Lanstead -june 201930 Nov 2019 17:24
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NOTES TO THE CONSOLIDATED INTERIM ACCOUNTS FOR THE PERIOD
ENDED 30 JUNE 2019
(Continued)
4 DERIVATIVE FINANCIAL ASSET
In June 2019, as part of a placing that raised, in aggregate, £2.66 million (before expenses) from new and
existing shareholders, the Company issued 26,565,200 new ordinary shares to Lanstead Capital LP
(‘Lanstead’) at a price of 10p per share for £2.66 million. All of the shares with full voting rights were
allotted to Lanstead on 2 July 2019. The Company simultaneously entered into a Sharing Agreement with
Lanstead for 100% of these shares with a reference price of 13.33p per share. The Sharing Agreement is
for a 24 month period. The actual consideration is variable depending upon the Company’s share price.
The Sharing Agreement is treated as a derivative financial asset and valued at fair value through the
income statement with reference to the Company’s share price as at the end of the accounting period.
On 2 July 2019, the Company also issued, in aggregate, a further 1,328,290 new ordinary shares to
Lanstead as a value payment in connection with the Share Subscription and the Sharing Agreement.
At the end of the accounting period the amount receivable is restated to fair value based upon the share
price of the Company at that date. Any change in the fair value of the derivative financial asset is
reflected in the income statement. As at 30 June 2019, the Company completed a calculation of fair value
of the derivative financial asset that resulted in a finance loss of £785k which was recorded in the income
statement. The restatement to fair value will be calculated at the end of each accounting period during the
course of the Sharing Agreement and will vary according to the Company’s share price performanc
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