Consolidated Statement of Comprehensive Income £ in Thousands |
12 Months Ended |
|---|---|
|
Dec. 31, 2021
GBP (£)
£ / shares
| |
| Consolidated Statement of Comprehensive Income | |
| Revenue | £ 132 |
| Cost of sales | (64) |
| Gross profit | 68 |
| Research and development expenses | (24,291) |
| Administrative expenses | (264,260) |
| Related party administrative expenses | (108) |
| Other operating income | 11,352 |
| Operating loss | (277,239) |
| Finance income | 32,590 |
| Finance costs | (92) |
| Related party finance costs | (483) |
| Net finance income/(costs) | 32,015 |
| Loss before tax | (245,224) |
| Net loss for the period | (245,224) |
| Foreign exchange translation differences | (85) |
| Total comprehensive loss for the year | £ (245,309) |
| Basic loss per share | £ / shares | £ (1.98) |
| Diluted loss per share | £ / shares | £ (1.98) |
Consolidated Statement of Financial Position - GBP (£) |
Dec. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Non-current assets | ||
| Property, plant and equipment | £ 3,821,000 | £ 2,690,000 |
| Right of use assets | 2,453,000 | 3,121,000 |
| Intangible assets | 1,018,000 | 2,048,000 |
| Non-current assets | 7,292,000 | 7,859,000 |
| Current assets | ||
| Trade and other receivables | 26,413,000 | 18,864,000 |
| Financial assets at amortized cost | 59,886,000 | |
| Restricted cash | 1,700,000 | 1,700,000 |
| Cash and cash equivalents | 48,680,000 | 62,927,000 |
| Current assets | 76,793,000 | 143,377,000 |
| Total assets | 84,085,000 | 151,236,000 |
| Equity | ||
| Share capital | 16,681 | 15,952 |
| Other reserve | 86,757,000 | 94,857,000 |
| Share premium | 257,704,000 | 257,197,000 |
| Accumulated deficit | (394,257,000) | (344,752,000) |
| Total Shareholder's (deficit)/equity | (49,779,000) | 7,318,000 |
| Non-current liabilities | ||
| Lease liabilities | 1,977,000 | 2,645,000 |
| Provisions | 256,000 | 365,000 |
| Derivative financial liabilities | 109,291,000 | 115,247,000 |
| Trade and other payables | 3,922,000 | 4,153,000 |
| Non-current liabilities | 115,446,000 | 122,410,000 |
| Current liabilities | ||
| Lease liabilities | 643,000 | 516,000 |
| Warrant liabilities | 907,000 | 4,961,000 |
| Trade and other payables | 16,868,000 | 16,031,000 |
| Current liabilities | 18,418,000 | 21,508,000 |
| Total liabilities | 133,864,000 | 143,918,000 |
| Total equity and liabilities | £ 84,085,000 | £ 151,236,000 |
General information |
12 Months Ended |
|---|---|
Dec. 31, 2023 | |
| General information | |
| General information | 1General information Vertical Aerospace Ltd. (the “Company”, or the “Group” if together with its subsidiaries) is incorporated under the Companies Law (as amended) of the Cayman Islands. The address of its principal executive office is: Unit 1 Camwal Court, Bristol, United Kingdom. The Group’s main operations are in the United Kingdom and these financial statements are presented in Pounds Sterling and all values are rounded to the nearest thousand (£’000) except where otherwise indicated. These financial statements were authorized for issue by the Board of Directors on March 12, 2024. Principal activities The principal activity of the Company and its wholly owned subsidiary, Vertical Aerospace Group Ltd (“VAGL”), is the development and commercialization of vertical take-off and landing electrically powered aircraft (“eVTOL”). VAGL became a subsidiary of the Company on December 15, 2021 as part of the capital reorganization. Prior to December 15, 2021, the Company was a shell company with no active trade or business, and all relevant assets and liabilities, as well as income and expenses, were borne by VAGL. |
Significant accounting policies |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
| Significant accounting policies | ||||||||||||||||||||||||||||||||||||||||||||||
| Significant accounting policies | 2Significant accounting policies Presentation of these financial statements The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). Basis of preparation The consolidated financial statements have been prepared on a historical cost basis, as modified by the revaluation of certain financial assets and liabilities (including derivative financial instruments) which are recognized at fair value through profit or loss. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the company’s accounting policies. The functional currency of the Company is US Dollars (‘$’ or ‘USD’) and the functional currency of VAGL is pounds sterling (‘£’ or ‘GBP’). The financial statements are presented in pounds sterling (‘£’ or ‘GBP’), which is the Group’s presentation currency. Items included in the financial statements are measured using the currency of the primary economic environment in which the entity and its subsidiaries operate (“the functional currency”). Cumulative translation adjustments resulting from translating foreign functional currency financial statements into GBP are reported within other reserves. All amounts are presented in and rounded to the nearest thousand unless otherwise indicated. Certain amounts in prior year financial statements have been reclassified to conform to current year presentation. Basis of consolidation Vertical Aerospace Ltd is the parent of the Group and has 100% ownership interest and voting rights of Vertical Aerospace Group Limited, which is its only material subsidiary. The consolidated financial statements incorporate the financial positions and the results of operations of the Group. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The financial statements of the subsidiaries are prepared for the same reporting period as the Company using consistent accounting policies. Intercompany transactions, balances and unrealized gains on transactions between Group companies are eliminated. 2Significant accounting policies (continued) The capital reorganization On December 15, 2021 the Company consummated the capital reorganization whereby the Company acquired all the ordinary shares of VAGL in consideration for the issuance of ordinary shares in the Company, by way of a share for share exchange. At the same time Broadstone Acquisition Corp., (“Broadstone”, a Cayman Islands exempted company), a special purpose acquisition company, was acquired by the Group. This Business Combination is accounted for as a capital reorganization in accordance with IFRS. Under this method of accounting, Broadstone is treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination is treated as the equivalent of VAGL issuing shares at the closing of the Business Combination for the net assets of Broadstone as of the closing date, accompanied by a recapitalization. The reorganization was accounted for within the scope of IFRS 2. Accordingly, during the year ended December 31, 2021 the Company recorded a one-time non-cash expense of £84,712 thousand, recognized as a share listing expense, based on the excess of the fair value of Company shares issued considering a fair value of a share, at $10.68 per share, over the fair value of Broadstone’s identifiable net assets. Summary of significant accounting policies and key accounting estimates The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. Going concern Management has prepared a cash flow forecast for the Group and has considered the ability for the Group to continue as a going concern for the foreseeable future, being at least 12 months after approving these financial statements. The Group is currently in the research and development phase of its journey to commercialization of eVTOL technology. Commensurate with being in the development phase, the Group has invested heavily in research to support the development of its aircraft. The Group is not currently generating revenue and has incurred net losses and net cash outflows from operating activities since inception. As of December 31, 2023, the Group had £48.7 million of cash and cash equivalents on hand and a net shareholders’ deficit of £49.8 million. As at the date of this report, the Group had approximately £52 million of cash and cash equivalents on hand. On February 22, 2024 the Company entered into the SF Investment Agreement with Imagination Aero Investments Limited (“Imagination Aero”), a company indirectly owned by Stephen Fitzpatrick, pursuant to which Imagination Aero agreed to purchase, and the Company agreed to issue and sell to Imagination Aero, up to $50 million of (i) newly issued ordinary shares and (ii) 50,000,000 SF Warrants, in each case at purchase prices specified in the Investment Agreement. In accordance with the SF Investment Agreement, on March 13, 2024, the Company received $25 million in gross proceeds in consideration for newly issued ordinary shares and SF Warrants and, in the third quarter of 2024, the Company will, subject to the terms of the SF Investment Agreement, receive up to an additional $25 million in consideration for additional newly issued ordinary shares. Within the next 12 months following the date of this Annual Report, management expects its net cash outflows from operations to be approximately £70 million (after taking into account expected R&D tax receipts and grants of approximately £28 million), which will be used primarily to fund the creation and testing of the prototype aircraft, and to support the certification process . 2Significant accounting policies (continued) The aforementioned investment is expected to extend the Group’s projected cash runway into the second quarter of 2025, providing the platform for further funding rounds. The Convertible Senior Secured Notes require retention of $10 million cash to avoid a covenant breach, which if breached could result in the note holder seeking repayment of the notes or converting them into equity which could result in the holder taking control of the Group. The Group will need to raise additional capital to fund its future operations and remain as a going concern, before the Group uses all of its existing resources. Although the Group plans to raise additional funds over the course of the next twelve months, there can be no assurance that the Group will be able to obtain additional funding on acceptable terms and thus have sufficient funds to meet the Group’s funding requirements. As a result, the timely completion of financing is important for the Group’s ability to continue as a going concern when it has exhausted its existing resources. The inability to obtain future funding could impact; the Group's financial condition and ability to pursue its business strategies, including being required to delay, reduce or eliminate some of its research and development programs, or being unable to continue operations or continue as a going concern. The dependency on raising additional capital indicates that a material uncertainty exists that may cast significant doubt (or substantial doubt as contemplated by PCAOB standards) on the Group’s ability to continue as a going concern and therefore the Group may be unable to realize the assets and discharge the liabilities in the normal course of business. The consolidated financial statements have been prepared assuming that the Group will continue as a going concern, which contemplates the continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business and do not include any adjustments that would result if the Group were unable to continue as a going concern. Changes in accounting policy The Group adopted the following amendments for the first time during the period commencing January 1, 2023:
The amendments listed above did not have any impact on the amounts recognized in prior periods and are not expected to significantly affect the current or future periods. No accounting standards and interpretations that have been published but not effective for periods ending December 31, 2023 have been early adopted by the Group or are expected to have a material impact on the Group. Government grants Government grants are recognized as Other operating income and are recognized in the period when the expense to which the grant relates is incurred. Grants are only recognized when there is a signed grant offer letter or equivalent from the government body and there is reasonable assurance that the Group will be able to satisfy all conditions of the grant. Research and development tax relief As a Group that carries out extensive research and development activities, the Group benefits from UK research and development tax reliefs. Qualifying expenditures largely comprise of R&D staff employment costs, R&D components, consumables, parts, tooling and outsourced contracting support for R&D activities and utilities costs. HM Revenue & Customs administers two such tax relief schemes: one aimed at small and medium-sized enterprises (SME); and the R&D expenditure credit scheme (RDEC), aimed at large companies and other companies that aren’t eligible for the SME relief. SME relief is recorded either as a reduction in its income tax liability or as a credit, whilst credits the Company receives under RDEC scheme claim are classed as taxable income. 2Significant accounting policies (continued) Research and development expenses Research expenditure is charged to profit or loss in the period in which it occurred. Development expenditure is recognized as an intangible asset when it is probable that the project will generate future economic benefit, considering factors such as technological, commercial and regulatory feasibility. Other development expenditure is charged to profit or loss in the period in which it occurred. Refer to note 3 Critical accounting judgments and key sources of estimation uncertainty for a discussion on the judgment of this classification. The amounts included in research and development expenses include staff costs for staff working directly on research and development projects and for expenses directly attributable to a research project, excluding software costs. Finance income and costs Finance income and costs includes the fair value movement on publicly traded warrants and convertible loan notes. Finance costs includes interest payable and is recognized in profit or loss using the effective interest method. Interest income is recognized in profit or loss as it accrues, using the effective interest method. Foreign currency transactions and balances Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies at year - end exchange rates, are recognized in profit or loss. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. Translation differences arising from the consolidation of subsidiaries whose functional currency differs to the presentational currency of the group are recorded within other comprehensive income. The most important exchange rates that have been used in preparing the financial statements are: Closing rate as at December 31, 2023: USD $1 = GBP £0.7845 (2022: £0.8306) Average rate for the year ending December 31, 2023: USD $1 = GBP £0.8042 (2022: £0.8117) Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated. Tax The tax expense for the period comprises current tax and deferred tax. Tax is recognized in profit or loss, except that a change attributable to an item of income or expense recognized as other comprehensive income is also recognized directly in other comprehensive income. The current income tax charge is calculated based on tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income. 2Significant accounting policies (continued) Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The group measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses. Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to the same taxation authority. Property, plant and equipment Property, plant and equipment is stated at cost, which includes directly attributable incremental costs incurred in their acquisition and installation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Depreciation Depreciation is charged to write off the cost of assets over their estimated useful lives, as follows:
