Invinity Energy Systems PLC 2023 Financial Results

RNS Number : 0743U

Invinity Energy Systems PLC

27 June 2024

The information contained within this Announcement is deemed by Invinity Energy Systems plc to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 ("MAR").

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27 June 2024

Invinity Energy Systems plc

("Invinity" or the "Company")

2023 Financial Results

Invinity Energy Systems plc (AIM: IES) (AQSE: IES) (OTCQX: IESVF), a leading global manufacturer of utility-grade energy storage, is pleased to announce its Full Year Results for the year ended 31 December 2023 that are in line with expectations.

The Company will hold a virtual meeting for analysts at 10am (UK time) today. Analysts wishing to attend are kindly asked to email invinity@tavistock.co.uk to receive instructions on how to join the meeting.

Invinity's management team will host a virtual results presentation and interactive Q&A for all shareholders at 3pm (UK time) on Wednesday 3 July 2024 via the Investor Meet Company platform. Investors wishing to join the session will be automatically invited if they already follow Invinity on that platform, or can register for free via this link.

The Company's 2023 Annual Report will shortly be available for download from the Company's website and will be posted to shareholders' registered addresses.

Highlights

· 511% increase in total income¹ YoY to £22.0m (2022: £3.6m), marginally ahead of guidance provided on 18 December 2023 and largely due to an 800% YoY increase in products shipped (32.5 MWh) during the period.

· 136.7 MWh of Invinity batteries sold or awarded funding during 2023 for delivery in 2024 or 2025 including 99.6 MWh relating to Invinity's next generation Mistral product, which remains on track for commercial launch later this year.

· 170% increase in total global pipeline of commercial interest to 6.6 GWh as of 17 June 2024 (24 May 2023: 2.47 GWh) reflecting growing commercial interest in Invinity's products and longer duration energy storage solutions in general.

· Loss from operations of £22.8m (2022: £19.0m). The majority of the 2023 gross loss relates to projects signed before 2022. Margin improvement is a key strategic objective and more recent projects are forecast to achieve broadly flat or small positive gross margins at the project level (before allocation of facility costs).

· 10% reduction in cash outflows YoY to £19.7m (2022: £21.9m) and broadly unchanged administrative costs of £19.1m (2022: £19.0m) reflecting a net improvement in operating assets and liabilities as well as a continued focus on cost management.

· Debt-free with £53.2m of cash at 31 May 2024 (2023: £15.4m) reflecting a post period £57.4m fundraise cornerstoned by a £25m investment from UK Infrastructure Bank completed in May 2024.

¹Includes sales revenue and project related grant income

Commercial Pipeline

Invinity's commercial pipeline development over the past year is detailed below:

Date	Base (MWh)	Advanced (MWh)	Qualified Near Term (MWh)	Qualified Further Term (MWh)
24-May-2023 (2022 Annual Report)	42.8	73.4	957.1	1,397.4
22-Sep-2023 (HY23 Results)	43.1	137.3	1,415.0	3,057.8
30-Nov-2023 (YE Business Update)	49.8	92.0	1,898.5	3,790.7
17-Jun-2024 (2023 Annual Report)	45.8	446.5	2,009.4	4,122.2
% change (May 2023 to June 2024)	+7%	+508%	+110%	+195%

N.B. Definitions of pipeline category terms can be found in the Company's announcements

Larry Zulch, Chief Executive Officer at Invinity said:

"Our impressive gains in 2023 delivered on the very high expectations we set for ourselves and established an appropriate foundation for a successful fundraise just completed. We welcome our new investors as we focus on progressing toward positive cashflow with a compelling new product and a low-capex strategy for delivering it at scale into a market hungry for energy storage."

Stay up to date with news from Invinity. Join the distribution list for the Company's monthly investor newsletter here.

Enquiries:

Invinity Energy Systems plc	+44 (0)20 4551 0361
Jonathan Marren, Chief Financial Officer and Chief Development Officer Joe Worthington, Director of Communications and Investor Relations

Canaccord Genuity (Nominated Adviser and Joint Broker)	+44 (0)20 7523 8000
Henry Fitzgerald-O'Connor / Bobbie Hilliam / Harry Pardoe / Ana Ercegovic

VSA Capital (AQSE Corporate Advisor, Financial Adviser and Joint Broker)	+44 (0)20 3005 5000
Andrew Monk / Andrew Raca

Tavistock (Financial PR Advisor)	+44 (0)20 7920 3150
Simon Hudson / Saskia Sizen / Adam Baynes	invinity@tavistock.co.uk

Notes to Editors

Invinity Energy Systems plc (AIM: IES) (AQSE: IES) (OTCQX: IESVF) manufactures vanadium flow batteries for large-scale, high-throughput energy storage requirements of business, industry and electrical networks.

Invinity's factory-built flow batteries run continually with no degradation for over 25 years, making them suitable for the most demanding applications in renewable energy production. Energy storage systems based on Invinity's batteries are safe, reliable, and economical, and range in size from less than 250 kilowatt-hours to tens of megawatt-hours.

Invinity was created in April 2020 through the merger of two flow battery industry leaders: redT energy plc and Avalon Battery Corporation. With 75 MWh of systems already deployed or contracted for delivery across 82 sites in 15 countries, Invinity is active in all major global energy storage markets and has operations in the UK, Canada, USA, China and Australia. Invinity Energy Systems plc is quoted in the UK on AIM and AQSE and trades in the USA on OTCQX.

To find out more, visit invinity.com, sign up to our monthly Investor Newsletter here or contact Investor Relations on via +44 (0)20 4551 0361 or ir@invinity.com.

Audited Financial Results for the Year Ended 31 December 2023

Introduction - Foundations for Scale

Matt Harper, Chief Commercial Officer

An unprecedented level of attention and capital is flowing towards building a net zero grid by the customers, regulators and grid operators who make up global electricity markets.

Wind and solar power are the least-cost form of generation almost everywhere. Markets that can take that low-carbon electricity and deliver it to users reliably and at low cost are the focus of policymakers worldwide. This is the opportunity on which Invinity is focused.

Over the past two years, the Invinity team has delivered ever-larger projects - proving how our vanadium flow batteries can deliver the capabilities our customers want: durable, safe, long duration energy storage ("LDES"). With the launch of our next-generation vanadium flow battery, code-named "Mistral", expected later this year we will have the product that can deliver those capabilities to electric grids around the world at any scale.

This combination of opportunity and capability in markets around the world are Invinity's "foundations for scale". As we look forward, we see tremendous opportunity from those foundations. Invinity will go from strength to strength by proving at increasing scale the benefits of durable long duration storage. If we do that job right, we believe our products will fundamentally inform the structure of, and be widely deployed across, the global energy system for decades to come.

Market Headwinds and Tailwinds

Tremendous commercial opportunities are emerging on the path to net zero. First and foremost, renewables are the world's lowest cost source of new electric generating capacity. This is reflected in the massive solar farms being built from northern Canada to Dubai and the wind farms now serving Micronesia to northern Scotland.

However, headwinds are beginning to appear. In jurisdictions like California and Australia that have a large proportion of photovoltaic generating assets, negative electricity market prices are becoming common at peak solar generation times, challenging the economics of expanding such generation. More solar also means that fuel-powered generators are operating fewer hours per day, lowering asset utilisation and thus pushing up costs for peaking capacity. Even conventional low carbon sources are struggling: from Canada to Australia, hydro projects are taking longer and costing more, as are recent nuclear plants in the UK and U.S.

Fortunately, energy storage assets are increasingly proving their ability to "firm up" the output from intermittent renewables. Batteries are now meeting a significant portion of demand in some high renewables markets. LDES solutions promise to further extend the benefits of renewables when the sun isn't shining and the wind isn't blowing. Even in jurisdictions like California, the largest batteries in the world are only starting to fill in where solar power cuts off.

If batteries are going to facilitate an even higher proportion of our energy needs being served by renewables, critical questions remain: what kind of batteries will serve not just peak hours but power our businesses and homes 24 hours per day? How much capacity is required? Where should it be installed? And who will pay for it?

Fortunately, Invinity is already helping to answer these questions. Our batteries are ideally suited for a 24-hour non-stop cycle shifting solar overnight, doing so for the life of the generating asset and with a chemistry safe enough to be installed alongside homes and critical infrastructure. Additionally, our team are actively engaging with policymakers and regulators worldwide to ensure their plans contemplate these advantages, seeding markets for the revenue and profits that will see our business grow and thrive.

The UK: Less Sun, More Wind but Similar Challenges to California

The UK's transition towards a net zero grid saw a massive inflection point this winter, with wind outstripping fossil fuel generation in consecutive quarters for the first time ever. However, the UK battery market has struggled. Revenues for UK-based battery assets dropped significantly over the course of 2023, presenting challenging economics for asset operators and developers alike.

We've also seen significant delays in permitting and grid interconnection, which have been particularly challenging in the context of our LODES project, which was awarded funds by the UK Department of Energy Security and Net Zero ("DESNZ"). Fortunately, as regulations adapt to the benefits that batteries can deliver to the grid, and as local planning councils awaken to the safety benefits of our flow batteries over lithium alternatives, we are seeing individual projects accelerate.

The broad economic picture is improving as well. Revenues from installed assets on a £-per-MW basis have trended up over the first quarter of 2024, with LSE-listed Gresham House Energy Storage Fund reporting portfolio revenue of £77,900 per MW per year in April 2024 as compared with £43,800 per MW per year as recently as January 2024. While monthly variation can be expected, as more variable resources come online, we expect the overcapacity in the UK battery market to be absorbed and asset values return to an investable level.

Finally, on the regulatory front, 2024 so far has seen two exciting developments. In January, DESNZ released the first working paper on a proposed "Cap and Floor" scheme to accelerate the deployment of non-lithium, long duration storage on the UK grid. This scheme, on whose development the Department did and continues to seek Invinity's input, is designed to ensure investable returns for operators of large-scale LDES projects and inform the development of future markets for LDES services.

Then in March, the House of Lords' Science and Technology Committee released a paper titled "Long-duration energy storage: get on with it", presenting a compelling vision for how batteries like Invinity's can both advance the path to net zero while decreasing consumers' electricity costs. We expect strongly positive policies and regulation will flow from this work.

With DESNZ projecting that deploying up to 20 GW of LDES can save UK electricity ratepayers up to £24bn, there is ample reason to expect success. An election year always injects some uncertainty, but with both the current government's "Powering up Britain" and the Labour party's "Great British Energy" platforms firmly supporting long duration storage, we feel confident of our prospects.

The U.S.: Focused on Deployment

Where the UK has focused on market innovation to accelerate storage, the U.S. focus has been on individual technologies and the companies that build them. In March 2023 the U.S. Department of Energy ("DOE") published its "Pathways to Liftoff" paper presenting how various forms of energy storage can enhance integration of renewables. That paper was strongly supportive of storage that delivers inter-day shifting of renewable energy, the segment where Invinity focuses. In June 2023, the Invinity team presented a whitepaper based on the U.S. DOE's analysis at the International Flow Battery Forum which identified the inter-day LDES segment as the one that would deliver the largest amount of energy to the grid by 2040.

Based on that work, the DOE has set out to allocate up to $3.5 billion worth of funds to LDES projects. Results of the highly competitive first round of solicitations were announced in September 2023 with only 12 projects being funded, and Invinity being the only company to have been awarded funds twice. Upon delivery, our 12 MWh project at the DOE's Pacific Northwest National Labs' Grid Storage Launchpad, and our 72 MWh of VFBs installed at five sites with the National Renewables Cooperative Organization, will be a massive leap forward in proving not just the deployability of our batteries at scale, but the impact they can have for the grid at large.

From Our Shores to Their Shores

The one undeniable trend all over the world has been towards the regional manufacturing of infrastructure equipment in general, components for a net zero grid in particular, and battery, solar and wind components specifically.

We initially observed this trend in Asia where grid operators are increasingly nervous about security risks posed by products made in China. The trend accelerated with the introduction of the U.S. Inflation Reduction Act, which provides incentives for domestic battery manufacturing. While not every jurisdiction has the market power to shift an entire industry, in every country where we operate we consistently hear the fastest path to adoption is one that aligns with good, well-paying jobs and a strong domestic industry.

Fortunately, Invinity has a tremendous advantage in this respect. Our supply chain already has global reach and does not rely on "gigafactory" scale production or highly specialised manufacturing. As we are proving with our new facility in Motherwell in Scotland that, upon completion, will take our UK capacity to over 500 MWh per year for customers in the UK and EU, we can expand manufacturing based on customer demand at a very low capital cost. As we expand our partnership strategy to deliver our products globally through capable regional partners, we will be able to further scale our business faster than either lithium incumbents or new entrants to our industry.

Delivering on Capability

Invinity's plan to deliver the capabilities that will serve these massive and growing opportunities can be summed up in one word: Mistral. Mistral is, at its most fundamental, our platform for scale. The north star for our business is to build a battery that can deliver low-cost, low carbon renewable power on demand at a lower total cost of energy than any other source. With commercial rollout imminent, both we and our regional partners are getting ever more inbound sales inquiries, significantly enhancing our commercial pipeline.

Our business is highly regional. Mistral is designed for a global supply chain both inbound to Invinity and outbound to our regional partners, who will deliver the market-specific operating knowledge, regional installation capabilities and domestic sources of supply that are critical to success. However, we must also achieve ultra-low cost, protect our intellectual property and ensure consistently high product quality all while accelerating speed to market.

In support of those plans, we have been encouraged by our current and prospective partners' response to the "license and royalty" model with which we intend to grow our international business. In this model, Invinity will deliver core technology components to our regional manufacturing partners, who will assemble and deliver products to their own regional client base. This will allow us to rapidly scale while remaining a capital-light business. Our first partner to adopt this model, Everdura in Taiwan, has begun work on their final assembly plant, and is painting a path for steadily evolving relationships in Australia, Eastern Europe and the Middle East.

Conclusion

The coming years for Invinity are all about scale. We need our products to be at a scale so they can solve grid operators' and project developers' most pressing challenges. We need our book of business to scale to where we can set the direction of a rapidly evolving global market and regulatory landscape. And we need our organisation to scale so we can deliver the revenue and profits that will see us continually enhance shareholder value.

The foundations for scale - both the opportunity we seek to serve and the capabilities we'll deliver to do so - are clear. The need for durable, safe, long duration storage as a critical component of a high renewables net zero grid is no longer in question and plans to deliver on that need are being developed by the world's most influential agencies, governments and regulators. With Mistral, Invinity will have the tool to deliver our vanadium flow batteries' capabilities to the global market. This foundation is an incredible starting point, and I'm looking forward to delivering its potential alongside the Invinity team.

Chairman's Report: Delivering Progress

I'm pleased to report that Invinity continues to make further progress on its Pathway to Profitability Strategy that was set out on pages 12-13 of our 2022 Annual Report. Our achievements in 2023 were focused on our key themes of delivery and scaling our business.

