NNN.L Regulatory News (NNN)

30th September 2022

Operational highlights for the period:

· Successful trial results with Volz Holdings and REACH UK registration

o  Creating potential to lead to wider adoption by the global filtration industry

o  Pipeline of interest is already at an advanced stage

· Joint development agreement with a global wellness company for their first project in the cosmetics market

o  On successful completion, opportunity to enter into an exclusive commercial agreement for the supply of nanoparticles for this cosmetics market

· New share subscription agreement to raise £2,942,500

o  Proceeds to be used primarily to fund its working capital requirements as the Group looks to commercialise its bespoke nanoparticle technology

· Directors continue to purchase shares in the Company

o  Confidence in considerable potential of the Group's nanoparticle technology

· Strengthened Board

o  New board members enhance commercial expertise and corporate governance

Mark Duffin, Chief Executive Officer commented:

"We are pleased with the recent updates that we have been able to share as a result of the hard work especially during the last 12 months. The REACH UK registration will allow our partner Volz to apply antiviral technology to all their products. This has the potential to lead to wider adoption by the global filtration industry. The first project in our R&D programme that was secured is a testimony to our leadership in the nanotechnology market. Confidentiality and competitive advantage remain our priority during the development stage and we look forward to potentially becoming exclusive partners in the future. The funding arrangements with Lanstead provide further working capital as the Group looks to commercialise its bespoke nanoparticle technology.

"As a result, we are very excited about the future of the business and are confident about the near term prospects of the business."

Enquiries

nanosynth group plc

Mark Duffin (Chief Executive Officer) via IFC Advisory

SP Angel Corporate Finance LLP +44 20 3470 0470

Nominated Adviser and Joint Broker

Stuart Gledhill

Caroline Rowe

IFC Advisory Ltd +44 20 3934 6630

Graham Herring

Zach Cohen

Chairman's Statement

The current year has seen the consolidation of the new direction of the Group, with a refocus on the development and commercialisation of the Group's core nanoparticle platform and technology.

Through its joint venture with Volz Holding v.o.s. (Volz), the Group has completed successful trial results in the development of a standard retro-fit to media production lines that allows for the incorporation of the Group's antiviral technology into heating, ventilation and air conditioning units. The UK's Health and Safety Executive has completed its checks and approved Pharm 2 Farm Limited, a wholly owned subsidiary of nanosynth, for REACH UK registration and allocated the appropriate substance tonnage that will allow the production and distribution of up to 100 tonnes of copper oxide nano material per year.

In addition to the refinement of technology used in the joint venture with Volz, the Group has identified seven specific market verticals that the company has decided to further develop and apply to nanoparticle technology with targeted strategic partners.

The areas include: Animal health and wellbeing, Cosmetics, Medical, Plants, Food and drink, Functional coating and Electronics.

The Group announced the first such development in August 2022 that it had entered into a joint development agreement with a global wellness company for a project in the cosmetics market. It is the intention, on successful development of a revolutionary product for the market, to enter into an exclusive commercial agreement for the supply of nanoparticles into that market.

In addition, we have held numerous meaningful conversations with large companies across all 7 verticals. In particular, formal discussions have progressed extensively within the cosmetics and plant verticals which gives us encouragement that we will be able to deliver further development contracts during the current financial year although the final timing and eventual outcome of such discussions remains uncertain.

Subscription

As announced on 26 August 2022, he Group finalised a fundraising via a Subscription and Sharing Agreement with Lanstead Capital Investors LP (Lanstead).

Gross proceeds of £2,942,500 will be pledged to Lanstead pursuant to the Sharing Agreement. The agreement entitles the Group to receive back the proceeds on a pro-rata basis over 24 months subject to adjustment upwards or downwards each month depending upon the share price relative to a benchmark share price of 0.7333 pence per share.

The Sharing Agreement provides the opportunity for the Group to benefit from positive future share price performance.

However, if the Company's 20-day Volume Weighted Average Share Price is less than the benchmark price, then the amount received by the Company under the Sharing Agreement will be proportionately less than the gross proceeds of the Lanstead Subscription which were pledged by the Company to Lanstead at the outset.

Board Update

On 30 June 2022 the Group announced the appointment of Andrew Stedman as Chief Financial Officer and Peter Gray as an independent Non-Executive Director.

Andrew was appointed non-Board CFO on 7 February 2022. He brings the experience of a well rounded and highly commercial finance leader with substantial M&A and deal exposure skills which are closely aligned with our strategic objectives.

Peter has a wealth of experience in corporate and M&A transactions and frequently lectures on the subject of mergers and acquisitions. He is employed as a partner in Finn Corp Group plc, a corporate finance and broking house.

