.
Online Sales
The acquisition of Chill.com has been a catalyst for major
change, bringing new opportunities that will shape the Company's
future. It is widely known that online retail is growing at a
faster rate than sales in brick-and-mortar locations while also
providing direct access to millions of consumers across the world.
With an unforgettable domain name and targeted marketing, Chill has
the opportunity to provide 24/7 access to product categories that
have traditionally struggled to reach markets beyond the
convenience store environment. Global online sales of tobacco have
more than doubled since 2017, while growth of the multi-billion
dollar reduced-risk products (RRPs) category provides a compelling
case for a model built around e-commerce.
Our priority is to make Chill.com the premier destination for
lifestyle and tobacco alternative products including CBD,
tobacco-free nicotine (TFN) and others that are currently in
development. We are committed to building on the existing power of
the domain which reached Google's first page of results for US
'Chill' searches within just weeks of activation. This work will
include an overhaul of our site and its positioning, ensuring that
it wins market share with a stellar user experience, unbeatable
search engine optimisation, and high conversion rates. In turn, the
site will provide valuable data that will allow us to sharpen our
operating model and sales strategies.
We have already seen the benefits of a digital-first approach.
Order volumes have increased steadily since the July 2021
acquisition of the site and the average Chill.com customer spends
more than $40 per online transaction. Crucially, these sales sit
within an ecosystem and supply chain that we control. So long as
the internet is up and postal services are running, Chill.com will
be online and selling regardless of external factors affecting the
retail market.
Physical Retail
The c-store channel has acted as the cornerstone of Chill
Brands' business, proving the demand for the Company's products.
Chill SKUs have been recognised as top performers in the retail
programmes of our distribution partners, while Chill CBD Flavour
Pouches beat hundreds of products to win second place in the CSP
2021 Retailer Choice Best New Product Award.
The hiring of a retail sales leader is already providing
immeasurable benefit to the company by assessing, refining and
adapting our retail strategy using his breadth of experience. We
are committed to the physical retail channel under his leadership.
His methodical and deliberate strategy will help Chill Brands
overcome pressures of COVID-19 pandemic and widespread global
logistics issues have made it increasingly difficult to distribute
to our physical retail partners at scale. Cost increases and
capital commitments that are challenging even the largest CPG
conglomerates have weighed heavily on our decisions as we work with
trusted advisors to build a roadmap. With the benefit of new
intelligence and guidance, it has become clear that it is not in
the best interests of the Company or its shareholders to pursue the
rollout timeline announced in February 2021.
This does not mean that Chill Brands is stepping away from
physical retail. Notwithstanding this strategic decision, all
previously announced distribution agreements remain in place, and
we will continue to activate new stores and territories in line
with a comprehensive business plan that has been devised by Mr
Sandore, one of the most capable minds in the CPG space. We will
also provide enhanced support to more than 2,500 retailers and
distributors that already stock Chill products, enabling them to
reach more consumers and sell our products in higher volumes.
Store count is no longer the sole route to success for Chill
Brands, but it remains a key pillar of our model. As part of this
realignment the Company will focus not on one sales channel but on
the wider goals of revenue generation and market penetration. By
supporting retailers and winning online, we will widen our funnel
while maintaining a strong financial position that will lead to
continued growth.
Outlook
Chill is the combination of a powerful brand, a driven and
experienced team, and products at the forefront of the world's
fastest growing consumer category. As we look back on the first
half of this financial year, we are also firmly focused on the
future and making changes that will propel the Company on to
greater success. Through persistent execution of marketing and
sales strategies, Chill Brands will become an iconic brand
synonymous with creating a "Chill State of Mind" - a mindset
advanced by the freedom and choice offered to our customers through
lifestyle marketing and innovative products.
This is the moment at which Chill Brands matures into a focused
and fully operational CPG company with aspirations to join the
ranks of the world's largest brands. In the coming weeks we will
continue to build our model alongside an investment case that
reaffirms the decisions of existing long-term holders and attracts
new ones. We would like to take this opportunity to thank our
shareholders for their ongoing support and restate our belief that
Chill Brands has a bright and prosperous future ahead.