I am especially pleased to note that Invinity has secured significant orders for its vanadium flow batteries and grown its pipeline of confirmed commercial interest. Growing commercial traction underpins our current ramp-up and investment phase aimed at delivering a profitable, self-sustaining business. Our achievements in 2023 were delivered against a backdrop of rapidly growing global renewable energy production and storage. Long duration energy storage is a key enabler in delivering these plans and governments are being increasingly urged to "get on with it" as a means to unlock lower cost, lower carbon energy on demand. The launch of our next-generation product later this year will further open up this potentially huge addressable global market.

Last year I stated that delivery is an important target for the Company and I am pleased to report that in 2023 Invinity delivered and commissioned more vanadium flow batteries in 12 months than ever before. This proven ability to deliver cements Invinity's position as a world leading manufacturer of vanadium flow batteries that is meeting the needs of its customers. I have been to two site openings in the last 12 months. One a large Canadian classic solar/storage site and secondly a European "behind-the-meter" project delivered by ENGIE Belgium, Equans BeLux and Jan De Nul with support from the Belgium Energy Ministry. These projects highlight the flexibility of our technology and its ability to generate value for our customers in a broad range of applications.

During 2023 we brought in our customer Everdura as a new strategic partner, enabling Invinity to gain operational and commercial access into a new market. Strategic partnerships are going to be of great importance to Invinity's long term growth and I am pleased to note that our partnership with Everdura took a step further early in 2024 when they signed up to become an exclusive manufacturer of our next-generation product for the Taiwanese market. The partnership route will enable Invinity's leading energy storage products to be deployed in more markets, quicker and more economically.

I am also pleased to note more recently the strategic investment secured from the UK Infrastructure Bank ("UKIB") and Korea Investment Partners, who participated in an oversubscribed fundraise alongside existing and new investors in May 2024. Their backing not only gives a valuable endorsement of Invinity and its technology but provides important growth capital which will further accelerate our progress towards profitability.

These successes are a testament to the foundations Invinity has laid over the last 18 months and I would like to take this opportunity to thank the entire team for their hard work and perseverance that made this possible. I would also like to thank all my Board colleagues for their support and assistance over the year, particularly Jonathan Marren who has taken on the role of Chief Financial Officer in addition to his role as Chief Development Officer. The years of experience, responsibility and focus that our Board collectively brings to bear will ensure that the Company continues to make the right decisions for its long-term future.

Invinity is making progress, having delivered more batteries than ever before and secured funding and contracts for almost 100 MWh of our next generation product. I wish to express the thanks of the entire Board for the support we received for our recent oversubscribed fundraise. Invinity is now adequately capitalised to address the opportunity at hand. We can attract and retain quality staff, expand manufacturing capacity and deliver our next-generation product to our clients. I look forward to this new phase in our development.

I have confidence in our team's ability to deliver on our publicly stated strategy. The opportunity is huge and there is much to be done.

Neil O'Brien

Non-executive Chairman

26 June 2024

Chief Executive's Report: Getting on with it

I've taken inspiration for my report title from Baroness Brown who simply titled her recent report to the House of Lords "Long-duration energy storage: get on with it"; I feel it succinctly captures our challenge. The need is acute and progress is required.

Every step toward renewable energy from wind, solar, or the tides is simultaneously a call for more energy storage to reduce instability. While the most widespread use of energy storage-stabilising the grid over seconds or minutes-remains important, grid stability over the course of a day, the "long-duration" referred to in the title, is increasingly vital. Invinity's products can do both.

Invinity is progressing well. In 2023, we:

· Delivered more product than ever before;

· Recognised five times more revenue than in 2022;

· Closed significant new deals across each of our core markets;

· Secured funding for major projects using Mistral, our next-generation product; and

· Progressed our strategic aim to deliver projects at positive gross margin, an important step towards net cash generation.

I am incredibly proud of our team for these accomplishments. We are receiving recognition for them: Bloomberg New Energy Finance included Invinity on its list of Global Tier 1 battery manufacturers for the first time, the only flow battery company and the only UK company they recognised.

But our 2023 accomplishments only serve to heighten our determination to rapidly and efficiently advance our products, their commercial recognition, and our ability to deliver ever-larger orders. Before looking forward, however, we should review our commitments from 2022.

Our 2023 Achievements

In my 2022 report, I outlined a four-part strategy that would enable Invinity to make demonstrable progress year-on-year. I am pleased to report significant progress in each area:

1) Deliver on Backlog

Invinity delivered more than 32,000 kilowatt-hours of our vanadium flow batteries ("VFBs") to customers across four continents.

Scaling up manufacturing and improving our supply chain was a major focus in 2023. A new manufacturing facility in Vancouver added 200,000 kilowatt-hours of yearly capacity. I am pleased that we have recently expanded our capacity in the UK and plan to do the same in the U.S. as well in due course. Our supply chain improvements reduced costs while keeping environmental, social and governance obligations front of mind.

2) Close New Deals

2023 saw Invinity sign deals with eight new customers and enter into a number of commercial partnerships. We targeted and subsequently won a number of funding opportunities that will support progressing large high-profile projects toward financial close.

Our sales pipeline, with continued application of strict criteria, has grown 170% year-on-year to over 6,000 megawatt-hours of qualified commercial demand, giving us confidence that the market opportunity remains very real and very large.

3) Deliver Mistral

Mistral, the code name for our next-generation product currently being co-developed with Gamesa Electric and Siemens Gamesa Renewable Energy, promises to be more capable, more scalable, and more economical than other energy storage. That means it must operate continuously for decades without degradation, function at gigawatt-hour scale, and do so with a low lifetime cost per unit of energy stored and no risk of an expensive fire. Our current VS3 product has proven these goals are eminently achievable, and Mistral will deliver them.

Developing an ambitious new product is not easy, but I am pleased to report that the team made significant progress in 2023, achieving a fully operational prototype that validated Mistral's fundamental performance targets and operating parameters. This major step gave us confidence to initiate pilot manufacturing in readiness for Mistral's official launch later this year.

Performance verification enabled us to begin commercial activity for Mistral in 2023 and I am pleased that we met our target of securing a Mistral pilot project in the first half of 2023 and a commercial order for Mistral later in the year. Additional validation came from the U.S. Department of Energy ("DOE") which awarded funding for 84,000 kilowatt-hours of Mistral projects after an extensive process evaluating Mistral and Invinity's capability to deliver it.

4) Operational Excellence

Outward progress must be matched by internal capabilities, and in 2023 we focused on efficient delivery of more product than ever before and the processes that enable us to continue to grow. The delivery and commissioning of more than 28,000 kilowatt-hours of our VS3 product demonstrates success.

We focus on making Invinity a great place to work; the best workforce allows us to produce the best VFBs.

Looking Forward

In our recent fundraise, we highlighted our strategy of utilising partnerships. In the U.S. and UK, our partners help us pursue capex-light manufacturing and direct sales. Outside these core markets, we are working with existing and pursuing new partners capable of commercial engagement, product and project support, and after-sales activities. Our relationship with rest-of-world partners typically starts with reselling our products but can lead to manufacturing under a licence and royalty model.

1) The UK Market

Each year, the UK discards ("curtails") enough renewable energy to power an estimated million homes. Much of this could be captured in LDES and used effectively. However, current regulatory support for energy storage focuses on grid stability and therefore shorter-duration batteries. We know LDES projects to be economically compelling but proving that requires financial returns from operating LDES projects. The UK Government is helping us provide that proof:

· In April 2023, Invinity secured £11 million of matched funding under Phase 2 of the UK Government's Longer Duration Energy Storage ("LODES") Competition for the largest VFB deployed in the UK.

· The House of Lords released the aforementioned report from the Science and Technology Committee on LDES and its critical role in UK electricity supply.

· More recently, the UK Infrastructure Bank, wholly owned and backed by HM Treasury but operating independently, made a £25 million equity investment in Invinity to support UK LDES projects, manufacturing and jobs.

The UK electricity market has great potential for Invinity given the significant need for LDES and the UK Government's support for its deployment. Our manufacturing and electrochemical research in Scotland supports our focus on the UK. We envision an LDES growth phase occurring in the UK just as Mistral becomes available to dramatically expand our capabilities.

2) The North American Market

A somewhat different approach is required to address the enormous LDES market in North America, though in both markets, adoption of renewable energy is limited by the deployment of energy storage. Governments are stepping in to accelerate LDES projects with one prominent example being the U.S. Inflation Reduction Act of 2022 which provides tax credits that support energy storage projects. Further examples include:

· In June 2023, The British Columbia Centre for Innovation and Clean Energy provided funding to support the very first Mistral project.

· In September 2023, the U.S. DOE awarded funding for a 12,000 kilowatt-hour Mistral project at the Pacific Northwest National Laboratory ("PNNL"), an energy research lab with more than 6,000 scientists, engineers, and professional staff. This will be the largest battery system ever provided to PNNL.

· The September 2023 U.S. DOE announcement also announced funding for 72,000 kilowatt-hours of Mistral to be installed at five regional energy cooperatives.

Qualifying for government support in the U.S. requires meeting certain requirements for U.S. domestic content. Invinity has developed relationships with various partners to support a capex-light strategy to optimize our supply chain and U.S. manufacturing.

We see the North American market as having very high potential for Invinity. There is an emerging need for non-lithium LDES, and Invinity is in a prime position to address that need with Mistral.

3) Outside Core Markets

Invinity cannot address the worldwide need for LDES with a local presence in every area with potential. The solution is to identify partners able to fully represent our products.

An example is our relationship with Everdura in Taiwan. Everdura, whose parent Everbrite made an equity investment in 2023 in Invinity, has been pursuing commercial opportunities for Invinity's products across the entire ASEAN region. In September 2023, Everdura became our first commercial customer to place a Mistral order.

In February 2024, Everdura signed a manufacturing agreement for Mistral that gives Invinity a royalty based on a percentage of their Mistral revenue in exchange for direct access to our supply chain and the ability to order our proprietary cell stacks and software directly from Invinity.

We are pursuing other similar high-potential relationships and look forward to announcing them in due course.

Conclusion

Mistral is a differentiated product with compelling economics. It promises to operate continuously for decades with high throughput, no degradation, and zero chance of a fire (our water-based electrolyte is entirely non-flammable). Bringing Mistral to market is our highest priority and I'm pleased to say it is going well, though certainly there are challenges, many we've met and some still to come. However, we view every challenge as an opportunity to prove our capabilities and take us further ahead of the competition.

Mistral in itself is not enough. We must have an appropriate strategy, tailored by region, for commercialization and manufacturing; embrace and enhance our relationships with partners; operate efficiently and effectively; and reduce the potential impact of events outside of our control. And, finally, we must rapidly become profitable, the ultimate measure of our success.

We are doing all of this with the finest team I have ever had the privilege of leading and the continued support of our investors and our partners. I am endlessly grateful for both.

Larry Zulch

Chief Executive Officer

26 June 2024

Chief Financial Officer's Report: Building a Sustainable Business

Financial Highlights

	2023 £'000	2022 £'000
Revenue	22,006	2,944
Project related grant income shown against cost of sales	11	647
Total revenue and grant income other than revenue	22,017	3,591

Loss from operations	(22,778)	(18,982)

	2023	2022
	£ 000	£ 000

Total inventory	3,288	9,827
Pre-paid inventory	1,073	5,102
Total inventory and Pre-paid inventory	4,361	14,929

Amounts due from customer contracts included in trade receivables	2,496	1,737
Contract assets (accrued income for work done not yet invoiced)	1,192	500
Contract liabilities (deferred revenue related to advances on customer contracts)	(1,312)	(8,375)
Trade payables	(2,166)	(3,706)
Provision for contract losses	(333)	(1,607)
Warranty provision	(602)	(284)

Net position	3,636	3,194

2023 Financial Performance

I am pleased to report that total income including sales revenue and project related grant income increased significantly to £22.0 million in 2023 (2022: £3.6 million). Revenue is recognised against projects when specific performance obligations related to those projects have been satisfied.

In the year, revenue was recognised on 15 projects across Australia, the U.S., Canada, the UK and Europe totalling over 35 MWh of projects. This marks the first time the Company has recorded significant revenue and represents a major milestone.

As in the prior year, grant funding specific to customer projects has been presented alongside the relevant project revenue and associated direct costs where that funding is project specific and represents a direct subsidy against project costs. Unlike 2022, such grant funding only constituted a negligible part of total revenue and grant income other than revenue.

The Company recorded a gross loss of £3.3 million (2022: gross profit of £0.7 million) but it is notable that the gross profit recorded in 2022 included the writing back of £3.2 million of provisions.

The Company has a strategic aim to move to delivering projects at positive gross margins and this positive trend continues with the majority of the gross loss being attributed to projects signed before 2022 and with the more recent projects being at broadly flat or small positive gross margins at the project level (before allocation of facility costs).

Administrative expenses did not change significantly from the prior year at £19.1 million (2022: £19.0 million) reflecting a continued focus on managing costs. Administrative costs were represented by an increased investment in people with staff costs of £12.8 million in 2023 (2022: £10.3 million) and professional fees decreased to £0.7 million in 2023 (2022: £3.0 million), benefiting from the one-off items in 2022 not recurring in the current year. Sales and marketing costs increased to £1.0 million (2022: £0.2 million) as a result of continuing investment in this area to support marketing the Company's products, depreciation of £1.1 million (2022: £1.2 million) and IT costs of £0.9 million (2022 £1.2 million). Net research and development recoveries were £0.1 million (2022: £1.6 million costs) reflecting recoveries from Gamesa Electric S.A.U. ("Gamesa Electric") under the Joint Development and Commercialisation Agreement ("JDCA") whereby Gamesa Electric agreed to fund up to an aggregate US$4.62 million of Invinity's activities towards the development of the Company's next-generation product, code-named "Mistral", payable as development milestones are met.

Net Finance costs were £0.4 million (2022: £0.4 million income) with the majority of the difference being the costs associated with the repayment and termination of the convertible loan instrument that was entered into on 14 December 2022 to provide additional working capital for the business and was completed in the year.

Total inventory and pre-paid inventory reduced to £4.4 million (2022: £14.9 million) as a result of the conversion into revenue from the delivery of products during the year and in particular the Spencer Energy, Viejas Casino & Resort and Elemental Energy projects. Considering wider balance sheet items directly relating to product sales (i.e. Trade receivables, Accrued income, Deferred revenue, Trade payables, Provision for contract losses and Warranty provision), the net balance sheet position increased by £0.4 million to £3.6 million (2022: £3.2 million).

2023 Cash Performance

Year-on-year cash outflow from operations reduced to £19.7 million (2022: £21.9 million) principally as a result of a net improvement in operating assets and liabilities as set out in note 14.

As stated above, the Company has a strategic aim to move to delivering projects at positive gross margin and this positive trend continues with the more recent projects being at broadly flat or small positive gross margins at the project level (before allocation of facility costs). Delivering on this margin is a key corporate priority and will make an important contribution to the Company being able to fund its administrative costs from cash from operations in the future.

To this end, the Company continues to develop Mistral. Mistral is expected to be manufactured at significantly lower cost than the Company's existing product, the VS3 and, when deployed, will occupy a comparatively smaller physical footprint that will lead to lower costs for operations and maintenance. These characteristics are expected to enable the Company to sell this new product at a materially lower and more competitive price point than currently. This is anticipated to drive additional sales at a materially better gross margin thus leading to future cash generation and profitability.