Intangible assets Intangible assets are carried at cost, less accumulated amortization and impairment losses. Computer software licenses acquired for use within the Company are capitalized as an intangible asset on the basis of the costs incurred to acquire and bring to use the specific software. 2Significant accounting policies (continued) Amortization Amortization is provided on intangible assets so as to write off the cost on a straight-line basis, less any estimated residual value, over their expected useful economic life as follows:
Business combinations and goodwill The purchase method is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued, and liabilities incurred or assumed at the date of exchange. Identifiable assets acquired and liabilities and contingent liabilities assumed are measured initially at their fair values on the date of acquisition. The excess of the cost of acquisition over the fair value of the Group’s share of identifiable net assets, including intangible assets acquired, is recorded as goodwill. If the cost of acquisition is less than the fair value of the Group’s share of net assets of the subsidiary acquired, the difference is recognized directly in profit or loss. Goodwill is stated at cost, less any accumulated impairment losses. Goodwill is tested annually for impairment or when there are indicators of impairment. Cash and cash equivalents Cash at bank is held on deposit with financial institutions located within the United Kingdom and is immediately available. Management has assessed the financial institutions that hold the Company’s cash at bank to be financially sound, with minimal credit risk in existence. Term deposits are presented as cash equivalents if they have a maturity of three months or less from the date of placing deposits and are repayable with 24 hours’ notice with no loss of interest. The cash at bank excludes restricted cash deposits, which are subject to restrictions and are therefore not available for general use. Restricted cash The Company presents restricted cash as a separate line item on the balance sheet where this is relevant to an understanding of the Group’s financial position. Restricted cash refers to cash that is held by the Company for specific reasons and is, therefore, not available for immediate ordinary business use. Short term deposits Term deposits are presented as cash equivalents if they have a maturity of three months or less from the date of acquisition and are repayable with 24 hours’ notice with no loss of interest. Trade and other receivables Trade receivables are amounts due from customers for services performed in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets. Trade receivables are recognized initially at the transaction price. They are subsequently measured at amortized cost using the effective interest method, less provision for impairment. A provision for the impairment of trade receivables is established using an expected credit loss model as per the Group’s accounting policy for the impairment of financial assets. Other receivables represent amounts due from parties who are not customers and are measured at amortized cost. 2Significant accounting policies (continued) Trade and other payables Trade and other payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade and other payables are recognized initially at the transaction price and subsequently measured at amortized cost using the effective interest method. Borrowings All borrowings are initially recorded at the amount of proceeds received, net of transaction costs. Borrowings are subsequently carried at amortized cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognized as a charge to profit or loss over the period of the relevant borrowing using the effective interest method. Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Provisions Provisions are recognized when the company has a present obligation (legal or constructive) resulting from a past event, it is probable that the Company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at management’s best estimate of the expenditure required to settle the obligation at the reporting date and are discounted to present value where the effect is material. Leases Definition A lease is a contract, or part of a contract, which conveys the right to use an asset or a physically distinct part of an asset (‘the underlying asset’) for a period of time in exchange for consideration. Further, the contract must convey the right to the company to control the asset or a physically distinct portion thereof. A contract is deemed to convey the right to control the underlying asset, if throughout the period of use, the company has the right to:
Initial recognition and measurement The company initially recognizes a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. The lease liability is measured at the present value of the lease payments to be made over the lease term. The lease payments include fixed payments, purchase options at exercise price (where reasonably certain), expected amount of residual value guarantees, termination option penalties (where reasonably certain) and variable lease payments that depend on an index or rate. 2Significant accounting policies (continued) The right of use asset is initially measured at the amount of the lease liability, adjusted for lease prepayments, lease incentives received, the company’s initial direct costs and an estimate of restoration, removal and dismantling costs. Subsequent measurement After the commencement date, the company measures the lease liability by: (a)Increasing the carrying amount to reflect interest on the lease liability; (b)Reducing the carrying amount to reflect the lease payments made; and (c)Re-measuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in substance fixed lease payments or on the occurrence of other specific events. Interest on the lease liability in each period during the lease term is the amount that produces a constant periodic rate of interest on the remaining balance of the lease liability. Interest charges are included in finance costs in profit or loss, unless the costs are included in the carrying amount of another asset applying other applicable standards. Variable lease payments not included in the measurement of the lease liability, are included in operating expenses in the period in which the event or condition that triggers them arises. Right-of-use assets The related right-of-use asset is accounted for using the cost model in IFRS 16 and depreciated and charged in accordance with the depreciation requirements of IAS 16 Property, Plant and Equipment as disclosed in the accounting policy for Property, Plant and Equipment. Adjustments are made to the carrying value of the right - of - use asset where the lease liability is re-measured in accordance with the above. Right of use assets are tested for impairment in accordance with IAS 36 Impairment of Assets as disclosed in the accounting policy in impairment. Short term and low value leases The company has made an accounting policy election, by class of underlying asset, not to recognize lease assets and lease liabilities for leases with a lease term of 12 months or less (short term leases). The company has made an accounting policy election on a lease-by-lease basis, not to recognize lease assets on leases for which the underlying asset is of low value. Lease payments on short term and low value leases are accounted for on a straight-line bases over the term of the lease or other systematic basis. Short term and low value lease payments are included in operating expenses. Impairment (non-financial assets) All assets are reviewed for impairment when there is an indicator of impairment. In addition, goodwill is reviewed for impairment at least annually. An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period. 2Significant accounting policies (continued) Share capital and reserves Ordinary shares are classified as equity and share capital is carried at par value. Share capital issued meets the definition of an equity instrument as defined in IAS 32 ‘Financial Instruments’ when the contract evidences a residual interest in the assets of the Company after deducting all of its liabilities. Incremental costs directly attributable to the issue of shares are accounted for as a deduction from consideration received, and are recorded in share premium. Share premium reflects the proceeds received (net of allowable costs) in excess of the par value. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis. Employee Benefits A defined contribution plan is a pension plan under which fixed contributions are paid into a separate entity and has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The contributions are recognized as an employee benefit expense when they are due. For defined contribution plans, contributions are paid into publicly or privately administered pension insurance plans on a mandatory or contractual basis. The contributions are recognized as an employee benefit expense when they are due. Liabilities for wages and salaries, including non-monetary benefits and annual leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service, are recognized in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as accruals and classified as current liabilities in the balance sheet. Share based payments – Enterprise Management Incentive and 2021 Incentive Plan The Company operates an equity-settled, share-based compensation plan, under which the entity receives services from employees as consideration for equity instruments (share options or shares). The fair value of the employee services received in exchange for the grant of the shares is recognized as an expense. The total amount to be expensed is determined by reference to the fair value of the shares granted: - including any market performance conditions (for example, an entity’s share price); - excluding the impact of any service and non-market performance vesting conditions (for example, remaining an employee of the entity over a specified time period); and - including the impact of any non-vesting conditions. Non-market performance and service conditions are included in the assumptions about the number of shares that are expected to vest. The total expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. In addition, 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 recognizing the expense during the period between service commencement period and grant date. 2Significant accounting policies (continued) At the end of each reporting period, the Company revises its estimates of the number of shares that are expected to vest based on the non-market vesting conditions. The Company recognizes the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. See note 23 for further details. Other non-current share-based payments were made during 2021 as detailed within the significant accounting policy for the capital reorganization. Further information is included with the critical accounting judgments and key sources of estimation uncertainty. Financial instruments Financial instruments are contracts that give rise to a financial asset for one entity and to a financial liability or equity instrument for another entity. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognized on the settlement date.The company recognizes financial assets and financial liabilities in the statement of financial position when, and only when, the company becomes party to the contractual provisions of the financial instrument. Financial assets and financial liabilities are offset, and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously. Financial assets The Group’s financial assets include cash at bank and other financial assets. Financial assets are initially measured at fair value plus, in the case of a financial asset not measured at fair value through profit or loss, transaction costs. Trade receivables are measured at their transaction price. For all financial assets the Group has the objective to hold financial assets in order to collect the contractual cash flows. The contractual terms of all the Group’s financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the outstanding amount. All financial assets are therefore measured at amortized cost. Impairment of financial assets — expected credit losses (“ECL”) All financial assets measured at amortized cost are required to be impaired at initial recognition in the amount of their expected credit loss (“ECL”), based on the difference between the contractual and expected cash flows. The simplification available for financial instruments with a low credit risk (“low credit risk exemption”) is applied as of the reporting date. Factors that can contribute to a low credit risk assessment are debtor specific rating information and related outlooks. The requirement for classification with a low credit risk is regarded to be fulfilled for counterparties that have at least an investment grade rating; in this case there is no need to monitor credit risks for financial instruments with a low credit risk. 2Significant accounting policies (continued) Financial liabilities The Group’s financial liabilities include warrants, lease liabilities, convertible loans, trade and other payables, and other financial liabilities. Financial liabilities are classified as measured at amortized cost or fair value through profit or loss (“FVTPL”). All financial liabilities are recognized initially at fair value less, in the case of a financial liability not at fair value through profit or loss, directly attributable transaction costs. Financial liabilities at FVTPL are measured at fair value and gains and losses resulting from changes in fair value are recognized in finance income/expenses. The Group only accounts for convertible loans and warrants as a financial liability at FVTPL. All other financial liabilities are subsequently measured at amortized cost. An embedded derivative in a hybrid contract, with a financial liability or a non-financial host, is separated from the host and accounted for as a separate derivative if: the economic characteristics and risks are not closely related to the host; a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and the hybrid contract is not measured at fair value through profit or loss. The assessment whether to separate an embedded derivative is done only once at initial recognition of the hybrid contract. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows. A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. Convertible Loans Convertible loans are bifurcated into a debt component and a conversion right if the latter is an equity instrument. The conversion right of a convertible loan is not an equity instrument but a liability if some conversion features of the loan lead to a conversion into a variable number of shares. In this case it has to be assessed if embedded derivatives need to be separated from the host contract. If this is the case, the remaining host contract is measured at amortized cost and the separated embedded derivative is measured at fair value through profit or loss until the loan is converted into equity or becomes due for repayment. The conversion features and other repayment options provided for in the contract are identified as a combined embedded derivative if they share the same risk exposure and are interdependent. Warrant Liabilities Public warrants are recognized as liabilities in accordance with IFRS 9 at fair value. The liabilities are subject to re-measurement at each balance sheet date until exercised. Private warrants linked to sales targets are recognized within equity as these satisfy the “fix to fix” criterion within IAS 32. 2Significant accounting policies (continued) Fair value measurements IFRS 13 clarifies that fair value is a market price, representing the amount received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measurement, determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier hierarchy is established as follows: Level 1Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2Other than quoted prices included in level 1, inputs that are observable for the asset or liability, either directly or indirectly, for suitability for the full term of the asset or liability. Level 3Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. |