Trevor Taylor & Antonio Russo
Co-Chief Executive Officers, Chill Brands Group plc
Chill Brands Group PLC (Formerly Zoetic International PLC)
Condensed Consolidated Statement of Comprehensive Income (Unaudited)
For the six months ended 30 September 2021
Unaudited six months Unaudited six months
ended 30 September 2021 ended 30 September 2020 Audited year ended 31
GBP GBP March 2021 GBP
-------------------------- -------------------------- --------------------------
Revenue 1,073,872 54,554 320,875
Cost of sales (756,434) (37,976) (361,517)
-------------------------- -------------------------- --------------------------
Gross profit 317,438 16,578 (40,642)
Administrative expenses (1,437,282) (1,000,042) (2,151,391)
Share expenses for options
granted (1,348,903) - (1,410,268)
Other Expense - - (1,200,000)
-------------------------- -------------------------- --------------------------
Operating Loss (2,468,747) (983,464) (4,802,301)
Loss for the period from
discontinued activities (114,960) (146,120) (49,762)
Finance income 32 1,755 1,762
Loss on ordinary activities
before taxation (2,583,675) (1,127,829) (4,850,301)
Taxation on loss on
ordinary activities - - -
-------------------------- -------------------------- --------------------------
Loss for the period (2,583,675) (1,127,829) (4,850,301)
Items that may be
re-classified subsequently
to profit or loss:
Foreign exchange
adjustment on
consolidation (99,496) 32,117 231,644
Total comprehensive loss
for the
period attributable to the
equity holders (2,683,171) (1,095,712) (4,618,657)
-------------------------- -------------------------- --------------------------
Loss per share (basic and
diluted)
attributable to the equity
holders (pence) (1.24) -0.59 -2.51
-------------------------- -------------------------- --------------------------
Chill Brands Group PLC (Formerly Zoetic International PLC)
Condensed Consolidated Statement of Financial Position (Unaudited)
As at 30 September 2021
Unaudited six months Unaudited six months
ended 30 September 2021 ended 30 September 2020 Audited year ended 31
GBP GBP March 2021 GBP
-------------------------- -------------------------- --------------------------
Non-Current Assets
Tangible assets 70,562 69,529 54,597
Right of use lease asset 285,559 - -
Related party note
receivable, net of
current portion 566,571 - -
Intangible assets 1,195,898 1,892 -
Total Noncurrent Assets 2,118,590 71,421 54,597
Current Assets
Inventory 1,063,278 1,302,620 1,238,779
Current portion of
related party note
receivable 377,302 - -
Trade and other
receivables 248,266 717,068 136,093
Cash and cash equivalents 2,079,779 451,886 333,176
Total Current Assets 3,768,625 2,471,574 1,708,048
Total Assets 5,887,215 2,542,995 1,762,645
========================== ========================== ==========================
Current Liabilities
Current maturities of
loans 10,000 7,617 8,382
Trade and other payables 759,989 778,395 661,653
Current portion of right
of use lease liability 58,110 - -
Accrued liabilities 618,912 - 1,244,750
Total Current Liabilities 1,447,011 786,012 1,914,785
Non-Current Liabilities
Loans, net of current
portion 67,424 262,313 72,042
Right of use lease
liability, net of
current portion 231,231 - -
-------------------------- -------------------------- --------------------------
Total Non-Current
Liabilities 298,655 262,313 72,042
Net Assets 4,141,549 1,494,670 (224,182)
-------------------------- -------------------------- --------------------------
Equity
Share capital 2,120,700 1,945,700 2,020,700
Share premium account 10,298,440 3,283,116 4,698,441
Share based payments
reserve 2,780,589 4,803 1,431,686
Shares to be issued
reserve - 1,096,500 -
Foreign currency
translation reserve 433,150 333,119 532,646
Retained profit/(loss) (11,491,330) (5,168,568) (8,907,655)
-------------------------- --------------------------
Total Equity 4,141,549 1,494,670 (224,182)
========================== ========================== ==========================
Chill Brands Group PLC (Formerly Zoetic International PLC)
Condensed Consolidated Statement of Changes in Equity (Unaudited)
For the six months ended 30 September 2021
Share
Share Based Foreign
Share Premium Payment Shares To Currency
Capital Account Reserve Be Issued Translation Retained
GBP GBP GBP Reserve GBP Reserve GBP Loss GBP Total GBP
---------- ----------- ---------- ------------ ------------ ------------- ------------