During the six months to 30 June 2022, the Group recorded revenues from continuing operations of £9,988 compared with £133,116 for the six months to 30 June 2021. The operating loss from continuing operations for the period was £1,781,217 (30 June 2021: £1,162,718). The loss per share on continuing operations was 0.085 pence (30 June 2021: loss per share 0.057 pence).

● Consolidated net assets at 30 June 2022 amounted to £3,443,023 (31 December 2021: £4,959,667).

● Cash balances at the period end amounted to £1,787,242 (31 December 2021: £3,760,992).

The Interim results include non-recurring charges as a result of action taken to reduce overhead cost. The Board has now completed its review as of September 22 and now believes that, as a result of these actions, the cash burn has been reduced to a sustainable level.

Acknowledgments

On behalf of the Board, I would like to extend our thanks to our business partners, customers, employees and shareholders for their continued support throughout the period. 

Richard Clarke

Non-Executive Chairman

NOTES TO THE INTERIM RESULTS:

1. General information and accounting policies

The principal activity of nanosynth group plc ("the Company") and its subsidiaries (together "the Group") is the synthesis and application of nanoparticles to create new, and improve existing products.

The Company is a public limited company, incorporated and domiciled in the United Kingdom, with its shares traded on the London Stock Exchange's AIM. Its registered office is: 27-28 Eastcastle Street, London W1W 8DH.

This announcement is for the unaudited interim results for the period ended 30 June 2022.

The Directors approved these unaudited interim results on 30th September 2022.

2. Basis of preparation

The condensed consolidated interim financial information (the "Financial Information") has been prepared in accordance with the requirements of the AIM Rules for Companies. As permitted, the Company has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing this Financial Information. The Financial Information should be read in conjunction with the annual financial statements for the year ended 31 December 2021, which have been prepared in accordance with UK-adopted International Accounting Standards (UK-adopted IAS). In the opinion of the Directors the Financial Information for the period represents fairly the financial position, results from operations and cash flows for the period in conformity with generally accepted accounting principles consistently applied. 

The Financial Information set out above does not constitute statutory accounts within the meaning of the Companies Act 2006. The Financial Information 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 United Kingdom. Statutory financial statements for the year ended 31 December 2021 were approved by the Board of Directors on 28 June 2022 and subsequently delivered to the Registrar of Companies and are also available on the Group's website: [www.nanosynthgroup.com].

The 2022 Financial Information of the Group has not been audited.

These interim results are presented in Sterling rounded to the nearest pound.

Going concern basis

The interim financial information has been prepared assuming that the Group will continue as a going concern.

The operational requirements of the Group comprise of maintaining a Head Office in the UK alongside its UK operations. The Directors continually review the Group's working capital forecasts and manage the further development spend against the expected cash resources. As detailed in note 6 the Company has announced the raising of additional funding after the reporting period.

Risks and uncertainties

The Board continuously assesses and monitors the key risks facing the business. The key risks that could affect the Group's medium-term performance and the factors that mitigate those risks have not substantially changed from those set out in the Group's 2021 Annual Report and Financial Statements.  The Group is exposed to market risks (including foreign exchange risk and price risk), credit risk and to a limited extent, interest rate risk, liquidity risk and foreign exchange risk.

Critical accounting estimates and judgements

The preparation of Financial Information in conformity with UK-adopted IAS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the end of the reporting period. It also requires management to exercise its judgement in the process of applying the Group's Accounting Policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Information, are disclosed in Note 4 of the Group's 2021 Annual Report and Financial Statements.

Accounting policies

There have been no changes to the Group's accounting policies, presentation and methods of computation in this Financial Information compared to those which were applied in the preparation of the Group's Annual Financial Statements for the year ended 31 December 2021.

The comparative information for the six months ended 30 June 2021 has been restated to reflect the Cloudveil Limited operation which was returned to its founders during November 2021 for nominal consideration.

3. Share capital

4. Earnings per share

Basic earnings per share have been calculated by dividing the loss attributable to equity holders of the Company after taxation by the weighted average number of shares in issue during the period. There is no difference between the basic and diluted earnings per share as the effect on the exercise of options and warrants would be to decrease the earnings per share.

5. Dividends

No dividend has been declared or paid by the Company during the six months ended 30 June 2022 (2021: nil).

6. Events after the reporting period

On 26 August 2022 the Company announced a share subscription by Landstead Capital Investors LP (Landstead), an institutional investor, for 535,000,000 new ordinary shares at an issue price of 0.55 pence. The gross proceeds were pledged to Landstead by the Company as part of a Sharing Agreement whereby the pledged amount would be paid back to the Company on a prorate basis over 24 months subject to an adjustment based upon the share price at that time against a benchark of 0.7333 pence per share.