Critical accounting judgements and key sources of estimation uncertainty |
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| Critical accounting judgements and key sources of estimation uncertainty | 3Critical accounting judgments and key sources of estimation uncertainty The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. The Company’s most significant estimates and judgments involve the valuation of the stock-based consideration, including the fair value of common stock and market-based restricted stock units, and the valuations of derivative liabilities including convertible loan notes. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Such estimates often require the selection of appropriate valuation methodologies and models and may involve significant judgment in evaluating ranges of assumptions and financial inputs. Actual results may differ from those estimates under different assumptions, financial inputs, or circumstances. Research and development Capitalization of development costs The business incurs a significant amount of research and development costs. The point in time at which the business begins capitalization of any project is a critical accounting judgment. The business assesses the technology readiness level of its research and development projects, along with the commercialization potential and guidance from the accounting standards to assess whether a particular development project should be capitalized or not. 3Critical accounting judgements and key sources of estimation uncertainty (continued) Costs for internally generated research and development are capitalized only if: the product or process is technically feasible; adequate resources are available to successfully complete the development; the benefits from the assets are demonstrated; the costs attributable to the projects are reliably measured; and an intention exists to produce and market or use the developed product or process and market relevance can be demonstrated. Management has concluded none of the projects currently meet the requirements for capitalization as the market for the use of eVTOL technologies is not yet established or proven, and uncertainties remain regarding the successful completion of this development. If costs relating to a research and development project are not capitalized, they are expensed as incurred and presented in Research and Development expenses in profit or loss (note 7). Research and development tax relief Research and development tax relief supports companies that work on innovative projects in science and technology. HM Revenue & Customs administers two such tax relief schemes: one aimed at small and medium-sized enterprises (SME); and the R&D expenditure credit scheme (RDEC), aimed at large companies and other companies that aren’t eligible for the SME relief. To qualify for tax relief the work must be part of a specific project to make an advance in science or technology. This definition is based on an international standard. The activities must directly contribute to achieving this advance in science or technology through the resolution of scientific or technological uncertainty. Certain indirect activities related to the project are also qualifying where such activities form part of a project but do not directly contribute to the resolution of the scientific or technological uncertainty. An appropriate proportion of the staffing cost can be qualifying expenditure if the employee is only partly directly and actively involved in relevant research and development activity. Management have applied judgment in determining the proportion of research and development staff costs incurred on non-qualifying activities and the extent of administrative staff costs relating to qualifying indirect activities. Share acquisition – business combination under common control There is currently no guidance in IFRS on the accounting treatment for combinations among entities under common control. IAS 8 requires management, if there is no specifically applicable standard or interpretation, to develop a policy that is relevant to the decision-making needs of users and that is reliable. During the year ended December 31, 2021, management made a judgment and applied a method broadly described as predecessor accounting. The principles of predecessor accounting are:
The share acquisition of all the ordinary shares of VAGL during the year ended December 31, 2021 has been considered as a business combination under common control and resulted in VAGL's operations and all its net assets being recognized by the Company at their historical net book values. 3Critical accounting judgements and key sources of estimation uncertainty (continued) Share-based Payments Modification of Incentive Programs In relation to the 2021 Incentive Plan on December 19, 2023 and in relation to Enterprise Management Initiative (EMI) option agreements on March 15, 2022 the Company entered into option agreements with certain employees of the Group as replacement option agreements for share options previously granted over shares in the Company. New equity instruments were granted to eligible employees and on the respective date of award, the Company identified the new option agreements granted as replacement option agreements for the respective option agreements cancelled. As such the granting of these replacement option agreements has been accounted for in the same way as a modification of the original grant of equity instruments. It has been concluded that these modifications increased the fair value of the option agreements granted, measured immediately before and after the modification, and therefore the Company has subsequently included the incremental fair value granted in the measurement of the amount recognized for services received as consideration for the option agreements granted. The incremental fair value granted is the difference between the fair value of the replacement option agreements and the net fair value of the cancelled option agreements, at the date the replacement equity instruments were granted – see note 23 for further details. 2021 Incentive Plan During the year ended December 31, 2022 the Board of Directors adopted the “2021 Incentive Award Plan” in order to facilitate the grant of cash and equity incentives to employees. The share options were given to employees of VAGL in relation to shares in the Company. Under the scheme, the participants are granted options which only vest if the employee remains in employment with the company at the vesting date. Options are vested after the first anniversary of the grant date with 6.25% vesting quarterly until the options are fully vested. The “vesting period” is specified in IFRS 2 as the period during which all of the specified vesting conditions are to be satisfied in order for the employees to be entitled unconditionally to the equity instrument. The options expire at the end of the day before the tenth anniversary of the grant date. Management is required to use an appropriate pricing model to value the issue of equity to employees or those providing similar services. Any charge to the profit and loss account is therefore a function of the chosen pricing model, which is based on a range of assumptions. The fair value of the equity instruments granted was derived using a Black-Scholes Model and based upon actual share price on grant date. Risk free rate has been determined based upon U.S. Government five-year treasury securities. Expected volatility was determined by the historical volatility of the Company since the completion of the business combination. An attrition rate has been determined based upon historical experience. Business Combination During the year ended December 31, 2021, judgments were made in determining the valuation of shares prior to the business combination, including in relation to the issuance of Z-Shares to American Airlines (“American”) on June 10, 2021. For periods prior to the business combination, a probability-weighted model using option pricing methods has been used. For valuations as at or subsequent to the business combination the market value of the publicly traded shares has been used. 3Critical accounting judgements and key sources of estimation uncertainty (continued) The issuance of Class Z-Shares to American The issuance of Class Z-Shares to American was concluded to be a stand-alone transaction. The transaction ensured that American had an equity interest in VAGL in the event that the business combination did not complete and provided an incentive for American to invest in the PIPE. As a transaction in the Company’s own stock this would generally be within scope of IAS 32, however the compensatory nature of the transaction required consideration of other IFRS guidance, specifically IFRS 2. The valuation of the class Z-Shares considered the following substantive terms and features:
Two probability weighted scenarios were considered: a) the Z-Shares convert into to 6,125,000 shares in the Company, subject to lock up and call option, or b) they remain shares of VAGL if the business combination did not complete. During the year ended December 31, 2021 an expense of £16,739 thousand was recognized based on the total fair value of the class Z-Shares issued to American over the total consideration received (£nil). Convertible Loans and Embedded Derivatives The fair value of the Convertible Senior Secured Notes has been estimated using an option pricing model, in accordance with the International Valuation Standards definition of “market value”. This approach is deemed appropriate because:
The Convertible Notes, which have a term from the date of issuance, have a payment-in-kind interest rate of 9.0% (compounding semi-annually), or a cash interest rate of 7.0% (paid semi-annually). The holder of the Convertible Notes may convert them into ordinary shares in the Company at any time at a conversion ratio of 90.9091 per $1,000 principal amount (any payment-in-kind accrual converts at the same ratio). Many of the inputs are not observable and Company specific inputs include the expected probability and timing of specific future events. For detailed information on convertible loans and their embedded derivatives, a description of the valuation model and the input parameters, see note 24. |
Operating segments |
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| Operating segments | 4Operating segments The Group operates as a single operating segment and one reporting segment, being the development and commercialization of eVTOL technology. An operating segment is defined as a component of an entity for which discrete financial information is available and whose results are regularly reviewed by the chief operating decision maker. The Board of Directors review all financial information as a single segment. |
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| Revenue | 5Revenue The analysis of the Group’s revenue for the year is as follows:
All revenue relates to non-core ancillary consultancy services and was provided by Vertical Aerospace Engineering Limited, which was disposed of in October 2021. |
Other operating income |
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| Other operating income | 6Other operating income The analysis of the Group’s other operating income for the year is as follows:
Government grants Government grants relate to amounts receivable from the Aerospace Technology Institute (ATI) relating to the research and development of eVTOL technologies. The grant is made to fund research and development expenditure and is recognized in profit or loss in the period to which the expense it is intended to fund relates. R&D tax relief The Company receives R&D tax relief relating to the UK R&D expenditure credit (RDEC), which is reported within Other operating income. The Company also receives UK small and medium-sized enterprise (SME) R&D tax relief, which is reported within Income tax credit - see note 10 for further details. |
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| Expenses by nature | 7Expenses by nature Included within administrative expenses and research and development expenses are the following expenses.
Staff costs relate primarily to salary and salary - related expenses, including social security and pension contributions. Staff costs exclude share-based payments. Share based payment expense primary relates to both R&D staff and administrative staff and includes the following:
Enterprise Management Incentive and 2021 Incentive Plan The Group operates an Enterprise Management Incentive (“EMI”) scheme, being a tax advantaged share scheme that can be operated by qualifying companies. This scheme was modified during the year ended December 31, 2022 to reflect the revised capital structure of the Company following completion of the Business Combination. As part of this modification, all option holders exchanged their options held in VAGL for newly issued options in the Company. 7Expenses by nature (continued) Also, during the year ended December 31, 2022 the Board of Directors adopted the “2021 Incentive Award Plan” in order to facilitate the grant of cash and equity incentives to employees. The impact of both the modification of the EMI scheme and the adoption of the 2021 Incentive Aware Plan is reflected in these financial statements – see note 23 for further details. Issuance of Z-Shares to American On June 10, 2021, VAGL and American executed a subscription agreement by which American subscribed for 5,804 class Z-Shares of VAGL for total consideration of £0.06. Z-Shares refer to Z ordinary shares of £0.00001 par value that did not carry the right to receive distributions.Upon closing of the Business Combination, American exchanged 100% of its class Z-Shares for 6,125,000 common shares of the Company. Two probability weighted scenarios were considered: a) the Z-Shares convert into to 6,125,000 shares in the Company, subject to lock up and call option, or b) they remain shares of VAGL if the business combination did not complete.
The probability weighted calculation as at June 10, 2021 concluded that Business Combination was likely to be completed, giving a valuation of £16,739 thousand, recognized as an expense and within share premium of VAGL. Capital reorganization The difference in the fair value of the shares issued by the Company over the value of the net monetary assets of Broadstone represented a listing service, recognized as an expense upon consummation of the Business Combination.