Funding and Net Working Capital

At 31 December 2023 the Company had cash and cash equivalents of £5.0 million (2022: £5.1 million). The Company's cash balance during 2024 has been materially increased following the successful conclusion of a capital raising of £57.4 million which completed in May 2024.

At the prior year end, the Company had recorded a US$2.5 million convertible loan instrument taken out with Riverfort Global Opportunities PCC Ltd and YA II PN that was entered into on 14 December 2022 to provide additional working capital for the business. This convertible was entirely repaid during the period.

Accordingly, the Company was debt free as at 31 December 2023 and remains so as at the date of this document.

Strategic Investment

As noted last year, Invinity sees strategic partnerships and investment as an important pillar of its future corporate growth and it was delighted to conclude a material strategic investment from the UK Infrastructure Bank of £25.0 million and an investment from Korea Investment Partners of £3.0 million as part of a larger £57.4 million fundraising completed in May 2024.

In addition, as part of the capital raise in March 2023, Everbrite Technology Co. Ltd. (Everbrite), a leading Taiwanese manufacturer of industrial technology, subscribed for £2.5 million of shares in the Company. The investment by Everbrite followed the 1 December 2022 reseller agreement and initial 15 MWh purchase order of vanadium flow batteries with Everdura Technology Company, a joint venture between Everbrite and Taiwanese clean energy company, Pronergy Technology Co. Ltd, covering Taiwan and Southeast Asia.

These strategic investments underscore the development progress of the Company since the 2020 merger transaction that formed the Group as it is today and, in relation to the agreement with Everbrite, is intended to support a closer strategic relationship for the deployment of vanadium flow batteries in Taiwan and further afield.

Going Concern

Following completion of the fundraising in May 2024, the Company had cash of £53.2 million as at 31 May 2024 (2023: £15.4 million)

The Directors have prepared a cash flow forecast for the period from the balance sheet date until 30 June 2025. This forecast indicates that the Group would expect to remain cash positive during this period and without the requirement for further fundraising. The business continues to be in a cash outflow position, using funding generated from previous fundraises (although it is planning to move to a cash inflow position upon the launch and delivery of material volume of Mistral). As such, this cash flow forecast was stress-tested for a worst-case scenario of no positive cash receipts from sales. In this tested scenario, the business would remain cash positive for the 12 months from the date of approval of these financial statements. The accounts have therefore been prepared on a going concern basis.

Jonathan Marren

Chief Financial Officer and Chief Development Officer

26 June 2024

Financial Statements

Consolidated Statement of Profit and Loss

For the year ended 31 December 2023

		2023		2022
	Note	£000	£000	£000	£000
Revenue	4		22,006		2,944
Direct costs		(25,361)		(2,927)
Grant income against direct costs	4	11		647
Cost of sales	5		(25,350)		(2,280)
Gross (loss)/profit			(3,344)		664
Operating costs
Administrative expenses	6		(19,085)		(19,042)
Other items of operating income and expense	10		(349)		(604)
Loss from operations			(22,778)		(18,982)
Finance income			719		62
Finance costs			(1,233)		(65)
Gain on foreign currency transactions			113		448
Net finance (costs)/ income	11		(401)		445
Loss before income tax			(23,179)		(18,537)
Income tax expense	12		-		-
Loss for the year			(23,179)		(18,537)


Loss per ordinary share in pence
Basic	13		(13.1)		(16.0)
Diluted	13		(13.1)		(16.0)

The above consolidated statement of profit and loss should be read in conjunction with the accompanying notes.

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2023

	2023	2022
Continuing operations	£000	£000
Loss for the year Other comprehensive expense Items that may be reclassified subsequently to profit or loss:	(23,179)	(18,537)
Exchange differences on the translation of foreign operations	(60)	(137)
Total comprehensive loss for the year	(23,239)	(18,674)

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

Consolidated Statement of Financial Position

As at 31 December 2023

		2023	2022
	Note	£000	£000
Non-current assets
Goodwill and other intangible assets	15	24,002	24,050
Property, plant and equipment	16	1,699	1,208
Right-of-use assets	17	1,558	1,845
Contract assets	21	304	-
Total non-current assets		27,563	27,103

Current assets
Inventory	19	3,288	9,827
Other current assets	20	2,721	8,781
Contract assets	21	888	500
Trade receivables	22	2,496	1,737
Cash and cash equivalents	23	5,014	5,137
Total current assets		14,407	25,982
Total assets		41,970	53,085

Current liabilities
Trade and other payables	24	(3,948)	(4,935)
Derivative financial instruments	25	(406)	(769)
Contract liabilities	21	(1,312)	(8,375)
Lease liabilities	26	(723)	(740)
Provisions	21	(812)	(2,907)
Total current liabilities		(7,201)	(17,726)
Net current assets		7,206	8,256

Non-current liabilities
Lease liabilities	26	(833)	(969)
Provisions	21	(123)	-
Total non-current liabilities		(956)	(969)
Total liabilities		(8,157)	(18,695)
Net assets		33,813	34,390

Equity
Called up share capital	27	51,348	50,716
Share premium	27	162,883	141,579
Share-based payment reserve	27	6,683	5,957
Accumulated losses	27	(185,273)	(162,094)
Currency translation reserve	27	(1,867)	(1,807)
Other reserves	27	39	39
Total equity		33,813	34,390

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

The financial statements were authorised by the Board of Directors and authorised for issue on 26 June 2024 and were signed on its behalf by:

Jonathan Marren

Director

Consolidated Statement of Changes in Equity

As at 31 December 2023

	Called up share capital	Share premium	Share-based payment reserve	Accumul-ated losses	Currency transla-tion reserve	Other reserves	Total
	£000	£000	£000	£000	£000	£000	£000
At 1 January 2023	50,716	141,579	5,957	(162,094)	(1,807)	39	34,390
Loss for the year	-	-	-	(23,179)	-	-	(23,179)
Other comprehensive income
Foreign currency translation differences	-	-	-	-	(60)	-	(60)
Total comprehensive loss for the year	-	-	-	(23,179)	(60)	-	(23,239)
Transactions with owners in their capacity as owners
Investment funding arrangement, net of transaction costs	631	21,295	-	-	-	-	21,926
Exercise of share options	1	9	-	-	-	-	10
Share-based payments	-	-	726	-	-	-	726
Total contributions by owners	632	21,304	726	-	-	-	22,662
At 31 December 2023	51,348	162,883	6,683	(185,273)	(1,867)	39	33,813

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

	Called up share capital	Share premium	Share-based payment reserve	Accumul-ated losses	Currency transla-tion reserve	Other reserves	Total
	£000	£000	£000	£000	£000	£000	£000
At 1 January 2022	50,690	140,445	5,293	(143,557)	(1,670)	39	51,240
Loss for the year	-	-	-	(18,537)	-	-	(18,537)
Other comprehensive income
Foreign currency translation differences	-	-	-	-	(137)	-	(137)
Total comprehensive loss for the year	-	-	-	(18,537)	(137)	-	(18,674)
Transactions with owners in their capacity as owners
Investment funding arrangement, net of transaction costs	25	1,129	(23)	-	-	-	1,131
Exercise of share options	1	5	-	-	-	-	6
Share-based payments	-	-	681	-	-	-	681
Equity settled interest on Investment funding arrangement	-	-	6	-	-	-	6
Total contributions by owners	26	1,134	664	-	-	-	1,824
At 31 December 2022	50,716	141,579	5,957	(162,094)	(1,807)	39	34,390

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

Consolidated Statement of Cash Flows

For the year ended 31 December 2023

		2023	2022
	Note	£000	£000
Cash flows from operating activities
Cash used in operations	14	(19,657)	(21,934)
Interest received		299	62
Interest paid		(1)	(1)
Net cash outflow from operating activities		(19,359)	(21,872)

Cash flows from investing activities
Acquisition of property, plant and equipment	16	(1,013)	(708)
Proceeds from disposal of property, plant and equipment	16	57	-
Deposits on right-of-use assets		(28)	-
Net cash outflows from investing activities		(984)	(708)

Cash flows from financing activities
Payment of lease liabilities	26	(629)	(591)
Interest paid on lease liabilities	26	(44)	(59)
Proceeds from the issue of share capital		23,044	1,161
Proceeds from the Investment funding arrangement, net of transaction costs	25	-	769
Proceeds from sale of conversion shares		742	-
Financing charges on repayment of derivative financial instruments		(992)	-
Repayment of investment funding arrangement		(881)	-
Proceeds from the exercise of share options and warrants		10	6
Payment of transaction costs for the issue of share capital		(1,117)	-
Net cash inflow from financing activities		20,133	1,286

Net decrease in cash and cash equivalents		(210)	(21,294)
Cash and cash equivalents at the beginning of the year		5,137	26,355
Effects of exchange rate changes on cash and cash equivalents		87	76
Cash and cash equivalents at the end of the year		5,014	5,137

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

Notes

1 General Information

Invinity Energy Systems plc (the 'Company') is a public company limited by shares incorporated and domiciled in Jersey. The registered office address is Third Floor, IFC5, Castle Street, St. Helier, JE2 3BY, Jersey.

The Company is quoted on the AIM Market of the London Stock Exchange with the ticker symbol IES.L, on the AQSE Growth Market in the United Kingdom with the ticker symbol IES and on the OTCQX Best Market in the United States of America with the ticker symbol IESVF.

The principal activities of the Company and its subsidiaries (together the 'Group') relate to the manufacture and sale of vanadium flow battery systems and associated installation, warranty and other services.

2 Accounting policies

Basis of preparation

These consolidated financial statements have been prepared in accordance with International UK-adopted International Accounting Standards, the associated interpretations issued by the IFRS Interpretations Committee (together 'IFRS') and in accordance with the Companies (Jersey) Law 1991.

Separate presentation of the parent company financial statements is not required by the Companies (Jersey) Law 1991 and, accordingly, such statements have not been included in this report.

The accounting policies applied in preparing these consolidated financial statements are set out below. These policies have been consistently applied throughout the period and to each subsidiary within the Group.

The financial statements have been prepared under the historical cost convention except where stated.

Going concern

The Directors are satisfied that the Group has adequate resources to continue to operate as a going concern for the foreseeable future and that no material uncertainties exist which could cause significant doubt with respect to this assessment. In making this assessment, the Directors have considered the Group's balance sheet position and forecast earnings and cash flows for the period from the date of approval of these financial statements to 30 June 2025.

The Group has relied on fundraising in previous years and following the completion of successful fundraising in May 2024, the Group had cash of £53.2 million as at 31 May 2024 (2022: £15.4 million).

As part of the going concern assessment the Directors have prepared a cash flow forecast which indicates that the Group would expect to remain cash positive during this period and without the requirement for further fundraising. The business continues in a cash outflow position, using funding generated from previous fundraises. However, it plans to move to a cash inflow position upon the launch and delivery of material volume of the next generation product.

This cash flow forecast was stress-tested for a worst-case scenario of no positive cash receipts from sales. In these tested scenarios, the business would remain cash positive for the 12 months from the date of approval of these financial statements.

Therefore, the Directors believe it is appropriate to prepare the accounts on a going concern basis.

New standards, amendments and interpretations effective and adopted by the Group in 2023

Amendments to existing standards previously issued by the IASB with effective dates during the year ended 31 December 2023 are summarised below. There was no effect on the Group's consolidated financial statements for the year ended 31 December 2023 as a result of the adoption of these amendments.

IFRS 17 Insurance Contracts

The Group has adopted IFRS 17 and the related amendments for the first time in the current year. IFRS 17 establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts and supersedes IFRS 4 Insurance Contracts.

IFRS 17 outlines a general model, which is modified for insurance contracts with direct participation features, described as the variable fee approach. The general model is simplified if certain criteria are met by measuring the liability for remaining coverage using the premium allocation approach. The general model uses current assumptions to estimate the amount, timing and uncertainty of future cash flows and it explicitly measures the cost of that uncertainty. It considers market interest rates, and the impact of policyholders' options and guarantees.

The Group does not have any contracts that meet the definition of an insurance contract under IFRS 17.

Amendments to 'IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 - Making Materiality Judgements - Disclosure of Accounting Policies'

The Group has adopted the amendments to IAS 1 for the first time in the current year. The amendments change the requirements in IAS 1 with regard to disclosure of accounting policies. The amendments replace all instances of the term 'significant accounting policies' with 'material accounting policy information'. Accounting policy information is material if, when considered together with other information included in an entity's financial statements, it can reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements.

The supporting paragraphs in IAS 1 are also amended to clarify that accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed. Accounting policy information may be material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial. However, not all accounting policy information relating to material transactions, other events or conditions is itself material.

The IASB has also developed guidance and examples to explain and demonstrate the application of the 'four-step materiality process' described in IFRS Practice Statement 2.

Amendments to 'IAS 12 Income Taxes - Deferred Tax related to Assets and Liabilities arising from a Single Transaction'

The Group has adopted the amendments to IAS 12 for the first time in the current year. The amendments introduce a further exception from the initial recognition exemption. Under the amendments, an entity does not apply the initial recognition exemption for transactions that give rise to equal taxable and deductible temporary differences. Depending on the applicable tax law, equal taxable and deductible temporary differences may arise on initial recognition of an asset and liability in a transaction that is not a business combination and affects neither accounting profit nor taxable profit. Following the amendments to IAS 12, an entity is required to recognise the related deferred tax asset and liability, with the recognition of any deferred tax asset being subject to the recoverability criteria in IAS 12.

Amendments to 'IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors -Definition of Accounting Estimates'

The Group has adopted the amendments to IAS 8 for the first time in the current year. The amendments replace the definition of a change in accounting estimates with a definition of accounting estimates. Under the new definition, accounting estimates are "monetary amounts in financial statements that are subject to measurement uncertainty". The definition of a change in accounting estimates was deleted.

New standards and interpretations not yet adopted

Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2023 reporting periods and have not been early adopted by the Company. These standards are not expected to have a material impact on the entity in the current or future reporting periods or on foreseeable future transactions and are summarised below:

§ IAS 1 Classification of Liabilities as Current or Non-Current (effective for periods beginning on or after 1 January 2024);

§ IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (the effective date of the amendments has yet to be set by the IASB);

§ IAS 1 Non-current Liabilities with Covenants (effective for periods beginning on or after 1 January 2024);

§ IAS 7 and IFRS 7 Supplier Finance Arrangements (effective for periods beginning on or after 1 January 2024); and

§ IFRS 16 Lease Liability in a Sale and Leaseback (effective for periods beginning on or after 1 January 2024).

Foreign currency

Presentation currency

The consolidated financial statements are presented in Great British Pounds (GBP) rounded to the nearest thousand (£000), except where otherwise indicated.

Functional currency

Items included in the financial information of the individual companies that comprise the Group are measured using the currency of the primary economic environment in which each subsidiary operates (its functional currency).

Whilst Jersey uses the Jersey Pound as its currency, Jersey is in a currency union with the United Kingdom and so the functional currency of the parent company of the Group has been determined to be GBP.