At 31 March 31
2020 1,729,200 3,020,616 54,171 1,096,500 301,002 (4,090,107) 2,111,382
------------------ ---------- ----------- ---------- ------------ ------------ ------------- ------------
At 1 April 2020
as previously
stated 1,729,200 3,020,616 54,171 - 301,002 (2,993,607) 2,111,382
------------------ ---------- ----------- ---------- ------------ ------------ ------------- ------------
Prior period
adjustment - - - 1,096,500 - (1,096,500) -
At 1 April 2020
as restated 1,729,200 3,020,616 54,171 1,096,500 301,002 (4,090,107) 2,111,382
------------------ ---------- ----------- ---------- ------------ ------------ ------------- ------------
Comprehensive
income for the
period
Loss for the
period - - - - - (1,127,829) (1,127,829)
Other -
comprehensive
income - - - - - -
Translation
adjustment - - - - 32,117 - 32,117
------------
Total
comprehensive
loss for the
period
attributable
to the equity
holders - - - - 32,117 (1,127,829) (1,095,712)
Issue of
warrant and
options - - - - - - -
Exercise of
warrants - - - - - - -
Lapse of
warrants - - (49,368) - - 49,368 -
Shares issued
in the period 216,500 262,500 - - - - 479,000
Cost relating
to share
issues - - - - - - -
At 30 September
2020 1,945,700 3,283,116 4,803 1,096,500 333,119 (5,168,568) 1,494,670
------------------ ---------- ----------- ---------- ------------ ------------ ------------- ------------
Comprehensive
income for the
period
Loss for the
period - - - - - (3,722,472) (3,722,472)
Other -
comprehensive
income - - - - - -
Translation
adjustment - - - - 199,527 - 199,527
------------
Total
comprehensive
loss for the
period
attributable
to the equity
holders - - - - 199,527 (3,722,472) (3,522,945)
Issue of
warrant and
options - - 1,410,268 - - - 1,410,268
Lapse of
warrants - - 16,615 - (16,615) -
Exercise of
warrants 20,000 - - - - - 20,000
Conversion of
loans 55,000 212,500 - - - - 267,500
Shares issued
in the period - 1,230,000 - (1,096,500) - - 133,500
Cost relating
to share
issues - (27,175) - - - - (27,175)
At 31 March 2021 2,020,700 4,698,441 1,431,686 - 532,646 (8,907,655) (224,182)
------------------ ---------- ----------- ---------- ------------ ------------ ------------- ------------
Comprehensive
income for the
period
Loss for the
period - - - - - (2,583,675) (2,583,675)
Other -
comprehensive
income - - - - - -
Translation
adjustment - - - - (99,496) - (99,496)
------------
Total
comprehensive
loss for the
period
attributable
to the equity
holders - - - - (99,496) (2,583,675) (2,683,171)
Issue of
warrant and
options - - 1,348,903 - - - 1,348,903
Exercise of
warrants - - - - - - -
Lapse of
warrants - - - - -
Shares issued
in the period 100,000 5,900,000 - - - - 6,000,000
Cost relating
to share
issues - (300,001) - - - - (300,001)
At 30 September
2021 2,120,700 10,298,440 2,780,589 - 433,150 (11,491,330) 4,141,549
------------------ ---------- ----------- ---------- ------------ ------------ ------------- ------------
Chill Brands Group PLC (Formerly Zoetic International PLC)
Condensed Consolidated Statement of Cash Flows (Unaudited)
For the six months ended 30 September 2021
Unaudited six months Unaudited six months
ended 30 September 2021 ended 30 September 2020 Audited year ended 31
GBP GBP March 2021 GBP
------------------------- ------------------------- -------------------------
Cash Flows From Operating
Activities
Loss for the period (2,583,675) (1,127,829) (4,850,301)
Adjustments for:
Depreciation and
amortization charges 7,835 10,675 20,677
Impairment provision - - 206,685
Share expense for
options granted 1,348,903 - 1,410,268
Net foreign exchange
adjustments (112,157) 18,680 193,717
Operating cash flow
before working capital
movements (1,339,094) (1,098,474) (3,018,954)
------------------------- ------------------------- -------------------------
(Increase)/decrease
in inventories 175,501 (134,884) (275,743)
(Increase)/decrease
in trade receivables (112,173) 1,021,955 1,301,039
(Increase)/decrease
in related party
note receivable (943,873) - -
Increase/(decrease)
in trade and other
payables 98,336 (448,990) (235,732)
(Increase)/decrease
in other assets 125,873 - -
Increase/(decrease)
in other liabilities (122,091) - -
Increase/(decrease)
in accrued expenses (625,838) - 1,244,750
Net Cash Used by Operating
Activities (2,743,359) (660,393) (984,640)
------------------------- ------------------------- -------------------------