A total charge of £84,712 thousand was recognized, which also includes £1,572 thousand in relation to the issuance of private options to MWC. Issuance of shares to suppliers and partners Upon consummation of the Business Combination the Company recognized an expense of £10,389 thousand in relation to the issuance of shares to certain suppliers and partners for net proceeds below market value. |
Finance income/(costs) |
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| Finance income/(costs) | 8Finance income/(costs)
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Basic and diluted loss per share |
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| Basic and diluted loss per share | 9Basic and diluted loss per share Basic earnings per share, in this case a loss per share, is calculated by dividing the loss for the year attributable to ordinary equity holders of the parent by the number of ordinary shares outstanding. Because a net loss for all periods presented has been reported, the diluted loss per share is the same as basic loss per share. Therefore, all potentially dilutive common stock equivalents are anti-dilutive and have been excluded from the calculation of net loss per share. The calculation of loss per share is based on the following data:
On February 22, 2024, the Company entered into the SF Investment Agreement with Imagination Aero, a company wholly owned by Stephen Fitzpatrick, pursuant to which Imagination Aero agreed to purchase, and the Company agreed to issue and sell to Imagination Aero, up to $50 million of (i) newly issued ordinary shares and (ii) 50,000,000 SF Warrants, in each case at purchase prices specified in the Investment Agreement and subject to the terms and conditions set out in the SF Investment Agreement. This transaction would have changed significantly the number of ordinary shares or potential ordinary shares outstanding at the end of the period had this transaction occurred before the end of the reporting period. |
Income tax credit |
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| Income tax credit | 10Income tax credit Tax credited /(charged) in profit or loss:
The tax on loss before tax for the year is the lower (2022: higher) than as the small profits rate of corporation tax in the UK of 19% (2022: 19%). The differences are reconciled below:
From April 1, 2023 there is no longer a single corporation tax rate in the UK for non-ring fence profits. At the Spring Budget 2021, the UK Government announced that the corporation tax main rate for non-ring fence profits would increase to 25% for profits above £250 thousand. A small profits rate of 19% was also announced for companies with profits of £50 thousand or less. Companies with profits between £50 thousand and £250 thousand will pay tax at the main rate, reduced by a marginal relief. This provides a gradual increase in the effective corporation tax rate. No deferred tax assets or liabilities have been recognized as the Group has a surplus of UK tax losses which offset in the same jurisdiction as any deferred tax liabilities. A deferred tax asset for the surplus tax losses has not been recognized as the Group has not yet been profitable and therefore there is uncertainty over the availability of future taxable profits against which to utilize the tax losses. Unused potential tax losses for which no deferred tax asset has been recognized as at December 31, 2023 were estimated as £116,000 thousand (2022: £92,000 thousand). |
Property, plant and equipment |
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| Property, plant and equipment | 11Property, plant and equipment
All property, plant and equipment is attributable to the UK. |
Right of use assets |
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| Right of use assets | 12Right of use assets
The right of use assets are leasehold properties in Bristol and Kemble, UK. Further information on the lease liabilities of these leases can be found in note 18. |
Intangible assets |
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| Intangible assets | 13Intangible assets
The amortization charge of £1,164 thousand (2022: £1,195 thousand) is shown in Administrative expenses. All intangible assets are attributable to the UK and IT software is third party software licenses, which includes perpetual licenses and implementation costs. The carrying amounts of the software was reviewed at the reporting date and management determined that there were no indicators of impairment. Goodwill previously recognized on the acquisition of Vertical Advanced Engineering Ltd in July 2019 was fully impaired during the year ended December 31, 2022. |
Cash and cash equivalents |
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| Cash and cash equivalents | |
| Cash and cash equivalents | 14Cash and cash equivalents Restricted cash is deemed to be restricted by way of a rent guarantee, which the counterparty can call on in the event of default by the Company. Current assets at amortized cost, reported as at December 31, 2022, relate to short term deposits. Such balances are presented as cash equivalents if they have a maturity of three months or less from the date of placing deposits and are repayable with 24 hours’ notice with no loss of interest. All balances are held with financial institutions with a minimum rating of ‘A’. |
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| Trade and other receivables | 15Trade and other receivables
Included within R&D tax relief receivable is £15,838 thousand for R&D tax relief claimed under the HMRC SME Scheme (2022: £nil) and £578k claimed under the HMRC RDEC scheme (2022: £7,212 thousand). Other receivables include the fair value of trade and other receivables classified as financial instruments are disclosed in note 25 Financial instruments. Expected credit losses were not significant in 2023 or 2022. The Group’s exposure to credit and market risks, including impairments and allowances for credit losses, relating to trade and other receivables is disclosed in note 26 Financial risk management and impairment of financial assets. |
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| Share capital and other reserves | 16Share capital and other reserves Allotted, called up and fully paid shares
Ordinary shares have full voting rights, full dividend rights. The Company is authorized to issue 500,000,000 ordinary shares. During the period 7,038,223 ordinary shares were issued as shown below:
In addition to the shares issued above, 1,673,219 options have been exercised as at December 31, 2023 for which ordinary shares are yet to be issued for a nominal value of $0.0001 During the year ended December 31, 2023 share premium increased by £796 thousand as a result of exercise of employee awarded share options. No proceeds remain outstanding as at December 31, 2023. In December 2021 upon consummation of the Business Combination, 9,400,000 ordinary shares at $0.0001 par value were issued to PIPE investors at $10 per share giving rise to share premium of £71,036 thousand. 16Share capital and other reserves (Continued) Nature and purpose of other reserves
The share-based payments reserve is used to recognize the grant date fair value of options issued to employees but not exercised. The translation reserve arises as a result of the retranslation of overseas subsidiaries and the Company's USD denominated balances in consolidated financial statements. The warrant reserve is used to recognize the fair value of warrants issued in exchange for a fixed amount of cash or another financial asset for a fixed number of the Company’s ordinary shares (‘fixed-for-fixed condition’). The merger reserve is used to reflect any difference between the consideration and the book value of net assets acquired as part of a business combination. During 2021, and as part of the business combination, American exchanged its existing shareholding of 5,804 VAGL Z-Shares for 6,125,000 Ordinary Shares in the Company (£16,739 thousand). Additionally, convertible loans issued to Microsoft and Rocket Internet SE (totaling £25,000 thousand) and Stephen Fitzpatrick (£9,000 thousand) were converted into equity. |
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Loans from related parties |
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| Loans from related parties | 17Loans from related parties
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Leases |
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| Leases | 18Leases The balance sheet shows the following amounts relating to lease liabilities:
Lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case, the Company’s incremental borrowing rate is used, being the rate that the Company 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. 18Leases (Continued) Lease liabilities maturity analysis A maturity analysis of lease liabilities based on contractual undiscounted gross cash flow is reported below:
Total cash outflows related to leases Total cash outflows related to leases are presented in the table below:
A reconciliation of the lease creditors is shown below:
Lease creditors relate to property in Bristol and Kemble, UK. The cost, depreciation charge and carrying value for the right-of-use asset is disclosed in note 12 Right of use assets. The interest expense on lease liabilities is disclosed in note 8. Impairment refers to the exercise of contractually available lease break clauses. |
Provisions |
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| Provisions | 19Provisions
The dilapidation provision was recognized as a result of the obligation to return the leased property in Bristol, UK to its original condition at the end of the lease which currently expires in 2028. The provision is recognized at amortized cost with discount unwind being recognized each year. The provision is expected to be utilized at the end of the lease period. |
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| Trade and other payables | 20Trade and other payables Amounts falling due within one year:
Amounts falling due after more than one year:
The Group’s exposure to market and liquidity risks, including maturity analysis, related to trade and other payables is disclosed in note 26 Financial risk management and impairment of financial assets. |
Warrant Liability |
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| Warrant Liability | 21Warrant liabilities Warrants recorded as a liability The following warrants are in issue but not exercised:
Recorded as a liability, the following shows the change in fair value:
21Warrant liabilities (continued) Public warrants may only be exercised for a whole number of shares. The public warrants will expire five years from the consummation of the Business Combination that closed on December 16, 2021, or earlier upon redemption or liquidation. Once the public warrants become exercisable, the Company may redeem the public warrants for redemption at a price of $0.01 per public warrant if the closing price of the common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period. Each public warrant entitles the registered holder to purchase one share of common stock at a price of $11.50 per share. The exercise price and number of common stock issuable upon exercise of the public warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger, or consolidation. The public warrants will not be adjusted for issuances of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the public warrants. On December 15, 2021 Mudrick Capital Management were issued with 4,000,000 warrants, which are exercisable for one ordinary share each, with an exercise price of $11.50 per ordinary share (subject to adjustment). During the year ended December 31, 2022 a total of 2,000,000 warrants issued to MWC were reclassified to be recorded within equity. Warrants recorded in reserves issued to Virgin, American and Avolon On October 29, 2021, the Company entered into the Virgin Atlantic Warrant Instrument, which provides for a warrant over 2,625,000 ordinary Shares issued immediately after the Share Acquisition Closing. These warrants remain outstanding till date. These were valued at £8,558 thousand within other reserves on initial recognition. Immediately after the Share Acquisition Closing, the Company entered into the American Warrant Instrument and the Avolon Warrant Instrument, which provides for a warrant over 2,625,000 Ordinary Shares and 6,378,600 Ordinary Shares respectively,that were both issued and exercised immediately after the Share Acquisition Closing. Avolon were also issued with, and exercised, 3,765,000 commercial warrants by the Company as a result of entering into a firm commitment to place 100 aircraft with a prime carrier. 21Warrant liabilities (continued) A contract asset has not been recognized as the customer has the ability to terminate the contract without penalty and the aircraft subject to the purchase order has not yet been certified, therefore during the year ended December 31, 2021 an expense has been recognized as shown below:
No instruments of a similar nature were issued during the year ended December 31, 2023. |
Pension and other schemes |
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| Pension and other schemes | 22Pension and other schemes Defined contribution pension scheme The Group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the Group to the scheme and amounted to £2,231 thousand (2022: £1,070 thousand). Contributions totaling £15 thousand (2022: £220 thousand) were payable to the scheme at the end of the year and are included in trade and other payables. |
Share-based payments |
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| Share-based payments | 23Share-based payments EMI Scheme The movements in the number of EMI share options during the year were as follows:
The EMI share options were all granted prior to December 31, 2021, after which no new grants were made. The movements in the weighted average exercise price of share options during the year were as follows:
23Share-based payments (continued) The exercise price of share options granted during the prior period was based upon the modification of the scheme to reflect the revised capital structure of the Company. Details of share options outstanding at the end of the year are as follows:
The number of options which were exercisable at December 31, 2023 was 4,956,810 (2022: 11,317,247) with exercise prices ranging from £0.03 to £1.10. The option pricing model used was a Black-Scholes Model and the main inputs are set out in the table below:
Given the lack of share price history, volatility was estimated with reference to other industry competitors, on a listed stock market, with a premium attached for various uncertainties. The total expense recognized by the company during the year in respect of the EMI scheme was £732 thousand (2022: £7,858 thousand). 2021 Incentive Plan Commencing October 1, 2022, employees in the Company were granted options in relation to shares issued by the Company. Under the scheme, participants are granted options which only vest if the employee remains in employment with the company at the vesting date. Such options typically vest from the first anniversary of the grant date, with 6.25% vesting quarterly until the options are fully vested. The options expire at the end of the day before the tenth anniversary of the grant date. The fair value of the equity instruments granted was derived using a Black-Scholes Model and based upon actual share price on grant date. The following inputs were used:
Expected volatility was determined by the historical volatility of the Company since the business combination. The total expense recognized by the company during the year in respect of the 2021 Incentive Plan is £8,084 thousand (2022: £14,512 thousand). 23Share-based payments (continued) The movements in the number of employee share options during the year were as follows:
The number of options outstanding as at the end of the period consists of 8,821,470 nil cost options, 1,145,983 Company Share Option Plan (CSOP) options and 18,518 cost stock options. The movements in the weighted average exercise price of CSOP options during the year were as follows:
During the year the CSOP options granted during the year ended December 31, 2022 were modified by the Company through the issuance of replacement awards that reduced the participants respective exercise price from £6.63 to £0.98. No additional awards were awarded to scheme participants and no changes to the vesting conditions were made. The Company has accounted for the incremental fair value of these replacement awards, determined using a Black-Scholes Model, in addition to the grant-date fair value of the original award. The main inputs are set out in the table below.