Foreign currency transactions

Transactions in currencies other than an entity's functional currency (foreign currencies) are translated using the exchange rate on the date of the transaction. Foreign exchange gains and losses resulting from the settlement of transactions denominated in a foreign currency are translated into functional currency using the relevant exchange rate at the date of the transaction.

Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at the balance sheet date of monetary assets and liabilities denominated in foreign currencies, are recognised in the consolidated statement of comprehensive loss within gains/(losses) on foreign currency transactions.

Foreign currency gains/(losses) realised on the retranslation of subsidiaries as part of the year-end consolidation are recorded in the translation reserve that forms a part of shareholders' funds in the consolidated financial statements of the Group.

Consolidation of subsidiaries

Subsidiaries are all entities over which the Company has control. The Company controls an entity when it is exposed to, or has rights over, variable returns from its involvement with the entity and can affect those returns through its ability to exercise control over the entity. Subsidiaries are consolidated in the Group financial statements from the date at which control is transferred to the Company.

Subsidiaries are deconsolidated from the date that control ceases. The ability to control an entity may cease because of the sale of a subsidiary or other change in the Company's shareholding in that subsidiary, voting rights or board representation.

Foreign currency operations

Subsidiaries of the Company may have functional currencies that are different from that of the Company. Since the Group financial statements are presented in GBP, the assets and liabilities of foreign currency subsidiaries consolidated into these financial statements are translated into the Group's presentational currency using exchange rates prevailing at the end of the reporting period. Income and expense items are similarly translated using the average rate for each month during the year. The exchange rates on the actual dates of transactions are used where exchange rates fluctuate significantly within a month. Exchange differences arising on consolidation are recognised in other comprehensive income and are accumulated as part of shareholder's equity.

Transaction between entities within the Group

Transactions and balances between companies forming part of the Group together with any unrealised income and expenses arising from intra-group transactions are eliminated in the preparation of the consolidated financial statements of the Group.

Operating segments

The Group is organised internally to report to the Executive Directors as a whole. The Executive Directors comprise the Chief Executive Officer, the Chief Commercial Officer, and the Chief Financial Officer and Chief Development Officer. The Executive Directors, as a group, have been determined, collectively, to prosecute the role of chief operating decision maker of the Group. The chief operating decision maker is ultimately responsible for entity-wide resource allocation decisions, the evaluation of the financial, operating and ESG performance of the Group.

The Group's activities have been determined to represent a single operating segment being the provision of vanadium flow batteries and ancillary services, principally comprising installation and integration services, and the provision of extended warranties for battery units sold.

Revenue

The Group generates revenue from the sale of battery storage systems integration hardware, installation, extended warranty and other services. These multiple elements are separate performance obligations that are derived from contractual arrangements with customers. The sales contracts do not include a general right of return.

For contracts that contain multiple elements or promises, the Group accounts for individual goods and services separately if they are distinct. A product or service is distinct if it is separately identifiable from other items in the agreement and where a customer can benefit from the good or service on its own or together with other resources that are readily available.

The consideration paid for each performance obligation is typically fixed. A significant portion of the aggregate payment due under a contract for sale is normally due before delivery or completion of the service. The total consideration under the contract is allocated between the distinct performance obligations contained in the contract based on their stand-alone selling prices. The stand-alone selling price is estimated using an adjusted market assessment approach that looks to industry benchmarks or pricing surveys for certain standalone products or services.

The Group measures revenue based on the consideration specified in the contracts for sale with customers. Revenue is recognised when a performance obligation is satisfied by transferring control over a good or service to a customer. With respect to the battery system, associated control systems and integration hardware, control is transferred at a point in time and is usually based on the contractual shipping terms. In certain instances, the battery system and integration hardware may be ready for delivery although the customer is not ready to receive the product. The Group will recognise revenue in accordance with IFRS 15 as a Bill-and-Hold arrangement if all of the following conditions are satisfied:

§ The reason for the bill and hold arrangement is substantive;

§ The battery systems and hardware are identified separately as belonging to the customer;

§ The battery systems and hardware are currently ready for physical transfer to the customer; and

§ The Company does not have the ability to use the product or to direct it to another customer.

With respect to the services that includes installation and commissioning, the performance obligation is usually satisfied at a point in time when a when a commissioning certificate or site performance report has been issued to the customer. Revenue excludes any taxes such as sales taxes, value added tax or other levies that are invoiced and collected on behalf of third parties, such as government tax authorities.

In addition, under the terms of its contracts for sale, the Group may be responsible for other services such as storing and delivering battery systems to its customers. When this is the case, the Group will invoice the relevant customer for, and will recognise as revenue, any charges incurred together with any associated handling costs. Revenue is recognised for the storage services over time as the services are delivered and for shipping services at a point in time when the goods are delivered to the agreed upon location. The related costs incurred by the Group for storage, shipping and handling services are recognised as cost of sales concurrent with the recognition of the associated revenue.

Grant income

Government and other grants received are recognised in the consolidated statement of profit and loss in the period that the related expenditure is incurred. Grant income received in respect of costs incurred is presented net within the associated cost category. Capital grants are similarly netted against the relevant asset acquired or constructed.

Grant income received in advance of the associated expenditure is presented as deferred income within contract liabilities and released to profit and loss as the associated expenditure is incurred. Grant income receivable is presented as accrued income within contract assets until such time as it can be claimed or is received.

Finance income and costs

Finance income comprises interest on cash deposits, foreign currency gains and the unwind of discount on any assets that are carried at amortised cost. Interest income is recognised as it accrues using the effective interest rate method.

Finance costs include foreign currency losses and the unwind of the discount on any liabilities held at amortised cost, such as lease liabilities arising from lease contracts.

Employee benefits

Short-term benefits

Benefits provided to employees that are short-term in nature are recognised as expenses in the statement of profit and loss as the related service is provided. The principal short-term benefits given to employees are salaries, associated holiday pay and other periodic benefits such as healthcare and pension contributions made by the Group for the benefit of the employee. A liability is recognised for the amount expected to be paid under short-term cash bonus plans if there is either a present legal or constructive obligation to pay the amount and the amount can be reliably estimated.

Share-based payments

The Group operates equity-settled share-based compensation plans, under which it compensates employees for services rendered through the issue of equity instruments, deferred share awards or options to subscribe for ordinary shares of the Group. The fair value of the employee services received in exchange for the grant of the equity instruments, shares or options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted:

§ including any market conditions (for example, the Group's share price);

§ excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales, growth targets, and the requirement to remain as an employee of the Group over a specified period); and

§ including the impact of any non-vesting conditions.

Non-market performance and service conditions are included in the assumptions regarding the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all the specified vesting conditions are to be satisfied.

In some circumstances, employees may provide services in advance of the grant date and therefore the grant date fair value is estimated for the purposes of recognising the expense during the period between service commencement and the grant date.

At the end of each reporting period, the Group revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the consolidated statement of profit and loss, with a corresponding adjustment to equity.

Any social security contributions payable in connection with the grant of the share options is considered an integral part of the grant itself, and the charge will be treated as a cash-settled transaction.

Taxes

The total tax charge or credit recognised in the statement of profit and loss comprises both current and deferred taxes. Taxation is recognised in the consolidated statement of profit and loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.

Current tax

The current tax charge is based on the taxable profit for the year. Taxable profit or loss is different from the profit or loss reported in the statement of profit and loss as it excludes items of income and/or expense that are taxable or deductible in other years (temporary differences) and it further excludes items that are never taxable nor deductible (permanent differences).

Deferred tax

Deferred tax is the tax that is expected to be payable or recoverable on differences between the carrying value of assets and liabilities in the financial statements and the corresponding value of those assets and liabilities used to calculate taxable profit or loss.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.

Deferred tax assets and liabilities are recognised using the liability method for all taxable temporary differences, except in respect of taxable temporary differences associated with investments in subsidiaries and associates. Where the timing of the reversal of temporary difference arising from such investment related assets and liabilities can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future then the Group does not recognise deferred tax liabilities on these items.

A deferred tax asset or liability is not recognised if a temporary difference arises on initial recognition of an asset or liability and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

Current and deferred tax is calculated using tax rates and laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax balances are presented on a gross basis. Refer to note 18, deferred tax balances.

Earnings per share

The Group presents basic and diluted earnings per share ("EPS") data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year.

Diluted EPS is determined by adjusting the weighted average number of ordinary shares outstanding used in the EPS calculation to include all potentially dilutive ordinary shares, which, in the case of the Company, represents additional shares that could be issued in relation to 'in-the-money' convertible notes, warrants or share options.

The effects of anti-dilutive potential ordinary shares are ignored in calculating diluted EPS. Anti-dilution is when an increase in earnings per share or a reduction in loss per share would result from the exercise of such options, warrants or convertible instruments.

Intangible assets

Goodwill

The Group allocates the fair value of the purchase consideration on the acquisition of a subsidiary to the assets acquired and liabilities assumed based on an assessment of fair value at the acquisition date. Any excess of purchase consideration is recognised as goodwill. Where goodwill is recognised, it is allocated to the cash generating units (CGUs) in a systematic manner reflective of how the Group expects to recover the value of the goodwill. Because the Group has been determined to consist of a single business unit, the carrying value of goodwill is tested for impairment based on the recoverable value of the Group as a whole.

Goodwill is tested for impairment on an annual basis, and the Group will also test for impairment at other times if there is an indication that an impairment may exist. Determining whether goodwill is impaired requires an estimation of the value-in-use of the CGU. The key estimates are therefore the selection of the suitable discount rates and the estimation of future growth rates which may depend on specific risks and the anticipated economic and market conditions related to the CGU.

As part of determining the value in use of the CGU, sensitivities have been considered on the underlying inputs included within the value-in-use calculations used for impairment reviews and no impact exists on the carrying value of goodwill, given the headroom identified as a result of the impairment test. Goodwill is impaired where circumstances indicate that the recoverable amount of the underlying CGU may no longer support the carrying value of the CGU. An impairment charge is recognised in the statement of profit and loss for the period in which it is determined the goodwill is no longer recoverable. Impairment losses related to goodwill cannot be reversed in future periods.

Internally generated intangible assets - research and development costs

Research

Expenditure on research activities is recognised as an expense in the period in which it is incurred. Research activities are aimed at creating new knowledge or the use of existing knowledge in new or creative ways to generate new concepts. Research activity does not typically have a defined commercial objective at the outset.

Development

Where projects evolve toward commerciality or are related to a specific commercial objective they are assessed to determine whether the activity constitutes development that is associated with a commercial objective or practical application.

The associated costs represent development costs and can be capitalised if, and only if, the following conditions can be demonstrated:

§ the technical feasibility of completing the intangible asset so that it can be made available for use or sale;

§ the intention to complete the intangible asset for use or sale;

§ the availability of adequate technical, financial and other resources to complete the development and to use or sell it;

§ an asset is created that can be separately identified for use or sale;

§ it is probable that the asset created will generate future economic benefits; and

§ the development cost of the asset can be measured reliably.

Development work undertaken by the Group typically relates to the refinement of design, materials selection, construction techniques, firmware and control systems to enhance battery system performance over successive generations. Where development costs are capitalised, they are amortised over the expected period to the introduction of the next generation of battery system.

Amortisation is recorded over that period on a straight-line basis with the corresponding amortisation charge recognised in the statement of profit and loss as a component of administrative expenses.

Four years has historically been the typical cycle time between successive generations of battery system design.

Other intangible assets

Intangible assets other than goodwill that are acquired by the Group are stated at their historical cost of acquisition less accumulated amortisation and any impairment losses.

Software and purchased domain names

Third-party software is initially capitalised at its cost of purchase. Amortisation is charged to administrative expenses over the expected useful life of the software which has been assessed as three years from the date of acquisition.

Acquired domain names are initially capitalised at cost of purchase. Amortisation is charged to administrative expenses over the expected useful life of the domain name which has been assessed as ten years from the date of acquisition.

Patents and certifications

Patent rights and certifications are initially capitalised at the cost of applying for relevant patent rights and other protections, and certifications. Amortisation is charged to administrative expenses over the expected useful life of the patents and certifications which has been assessed as five years from the date of acquisition.

Property, plant and equipment

Items of property, plant and equipment are stated at historical cost less accumulated depreciation and any impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent expenditure is only included in the asset's carrying amount or recognised as a separate asset, as appropriate, when it is probable that future economic benefits associated with that item will flow to the Group.

Costs that do not enhance the value of an asset such as repair and maintenance costs are charged to the statement of profit and loss in the period in which they are incurred.

Depreciation is charged to write off the cost of assets over their estimated useful lives on a straight-line basis. Depreciation commences on the date the assets are available for use. Work-in-progress assets are not depreciated until they are available for use and transferred to the appropriate category of property, plant and equipment.

Estimated useful lives for property, plant and equipment and other intangible assets are:

Category	Period (years)	Recognition in statement of profit and loss
Computer and office equipment	3 - 5	Administrative expenses
Leasehold improvements	Shorter of lease term or useful life	Administrative expenses / Cost of sales
Vehicles	3	Administrative expenses
Manufacturing equipment and tooling	3 - 20	Cost of sales
R&D Equipment	5 - 10	Administrative expenses
Software and purchased domain names	3	Administrative expenses
Patents and certifications	10	Administrative expenses

Depreciation methods, useful lives and residual values of assets are reviewed, and adjusted prospectively as appropriate, at each reporting date.

Where an asset is disposed of, the corresponding gain or loss on disposal is determined by comparing the sales proceeds received with the carrying amount of that asset at the date of disposal. Gains or losses on disposal of fixed assets are included within other items of operating income and expense in the statement of profit and loss.

Impairment of tangible and intangible assets

The Group reviews the carrying values of its tangible and intangible assets, other than goodwill, at each balance sheet date to determine if any indicators exist that could mean those assets are impaired. Where an indicator of impairment exists the recoverable amount of the relevant asset (or CGU) is estimated to determine the amount of any potential impairment loss.

Recoverable amounts are determined using a discounted cash flow model related to each asset or CGU being assessed. The discount rate applied to the cash flows in the model is a pre-tax discount rate that reflects market assessment of the time value of money and risks specific to the groups of assets being considered.

If the recoverable value estimated in the cash flow model for a specific asset (or CGU) is lower than the carrying value, then the carrying value of the asset is reduced to its estimated recoverable value with a corresponding charge immediately recognised in the statement of profit and loss.

Where the condition that gave rise to an impairment loss reverses in a subsequent period, the impairment loss is similarly reversed and the carrying value of the asset increased to the revised estimate of its recoverable value. The carrying value of an asset immediately following the reversal of an impairment cannot exceed the carrying value that the asset would have had if the original impairment had not been made and the asset was depreciated as normal. A reversal of an impairment loss is recognised immediately in profit or loss.

The value of any impairment (or reversal of impairment) of an asset is recorded in the same financial statement line item where depreciation or amortisation of the asset would normally be shown.

Where it is impractical to meaningfully assess recoverable amount using a discounted cash flow model, for instance where near term cash flows are low or negative, an assessment of the fair value adjusted for the costs that would be incurred in the disposal of an asset or operation is used. This is typically the case for development stage assets, operations or associated intangible assets (including goodwill) where the underlying products or technologies have not yet been commercialised.

Provisions

Provisions are established when the Group has a present legal or constructive obligation because of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount of that outflow can be reliably estimated.