Cash Flows From Investing
Activities
Purchase of tangible fixed
assets (23,800) - 301,891
Purchase of intangible
assets (1,195,898) (1,892) (1,352)
Net Cash Used by Investing
Activities (1,219,698) (1,892) 300,539
------------------------- ------------------------- -------------------------
Cash Flows From Financing
Activities
Net proceeds from issue of
shares 5,699,999 479,000 542,825
Long-term borrowings - 269,930 -
Loans made by the Group - - 80,424
Repayment of long-term debt (3,000) - -
Net Cash Generated by
Financing Activities 5,696,999 748,930 623,249
------------------------- ------------------------- -------------------------
Net increase in cash and cash
equivalents
As above 1,733,942 86,645 (60,852)
Cash and cash equivalents at
beginning of period 333,176 349,006 349,006
Foreign exchange adjustment
on opening balances 12,661 16,235 45,022
Cash and cash equivalents at
end of period 2,079,779 451,886 333,176
========================= ========================= =========================
CHILL BRANDS GROUP PLC
(FORMERLY KNOWN AS ZOETIC INTERNATIONAL PLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended 30 September 2021
NOTE 1 - GENERAL INFORMATION
Chill Brands Group PLC ("the Company") (formerly Zoetic
International PLC) and its subsidiaries (together "the Group") are
involved in the development, production and distribution of premium
cannabidiol (CBD) products. The Company, a public limited company
incorporated and domiciled in England and Wales, is the Group's
ultimate parent company. The Company was incorporated on 13
November 2014 with Company Registration Number 09309241 and its
registered office and principal place of business is 27/28
Eastcastle Street, London W1W 8DH. The principal executive offices
are located at 1601 Riverfront Drive, Grand Junction, Colorado
81501.
NOTE 2 - ACCOUNTING POLICIES
Basis of preparation
The interim condensed unaudited consolidated financial
statements for the period ended 30 September 2021 have been
prepared in accordance with IAS 34 Interim Financial Reporting. The
comparative figures for 31 March 2021 are extracted from the
Group's audited accounts to that date. The comparative figures for
the period ended 30 September 2020 are unaudited.
The condensed unaudited consolidated interim financial
statements of the Group have been prepared on the basis of the
accounting policies, presentation, methods of computation and
estimation techniques used in the preparation of the audited
accounts for the period ended 31 March 2021 and expected to be
adopted in the financial information by the Group in preparing its
annual report for the year ending 31 March 2022.
The financial information in this statement relating to the six
months ended 30 September 2021 and the six months ended 30
September 2020 has neither been audited nor reviewed by the
auditors pursuant to guidance issued by the Auditing Practices
Board. The financial information presented for the year ended 31
March 2021 does not constitute the full statutory accounts for that
period. The Annual Report and Financial Statements for the year
ended 31 March 2021 have been filed with the Registrar of
Companies.
The financial information of the Group is presented in British
Pounds Sterling ("GBP").
NOTE 3 - EXITING FROM OIL AND GAS
In September 2020, the Group reached an agreement regarding the
disposal of its East Denver oil and gas assets to the operator of
those facilities, True Oil LLC. The proceeds of sale from the East
Denver assets was agreed at US $376,000, although the Group had a
loan secured on the assets of US $276,574 from ANB Bank. Following
the execution of this agreement, the ANB Bank loan has been settled
in full. In the same month the Group finalized the closure of the
legacy Highlands Natural Resources Corporation office in Denver,
Colorado, along with the termination of a number of employment and
consultancy contracts for personnel concerned with the management
of the Group's former natural resources assets. The Group's
Colorado-based hemp cultivation and CBD production center has also
been closed.
In May 2020, an asset purchase agreement was reached between the
Company and Path Investments plc ("Path"), the latter of which will
acquire the Group's 75% interest in the patented hydrocarbon well
stimulation and protection technology, DT Ultravert (DTU) with the
final agreement reached on 5 November 2020.