Expected volatility was determined by the historical volatility of the Company since the business combination. The incremental fair value expense recognized by the company as a result of the modification is £119 thousand. Details of share options outstanding at the end of the year were as follows:
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| Derivative financial liabilities | 24Derivative financial liabilities During 2021, the Group raised a total of £166,981 thousand, consisting of £25,000 thousand additional convertible loan notes issued to Microsoft Corporation and Rocket Internet SE, which were converted to equity during the year, and £141,981 thousand to Mudrick Capital Management L.P. through the issuance of Convertible Senior Secured Notes. Convertible Senior Secured Notes consists of the following:
On December 15, 2021 Mudrick purchased Convertible Senior Secured Notes of and from the Company in an aggregate principal amount of $200,000 thousand for an aggregate purchase price of $192,000 (the “Purchase Price”). The Convertible Senior Secured Notes are initially convertible into up to 18,181,820 ordinary shares at an initial conversion rate of 90.9091 ordinary shares per $1,000 principal amount subject to adjustments to such rate as provided in the Indenture governing the Convertible Senior Secured Notes. Upon the occurrence of a Fundamental Change, Mudrick has the right, at its option, to require the Company to repurchase for cash all or any portion of its Convertible Senior Secured Notes in principal amounts of $1,000, at a fundamental change repurchase price equal to the principal amount to be repurchased. A fundamental change consists of a change in beneficial owner of the Company; the sale of all or substantially all of the assets or share capital of the Company; dissolution or liquidation of the Company; or NYSE de-listing. The Convertible Senior Secured Notes will bear interest at the rate of 7% per annum if the Company elects to pay interest in cash or 9% per annum if the Company elects to pay interest in-kind, by way of PIK Notes. Interest will be paid semi-annually in arrears. Upon the occurrence of an event of default, an additional 2.00% will be added to the stated interest rate. The Convertible Senior Secured Notes will mature on the fifth anniversary of issuance and will be redeemable at any time by the Company, in whole but not in part, for cash, at par plus, if redeemed before the second anniversary of issuance, certain make-whole premiums. A number of covenants exist in relation to the Company’s obligations with regard to payment of notes and interest; furnishing the trustee with exchange act reports; compliance with Section 13 or 15(d) of the Exchange Act; provision of an annual compliance certificate; relinquishing of the benefit or advantage of, any stay, extension or usury law; acquisition of notes by the Company; permitting any Company subsidiaries to become liable for the notes; limitation on liens securing indebtedness; limitation on asset sales; limitation on transactions with affiliates; limitation on restricted payments; retention of $10 million cash; guarantors; and material IP. No breaches have been identified during the year. Accordingly, cash at bank includes £7,845 thousand subject to the above covenant as at December 31, 2023. In accordance with IFRS 9, this is treated as a hybrid instrument and is designated in entirety as fair value through profit or loss. Therefore, upon initial recognition the Company has not separated the convertible loan into a host liability component (accounted for at amortized cost) and the derivative liability components (accounted for at fair value through profit or loss). The valuation methods and assumptions are shown in note 25. |
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| Financial instruments | 25Financial instruments Financial assets at amortized cost
The fair value of financial assets is based on the expectation of recovery of balances. All balances are expected to be received in full. Trade and other receivables have been categorized in level 2 of the fair value hierarchy. All other balances have been recognized in level 1 of the fair value hierarchy. Financial liabilities at amortized cost:
All balances have been recognized in level 2 of the fair value hierarchy. Financial liabilities at fair value through profit or loss:
Warrants are traded in an active market and are therefore categorized in level 1 of the fair value hierarchy (see note 21). Convertible Senior Secured Notes (both host contract and embedded derivative) are categorized in level 3 of the fair value hierarchy (see note 24). Valuation methods and assumptions Financial liabilities at amortized cost The fair value of trade and other payables is estimated as the present value of future cash flows, discounted at the market rate of interest at the balance sheet date if the effect is material. Due to their short maturities, the fair value of the trade and other payables approximates their book value. The total interest expense for financial liabilities not held at fair value through profit or loss is £199 thousand (2022: £143 thousand). 25Financial instruments (continued) Financial liabilities at fair value through profit or loss The fair value of the Convertible Senior Secured Notes has been estimated using an option pricing model, in accordance with the International Valuation Standards definition of “market value”. The Convertible Notes, which have a term from the date of issuance on December 16, 2021, have a payment-in-kind interest rate of 9.0% (compounding semi-annually), or a cash interest rate of 7.0% (paid semi-annually). The holder of the Convertible Notes may convert them into ordinary shares in the Company at any time at a conversion ratio of 90.9091 per $1,000 principal amount as at December 31, 2023 (any payment-in-kind accrual converts at the same ratio). Option pricing therefore has been utilized to calculate the probability that these options will be in the money, at expiration and assign a dollar value to it. The underlying share price of the Company, exercise price, volatility, interest rate, and time to expiration have been used as inputs into the model to derive the option's theoretical fair value. Company specific inputs include the expected probability and timing of future equity financing, in addition to the probability and timing of a future fundamental change. As of December 31, 2023 an estimated a fair value of £109,291 thousand (2022: £115,247 thousand) was calculated for the convertible note based on the following valuation inputs:
Credit spread was selected such that the fair value of the Convertible Notes reconciles to the total purchase price of $192.0 million based upon the arms' length transaction closing as of December 15, 2021. Risk-free rate is based on the interest rate on US government debt with a to five-year term. Volatility is based upon a reduction on the historical ordinary share volatility rate as operations develop and mature. Historical share price volatility of comparable companies with a three-month to four-year terms have also been considered. Had the stock price traded higher, or higher volatility been assumed then this would have resulted in a higher fair value being attributed to the instrument. An increase in the interest rate, risk - free rate or credit spread applied would result in a reduction in the fair value being attributed to the instrument. A 5-percentage point (or 20%) reduction in credit spread would result in an increase in the fair value of the instrument by approximately £15m. |
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| Financial risk management and impairment of financial assets | 26Financial risk management and impairment of financial assets The Group’s activities expose it to a variety of financial risks: market risk, credit risk, exchange rate risk and liquidity risk. Credit risk and impairment Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from prepayments to suppliers and distributors and deposits with the Group’s bank. Restricted cash as at December 31, 2023 includes £1,700 thousand (2022: £1,700 thousand) in relation to rent guarantees. Included in Cash at bank is £7,845 thousand (2022: £8,306 thousand) that is deemed to contain certain restrictions in order to satisfy certain covenants as at December 31, 2023. Term deposits are presented as cash equivalents if they have a maturity of three months or less from the date of acquisition and are repayable with 24 hours’ notice with no loss of interest. The carrying amount of financial assets represents the maximum credit exposure. Therefore, the maximum exposure to credit risk at the balance sheet date was £872 thousand (2022: £790 thousand) being the total of the carrying amount of financial assets excluding cash, which includes trade receivables and other receivables. All the receivables are with parties in the UK. The allowance account of trade receivables is used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible; at that point the amounts considered irrecoverable are written off against the trade receivables directly. The Group provides for impairment losses based on estimated irrecoverable amounts determined by reference to specific circumstances and the experience of management of debtor default in the industry. On that basis, the loss allowance as at December 31, 2023 and December 31, 2022 was determined as £nil for trade receivables. Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s financial position. The Group’s principal exposure to market risk is foreign exchange rate fluctuations. There are currently no currency forwards, options, or swaps to hedge this exposure. Foreign exchange risk The Group is exposed to foreign exchange risk arising from exposure to various currencies in the ordinary course of business. The Group holds cash in USD, EUR and GBP. The majority of the Group’s trading costs are in GBP; however, the Group also has supply contracts denominated in USD and EUR. The Group holds sufficient cash in USD,EUR and GBP to satisfy its trading costs in each of these currencies. In 2023 and 2022, the Group did not consider foreign exchange rate risk to have a material impact on the financial statements and therefore no sensitivity analysis is presented. The Company may be exposed to material foreign exchange risk in subsequent years because of the significance of the USD denominated Convertible Senior Secured Notes in particular relative to USD deposits and cash held ($20,887 thousand at December 31, 2023), which are expected to decline as expenses are incurred until future funding is secured. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.The Group’s management uses short and long-term cash flow forecasts to manage liquidity risk. Forecasts are supplemented by sensitivity analysis used to assess funding adequacy for at least a 12-month period. The Company manages its cash resources to ensure it has sufficient funds to meet all expected demands as they fall due. 26Financial risk management and impairment of financial assets (continued) Maturity analysis The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting arrangements.
Capital management The Group’s objective when managing capital is to ensure the Group continues as a going concern and grows in a sustainable manner. Given the ongoing development of eVTOL aircraft with minimal revenues, the Group relies on funding raised from the Business Combination transaction and other equity investors. Cash flow forecasting is performed on a regular basis which includes rolling forecasts of the Group’s liquidity requirements to ensure that the Group has sufficient cash to meet operational needs. |
Related party transactions |
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| Related party transactions | 27Related party transactions Key management personnel compensation Key management personnel are the members of the Board and executive officers.
Aggregate gains made on the exercise of share options for the Directors during the year totaled £1,788 thousand (2022: £1,351 thousand). Summary of transactions with other related parties On January 1, 2022 Domhnal Slattery was appointed Chairman of the Board of Directors. Mr. Slattery is the ultimate beneficial owner of Avolon-e. On August 3, 2023 Mr. Slattery resigned from the Board of Directors. As previously disclosed, in January 2022, the Company and Stephen Fitzpatrick entered into an option agreement with Mr. Slattery, pursuant to which Mr. Fitzpatrick granted Mr. Slattery an option to purchase up to an aggregate of 1,175,000 ordinary shares of the Company for an exercise price of $0.0001 per share. 27Related party transactions (continued) On April 21, 2023, Mr. Slattery, Mr. Fitzpatrick and the Company entered into an option termination agreement, pursuant to which the parties agreed to terminate the Call Option in consideration for specified payments of up to an aggregate of $2.5 million to be paid by Mr. Fitzpatrick to Mr. Slattery, subject to certain conditions, including the Company raising additional funds during 2023 and the Company maintaining a minimum pre-order book. On August 2, 2023 Mr. Slattery resigned as chairperson and director, and Michael Flewitt was appointed as chairperson. In connection with this and the option termination agreement referred to previously, $2.25 million was paid by Mr. Fitzpatrick to Mr. Slattery during the year ended December 31, 2023 with $250 thousand remaining conditional only on the Company's maintenance of a minimum pre-order book. Such conditions were satisfied as at December 31, 2023 and this remaining amount was paid by Mr. Fitzpatrick to Mr. Slattery subsequent to the period end. On January 23, 2023, Michael Cervenka resigned from the Board of Directors. On August 3, 2023, Vincent Casey resigned from the Board of Directors. On October 17, 2022, Harry Holt and Marcus Waley-Cohen resigned from the Board of Directors. On September 11, 2023 the Company appointed Stuart Simpson as Chief Financial Officer. On February 22, 2024, the Company entered into the SF Investment Agreement with Imagination Aero, a company wholly owned by Stephen Fitzpatrick, pursuant to which Imagination Aero agreed to purchase, and the Company agreed to issue and sell to Imagination Aero, up to $50 million of (i) newly issued ordinary shares and (ii) 50,000,000 SF Warrants, in each case at purchase prices specified in the Investment Agreement and subject to the terms and conditions set out in the SF Investment Agreement. During the year, Imagination Industries Ltd, a company controlled by Stephen Fitzpatrick provided and charged the Group with services totaling £83 thousand (2022: £83 thousand), of which £nil was outstanding as at December 31, 2023 (December 31, 2022: £14 thousand). |
Ultimate controlling party |
12 Months Ended |
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Dec. 31, 2023 | |
| Ultimate controlling party | |
| Ultimate controlling party | 28Ultimate controlling party The ultimate controlling party is Stephen Fitzpatrick. |
Non adjusting events after the reporting period |
12 Months Ended |
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Dec. 31, 2023 | |
| Non adjusting events after the reporting period | |
| Non adjusting events after the reporting period | 29Non adjusting events after the reporting period On February 22, 2024, the Company entered into the SF Investment Agreement with Imagination Aero, a company wholly owned by Stephen Fitzpatrick, pursuant to which Imagination Aero agreed to purchase, and the Company agreed to issue and sell to Imagination Aero, up to $50 million of (i) newly issued ordinary shares and (ii) 50,000,000 SF Warrants, in each case at purchase prices specified in the Investment Agreement and subject to the terms and conditions set out in the SF Investment Agreement. |
Quarterly Financial Information (Unaudited) |
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| Quarterly Financial Information (Unaudited) | 30Quarterly Financial Information (Unaudited) In March 2024, the Group identified an error related to the classification of the SME tax relief that it generates from HMRC in its statements of income and comprehensive income for the six-month period ended June 30, 2023 and for the three- and nine-month periods ended September 30, 2023. During the periods noted, the tax credit was erroneously classified within other operating income. Whilst the Group experiences recurring unrelieved trading losses, it elects to surrender such losses and, instead, claim a payable tax credit. Accordingly, the SME tax credit should have been classified as an income tax credit rather than as other operating income within the statements of income and comprehensive income. 30Quarterly Financial Information (Unaudited) (continued) The impact of the restatement on the statement of income and comprehensive income and statement of cash flows is presented in the following tables. There is no impact on the prior year financial statements for the year ended December 31, 2022. Additionally, There is no impact on the Unaudited Condensed Consolidated Interim Statements of Financial Position as at June 30, 2023 or September 30, 2023. The following tables present the effects of the changes in presentation of these amounts, compared to the previously reported Unaudited Condensed Consolidated Interim Statements of Income and Comprehensive Income (in thousands, except share and per share amounts):