Provisions are measured at the Group's best estimate of the expenditure required to settle the obligation at the financial position date, considering the risks and uncertainties of the obligation, and are discounted to present value of the expenditures that are expected to be incurred in settling the obligation using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks related to the obligation. The initial recognition of a provision results in a corresponding charge to profit or loss. Where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time, this increase is recognised as borrowing cost.

Leases

Group entities only participate in lease contracts as the lessee. Lease contracts typically relate to facilities.

On inception of a contract, the Group assesses whether it contains a lease. A contract is a lease or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to control the use of an identified asset is determined based on whether the Group has the right to obtain substantially all the economic benefits from the use of the asset throughout the period of use, and if the Group has the right to direct the use of the asset.

Obligations under a lease are recognised as a liability with a corresponding right-of-use asset, these are recognised at the commencement date of the lease.

The lease liability is initially measured at the present value of the lease payments that have not yet been paid at the inception of the lease, discounted using the interest rate implicit in the lease contract. Where the interest rate implicit in the lease contract cannot be readily determined, the Group's incremental borrowing rate is used.

Variable lease payments that do not depend on an index or rate are not included in the measurement of the lease liability. The lease liability is measured at amortised cost using the effective interest rate method.

The lease liability is subsequently measured at amortised cost using the effective interest method. It is remeasured when:

§ there is a change in future lease payments arising from a change in an index or rate;

§ there is a change in the Group's estimate of the amount expected to be payable under a residual value guarantee; or

§ the Group changes its assessment of whether it will exercise a purchase, extension or termination option.

When a lease liability is remeasured under one of these scenarios, a corresponding adjustment is made to the carrying value of the right-of-use asset or in profit and loss when the carrying amount of the asset has already been reduced to zero.

The corresponding right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability plus any lease payments made at or before the commencement date, any initial direct costs incurred and an estimate of the costs required to remove or restore the underlying asset, less any lease incentives received. The right-of-use asset is amortised over the shorter of the asset's useful life and the lease term on a straight-line basis.

The Group has elected not to recognise right-of-use assets and corresponding lease liabilities for short-term leases, those existing leases with a lease term of less than 12 months and leases related to low value assets with an annual lease cost of £5,000 or less. The payments for the exempt leases are recognised as an expense on a straight-line basis over the lease term.

The Group has elected not to separate non-lease components from lease components, by class of underlying asset. Each lease component and any associated non-lease components are accounted for as a single lease component.

Inventory

Inventory is stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their current location and condition. Cost is calculated using the first-in, first-out method.

Net realisable value is calculated as the estimated selling price for an item of inventory less estimated costs of completion.

Prepaid inventory

Prepaid inventory is recognised on inventory payments where physical delivery of that inventory has not yet been taken by the Group and is stated at the lower of cost and net realisable value.

Financial instruments

Financial assets and liabilities are recognised by the Group and recorded in the statement of financial position when the Group is contractually bound to the terms of the financial instrument. Financial assets and liabilities are derecognised when the Group is no longer bound by the terms of the financial instrument through settlement or expiry.

Financial assets

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss.

The classification of financial assets to which the Group is a party is determined by the nature of the underlying financial instrument and the characteristics of the contractual cash flows expected to be received under the terms of instrument.

Financial assets are not reclassified after their initial recognition unless there is a contractual change in the nature of the cash flows under the instrument or the business purpose of the instrument has changed.

For a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are 'solely payments of principal and interest (SPPI)' on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model.

Financial assets that the Group is party to are classified and measured as follows:

Financial asset	Measurement basis
Trade receivables	Amortised cost
Cash and cash equivalents	Amortised cost

Amortised cost

On initial recognition, the Group measures amortised cost for financial assets based on the fair value of each financial asset together with any transaction costs that are directly attributable to the financial asset.

After initial recognition, amortised cost is measured for each financial asset held using the effective interest rate method less any impairment loss identified. Interest income is recognised for all financial assets, other than those that are classified as short-term, by applying the effective interest rate for the instrument. Interest income on short-term financial assets is not considered to be material. Short-term financial instruments are determined as those that have contractual terms of 12-months or less at inception.

Interest income, foreign exchange gains and losses, impairment, and any gain or loss on derecognition are recognised in profit or loss.

Impairment of financial assets

A loss allowance for financial assets is determined based on the lifetime expected credit losses for financial assets. Lifetime expected credit losses are estimated based on factors including the Group's experience of collection, the number and value of delayed payments past the average credit periods across the Group's financial assets. The Group will also consider factors such as changes in national or local economic conditions that correlate with default on receivables and financial difficulties being experienced by the counterparty.

Financial assets are impaired in full and a corresponding charge is recognised in profit or loss where there is no reasonable expectation of recovery.

Financial liabilities

The classification of financial liabilities is determined at initial recognition. Financial liabilities are classified and measured as follows:

Financial liability	Measurement basis
Trade and other payables	Amortised cost
Derivative financial instruments	Fair Value through Profit and Loss
Lease liabilities	Amortised cost

Amortised cost

At initial recognition, the Group measures financial liabilities at amortised cost using the fair value of the underlying instrument less transaction costs directly attributable to the acquisition of the financial liability.

Derecognition of financial liabilities

The Group derecognises financial liabilities when the Group's obligations under the relevant instrument are discharged, expired or cancelled.

Derivative financial instruments

Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and they are subsequently remeasured to their fair value at the end of each reporting period. Changes in the fair value of any derivative instrument are recognised immediately in profit or loss and are included in other gains/(losses).

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand and on demand deposits, and other short-term highly liquid investments that are readily convertible to a known

amount of cash and are subject to an insignificant risk of change in value.

Equity instruments

Instruments are classified as equity instruments if the substance of the relative contract arrangements evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Company are recorded as proceeds received, net of direct issue costs not charged to income.

Offsetting

Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

3 Critical accounting judgments and key sources of estimation uncertainty

The preparation of the financial statements in conformity with generally accepted accounting practice (GAAP) requires management to make estimates and judgments. Those estimates and judgments can affect the reported values for assets and liabilities as well as the disclosure of contingent assets and liabilities at the balance sheet date.

Management is also required to make estimates and judgments related to the reported amounts of revenues and expenses and related to the timing of the recognition of those revenues and expenses.

Judgments made and estimates applied are based on historical experience and other factors including management's expectations of future events that are considered relevant. Actual results may differ from these estimates. The estimates, judgments and underlying assumptions made are reviewed on an ongoing basis and specifically in the preparation of the interim and annual published financial information.

Revisions to accounting estimates are recognised in the period in which the estimate is revised and applied consistently in future periods subject to the ongoing reassessment of estimates.

Critical judgments for the year under review

Going concern

The Directors are required to assess whether it is appropriate to prepare the financial statements on a going concern basis. In making this assessment the Directors need to be satisfied that the Group can meet its obligations as they fall due and will remain cash-positive for a period of at least 12 months from the date of approval of the financial statements. Potential additional funding that is not yet committed at the date of approval of the financial statements cannot be anticipated in making the assessment of going concern.

The Directors make their assessment based on a cash flow model prepared by management and based on its expectation of cash flows for the 18-month period from the date of approval of the financial statements. The extended period in the model provides additional comfort that the 12-month solvency requirement can be met when making the assessment of going concern.

In preparing the cash flow model, assumptions have been made regarding the timing of cash collection from customers based on the expected cash receipt under contracts that require milestone payments to be made by customers. The timing of the receipt of milestone payments may not always align with or precede the costs incurred by the Company in performing its obligations under a contract.

Downside sensitivities have been applied to the cash flows primarily related to no sales being made. Refer to 'Basis of preparation' for details of the going concern analysis performed and the Directors' conclusions regarding going concern.

The Directors expect that the business will continue to be viable throughout the model period and, accordingly, the financial statements have been prepared on a going concern basis.

Revenue recognition

Sales contracts are assessed in accordance with the Group accounting policy for revenue recognition. The policy requires the identification of the performance obligations, or promises, under the contract and a determination of the conditions and implications of each performance obligation. Revenue is recognised only when a distinct and appropriate performance obligation under a contract is satisfied.

Some performance obligations are satisfied separately such as the delivery of the battery systems and integration hardware. Other obligations may be satisfied in conjunction with other contract promises or where a contract calls for equipment sold under the contract to be integrated into a larger project before formal acceptance is notified by the customer.

Where the ability of a customer to benefit from a product or service is dependent on the satisfaction of other performance obligations, more than one promise may need to be bundled together as a combined performance obligation that must be satisfied before the revenue related to each element can be recognised.

Identifying where hardware or services are readily available from other providers is a key determinant as to whether a contract promise represents a separate performance obligation or if it should be bundled with other promises that, together, represent a single performance obligation.

Sources of estimation uncertainty for the year under review

Warranty provision

The Company provides time-limited standard warranties in its contracts for sale of battery systems. In addition, customers may elect to purchase separate, standalone extended warranties. Extended warranties are for periods greater than the standard warranties that are provided with the purchase of all battery systems.

Estimating the costs that may be incurred by the Company in servicing warranty agreements requires management to estimate the number of expected claims in relation to the total number of battery systems sold. In addition, an estimate of costs that the Company could expect to incur to remedy each warranty claim should also be made to determine the amount of the total provision that should be recorded for warranties.

Provisions made in respect of expected warranty obligations are reassessed and remeasured where actual experience indicates the claim rate may be higher or lower than initially expected or where costs to remedy warranty claims differ from the assumptions used in calculating the provision. The release of an over-provision of warranty costs results in other operating income being recognised in the period whereas an additional provision for warranties results in a charge being recognised.

A 20% increase in the number of warranty claims or a 20% increase in the cost to remedy warranty issues would increase the provision by £120,436. A 40% increase in the number of warranty claims or a 40% increase in the cost to remedy warranty issues would increase the provision by £240,872.

Refer to note 21, contract related balances.

Provision for onerous contracts

A contract is onerous when the unavoidable costs of meeting the Company's obligations under the contract are expected to be greater than the revenue earned under that contract.

The assessment of unavoidable costs includes direct costs such as parts and labour and indirect costs, such as production overhead or indirect labour, that are expected to be incurred in servicing a warranty claim.

The assessment of future costs is inherently subjective and requires the use of estimates in determining the appropriate amount of provision that may be required.

A 20% increase in unavoidable costs would increase the provision by £66,493. A 40% increase in unavoidable costs would increase the provision by £132,986.

Refer to note 21, contract related balances.

4 Revenue from contracts with customers and income from government grants

Segment information

The Group derives revenue from a single business segment, being the manufacture and sale of vanadium flow battery systems and related hardware together with the provision of services directly related to battery systems sold to customers.

The Group is organised internally to report on its financial and operational performance to its chief operating decision maker, which has been identified as the three Executive Directors as a group.

All revenues in 2023 were derived from continuing operations.

	2023	2022
Revenue from contracts with customers	£000	£000
Battery systems and associated control systems	19,425	2,548
Integration hardware	1,470	-
Installation and commissioning	504	254
Other services	607	142
Total revenue in the consolidated statement of profit and loss	22,006	2,944
Analysed as:
Revenue recognised at a point in time	22,000	2,936
Revenue recognised over time	6	8
Total revenue in the consolidated statement of profit and loss	22,006	2,944
Grant income shown against cost of sales	11	647
	22,017	3,591

Geographic analysis of revenue

The Group's revenue from contracts with customers was derived from the following geographic regions:

	2023	2022
Geographic analysis of revenue	£000	£000
Asia	737	160
Australia	6,212	-
Europe	2,826	1,691
North America	12,231	1,093
Total revenue in the consolidated statement of profit and loss	22,006	2,944

The Group maintains its principal production and assembly facilities in Bathgate, Scotland and Vancouver, Canada. These facilities include office space for design, sales and administrative teams. The Group also has offices, operations and management based in London, England and San Francisco, California.

The Group does not consider that the locations of its operations constitute geographic segments as they are managed centrally by the executive management team. The location of the manufacturing plants and business development activity is a function of time-zone when servicing customers both pre-sale and during product delivery. The geographic location of offices, facilities and management is not related to distinct markets or customer characteristics at the present time.

Significant customers and concentration of revenue

Revenue from contracts with customers was derived from three (2022: three) customers who each accounted for more than 10% of total revenue as follows:

	2023	2022
Significant customers and concentration of revenue	£000	£000
Customer A	6,238	-
Customer B	6,038	-
Customer C	4,299	-
Customer D	-	1,247
Customer E	-	466
Customer F	-	466

Grant income other than revenue

The Group receives grant income to help fund certain projects that are eligible for support, typically in the form of innovation grants. The total grant income that was received in the year was as follows:

	2023	2022
Grant income received	£000	£000
Business support grants against employee costs - COVID-19	-	(11)
Grants for research and development	160	647
Grants for product deployment	378
Economic and social development	1	-
Total government grants	539	636
Disclosed as: Grant income against cost of sales	11	647
Grant income against administrative expenses	528	(11)

5 Cost of sales

	2023	2022
	£000	£000
Movement in inventories of finished battery systems	27,023	6,168
Movement in provisions for warranty and warranty costs	(429)	763
Movement in provisions for sales contracts	(1,233)	(4,004)
Total cost of sales	25,361	2,927

6 Administrative expenses

	2023	2022
	£000	£000
Staff costs	12,750	10,322
Research and development costs	1,868	2,184
Research and development recoveries, tax credits and grants	(1,949)	(592)
Professional fees	669	2,983
Sales and marketing costs	1,048	249
Facilities and office costs	232	385
Depreciation and amortisation	1,056	1,150
Other administrative costs	3,411	2,361
Total administrative expenses	19,085	19,042

No development costs were capitalised in the period (2022: £nil).

7 Auditors' Remuneration

	2023	2022
	£000	£000
Fees payable to the Company's auditors for the audit of the consolidated financial statements	282	271
Audit of financial statements of subsidiaries pursuant to legislation	17	33
Fees payable to the Company's auditor for other services:
· Tax compliance services	-	19
	299	323

The Group has a policy in place related to the commissioning of non-audit service from its auditors where all such work requires pre-approval by the Audit & Risk Committee before the commencement of any non-audit work.

Audit fees are discussed with and approved by the Audit & Risk Committee.

8 Staff costs and headcount

	2023	2022
Staff costs	£000	£000
Wages and salaries	11,475	9,280
Employer payroll taxes	839	840
Contributions to defined contribution plans	123	95
Other benefits	977	822
Share-based payments	726	388
Total staff costs	14,140	11,425

Administrative staff costs in the year were £12,749,556 (2022: £10,321,870) and staff costs included in cost of sales were £1,390,336 (2022: £1,103,027).

	2023	2022
Average headcount	Number	Number
Canada	73	71
United Kingdom	59	68
United States of America	8	7
South Africa	-	1
Total	140	147

Key management compensation

The key management of the Group comprises the members of the senior leadership team.

	2023	2022
Key management compensation	£000	£000
Short-term employee benefits	2,364	1,812
Post-employment benefits	14	16
Equity settled share-based payment	263	225
Total key management compensation	2,641	2,053

Prior year equity settled share-based payment was included into the table above to conform to the current period presentation.

