RE: Must be some sort of record29 Sep 2023 18:25
1. Accounting policies (continued)
Going concern (continued)
The Company has needed to hold Fruitflow II SD in stock from 1 January 2023 onwards, to sell to new and
existing customers, and the Company therefore agreed to purchase from DSM the remaining stocks of
Fruitflow which DSM held on 31 December 2022.
It was originally intended that the Company would pay DSM for this inventory over the course of a three month
sale back period, commencing on 1 January 2023, with the Company having the option to purchase some but
not all of DSM’s remaining stocks of Fruitflow at 31 December 2022.
The Company and DSM have been in further negotiations around the inventory transfer throughout the course
of 2023, and the parties expect to be able to conclude these further negotiations in the coming months. The
amount of stock which the Company will finally elect to purchase from DSM remains uncertain, and it will
ultimately depend on (i) the best before dates of this inventory, which remain favourable / long dated in light of
recent production runs of new Fruitflow material, (ii) recent stability data which suggests that the best before
dates could be further extended, (iii) estimated customer demand in 2023/24 and beyond, (iv) the comparative
costs and timing of a potential production run for a new batch of material and (v) the Company’s financial
resources at that time.
Based on its current level of cash it is expected that the Group may therefore need to raise further equity
finance, or potentially new loan finance, in the coming months, a situation which is deemed to represent a
material uncertainty related to going concern.
Considering the success of previous fundraisings and the current performance of the business, the Directors
have a reasonable expectation of raising sufficient additional equity capital or new loan finance to continue in
operational existence for the foreseeable future. Subject to the outcome of ongoing negotiations with a third
party, the Company might also be able to hold some of its future stock requirements on a consignment basis,
only paying for the stock when it was required for sale. For these reasons the Directors continue to adopt the
going concern basis in preparing the Group’s and Parent Company’s financial statements
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