30Quarterly Financial Information (Unaudited) (continued) The following tables present the effects of the changes in presentation of these cash flows, compared to the previously reported Unaudited Condensed Consolidated Interim Statements of Cash Flows (in thousands):
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Significant accounting policies (Policies) |
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Dec. 31, 2023 | |||||||||||||||||||
| Significant accounting policies | |||||||||||||||||||
| Presentation of these financial statements | Presentation of these financial statements The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). |
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| Basis of preparation | Basis of preparation The consolidated financial statements have been prepared on a historical cost basis, as modified by the revaluation of certain financial assets and liabilities (including derivative financial instruments) which are recognized at fair value through profit or loss. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the company’s accounting policies. The functional currency of the Company is US Dollars (‘$’ or ‘USD’) and the functional currency of VAGL is pounds sterling (‘£’ or ‘GBP’). The financial statements are presented in pounds sterling (‘£’ or ‘GBP’), which is the Group’s presentation currency. Items included in the financial statements are measured using the currency of the primary economic environment in which the entity and its subsidiaries operate (“the functional currency”). Cumulative translation adjustments resulting from translating foreign functional currency financial statements into GBP are reported within other reserves. All amounts are presented in and rounded to the nearest thousand unless otherwise indicated. Certain amounts in prior year financial statements have been reclassified to conform to current year presentation. |
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| Basis of consolidation | Basis of consolidation Vertical Aerospace Ltd is the parent of the Group and has 100% ownership interest and voting rights of Vertical Aerospace Group Limited, which is its only material subsidiary. The consolidated financial statements incorporate the financial positions and the results of operations of the Group. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The financial statements of the subsidiaries are prepared for the same reporting period as the Company using consistent accounting policies. Intercompany transactions, balances and unrealized gains on transactions between Group companies are eliminated. |
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| The capital reorganization | The capital reorganization On December 15, 2021 the Company consummated the capital reorganization whereby the Company acquired all the ordinary shares of VAGL in consideration for the issuance of ordinary shares in the Company, by way of a share for share exchange. At the same time Broadstone Acquisition Corp., (“Broadstone”, a Cayman Islands exempted company), a special purpose acquisition company, was acquired by the Group. This Business Combination is accounted for as a capital reorganization in accordance with IFRS. Under this method of accounting, Broadstone is treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination is treated as the equivalent of VAGL issuing shares at the closing of the Business Combination for the net assets of Broadstone as of the closing date, accompanied by a recapitalization. The reorganization was accounted for within the scope of IFRS 2. Accordingly, during the year ended December 31, 2021 the Company recorded a one-time non-cash expense of £84,712 thousand, recognized as a share listing expense, based on the excess of the fair value of Company shares issued considering a fair value of a share, at $10.68 per share, over the fair value of Broadstone’s identifiable net assets. |
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| Going concern | Going concern Management has prepared a cash flow forecast for the Group and has considered the ability for the Group to continue as a going concern for the foreseeable future, being at least 12 months after approving these financial statements. The Group is currently in the research and development phase of its journey to commercialization of eVTOL technology. Commensurate with being in the development phase, the Group has invested heavily in research to support the development of its aircraft. The Group is not currently generating revenue and has incurred net losses and net cash outflows from operating activities since inception. As of December 31, 2023, the Group had £48.7 million of cash and cash equivalents on hand and a net shareholders’ deficit of £49.8 million. As at the date of this report, the Group had approximately £52 million of cash and cash equivalents on hand. On February 22, 2024 the Company entered into the SF Investment Agreement with Imagination Aero Investments Limited (“Imagination Aero”), a company indirectly owned by Stephen Fitzpatrick, pursuant to which Imagination Aero agreed to purchase, and the Company agreed to issue and sell to Imagination Aero, up to $50 million of (i) newly issued ordinary shares and (ii) 50,000,000 SF Warrants, in each case at purchase prices specified in the Investment Agreement. In accordance with the SF Investment Agreement, on March 13, 2024, the Company received $25 million in gross proceeds in consideration for newly issued ordinary shares and SF Warrants and, in the third quarter of 2024, the Company will, subject to the terms of the SF Investment Agreement, receive up to an additional $25 million in consideration for additional newly issued ordinary shares. Within the next 12 months following the date of this Annual Report, management expects its net cash outflows from operations to be approximately £70 million (after taking into account expected R&D tax receipts and grants of approximately £28 million), which will be used primarily to fund the creation and testing of the prototype aircraft, and to support the certification process . The aforementioned investment is expected to extend the Group’s projected cash runway into the second quarter of 2025, providing the platform for further funding rounds. The Convertible Senior Secured Notes require retention of $10 million cash to avoid a covenant breach, which if breached could result in the note holder seeking repayment of the notes or converting them into equity which could result in the holder taking control of the Group. The Group will need to raise additional capital to fund its future operations and remain as a going concern, before the Group uses all of its existing resources. Although the Group plans to raise additional funds over the course of the next twelve months, there can be no assurance that the Group will be able to obtain additional funding on acceptable terms and thus have sufficient funds to meet the Group’s funding requirements. As a result, the timely completion of financing is important for the Group’s ability to continue as a going concern when it has exhausted its existing resources. The inability to obtain future funding could impact; the Group's financial condition and ability to pursue its business strategies, including being required to delay, reduce or eliminate some of its research and development programs, or being unable to continue operations or continue as a going concern. The dependency on raising additional capital indicates that a material uncertainty exists that may cast significant doubt (or substantial doubt as contemplated by PCAOB standards) on the Group’s ability to continue as a going concern and therefore the Group may be unable to realize the assets and discharge the liabilities in the normal course of business. The consolidated financial statements have been prepared assuming that the Group will continue as a going concern, which contemplates the continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business and do not include any adjustments that would result if the Group were unable to continue as a going concern. |
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| Changes in accounting policy | Changes in accounting policy The Group adopted the following amendments for the first time during the period commencing January 1, 2023:
The amendments listed above did not have any impact on the amounts recognized in prior periods and are not expected to significantly affect the current or future periods. No accounting standards and interpretations that have been published but not effective for periods ending December 31, 2023 have been early adopted by the Group or are expected to have a material impact on the Group. |
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| Government grants | Government grants Government grants are recognized as Other operating income and are recognized in the period when the expense to which the grant relates is incurred. Grants are only recognized when there is a signed grant offer letter or equivalent from the government body and there is reasonable assurance that the Group will be able to satisfy all conditions of the grant. |
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| Benefit from Research and Development Tax Credit | Research and development tax relief As a Group that carries out extensive research and development activities, the Group benefits from UK research and development tax reliefs. Qualifying expenditures largely comprise of R&D staff employment costs, R&D components, consumables, parts, tooling and outsourced contracting support for R&D activities and utilities costs. HM Revenue & Customs administers two such tax relief schemes: one aimed at small and medium-sized enterprises (SME); and the R&D expenditure credit scheme (RDEC), aimed at large companies and other companies that aren’t eligible for the SME relief. SME relief is recorded either as a reduction in its income tax liability or as a credit, whilst credits the Company receives under RDEC scheme claim are classed as taxable income. |
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| Research and development expenses | Research and development expenses Research expenditure is charged to profit or loss in the period in which it occurred. Development expenditure is recognized as an intangible asset when it is probable that the project will generate future economic benefit, considering factors such as technological, commercial and regulatory feasibility. Other development expenditure is charged to profit or loss in the period in which it occurred. Refer to note 3 Critical accounting judgments and key sources of estimation uncertainty for a discussion on the judgment of this classification. The amounts included in research and development expenses include staff costs for staff working directly on research and development projects and for expenses directly attributable to a research project, excluding software costs. |
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| Finance income and costs | Finance income and costs Finance income and costs includes the fair value movement on publicly traded warrants and convertible loan notes. Finance costs includes interest payable and is recognized in profit or loss using the effective interest method. Interest income is recognized in profit or loss as it accrues, using the effective interest method. |
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| Foreign currency transactions and balances | Foreign currency transactions and balances Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies at year - end exchange rates, are recognized in profit or loss. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. Translation differences arising from the consolidation of subsidiaries whose functional currency differs to the presentational currency of the group are recorded within other comprehensive income. The most important exchange rates that have been used in preparing the financial statements are: Closing rate as at December 31, 2023: USD $1 = GBP £0.7845 (2022: £0.8306) Average rate for the year ending December 31, 2023: USD $1 = GBP £0.8042 (2022: £0.8117) Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated. |
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| Tax | Tax Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The group measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses. Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to the same taxation authority. |
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| Property, plant and equipment | Property, plant and equipment Property, plant and equipment is stated at cost, which includes directly attributable incremental costs incurred in their acquisition and installation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Depreciation Depreciation is charged to write off the cost of assets over their estimated useful lives, as follows:
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| Intangible assets | Intangible assets Intangible assets are carried at cost, less accumulated amortization and impairment losses. Computer software licenses acquired for use within the Company are capitalized as an intangible asset on the basis of the costs incurred to acquire and bring to use the specific software. 2Significant accounting policies (continued) Amortization Amortization is provided on intangible assets so as to write off the cost on a straight-line basis, less any estimated residual value, over their expected useful economic life as follows:
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| Business combinations and goodwill | Business combinations and goodwill The purchase method is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued, and liabilities incurred or assumed at the date of exchange. Identifiable assets acquired and liabilities and contingent liabilities assumed are measured initially at their fair values on the date of acquisition. The excess of the cost of acquisition over the fair value of the Group’s share of identifiable net assets, including intangible assets acquired, is recorded as goodwill. If the cost of acquisition is less than the fair value of the Group’s share of net assets of the subsidiary acquired, the difference is recognized directly in profit or loss. Goodwill is stated at cost, less any accumulated impairment losses. Goodwill is tested annually for impairment or when there are indicators of impairment. |
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| Cash and cash equivalents | Cash and cash equivalents Cash at bank is held on deposit with financial institutions located within the United Kingdom and is immediately available. Management has assessed the financial institutions that hold the Company’s cash at bank to be financially sound, with minimal credit risk in existence. Term deposits are presented as cash equivalents if they have a maturity of three months or less from the date of placing deposits and are repayable with 24 hours’ notice with no loss of interest. The cash at bank excludes restricted cash deposits, which are subject to restrictions and are therefore not available for general use. |
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| Restricted cash | Restricted cash The Company presents restricted cash as a separate line item on the balance sheet where this is relevant to an understanding of the Group’s financial position. Restricted cash refers to cash that is held by the Company for specific reasons and is, therefore, not available for immediate ordinary business use. |
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| Short term deposits | Short term deposits Term deposits are presented as cash equivalents if they have a maturity of three months or less from the date of acquisition and are repayable with 24 hours’ notice with no loss of interest. |
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| Trade and other receivables | Trade and other receivables Trade receivables are amounts due from customers for services performed in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets. Trade receivables are recognized initially at the transaction price. They are subsequently measured at amortized cost using the effective interest method, less provision for impairment. A provision for the impairment of trade receivables is established using an expected credit loss model as per the Group’s accounting policy for the impairment of financial assets. Other receivables represent amounts due from parties who are not customers and are measured at amortized cost. |
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| Trade and other payables | Trade and other payables Trade and other payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade and other payables are recognized initially at the transaction price and subsequently measured at amortized cost using the effective interest method. |