9 Share-based payments

Since its incorporation, the Company has operated various share-based incentive plans. The purpose of each of the schemes has been to incentivise Directors and employees related to improving Company performance and building shareholder value.

Set out below is a summary of the option awards in issue at 31 December 2023.

Standard	Grant date	Final Expiry date	Exercise price		2023	2022
redT 2015 plan	07 Dec 2015	07 Jan 2020	58.95	€c	-	68,803
redT 2018 plan	18 May 2018	18 May 2023	352.50	p	3,888	3,888
Invinity Energy 2018 ESOP	01 Apr 2020	12 Mar 2030	82.50	p	151,428	185,143
Invinity Energy 2018 ESOP	01 Apr 2020	12 Mar 2030	82.50	p	290,000	290,000
Invinity Energy 2018 Consultant SOP	01 Apr 2020	12 Mar 2030	82.50	P	378,000	378,000
Invinity Energy 2018 ESOP	01 Apr 2020	07 Jul 2026	4.34	p	1,052,134	1,052,134
Invinity Energy 2018 ESOP	01 Apr 2020	08 May 2029	6.84	p	628,358	658,314
Invinity Energy 2018 ESOP	26 Aug 2020	26 Aug 2030	113.00	p	1,540,000	2,043,334
Invinity Energy 2018 ESOP	28 Jan 2021	28 Jan 2031	204.00	p	313,000	372,000
Invinity Energy 2018 ESOP	04 Mar 2021	04 Mar 2031	152.00	p	170,000	194,000
Invinity Energy 2018 ESOP	15 Apr 2021	15 Apr 2031	151.00	p	84,000	108,000
Invinity Energy 2018 ESOP	03 Aug 2021	03 Aug 2031	134.50	p	290,000	375,000
Invinity Energy 2018 ESOP	29 Oct 2021	29 Oct 2031	111.50	p	263,000	297,000
Invinity Energy 2018 ESOP	20 Dec 2021	20 Dec 2031	91.00	p	135,000	135,000
Invinity Energy 2018 ESOP	03 Feb 2022	03 Feb 2032	64.50	p	150,000	186,000
Invinity Energy 2018 ESOP	02 Mar 2022 APR	02 Mar 2032	93.50	p	45,000	60,000
Invinity Energy 2018 ESOP	11 Apr 2022	11 Apr 2032	90.00	p	60,000	60,000
Invinity Energy 2018 ESOP	11 Jul 2022	11 Jul 2032	45.50	p	500,000	500,000
Invinity Energy 2018 ESOP	08 Dec 2022	08 Dec 2032	38.00	p	531,000	822,000
Invinity Energy 2018 ESOP	27 Jan 2023	27 Jan 2033	42.00	p	2,655,100	-
Invinity Energy 2018 ESOP	20 Apr 2023	20 Apr 2033	43.50	p	97,000	-
Invinity Energy 2018 ESOP	19 Jul 2023	19 Jul 2033	51.20	p	4,177,000	-
Invinity Energy 2018 ESOP	26 Oct 2023	26 Oct 2033	38.00	p	369,000	-
Invinity Energy 2018 ESOP	07 Dec 2023	07 Dec 2033	29.50	p	75,000	-
					13,957,908	7,788,616

Non-standard	Grant date	Expiry date	Exercise price		2023	2022
Long-term Incentive plan	8 Dec 2009	30 Jul 2023	50.00	€c	-	15,000
Camco 2006 Executive Share Plan	30 Jul 2013	30 Jul 2023	50.00	€c	-	68,127
redT 2018 plan	30 May 2018	30 Jul 2023	400.00	p	-	70,000
					-	153,127

Total					13,957,908	7,941,743

Weighted average remaining contractual life of options outstanding at the end of the year					7.96	7.18

A total of 39,956 employee options were exercised during the year (2022: 87,678) with a weighted average exercise price of 14.64 pence per share (2022: 4.34p).

The grant-date fair value of share options issued is calculated using a Black-Scholes methodology at the date of grant. Key inputs to the model include the share price at the date of grant, the option exercise price, the term of the award, share price volatility, the risk-free interest rate (by reference to government bond yields) and the expected dividend yield rate, which has historically been and continues to be zero, reflective of the development-stage nature of the Group.

The Long-term Incentive Plan, Camco 2006 Executive Share Plan and redT 2015 Plan are closed and all options have expired in 2023. No further option awards will be made under any of these plans.

The aggregate number of options granted, vested, exercised and forfeited during the year under the plans are summarised and analysed between unvested and vested awards as follows:

	Unvested		Vested
At 1 January 2023	3,538,691	84.86p	4,249,925	72.80p
Granted	8,184,600	46.41p	-	-
Forfeited	(1,279,738)	52.13p	(695,614)	114.21p
Vested	(1,844,379)	91.84p	1,844,379	91.84p
Exercised	-	-	(39,956)	14.64p
At 31 December 2023	8,599,174	51.64p	5,358,734	74.42p

	Unvested		Vested
At 1 January 2022	4,369,588	113.47p	2,708,094	35.26p
Granted	1,781,000	50.39p	-	-
Forfeited	(900,589)	121.89p	(81,799)	96.31p
Vested	(1,711,308)	108.00p	1,711,308	108.00p
Exercised	-	-	(87,678)	4.34p
At 31 December 2022	3,538,691	82.73p	4,249,925	69.24p

Plans with standard performance conditions

The primary share plan that remains outstanding at 31 December 2023 is the 2018 plan. The 2018 plan was adopted by the Board on 14 May 2018 and introduced HMRC scheme rules related to certain non-taxable option grants. The plan contains a provision to issue options as CSOP, EMI or unapproved awards.

Parallel options issued

In addition, certain legacy redT options were reissued in 2020 as they were considered by the Board to be sufficiently 'out-of-the-money' such that they no longer provided a performance incentive to the holders of the options. As a mechanism to adjust the terms of the unfavourable options, new parallel options were issued on a one-for-one basis with the same terms as the original awards excepting that they were issued with a lower exercise price.

Both the original and parallel option schemes remain in existence. However, the exercise by an employee of a single option from either pool (original or parallel) allocated to them will cause the equivalent value in the other pool to be forfeited. Accordingly, the number of options disclosed above has been adjusted to remove the number of options that is equivalent to the number of parallel options issued.

Other options

On 10 May 2021, the Company granted an option for 8,672,273 shares to Gamesa Electric S.A. Unipersonal (GaE), a wholly-owned subsidiary of Siemens Gamesa Renewable Energy S.A. The options were granted to GaE in consideration of its entering into a joint development and commercialisation agreement with Invinity Energy Nexus Limited, a wholly-owned subsidiary of the Company.

The exercise price of the options is 175 pence and upon exercise of those options then for as long as GaE holds at least 5% of the issued share capital of the Company it shall be entitled, subject to certain conditions, to nominate one non-executive director to the Board of the Company. The options expire on 10 May 2025.

Warrants issued in the period or outstanding

The Company had 909,090 warrants outstanding at 31 December 2023 in relation to a 2020 investment agreement with Riverfort Global Opportunities ("Riverfort") which expired 2 April 2024.

VSA Capital was awarded 340,000 warrants with an exercise price of 82.5 pence in April 2020, at the time of the merger. These warrants are outstanding and expire on 2 April 2025. In June 2023, the exercise price was amended to 50 pence with the expiry date remaining unchanged.

In December 2021, the Company issued 14,464,571 'placing units' comprised of one share, one short-term warrant and one long-term warrant.

At 31 December 2023, the Company had nil (2022: 14,464,317) short-term warrants and 14,463,665 (2022: 14,646,317) long-term warrants outstanding.

Short-term warrants expired 16 December 2023. The long-term warrants' subscription price was amended to 100 pence per ordinary share, giving the holder the right to subscribe to one new ordinary share at any time from Second Admission until 16 December 2024. The warrants are trading on the Aquis Stock Exchange (AQSE) and have been deemed to have no fair value based on the price at which they are currently quoted.

In December 2022, the Company issued 1,350,020 warrants as part of the convertible loan facility with Riverfort Global Opportunities and YA II PN Ltd ("Noteholders"). Each warrant gives the holder the right to subscribe for one new ordinary share at a price of 32 pence per ordinary share until 14 December 2026.

In consideration of the Noteholders undertakings, the Company has agreed to grant a further 449,980 warrants at an exercise price of 32 pence which will expire on 14 December 2026.

10 Other items of operating income and expense

The following items are included in comprehensive loss:

	2023	2022
	£000	£000
(Income)/expense

Provision for onerous contracts, net of amounts used	-	554
(Gain)/Loss on disposal of property, plant and equipment	(15)	33
Obsolete inventory	8	25
Impairment of inventory to net realisable value	151	-
Loss/(gain) on curtailment of right-of-use asset	205	(8)
Total other operating expenses	349	604

11 Net finance income and costs

	2023	2022
	£000	£000
Finance income
Interest on bank deposits and money market funds	(299)	(62)
Gain on realised foreign currency transactions	(42)	(38)
Gain on unrealised foreign currency transactions	(71)	(410)
Finance costs
Finance charges on convertible loan notes and financial instruments	768	6
Finance charges for lease liabilities	44	58
Finance charges for liabilities held at amortised cost	1	1

Net finance costs/(income)	401	(445)

12 Income tax expense

	2023	2022
	£000	£000
Current tax
Current tax on profits for the year	-	-
Total current tax expense	-	-

Reconciliation of income tax expense calculated using statutory tax rate

	2023	2022
	£000	£000
Loss before tax	(23,179)	(18,537)

Tax at the Jersey rate of nil%	-	-

Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Non-taxable gains and expenses not deductible for tax	67	181
Differences in overseas tax rates	(4,761)	(4,707)
Unrelieved tax losses carried forward	4,615	4,350
Origination and reversal of timing differences not recognised	79	176
Total income tax expense	-	-

13 Loss per share

	2023	2022
Basic loss per share	In pence	In pence
From continuing operations	(13.1)	(16.0)


	2023	2022
Diluted loss per share	In pence	In pence
From continuing operations	(13.1)	(16.0)


	2023	2022
Loss used in calculation of basic and diluted loss per share	£000	£000
From continuing operations	(23,179)	(18,537)

	2023	2022
Weighted average number of shares used in calculation	Number	Number
Basic	176,439,069	116,151,378
Diluted	177,915,837	117,754,966

Additional potential shares used in the calculation of diluted earnings per share primarily relate to potential shares outstanding at 31 December 2023 that may be issued in satisfaction of 'in-the-money' employee share options. Potentially dilutive shares related to 'in-the-money' outstanding warrants to subscribe for ordinary shares in the Company are also included in calculating diluted earnings per share.

Where additional potential shares have an anti-dilutive impact on the calculation of loss per share calculation, such potential shares are excluded from the weighted average number of shares used in the calculation.

	2023	2022
Weighted average number of shares used in loss per share calculation - basic and diluted	Number	Number
In issue at 1 January	119,007,846	116,048,761
Shares issued in the year - weighted average	57,431,223	102,617
Weighted average shares in issue 31 December	176,439,069	116,151,378
Effect of employee share options and other warrants not exercised	1,476,768	1,603,588
Weighted average number of diluted shares in issue 31 December	177,915,837	117,754,966

Additional potential shares are anti-dilutive where their inclusion in the calculation of loss per share results in a lower loss per share. The weighted average number of shares are not included in the diluted loss per share calculation because they had an anti-dilutive effect on the calculation was 26,279,049 (2022: 29,170,511).

14 Cash flows from operating activities

	2023	2022
	£000	£000
Loss after income tax	(23,179)	(18,537)

Adjustments for:
Depreciation and amortisation	1,399	1,350
(Gain)/loss on disposal of property, plant and equipment	(15)	33
Impairment of inventory	151	24
Obsolete inventory	8	-
Share-based payments charge	726	681
Equity settled interest and transaction costs on Investment funding arrangement	-	6
Net finance costs	481	(8)
Gain on unrealised foreign currency transactions	(71)	(168)
	(20,500)	(16,619)

Change in operating assets & liabilities
Decrease/(increase) in inventory	6,144	(3,875)
Increase in contract assets	(694)	(174)
Increase in trade receivables and other receivables	(796)	(88)
Decrease/(increase) in other current assets and prepaid inventory	5,823	(2,354)
(Decrease)/increase in trade and other payables	(956)	1,263
(Decrease)/increase in warranty provision	(647)	183
Decrease in onerous contract provision	(1,217)	(3,252)
(Decrease)/increase in contract liabilities	(6,814)	2,982
	843	(5,315)
Cash used in operations	(19,657)	(21,934)

15 Goodwill and other intangible assets

	Goodwill	Patents and certifications	Software and domain names	Total
	£000	£000	£000	£000
Cost
At 1 January 2023	23,944	203	50	24,197
Disposals	-	-	(15)	(15)
Foreign currency exchange differences	-	-	(1)	(1)
At 31 December 2023	23,944	203	34	24,181

Accumulated amortisation
At 1 January 2023	-	(112)	(35)	(147)
Amortisation charge	-	(41)	(7)	(48)
Disposals	-	-	15	15
Foreign currency exchange differences	-	-	1	1
At 31 December 2023	-	(153)	(26)	(179)

Net book value
At 1 January 2023	23,944	91	15	24,050
At 31 December 2023	23,944	50	8	24,002

	Goodwill	Patents and certifications	Software and domain names	Total
	£000	£000	£000	£000
Cost
At 1 January 2022	23,944	203	47	24,194
Additions	-	-	-	-
Foreign currency exchange differences	-	-	3	3
At 31 December 2022	23,944	203	50	24,197

Accumulated amortisation
At 1 January 2022	-	(71)	(26)	(97)
Amortisation charge	-	(41)	(8)	(49)
Foreign currency exchange differences	-	-	(1)	(1)
At 31 December 2022	-	(112)	(35)	(147)

Net book value
At 1 January 2022	23,944	132	21	24,097
At 31 December 2022	23,944	91	15	24,050

For impairment testing goodwill acquired through business combinations and patents and certifications with indefinite useful lives are allocated to the single CGU.

Goodwill

All goodwill is tested annually for impairment. At 31 December 2023, goodwill was tested for impairment using a fair value less costs of disposal methodology by reference to the Company's quoted market capitalisation using the price of 35.0 pence per share at that date and the discounted cash flow forecasts used to estimate the recoverable amounts. The discount rate used in the calculation amounted to 15%. Change of discount rate by 5% would not result in impairment of goodwill given significant headroom was maintained under all sensitivity scenarios run. No impairment loss was identified in relation to goodwill.

On 24 May 2024, the Company announced the results of a placing, subscription and open offer. The fundraising raised total proceeds of £57.38 million through placing of 121,739,130 new ordinary shares, subscription of 121,739,130 new ordinary shares and open offer of 6,011,983 new ordinary shares at 23.0 pence per share.

The closing share price on 30 May 2024 was 22.00 pence, giving a market capitalisation of £42.0 million which does not indicate impairment of goodwill or net assets.

Patents and certifications

There have been no events or circumstances that would indicate that the carrying value of patents and certifications may be impaired at 31 December 2023.