NOTE 4 - INCOME TAX EXPENSE
No tax is applicable to the Group for the period ended 30
September 2021. No deferred income tax asset has been recognized in
respect of the tax losses carried forward, due to the uncertainty
as to whether the Group will generate sufficient profits in the
foreseeable future to prudently justify this.
NOTE 5 - LOSS PER SHARE
Basic loss per ordinary share is calculated by dividing the loss
attributable to equity holders of the company by the weighted
average number of ordinary shares in issue during the period.
Diluted earnings per share is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion
of all dilutive potential ordinary shares. There are currently no
dilutive potential ordinary shares.
Earnings Weighted average Loss per
GBP number of shares share (pence)
------------------- ------------------ --------------------
Loss per share attributed to
ordinary shareholders (2,583,675) 208,900,635 (1.24)
NOTE 6 - INVENTORIES
Inventories comprise finished products and raw materials either
developed by the Group or bought in from third parties. All
inventory items are stated at their cost of production or
acquisition, or at net realizable value if this is lower. There are
no biological assets being grown for the six month period ended
September 30, 2021. For the period ended September 30, 2021, the
Group had no impairments on inventory.
NOTE 7 - NOTE RECEIVABLE - RELATED PARTY
During the six month period ended 30 September 2021, the Group
entered into a note agreement with a related party. The note
receivable consists of a note from an entity owned and operated by
a shareholder of the Group. The note carries interest on the unpaid
principal balance of 0% interest from 30 September 2021 through 31
January 2022 and shall bear interest at the short term rate of 0.18
percent per annum from 1 February 2022 until the note is paid in
full on 1 May 2023. The total balance due from the related parties
note receivable at 30 September 2021 was GBP943,874.
NOTE 8 - INTANGIBLE ASSETS
On 22 June 2021, the Group entered into an agreement to purchase
the domain name "Chill.com" and all intellectual property rights
that it has accrued in connection with the domain name. The domain
is intended to serve as a worldwide marketing anchor for the
Group's range of consumer products. The intangible assets are
valued as of 30 September 2021 at GBP1,195,898. Management has
assessed the asset for impairment as of 30 September 2021 and
believe the asset is not impaired.
NOTE 9 - LOANS
On 10 June 2020, the Group entered into a BBLS managed by the
British Business Bank on benefit of and with the financial backing
of the Secretary of State for Business, Energy and Industrial
Strategy. The BBLS loan of GBP50,000 carries an interest of 2.50%
rate per annum with repayment over 60 months beginning July 2021.
The loan balance was GBP47,500 and GBP50,000 as of 30 September
2021 and 31 March 2021, respectively.
On 22 April 2020, Highlands Natural Resources Corporation
entered into a Paycheck Protection Program (PPP) loan with the U.S.
Small Business Administration (SBA) for GBP154,078 with an interest
of 1.00% rate per annum with principal and accrued interest due and
payable on 22 April 2022. During the period ended 31 March 2021,
the Group received partial forgiveness of the SBA loan. The loan
balance was GBP29,924 and GBP30,424 as of 30 September 2021 and 31
March 2021, respectively.
On 20 April 2020, Zoetic Corporation entered into a PPP loan of
GBP93,100 with an interest of 1.00% rate per annum with principal
and accrued interest due and payable on 20 April 2022. During the
period ended 31 March 2021, the Group received full forgiveness of
the SBA loan.
NOTE 10 - LEASES
The Group determines if an arrangement is a lease at inception
if the contract conveys the right to control the use and obtain
substantially all the economic benefits from the use of an
identified asset for a period of time in exchange for
consideration.
The Group identifies a lease as a finance lease if the agreement
includes any of the following criteria: transfer of ownership by
the end of the lease term; an option to purchase the underlying
asset that the lessee is reasonably certain to exercise; a lease
term that represents 75 percent or more of the remaining economic
life of the underlying asset; a present value of lease payments and
any residual value guaranteed by the lessee that equals or exceeds
90 percent of the fair value of the underlying asset; or an
underlying asset that is so specialized in nature that there is no
expected alternative use to the lessor at the end of the lease
term. A lease that does not meet any of these criteria is
considered an operating lease.