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| Borrowings | Borrowings All borrowings are initially recorded at the amount of proceeds received, net of transaction costs. Borrowings are subsequently carried at amortized cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognized as a charge to profit or loss over the period of the relevant borrowing using the effective interest method. Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. |
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| Provisions | Provisions Provisions are recognized when the company has a present obligation (legal or constructive) resulting from a past event, it is probable that the Company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at management’s best estimate of the expenditure required to settle the obligation at the reporting date and are discounted to present value where the effect is material. |
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| Leases | Leases Definition A lease is a contract, or part of a contract, which conveys the right to use an asset or a physically distinct part of an asset (‘the underlying asset’) for a period of time in exchange for consideration. Further, the contract must convey the right to the company to control the asset or a physically distinct portion thereof. A contract is deemed to convey the right to control the underlying asset, if throughout the period of use, the company has the right to:
Initial recognition and measurement The company initially recognizes a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. The lease liability is measured at the present value of the lease payments to be made over the lease term. The lease payments include fixed payments, purchase options at exercise price (where reasonably certain), expected amount of residual value guarantees, termination option penalties (where reasonably certain) and variable lease payments that depend on an index or rate. 2Significant accounting policies (continued) The right of use asset is initially measured at the amount of the lease liability, adjusted for lease prepayments, lease incentives received, the company’s initial direct costs and an estimate of restoration, removal and dismantling costs. Subsequent measurement After the commencement date, the company measures the lease liability by: (a)Increasing the carrying amount to reflect interest on the lease liability; (b)Reducing the carrying amount to reflect the lease payments made; and (c)Re-measuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in substance fixed lease payments or on the occurrence of other specific events. Interest on the lease liability in each period during the lease term is the amount that produces a constant periodic rate of interest on the remaining balance of the lease liability. Interest charges are included in finance costs in profit or loss, unless the costs are included in the carrying amount of another asset applying other applicable standards. Variable lease payments not included in the measurement of the lease liability, are included in operating expenses in the period in which the event or condition that triggers them arises. |
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| Right-of-use assets | Right-of-use assets The related right-of-use asset is accounted for using the cost model in IFRS 16 and depreciated and charged in accordance with the depreciation requirements of IAS 16 Property, Plant and Equipment as disclosed in the accounting policy for Property, Plant and Equipment. Adjustments are made to the carrying value of the right - of - use asset where the lease liability is re-measured in accordance with the above. Right of use assets are tested for impairment in accordance with IAS 36 Impairment of Assets as disclosed in the accounting policy in impairment. Short term and low value leases The company has made an accounting policy election, by class of underlying asset, not to recognize lease assets and lease liabilities for leases with a lease term of 12 months or less (short term leases). The company has made an accounting policy election on a lease-by-lease basis, not to recognize lease assets on leases for which the underlying asset is of low value. Lease payments on short term and low value leases are accounted for on a straight-line bases over the term of the lease or other systematic basis. Short term and low value lease payments are included in operating expenses. |
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| Impairment (non-financial assets) | Impairment (non-financial assets) All assets are reviewed for impairment when there is an indicator of impairment. In addition, goodwill is reviewed for impairment at least annually. An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period. |
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| Share capital and reserves | Share capital and reserves Ordinary shares are classified as equity and share capital is carried at par value. Share capital issued meets the definition of an equity instrument as defined in IAS 32 ‘Financial Instruments’ when the contract evidences a residual interest in the assets of the Company after deducting all of its liabilities. Incremental costs directly attributable to the issue of shares are accounted for as a deduction from consideration received, and are recorded in share premium. Share premium reflects the proceeds received (net of allowable costs) in excess of the par value. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis. |
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| Employee Benefits | Employee Benefits A defined contribution plan is a pension plan under which fixed contributions are paid into a separate entity and has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The contributions are recognized as an employee benefit expense when they are due. For defined contribution plans, contributions are paid into publicly or privately administered pension insurance plans on a mandatory or contractual basis. The contributions are recognized as an employee benefit expense when they are due. Liabilities for wages and salaries, including non-monetary benefits and annual leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service, are recognized in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as accruals and classified as current liabilities in the balance sheet. |
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| Share based payments - Enterprise Management Incentive and 2021 Incentive Plan | Share based payments – Enterprise Management Incentive and 2021 Incentive Plan The Company operates an equity-settled, share-based compensation plan, under which the entity receives services from employees as consideration for equity instruments (share options or shares). The fair value of the employee services received in exchange for the grant of the shares is recognized as an expense. The total amount to be expensed is determined by reference to the fair value of the shares granted: - including any market performance conditions (for example, an entity’s share price); - excluding the impact of any service and non-market performance vesting conditions (for example, remaining an employee of the entity over a specified time period); and - including the impact of any non-vesting conditions. Non-market performance and service conditions are included in the assumptions about the number of shares that are expected to vest. The total expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. In addition, 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 recognizing the expense during the period between service commencement period and grant date. At the end of each reporting period, the Company revises its estimates of the number of shares that are expected to vest based on the non-market vesting conditions. The Company recognizes the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. See note 23 for further details. Other non-current share-based payments were made during 2021 as detailed within the significant accounting policy for the capital reorganization. Further information is included with the critical accounting judgments and key sources of estimation uncertainty. |
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| Financial instruments | Financial instruments Financial instruments are contracts that give rise to a financial asset for one entity and to a financial liability or equity instrument for another entity. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognized on the settlement date.The company recognizes financial assets and financial liabilities in the statement of financial position when, and only when, the company becomes party to the contractual provisions of the financial instrument. Financial assets and financial liabilities are offset, and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously. Financial assets The Group’s financial assets include cash at bank and other financial assets. Financial assets are initially measured at fair value plus, in the case of a financial asset not measured at fair value through profit or loss, transaction costs. Trade receivables are measured at their transaction price. For all financial assets the Group has the objective to hold financial assets in order to collect the contractual cash flows. The contractual terms of all the Group’s financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the outstanding amount. All financial assets are therefore measured at amortized cost. Impairment of financial assets — expected credit losses (“ECL”) All financial assets measured at amortized cost are required to be impaired at initial recognition in the amount of their expected credit loss (“ECL”), based on the difference between the contractual and expected cash flows. The simplification available for financial instruments with a low credit risk (“low credit risk exemption”) is applied as of the reporting date. Factors that can contribute to a low credit risk assessment are debtor specific rating information and related outlooks. The requirement for classification with a low credit risk is regarded to be fulfilled for counterparties that have at least an investment grade rating; in this case there is no need to monitor credit risks for financial instruments with a low credit risk. 2Significant accounting policies (continued) Financial liabilities The Group’s financial liabilities include warrants, lease liabilities, convertible loans, trade and other payables, and other financial liabilities. Financial liabilities are classified as measured at amortized cost or fair value through profit or loss (“FVTPL”). All financial liabilities are recognized initially at fair value less, in the case of a financial liability not at fair value through profit or loss, directly attributable transaction costs. Financial liabilities at FVTPL are measured at fair value and gains and losses resulting from changes in fair value are recognized in finance income/expenses. The Group only accounts for convertible loans and warrants as a financial liability at FVTPL. All other financial liabilities are subsequently measured at amortized cost. An embedded derivative in a hybrid contract, with a financial liability or a non-financial host, is separated from the host and accounted for as a separate derivative if: the economic characteristics and risks are not closely related to the host; a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and the hybrid contract is not measured at fair value through profit or loss. The assessment whether to separate an embedded derivative is done only once at initial recognition of the hybrid contract. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows. A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. Convertible Loans Convertible loans are bifurcated into a debt component and a conversion right if the latter is an equity instrument. The conversion right of a convertible loan is not an equity instrument but a liability if some conversion features of the loan lead to a conversion into a variable number of shares. In this case it has to be assessed if embedded derivatives need to be separated from the host contract. If this is the case, the remaining host contract is measured at amortized cost and the separated embedded derivative is measured at fair value through profit or loss until the loan is converted into equity or becomes due for repayment. The conversion features and other repayment options provided for in the contract are identified as a combined embedded derivative if they share the same risk exposure and are interdependent. Warrant Liabilities Public warrants are recognized as liabilities in accordance with IFRS 9 at fair value. The liabilities are subject to re-measurement at each balance sheet date until exercised. Private warrants linked to sales targets are recognized within equity as these satisfy the “fix to fix” criterion within IAS 32. 2Significant accounting policies (continued) Fair value measurements IFRS 13 clarifies that fair value is a market price, representing the amount received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measurement, determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier hierarchy is established as follows: Level 1Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2Other than quoted prices included in level 1, inputs that are observable for the asset or liability, either directly or indirectly, for suitability for the full term of the asset or liability. Level 3Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. |
Significant accounting policies (Tables) |
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Dec. 31, 2023 | |||||||||||||||||||
| Significant accounting policies | |||||||||||||||||||
| Summary of estimated useful lives of property, plant and equipment |
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| Summary of estimated useful lives of intangible assets |
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Revenue (Tables) |
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Dec. 31, 2023 | |||||||||||||||||||||||||||||
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| Summary of analysis of the group's revenue for the year |
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Other operating income (Tables) |
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| Summary of analysis of the group's other operating income for the year |
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Expenses by nature (Tables) |
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| Summary of administrative, research and development expenses |
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| Summary of share based payment expense |
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| Summary of calculation of fair value of Z-Shares |
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| Summary of capital reorganization |
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Finance income/(costs) (Tables) |
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| Schedule of finance income/(costs) |
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Basic and diluted loss per share (Tables) |
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| Basic and diluted loss per share | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Basic and diluted loss per share |
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Income tax credit (Tables) |
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| Summary of tax credited/(charged) in profit or loss |
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| Summary of differences between corporation tax benefit at standard rate and total income tax credit |
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Property, plant and equipment (Tables) |
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| Property, plant and equipment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of property, plant and equipment |
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Right of use assets (Tables) |
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| Right of use assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of right of use assets |
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Intangible assets (Tables) |
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| Summary of intangible assets |
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Trade and other receivables (Tables) |
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| Summary of trade and other receivables |
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Share capital and other reserves (Tables) |
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| Summary of allotted, called up and fully paid shares |
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| Summary of ordinary shares issued |
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| Summary of nature and purpose of other reserves |
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Loans from related parties (Tables) |
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| Summary of loans from related parties |
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Leases (Tables) |
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| Schedule of lease liabilities by current and non-current classification |
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| Schedule of maturity of lease liabilities |
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| Summary of cash outflows related to leases |