16 Property, plant and equipment

	Computer and office equipment	Leasehold improvements	Vehicles and equipment	Total
	£000	£000	£000	£000
Cost
At 1 January 2023	699	1,119	1,402	3,220
Additions	76	212	799	1,087
Disposals	(214)	(328)	(125)	(667)
Transfers	-	(161)	191	30
Foreign currency exchange differences	(7)	(19)	(32)	(58)
At 31 December 2023	554	823	2,235	3,612

Accumulated Depreciation
At 1 January 2023	(662)	(635)	(715)	(2,012)
Depreciation charge	(23)	(271)	(230)	(524)
Disposals	214	328	83	625
Transfers	-	147	(177)	(30)
Foreign currency exchange differences	6	7	15	28
At 31 December 2023	(465)	(424)	(1,024)	(1,913)

Net book value
At 1 January 2023	37	484	687	1,208
At 31 December 2023	89	399	1,211	1,699

	Computer and office equipment	Leasehold improvements	Vehicles and equipment	Total
	£000	£000	£000	£000
Cost
At 1 January 2022	780	681	1,165	2,626
Additions	45	429	234	708
Disposals	(136)	(2)	(37)	(175)
Foreign currency exchange differences	10	11	40	61
At 31 December 2022	699	1,119	1,402	3,220

Accumulated Depreciation
At 1 January 2022	(653)	(427)	(416)	(1,496)
Depreciation charge	(129)	(204)	(301)	(634)
Disposals	125	1	16	142
Foreign currency exchange differences	(5)	(5)	(14)	(24)
At 31 December 2022	(662)	(635)	(715)	(2,012)

Net book value
At 1 January 2022	127	254	749	1,130
At 31 December 2022	37	484	687	1,208

The Group has no assets pledged as security. No amounts of interest have been capitalised within property, plant and equipment at 31 December 2023 (2022: £nil).

17 Right-of-use assets

	Offices and facilities	Vehicles and equipment	Total
	£000	£000	£000

Cost
At 1 January 2023	3,330	31	3,361
Additions	929	-	929
Adjustments¹	(392)	-	(392)
Transfers²	-	(30)	(30)
Curtailments and disposals	(738)	-	(738)
Foreign currency exchange differences	(83)	(1)	(84)
At 31 December 2023	3,046	-	3,046

Accumulated Depreciation
At 1 January 2023	(1,489)	(27)	(1,516)
Depreciation charge	(824)	(4)	(828)
Adjustments¹	200	-	200
Transfers²	-	30	30
Curtailments and disposals	582	-	582
Foreign currency exchange differences	43	1	44
At 31 December 2023	(1,488)	-	(1,488)

Net book value
At 1 January 2023	1,841	4	1,845
At 31 December 2023	1,558	-	1,558

	Offices and facilities	Vehicles and equipment	Total
	£000	£000	£000

Cost
At 1 January 2022	1,845	28	1,873
Additions	1,512	-	1,512
Curtailments	(106)	-	(106)
Foreign currency exchange differences	79	3	82
At 31 December 2022	3,330	31	3,361

Accumulated Depreciation
At 1 January 2022	(879)	(19)	(898)
Depreciation charge	(661)	(6)	(667)
Curtailments	106	-	106
Foreign currency exchange differences	(55)	(2)	(57)
At 31 December 2022	(1,489)	(27)	(1,516)

Net book value
At 1 January 2022	966	9	975
At 31 December 2022	1,841	4	1,845

^1. During the year, adjustments were made to remove variable payments related to non-lease components from the lease liability and right-of use assets.

^2. During the year, right-of-use assets were transferred to property, plant and equipment upon completion of lease terms.

Right-of-use assets relate to buildings, vehicles and equipment held under leases with third-party lessors. A right-of-use asset represents the Company's right to use a leased asset over the term of the lease. The Company's rights to use specific buildings, items of equipment or specific vehicles under lease arrangements represent assets to the Group.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

To determine the incremental borrowing rate, the Group:

§ where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received;

§ uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the Group, which does not have recent third-party financing; and

§ makes adjustments specific to the lease, e.g. term, country, currency and security.

18 Deferred tax balances

	2023	2022
	£000	£000
Deferred tax relates to the following:
Accelerated capital allowances	5,292	1,003
Share options	292	595
Accrued liabilities	266	137
Reserves and other	901	3,008
Tax losses	110,568	91,482
Total deferred tax assets	117,319	96,225

Tax losses

The Company's subsidiaries carry on business in other tax regimes where the corporation tax rate is not zero. At 31 December 2023, the Group had the following tax losses carried forward available for use in future periods:

	2023	2022
	£000	£000
United Kingdom	51,887	46,416
Canada	35,928	27,707
United States of America	16,539	12,892
Ireland	6,214	4,467
Total potential tax benefit	110,568	91,482

Under current tax legislation tax losses in the United Kingdom and Ireland can be carried forward indefinitely and be offset against future profits arising from the same activities at the tax rate prevailing at that time. There is a portion of the tax losses in the United States of America that will begin to expire in 2035, whereas the majority can be carried forward indefinitely. The tax losses in Canada can be carried forward 20 years and will begin to expire in 2035.

Due to the uncertainty regarding the timing and extent of future profits within these subsidiaries, no deferred tax assets have been recognised in respect of these tax losses. Deferred tax is also not recognised on the timing differences between accounting and tax treatment in these subsidiaries given the offsetting tax losses on which no deferred tax has been recognised.

The UK Government announced that the Corporation Tax rate increased from 19% to 25% on profits of over £250,000, effective 1 April 2023. Profits below £50,000 continue to be chargeable to Corporation Tax at 19%. In computing the UK deferred tax asset, management has assumed that as neither the deferred tax assets nor the deferred tax liabilities will crystallise in the immediate future, calculations based on 19% are appropriate.

19 Inventory

	2023	2022
	£000	£000
Raw materials and consumables	2,961	1,815
Work in progress	285	6,370
Finished goods	42	1,642
Total inventory	3,288	9,827

Inventory recognised as an expense within cost of sales during the current year amounted to £27,023,108 (2022: £3,356,045).

At 31 December 2023, inventory impairment to net realisable value totalled £150,988 (2022: nil). Net reversal of inventory write-downs during the current year amounted to £nil (2022: £5,154).

20 Other current assets

	2023	2022
	£000	£000
Prepayments and deposits	475	1,879
Prepaid inventory	1,073	5,102
Tax credits - recoverable	719	551
Other receivables	454	1,249
Total other current assets	2,721	8,781

Prepaid inventory is recognised on inventory payments where physical delivery of that inventory has not yet been taken by the Group.

21 Contract related balances

The Group has recognised the following assets and liabilities related to revenue from contracts with customers that are in progress at the respective year-ends:

	2023	2022
	£000	£000
Amounts due from customer contracts included in trade receivables	2,496	1,737
Contract assets (accrued income for work done not yet invoiced)	888	500
Non-current contract assets	304	-
Contract liabilities (deferred revenue related to advances on customer contracts)	(1,312)	(8,375)
Net position of sales contracts	2,376	(6,138)

The amount of revenue recognised in the year that was included in contract liabilities at the end of the prior year was £8,097,770 (2022: £428,417).

The aggregate position on customer contracts included in the statement of financial position will change according to the number and size of contracts in progress at a given year-end as well as the status of payment milestones made by customers toward servicing those contracts. The Group structures payment milestones in its customer contracts to cover upfront expenditure for parts and materials and other working capital requirements associated with the delivery of promises under customer contracts to better manage Group cash flow.

The timing of revenue recognition is based on the satisfaction of individual performance obligations within a contract and is not based on the timing of advances received. Customer advances are recognised as contract liabilities in the statement of financial position and are released to income progressively as individual performance obligations are met. The difference in timing between the receipt of contract advances and the timing of the satisfaction of performance obligations for revenue recognition can cause values to remain in deferred income. The amount of such deferrals is related to both the overall size of the underlying contract and the planned pace of delivery in the related work schedule. This is expected to occur where satisfaction of performance obligations is evidenced by customer acceptance of the good or service that is the subject of the performance obligation.

Provisions related to contracts with customers

	Warranty provision	Legacy products provision	Provision for contract losses	Total
	£000	£000	£000	£000
At 1 January 2023	284	1,016	1,607	2,907
Charges to profit or loss:
· Provided in the year	552	15	332	899
· Unused amounts reversed	(38)	(968)	(235)	(1,241)
Amounts used in the year	(195)	(13)	(1,315)	(1,523)
Foreign exchange	(1)	(50)	(56)	(107)
At 31 December 2023	602	-	333	935
Current	586	-	226	812
Non-current	16	-	107	123

	Warranty provision	Legacy products provision	Provision for contract losses	Total
	£000	£000	£000	£000
At 1 January 2022	257	860	4,859	5,976
Charges to profit or loss:
· Provided in the year	204	555	565	1,324
· Unused amounts reversed	(28)	(94)	(2,059)	(2,181)
Amounts used in the year	(153)	(406)	(1,980)	(2,539)
Foreign exchange	4	101	222	327
At 31 December 2022	284	1,016	1,607	2,907
Current	284	1,016	1,607	2,907
Non-current	-	-	-	-

Warranty provision

The warranty provision represents management's best estimate of the costs anticipated to be incurred related to warranty claims, both current and future, from customers in respect of goods and services sold that remain within their warranty period. The estimate of future warranty costs is updated periodically based on the Company's actual experience of warranty claims from customers.

The element of the provision related to potential future claims is based on management's experience and is judgmental in nature. As for any product warranty, there is an inherent uncertainty around the likelihood and timing of a fault occurring that would cause further work to be undertaken or the replacement of equipment parts.

A standard warranty of up to two years from the date of commissioning is provided to all customers on goods and services sold and is included in the original cost of the product. Customers are also able to purchase extended warranties that extend the warranty period for up to a total of ten years.

Provision for legacy products

Where it is considered of commercial value, management has elected to provide for the costs of ongoing maintenance for certain legacy products. Provisions in respect of legacy products have fully unwound in 2023 and are no longer provided.

Provision for contract losses

A provision is established for contract losses when it becomes known that a customer contract has become onerous. A contract is onerous when the unavoidable costs of fulfilling the Group's obligations under a contract are greater than the revenue that will be earned from it.

The unavoidable costs of fulfilling contract obligations will include both direct and indirect costs.

The creation of an additional provision is recognised immediately in profit and loss. The provision is used to offset subsequent costs incurred as the contract moves to completion.

In determining the amount to be provided, management has evaluated the likelihood of input costs continuing to rise against a backdrop of inflation and instability due to current macro-economic factors such as, the increasing price of oil feeding through to production and shipping costs and continuing supply chain issues.

Provisions in respect of contract losses relate to contracts which are expected to be delivered in 2024 and will therefore unwind during that year. Provisions in respect of contract losses relating to extended warranties for up to a total of ten years will unwind over that period.

22 Trade receivables

	2023	2022
	£000	£000
Total trade receivables	2,496	1,737

All trade receivables relate to receivables arising from contracts with customers.

Trade receivables are amounts due from customers for sales of vanadium flow battery systems in the ordinary course of business. Trade receivables do not bear interest and generally have 30-day payment terms and therefore are all classified as current.

The actual credit loss over 2023 was determined to be less than 1% of total sales (2022: less than 1%). An allowance for potential credit losses of £139,639 (2022: £23,953) has been recognised.

23 Cash and cash equivalents

	2023	2022
	£000	£000
Total cash and cash equivalents	5,014	5,137

Term deposits are presented as cash equivalents if they have a maturity of three months or less from the date of acquisition.

24 Trade and other payables

	2023	2022
	£000	£000
Trade payables	2,166	3,706
Other payables	29	78
Accrued liabilities	877	701
Accrued employee compensation	772	143
Government remittances payable	104	306
Total trade and other payables	3,948	4,934

Trade payables are unsecured and are usually paid within 30 days.

The carrying amounts of trade and other payables are the same as their fair values due to the short-term nature of the underlying obligation representing the liability to pay.

25 Derivative financial instruments

	2023	2022
	£000	£000
Derivative value of warrants issued	406	449
Other	-	320
Total derivative financial instruments	406	769

Investment funding arrangement

On 14 December 2022, the Company entered into an investment agreement with Riverfort Global Opportunities PCC Limited and YA II PN Ltd. ("Noteholders"). The instrument was entered by way of an initial drawdown in the amount of US$2.5 million and related subscription of 2,870,038 shares priced at nominal value of €0.01 and to be used to facilitate the conversion of amounts advanced under the investment agreement.

Pursuant to the facility, the Noteholders were granted warrants exercisable at 67.35p to subscribe for 1,350,020 ordinary shares for a period of up to four years. These warrants remain outstanding and have been repriced to 32p being the price per share achieved in the 2023 capital raise. In consideration of the Noteholders undertakings, the Company has agreed to grant a further 449,980 warrants at an exercise price of 32p which will expire on 14 December 2026.

The convertible notes balance was fully repaid by 31 March 2023 using funds from the 2023 capital raise. Prepayment was at the Company's option and carried a redemption premium of 10% paid to the Noteholders at the date of prepayment totalling US$208,107.

Following the redemption of the investment agreement, proceeds from the sale of the conversion shares were split 97% to the company and 3% to the Noteholders, resulting in net proceeds to the Company of £742,601.

Information about the Group's exposure to interest rate, foreign currency and liquidity risks is included in note 29.

26 Lease liabilities

The Group's obligations under lease contracts are presented as follows:

	2023	2022
At 31 December	£000	£000
Current - due within 12 months	723	740
Non-current - due after 12 months	833	969
Total lease liabilities	1,556	1,709

Payments of lease principal and interest in the period to 31 December were:

	2023	2022
At 31 December	£000	£000
Payments of lease principal	629	591
Payments of interest	44	58
Total payments under leases	673	649

The contractual undiscounted cash flows for lease obligations at each period end were:

	2023	2022
At 31 December	£000	£000
Less than one year	784	804
One to five years	884	1,009
Total lease liabilities	1,668	1,813

Lease liabilities represent the present value of the minimum lease payments the Group is obliged to make to lessors under contracts for the lease of assets that are presented as right-of-use assets.

Amounts recognised in the consolidated statement of profit and loss were:

	2023	2022
	£000	£000
Variable lease payments	230	117
Expenses relating to short-term leases	70	82
Expenses relating to leases of low-value assets	8	5

27 Issued share capital and reserves

	2023		2022
	No: 000	£000	No: 000	£000
Authorised at 31 December	1,000,000	-	1,000,000	-

Issued and fully paid
At 1 January	119,007	50,716	116,048	50,690
Issued in the year	72,060	632	2,959	26
At 31 December	191,067	51,348	119,007	50,716

During the year, 72,059,618 new shares were issued with a nominal value of £631,857. The total gross proceeds were £23,045,832 with the balance of £22,413,975 credited to the share premium account. Total costs of issuance were £1,117,307 and these costs were charged directly to the share premium account.

On 22 November 2022, the Company subdivided each ordinary share of €0.50 nominal value into one ordinary share of €0.01 each and one Deferred A Share of €0.49 each. The Deferred A Shares do not have any voting rights and are not admitted to trading on AIM or any other market. They carry only a priority right to participate in any return of capital or in any dividend to the extent of €1 in aggregate over the class. The Deferred A Shares are, for all practical purposes, valueless and it is the Board's intention, at an appropriate time, to have the Deferred A Shares cancelled in accordance with Companies Law.