Lease right-of-use assets represent the Group's right to use an
underlying asset for the lease term and lease liabilities represent
the Group's obligation to make lease payments arising from the
lease. Right-of-use assets and liabilities are recognized at the
commencement date of a lease based on the present value of lease
payments over the lease term. Lease terms may include options to
extend or terminate the lease. The Group includes these extension
or termination options in the determination of the lease term when
it is reasonably certain that we will exercise that option. The
Group does not recognize leases having a term of less than one year
in the consolidated statements of financial position.
For purposes of determining the present value of the lease
payments, the Group use a lease's implicit interest rate when
readily determinable. As leases do not provide an implicit interest
rate, the Group used an incremental borrowing rate based on
available information at the commencement of the lease. Lease cost
for operating leases is recognized on a straight-line basis over
the lease term.
On 5 May 2021, the Group entered into an office lease agreement
between the Company and Bonsai Development LLC. The operating lease
is a five year lease with an option to extend up to five years. The
Group believes the option to extend up to five years is not
probable as of 30 September 2021. The Group recorded a right of use
lease asset and corresponding liability using an incremental
borrowing rate to determine the discount rate. As of 30 September
2021, the right of use lease asset had a balance of GBP285,559.
NOTE 11 - SHARE CAPITAL & RESERVES
Allotted, called up and fully paid Ordinary shares of GBP0.01
each:
Number of Share Capital Share Premium
Shares GBP GBP
Balance at 31 March 2021 202,070,034 2,020,700 4,698,441
1 May 2021 - issuance of
shares, net or origination
costs 10,000,000 100,000 5,599,999
-------------------- ------------------ -------------------
Balance at 30 September
2021 212,070,034 2,120,700 10,298,440
The Company has only one class of share and all shares rank pari
passu in every respect.
NOTE 12 - EQUITY-SETTLED SHARE-BASED PAYMENTS RESERVE
30 September 31 March
2021 GBP 2021 GBP
At beginning of period 1,431,686 54,171
On options and warrants granted
in the year 1,348,903 1,410,265
Released on lapsing of warrants
during the year - (32,753)
-------------------------- ---------------------
At end of period 2,780,589 1,431,686
NOTE 13 - SUBSEQUENT EVENTS
During the Annual General Meeting held on 30 September 2021, the
Group established a long-term incentive plan (LTIP) to grant awards
to eligible employees. The awards can take the form of options to
acquire Ordinary Shares with an exercise price determined by the
Board or conditional rights to acquire Ordinary Shares for no or
nominal consideration. All employees, including executive
directors, of the Group are eligible and may be granted awards
under the LTIP. The Board has discretion at the time of the grant
of an award to determine the basis on which an award will vest and
to determine whether an award will be subject to a holding
period.
On 22 November 2021, the Group announced that its ordinary
shares are now trading on the US OTCQB(R) Venture Market under the
symbol ZOEIF. The Group's ordinary shares will continue to trade on
the London Stock Exchange under the symbol CHLL.
On 14 December 2021, the Group announced that its ordinary
shares are now trading on the US OTCQB(R) Venture Market under the
symbol CHBRF. The Group's ordinary shares will continue to trade on
the London Stock Exchange under the symbol CHLL.
On 15 December 2021, the Group entered into a finance agreement
with gotoPremiumFinance for directors and officers (D&O)
insurance. The policy premiums are $136,725 (United States Dollars)
with $100,669 financed at an annual percentage rate of 8.75% over
the term of the policy ending 13 December 2022.
On 20 December 2021, the Group announced a sponsor partnership
with the U.S. Major Arena Soccer League (MASL), to offer the
Company's CBD products to the league and member teams. Total
consideration from the Group was $162,500 (United States Dollars)
which consisted of $100,000 in cash and 500,000 ordinary shares at
12.50p valued as of the closing price on 11 November 2021.
On 4 January 2022, the Group announced the addition of Mr.
Michael Sandore as Chief Commercial Officer.
On 27 January 2022, the Group announced the appointment of Mr.
Scott E. Thompson as a Non-Executive Director.
Responsibility Statement
Trevor Taylor and Antonio Russo, Co-CEOs confirm that to the
best of their knowledge that the condensed set of financial
statements, which has been prepared in accordance with IAS 34 as
contained in UK adopted IFRS and the interim management report
includes a fair review of the information required by the
Disclosure Guidance and Transparency Rules.
-ENDS-
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IR QVLBLLFLZBBZ
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