Ordinary shares have a par value of €0.01. The holders of ordinary shares are entitled to receive dividends as may be declared from time to time and are entitled to one vote per share at meetings of the Company.

Share capital and share premium

Share capital comprises issued capital in respect of issued and paid-up shares, at their par value. Share premium comprises the difference between the proceeds received and the par value of the issued and paid-up shares.

Share-based payment reserve

The share-based payment reserve comprises the equity component of the Company's share-based payments charges.

Currency translation reserve

The translation reserve comprises foreign currency differences arising from the translation of the financial statements of foreign operations.

Other reserve

Other reserve comprises the portion of the consideration paid for redT energy Holdings (Ireland) Limited's minority interests over the fair value of the shares purchased.

28 Financial assets and liabilities

All financial assets are held at amortised cost. There were no financial assets measured at fair value through other comprehensive income nor through profit and loss in either period presented.

The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial asset presented above. The carrying value of the financial assets approximate their fair values due to the short-term maturities of these instruments.

The Group does not currently use derivative instruments for managing financial risk. All financial liabilities are held at amortised cost.

Recognised fair value measurements

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading securities) is based on quoted market prices at the end of the reporting period.

The battery systems manufactured by the Company use vanadium metal as a key component in the electrolyte. Vanadium is an actively traded commodity for which quoted market prices are available.

The Company does not currently hold inventories of vanadium. Vanadium purchased from third parties is solely for the use in electrolyte and open purchase contracts are not accounted for as derivatives.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques that maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value instrument are observable, the instrument is included in Level 2.

At 31 December 2023, the Company held warrants issued to Riverfort Global Opportunities and YA II PN Ltd as part of the December 2022 financing event. The warrants are valued using Level 2 inputs as they do not represent a fixed-for-fixed equity instrument and are valued using observable market factors such as the share price at the date of the grant, the term of the award, the share price volatility and the risk-free interest rate.

Level 3: If one or more of the significant inputs is not based on observable market data the instrument is included in Level 3.

The Group did not hold any financial assets or liabilities that were required to be valued using Level 3 inputs at 31 December 2023 (2022: none).

No other financial instruments were outstanding at the period end that required to be valued using a methodology that uses Level 1, 2 or 3 inputs.

29 Financial risk management

This note explains the Group's exposure to financial risks and how these risks could affect the Group's future financial performance. Current year profit and loss information has been included where relevant to add further context.

Risk	Exposure arising from	Measurement	Management
Market risk - foreign exchange	Future commercial transactions Recognised financial assets and liabilities not denominated in GBP	Cash flow forecasting Sensitivity analysis	Cash is held in GBP until non-GBP requirements for up to the next six-months are established, at which point the GBP is sold in favour of the required currency, which is then remitted to the relevant Group entity
Market risk - commodity price risk	Price of vanadium to be used in the battery electrolyte	Quoted market prices for vanadium	Strategic supply arrangements with multiple pre-qualified suppliers
Credit risk	Cash and cash equivalents, trade receivables and contract assets	Ageing analysis Credit ratings	Monitoring accumulation of bank balances. Credit risk assessment for customers and pre-agreed deposits and interim payments within customer contracts
Liquidity risk	Borrowings and other liabilities	Rolling cash flow forecasts	Access to capital markets for equity or debt funding

Market risk - foreign exchange risk

The Group is primarily exposed to foreign exchange risk related to bank deposits, receivables or payables balances and other monetary working capital items that are denominated in a currency other than the Company's functional currency which has been determined to be GBP.

The Group does not speculate on foreign exchange and aims to mitigate its overall foreign exchange risk by holding currency in line with forecast regional operating expenses, providing an element of natural hedge against adverse foreign exchange movement.

The Group's exposure to foreign exchange risk at the end of the reporting period, expressed in GBP, was as follows:

	Sterling	Euro	Canadian dollar	US dollar	Australian dollar	Total
31 December 2023	£000	£000	£000	£000	£000	£000
Cash and cash equivalents	3,284	696	346	444	244	5,014
Trade receivables	747	1,350	11	388	-	2,496
Trade and other payables	(1,799)	(178)	(1,466)	(505)	-	(3,948)
Derivative financial instruments	(406)	-	-	-	-	(406)
Lease liabilities	(254)	-	(1,169)	(133)	-	(1,556)
Net exposure	1,572	1,868	(2,278)	194	244	1,600

	Sterling	Euro	Canadian dollar	US dollar	South African rand	Australian dollar	Total
31 December 2022	£000	£000	£000	£000	£000	£000	£000
Cash and cash equivalents	1,545	354	106	2,810	5	317	5,137
Trade receivables	350	-	1,475	(88)	-	-	1,737
Trade and other payables	(1,197)	(557)	(2,867)	(313)	-	-	(4,934)
Derivative financial instruments	(769)	-	-	-	-	-	(769)
Lease liabilities	(279)	-	(1,347)	(83)	-	-	(1,709)
Net exposure	(350)	(203)	(2,633)	2,326	5	317	(538)

Prior year comparatives were updated to exclude foreign exchange risk on contract assets and other current assets to conform to the current period presentation.

Sensitivity - exchange rates

The sensitivity of profit or loss to changes in quoted exchange rates for currencies to which the Group is exposed is as follows, based on each relevant exchange rate strengthening (or weakening) by 5%.

There is no impact on other components of equity as the Group is not party to any derivative financial instruments, such as hedging instruments, where currency gains and losses would be recognised in other comprehensive loss.

	2023	2022
At 31 December +/- 5%	£000	£000
Euro	93	24
Canadian dollar	(114)	227
US dollar	10	137
South African rand	-	1
Australian dollar	12	16
	1	405

Market risk - commodity price risk

The Group's batteries use an electrolyte incorporating vanadium. Vanadium is an elemental metal and is used primarily to strengthen steel, particularly for the construction industry.

Whilst it is not a mature market traded commodity, such that one can buy forward or derivative contracts, market prices for vanadium pentoxide (V2O5) at 98% purity are quoted in US dollars per pound.

Vanadium forms about two-thirds of the value of the electrolyte, which in turn forms about a quarter of the landed cost of a battery, and so a fluctuation in the price of vanadium will impact the profitability of battery sales. An increase or decrease in the market price of vanadium of 5% could cause the value of the electrolyte component of a battery to increase or decrease by approximately 3%.

Credit risk - cash held on deposit with banks

Credit risk arises from cash and cash equivalents and deposits with banks and other financial institutions.

Credit risk related to holdings with financial institutions is managed by only maintaining bank accounts with reputable financial institutions. The Group aims only to place funds on deposit with institutions with a minimum credit rating of B2 Moody's.

The Group's cash at bank and short-term deposits are held with institutions with credit ratings as follows:

	2023	2022
At 31 December	£000	£000
Aa1	220	780
Aa2	566	1,315
A1	4,228	3,037
Ba2	-	5
	5,014	5,137

Credit risk - trade and other receivables

Past due but not impaired

The Group's credit risk from receivables encompasses the default risk of its customers and other counterparties. Its exposure to credit risk is influenced mainly by the individual characteristics of each customer or counterparty. The creditworthiness of potential and existing customers is assessed prior to entering each new transaction. A credit analysis is performed, and appropriate payment terms implemented that may include increased level of upfront deposits for the purchase of battery units. The Group's standard terms of trade provide that up to 90% of the sales price of a battery unit is paid prior to delivery.

Receivables are considered for impairment on a case-by-case basis when they are past due or where there is objective evidence that the customer or counter party may be a default risk. The Group takes into consideration the customer or counter party payment history, its credit worthiness together with the prevailing economic environment in which it operates to assess the potential impairment of receivables. The assessment reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions.

On an ongoing basis, receivable balances attributable to each customer or other counterparty are monitored and appropriate action is taken when the relevant balance becomes or is considered likely to become overdue. The maximum exposure to loss arising from receivables is equal to invoiced value.

The ageing of trade receivable balances was:

	2023	2022
At 31 December	£000	£000
Current	1,940	1,582
Past due - less than 30 days	339	112
Past due - more than 30 days	217	43
Total trade receivables	2,496	1,737

Past due amounts at 31 December 2023, related to six customers (2022: four customers) and £139,639 (2022: £23,953) was considered to be impaired.

Liquidity risk

Liquidity risk relates to the Group's ability to meet its obligations as they fall due.

The Group generates cash from its operations that are principally related to the manufacture and installation of vanadium flow batteries. The market for reliable and flexible grid-scale storage solutions for energy generated from renewable sources is growing and the technology continues to develop.

The development of new and enhanced storage technologies can be capital intensive and the Group has historically funded development and early-stage commercial activity primarily from equity investment but also using cash from operations and loan funding.

The Group forecasts cash generation using a comprehensive company financial model and monitors the timing and amount of its payment obligations.

The following table shows the Group's financial liabilities by relevant maturity grouping based on contractual maturities. The amounts included in the analysis are contractual, undiscounted cashflows.

	Less than one year	One to two years	Two to five years	Over five years	Total contracted cash flows	Carrying amount
31 December 2023	£000	£000	£000	£000	£000	£000
Trade and other payables	3,948	-	-	-	3,948	3,948
Derivative financial instruments	406	-	-	-	406	406
Lease liabilities	784	422	462	-	1,668	1,556
Total financial liabilities	5,138	422	462		6,022	5,910

	Less than one year	One to two years	Two to five years	Over five years	Total contracted cash flows	Carrying amount
31 December 2022	£000	£000	£000	£000	£000	£000
Trade and other payables	4,582	352	-	-	4,934	4,394
Derivative financial instruments	769	-	-	-	769	769
Lease liabilities	740	630	339	-	1,813	1,709
Total financial liabilities	6,091	982	339	-	7,516	7,412

Capital management

At 31 December 2022, the Group had debt from an investment agreement entered with Riverfort Global Opportunities PCC Ltd and YA II PN Ltd. At 31 March 2023, the loan has been repaid in full using proceeds from the March 2023 equity raise. Following the loan redemption, the Company has no external debt outstanding.

The Board regularly reviews the Group's cash requirements and future projections to monitor cash usage and assess the need for additional funding. At 31 May 2024, the Group had £53.2 million of cash on hand.

30 Related parties

The only related parties of the Group are the key management and close members of their family. Key management has been determined as the CEO and his direct reports.

Invinity Energy Systems plc purchased a total of 15,000 shares at the issue price of 32 pence per share in the March 2023 fundraising on behalf of two executive directors. 31,250 shares were purchased on behalf of Larry Zulch and 15,625 shares on behalf of Matt Harper. At 31 December 2023, the £15,000 owed by executive directors had been settled.

Key management compensation is disclosed in note 8, Staff costs and headcount.

31 Group entities

				Ownership %

Direct subsidiary undertakings	Country of incorporation	Registered office	Principal activity	2023	2022
Camco Holdings UK Limited	England	128 City Road, London, EC1V 2NX, United Kingdom	Holding company	100%	100%
Invinity Energy Systems Limited (formerly Camco Services (UK) Limited)	England	128 City Road, London, EC1V 2NX, United Kingdom	Support services	100%	100%
Camco (Mauritius) Limited	Mauritius	24 Dr Joseph Rivière Street 1st Floor, Felix House Port Lewis, Mauritius	Holding company	100%	100%
Invinity Energy Systems (U.S.) Corporation	United States of America	1201 Orange St. #600 Wilmington, DE USA 19899	Energy storage	100%	100%
Invinity Energy Nexus Limited	England	128 City Road, London, EC1V 2NX, United Kingdom	Energy storage	100%	100%

Indirect subsidiary undertakings
redT Energy Holdings (UK) Limited	England	128 City Road, London, EC1V 2NX, United Kingdom	Research and consultancy	100%	100%
Re-Fuel Technology Limited	England	128 City Road, London, EC1V 2NX, United Kingdom	Energy storage	99%	99%
Invinity Energy (UK) Limited	England	Office 501 New Broad Street House, 35 New Broad Street, London, England, EC2M 1NH United Kingdom	Energy storage	99%	99%
redT Energy Holdings (Ireland) Limited	Ireland	22 Northumberland Road Ballsbridge, Dublin 4	Energy storage	99%	99%
Invinity Energy Systems (Ireland) Limited	Ireland	22 Northumberland Road Ballsbridge, Dublin 4	Energy storage	99%	99%
redT energy (Australia) (Pty) Ltd	Australia	RSK Advisory, Level 2, Suite 7 66 Victoria Crescent Narre Warren, Victoria 3805 Australia	Energy storage	99%	99%
Invinity Energy (South Africa) (Pty) Ltd	South Africa	1st Floor, Kiepersol House Stonemill Office Park 300 Acacia Road Darrenwood Randburg 2194	Business Services	100%	100%
Invinity Energy Systems (Canada) Corporation	Canada	2900-550 Burrard Street Vancouver, BC Canada V6C 0A3	Energy storage	100%	100%
Suzhou Avalon Battery Company Limited	The People's Republic of China	1809 Building 4 no.11888 East Taihu Avenue, Songling Town, Wujiang District, Suzhou City	Business Services	100%	100%

Associates
Vanadium Electrolyte Rental Limited	England	128 City Road, London, EC1V 2NX, United Kingdom	Vanadium procurement	50%	50%

32 Contingent Liability

The Group is involved in legal proceeding with a landlord with a received claim which has a possible range from £nil to £693k. While the outcome of this matter is uncertain and difficult to predict, management believes that, based on the information currently available, the ultimate resolution of these matters will not have a material adverse effect on the Group's financial position.

33 Events occurring after the report period

On 26 February 2024, the Company announced that it had entered into an agreement with its Taiwanese strategic partner, Everdura, to undertake domestic manufacturing of its next generation vanadium flow battery ("VFB") product, code-named "Mistral", to serve the Taiwanese and other markets ("the Agreement"). Under the Agreement, Everdura will manufacture Mistral VFBs to fulfil orders it intends to secure under the terms of the existing reseller agreement which targets more than 255 MWh of product sales over a three-year period. The Agreement states that Everdura will pay Invinity a royalty fee based on a material percentage of the sale price of any Mistral products sold. Everdura will also utilise Invinity's existing supply chain and purchase cell stacks directly from the Company, which will continue to be manufactured by Invinity at its facilities in the UK and Canada.

In addition, on 24 May 2024, the Company announced it had raised gross proceeds of £57.4 million through the issue of 249,490,243 new ordinary shares of €0.01 each at the issue price of 23 pence per new ordinary share. Of this amount, £25.0 million was raised through a subscription by the UK Infrastructure Bank (the British state-owned policy bank), £3.0 million by Korean Investment Partners (an affiliate of Korea Investment Holdings, a leading financial conglomerate in the Republic of Korea) acting through an investment fund, £28.0 million through an oversubscribed placing with institutional and other investors and £1.38 million from an open offer of 3 open offer shares for every 20 ordinary shares held to existing shareholders.

The fundraising shares were admitted to trading on the AIM market of the London Stock Exchange and the APEX segment of the AQSE Growth Market on 24 May 2024.

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