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| Schedule of reconciliation of lease liabilities |
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Provisions (Tables) |
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| Provisions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of provisions |
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Trade and other payables (Tables) |
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| Summary of trade and other payables | Amounts falling due within one year:
Amounts falling due after more than one year:
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Warrant Liability (Tables) |
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| Warrant Liability | |||||||||||||||||||||||||||||||
| Schedule of warrants issued but not exercised |
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| Schedule of change in fair value of warrants |
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||||||||||||||||||||||||||||||
| Schedule of expense |
|
Share-based payments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 Incentive Plan | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based payments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of movements in outstanding share options and weighted average exercise prices |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of share options outstanding |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of fair value of options granted |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of share based compensation payment award inputs option |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EMI Scheme | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based payments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of movements in outstanding share options and weighted average exercise prices |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of share options outstanding |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of fair value of options granted |
|
Derivative financial liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||
| Derivative financial liabilities | |||||||||||||||||||||||||
| Schedule of components of Convertible Senior Secured Notes |
|
Financial instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial instruments | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial assets at amortized cost |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial liabilities at amortized cost and fair value through profit and loss | Financial liabilities at amortized cost:
All balances have been recognized in level 2 of the fair value hierarchy. Financial liabilities at fair value through profit or loss:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of fair value measurement inputs for valuation of convertible loan notes |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial risk management and impairment of financial assets (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial risk management and impairment of financial assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Maturity analysis |
|
Related party transactions (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||
| Key management personnel | |||||||||||||||||||||||||||||||||||||||||
| Related party transactions | |||||||||||||||||||||||||||||||||||||||||
| Schedule of key management personnel compensation |
|
Quarterly Financial Information (Unaudited) (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarterly Financial Information (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Unaudited Condensed Consolidated Interim Statements of Financial Position | The following tables present the effects of the changes in presentation of these amounts, compared to the previously reported Unaudited Condensed Consolidated Interim Statements of Income and Comprehensive Income (in thousands, except share and per share amounts):
The following tables present the effects of the changes in presentation of these cash flows, compared to the previously reported Unaudited Condensed Consolidated Interim Statements of Cash Flows (in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant accounting policies - The capital reorganisation (Details) £ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2021
GBP (£)
|
Dec. 15, 2021
$ / shares
|
|
| Share listing expense | £ | £ 84,712 | ||
| Fair value per share over fair value of net assets acquired | $ / shares | $ 10.68 | ||
| Vertical Aerospace Group Ltd | |||
| Proportion of ownership interest and voting rights held | 100.00% | ||
Significant accounting policies - Foreign currency transactions and balances (Details) - £ / $ |
12 Months Ended | |
|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
| Foreign exchange rates | ||
| Closing rate | 0.7845 | 0.8306 |
| Average rate | 0.8042 | 0.8117 |
Significant accounting policies - Property, plant and equipment (Details) |
12 Months Ended |
|---|---|
Dec. 31, 2023 | |
| Office equipment | |
| Significant accounting policies | |
| Estimated useful lives of property, plant and equipment | 3 years |
| Plant and machinery | |
| Significant accounting policies | |
| Estimated useful lives of property, plant and equipment | 5 years |
| Vehicles | |
| Significant accounting policies | |
| Estimated useful lives of property, plant and equipment | 10 years |
Significant accounting policies - Intangible assets (Details) |
12 Months Ended |
|---|---|
Dec. 31, 2023 | |
| IT software | |
| Significant accounting policies | |
| Expected useful economic life | 3 years |
Operating segments (Details) |
12 Months Ended |
|---|---|
|
Dec. 31, 2023
segment
| |
| Operating segments | |
| Number of reporting segment | 1 |
Revenue (Details) £ in Thousands |
12 Months Ended |
|---|---|
|
Dec. 31, 2021
GBP (£)
| |
| Rendering of engineering consultancy services | |
| Revenue | |
| Rendering of engineering consultancy services | £ 132 |
Other operating income (Details) - GBP (£) £ in Thousands |
9 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Other operating income | ||||
| Government grants | £ 2,956 | £ 1,415 | £ 8,829 | |
| R&D tax relief | 1,370 | 4,496 | 2,388 | |
| Other | 135 | |||
| Total other operating income | £ 2,829 | £ 4,326 | £ 5,911 | £ 11,352 |
Expenses by nature - Share based payment expense (Details) - GBP (£) £ in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Share-based payments | |||
| Expense from share based payment | £ 8,816 | £ 23,189 | £ 111,996 |
| Enterprise Management Initiative | |||
| Share-based payments | |||
| Expense from share based payment | 732 | 7,858 | 156 |
| 2021 Incentive Plan | |||
| Share-based payments | |||
| Expense from share based payment | £ 8,084 | 14,512 | |
| Issuance of Z-Shares to American | |||
| Share-based payments | |||
| Expense from share based payment | 16,739 | ||
| Capital reorganization | |||
| Share-based payments | |||
| Expense from share based payment | 84,712 | ||
| Issuance of PIPE shares to suppliers and partners | |||
| Share-based payments | |||
| Expense from share based payment | £ 819 | £ 10,389 | |
Expenses by nature - Capital reorganization (Details) £ in Thousands |
Dec. 16, 2021
$ / shares
shares
|
Dec. 31, 2023
GBP (£)
|
Dec. 31, 2022
GBP (£)
|
Dec. 31, 2021
GBP (£)
|
|---|---|---|---|---|
| Share-based payments | ||||
| Warrants acquired (15,701,067 warrants at $1.04 per warrant) | £ (907) | £ (4,961) | ||
| Accounts payable acquired | (16,868) | (16,031) | ||
| Foreign exchange differences | £ 1,484 | £ 8,365 | £ (85) | |
| Capital reorganization | ||||
| Share-based payments | ||||
| Market value of 9,203,984 ordinary shares ($10.68 per share) | 74,265 | |||
| Cash acquired | 4,728 | |||
| Warrants acquired (15,701,067 warrants at $1.04 per warrant) | (11,997) | |||
| Accounts payable acquired | (2,289) | |||
| Add net liabilities acquired | 9,558 | |||
| Foreign exchange differences | 671 | |||
| Charge for listing services | £ 83,152 | |||
| Number of ordinary shares issued | shares | 9,203,984 | |||
| Market value per ordinary share | $ / shares | $ 10.68 | |||
| Value per warrant | $ / shares | $ 1.04 | |||
| Number of warrants issued | shares | 15,701,067 |
Finance income/(costs) (Details) - GBP (£) £ in Thousands |
3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Sep. 30, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Finance income/(costs) | ||||||
| In-kind interest on convertible loan notes | £ (16,160) | £ (14,897) | ||||
| Interest on loans from related parties | £ (483) | |||||
| Interest expense on leases | (199) | (143) | (77) | |||
| Foreign exchange loss | (13,338) | |||||
| Other | (101) | (116) | (15) | |||
| Total finance costs | (16,460) | (28,494) | (575) | |||
| Interest income on deposits | 3,356 | 623 | ||||
| Foreign exchange gain | 12,867 | |||||
| Fair value movements on convertible loan notes | 15,705 | 25,723 | 25,761 | |||
| Fair value movements on warrant liabilities | 3,873 | 5,880 | 6,817 | |||
| Other | 12 | |||||
| Total finance income | £ 28,320 | 35,801 | 32,226 | 32,590 | ||
| Net finance income/(costs) | £ (8,121) | £ 24,193 | £ 16,073 | £ 19,341 | £ 3,732 | £ 32,015 |
Basic and diluted loss per share (Details) £ / shares in Units, £ in Thousands, $ in Millions |
12 Months Ended | |||
|---|---|---|---|---|
|
Dec. 31, 2023
GBP (£)
£ / shares
shares
|
Dec. 31, 2022
GBP (£)
£ / shares
shares
|
Dec. 31, 2021
GBP (£)
£ / shares
shares
|
Feb. 22, 2024
USD ($)
shares
|
|
| Basic and diluted loss per share | ||||
| Net loss for the period, basic | £ | £ (59,946) | £ (94,375) | £ (245,224) | |
| Basic loss per share | £ / shares | £ (0.31) | £ (0.53) | £ (1.98) | |
| Diluted loss per share | £ / shares | £ (0.31) | £ (0.53) | £ (1.98) | |
| Weighted average issued shares, basic | shares | 191,250,614 | 179,470,377 | 124,130,921 | |
| Equity investment by related party | Imagination Aero | Maximum | ||||
| Basic and diluted loss per share | ||||
| Investment commitment by related party | $ | $ 50 | |||
| Number of warrants to be issued | shares | 50,000,000 | |||
Income tax credit - Current taxation (Details) - GBP (£) £ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
| Income tax expense | ||
| Standard rate of corporation tax | 19.00% | 19.00% |
| UK | ||
| Income tax expense | ||
| UK corporation tax | £ 22,661 | |
Income tax credit - Reconciliation (Details) - GBP (£) £ in Thousands |
9 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Income tax credit | ||||
| Loss before tax | £ (82,607) | £ (94,375) | £ (245,224) | |
| Corporation tax benefit at standard rate | 15,695 | 17,931 | 46,593 | |
| Decrease in tax credit from effect of expenses not deductible in determining taxable loss | (892) | (418) | (92) | |
| Decrease in tax credit from tax losses for which no deferred tax asset was recognised | (14,804) | £ (17,513) | £ (46,501) | |
| Research and development tax credit | 22,661 | |||
| Total income tax credit | £ 16,600 | £ 22,661 | ||
Income tax credit - Additional information (Details) - GBP (£) £ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Income tax credit | ||
| Unused potential tax losses for which no deferred tax asset is recognized | £ 116,000 | £ 92,000 |
| Deferred tax assets or liabilities recognized | £ 0 |
Right of use assets (Details) - GBP (£) £ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
| Right of use assets | ||
| Balance at the beginning | £ 3,121 | |
| Balance at the end | 2,453 | £ 3,121 |
| Property | ||
| Right of use assets | ||
| Balance at the beginning | 3,121 | |
| Balance at the end | 2,453 | 3,121 |
| Property | Cost or valuation | ||
| Right of use assets | ||
| Balance at the beginning | 4,091 | 2,529 |
| Additions | 183 | 1,562 |
| Balance at the end | 4,274 | 4,091 |
| Property | Accumulated depreciation | ||
| Right of use assets | ||
| Balance at the beginning | (970) | (560) |
| Charge for the year | 658 | 410 |
| Impairment | 193 | |
| Balance at the end | £ (1,821) | £ (970) |
Intangible assets - Amortisation (Details) - GBP (£) £ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
| Administrative expenses | ||
| Intangible assets | ||
| Amortization charge | £ 1,164 | £ 1,195 |
Trade and other receivables (Details) - GBP (£) £ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Disclosure of offsetting of financial assets [line items] | ||
| R&D tax relief receivable | £ 16,416 | £ 7,212 |
| Government grants and VAT receivable | 4,060 | 3,693 |
| Prepayments | 5,062 | 7,169 |
| Other receivables | 875 | 790 |
| Total trade and other receivables | 26,413 | 18,864 |
| HMRC SME Scheme | ||
| Disclosure of offsetting of financial assets [line items] | ||
| R&D tax relief receivable | 15,838 | 0 |
| HMRC RDEC Scheme | ||
| Disclosure of offsetting of financial assets [line items] | ||
| R&D tax relief receivable | £ 578 | £ 7,212 |
Share capital and other reserves - Allotted, called up and fully paid shares (Details) |
Dec. 31, 2023
$ / shares
|
Dec. 31, 2023
GBP (£)
shares
|
Dec. 31, 2022
GBP (£)
shares
|
Dec. 31, 2021
$ / shares
|
|---|---|---|---|---|
| Share capital and reserves | ||||
| Number of shares allotted, called up and fully paid shares | 221,249,244 | 214,211,021 | ||
| Share capital | £ | £ 16,681 | £ 15,952 | ||
| Ordinary Share | ||||
| Share capital and reserves | ||||
| Number of shares authorized | 500,000,000 | |||
| Par value per share | $ / shares | $ 0.0001 | $ 0.0001 | ||
| Number of shares allotted, called up and fully paid shares | 221,249,244 | 214,211,021 | ||
| Share capital | £ | £ 16,681 | £ 15,952 |
Share capital and other reserves - Nature and purpose of other reserves (Details) - GBP (£) £ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|---|
| Share capital and other reserves | |||
| Share based payment reserve | £ 21,140 | £ 22,359 | |
| Foreign currency translation reserve | 1,484 | 8,365 | £ (85) |
| Warrant reserve | 9,292 | 9,292 | 8,558 |
| Merger reserve | 54,841 | 54,841 | 54,841 |
| Other reserves | £ 86,757 | £ 94,857 | £ 63,314 |
Leases - Balance sheet shows the following amounts relating to lease liabilities (Details) - GBP (£) £ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|---|
| Lease liabilities [abstract] | |||
| Long term lease liabilities | £ 1,977 | £ 2,645 | |
| Current lease liabilities | 643 | 516 | |
| Total lease liabilities | £ 2,620 | £ 3,161 | £ 1,942 |
Leases - Lease liabilities maturity analysis (Details) - GBP (£) £ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Disclosure of maturity analysis of operating lease payments [line items] | ||
| Total lease liabilities (undiscounted) | £ 3,172 | £ 3,934 |
| Less than one year | ||
| Disclosure of maturity analysis of operating lease payments [line items] | ||
| Total lease liabilities (undiscounted) | 760 | 668 |
| Within 2 - 5 years | ||
| Disclosure of maturity analysis of operating lease payments [line items] | ||
| Total lease liabilities (undiscounted) | 1,916 | 2,371 |
| More than 5 years | ||
| Disclosure of maturity analysis of operating lease payments [line items] | ||
| Total lease liabilities (undiscounted) | £ 496 | £ 895 |
Leases - Cash outflows related to leases (Details) - GBP (£) £ in Thousands |
6 Months Ended | 9 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|---|
Jun. 30, 2023 |
Sep. 30, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Leases | |||||
| Right of use assets | £ 349 | £ 448 | £ 669 | £ 484 | £ 240 |
| Short term leases | 224 | 190 | |||
| Total cash outflow | £ 893 | £ 674 | |||
Leases - Reconciliation of the finance lease creditors (Details) - GBP (£) £ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
| Reconciliation of undiscounted lease payments to net investment in finance lease [abstract] | ||
| Beginning balance | £ 3,161 | £ 1,942 |
| Additions | 182 | 1,560 |
| Reversal of lease liability | (193) | |
| Interest element of payments to finance lease creditors | (199) | (142) |
| Principal element of payments to finance lease creditors | (530) | (342) |
| Interest expense of leases | 199 | 143 |
| Ending balance | £ 2,620 | £ 3,161 |
Provisions (Details) - GBP (£) £ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
| Disclosure of other provisions [line items] | ||
| As at January 1 | £ 365 | £ 95 |
| Additions | 76 | 264 |
| Reversals | (192) | |
| Unwinding of discount | 7 | 6 |
| As at December 31 | 256 | 365 |
| Tax and social security | ||
| Disclosure of other provisions [line items] | ||
| As at January 1 | 264 | |
| Additions | 76 | 264 |
| Reversals | (192) | |
| As at December 31 | 148 | 264 |
| Dilapidation Provision | ||
| Disclosure of other provisions [line items] | ||
| As at January 1 | 101 | 95 |
| Unwinding of discount | 7 | 6 |
| As at December 31 | £ 108 | £ 101 |
Trade and other payables (Details) - GBP (£) £ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Disclosure of information about terms and conditions of hedging instruments and how they affect future cash flows [line items] | ||
| Outstanding defined contribution pension costs | £ 15 | £ 220 |
| Less than one year | ||
| Disclosure of information about terms and conditions of hedging instruments and how they affect future cash flows [line items] | ||
| Trade payables | 3,726 | 4,454 |
| Accrued expenses | 12,146 | 10,500 |
| Social security and other taxes | 981 | 857 |
| Outstanding defined contribution pension costs | 15 | 220 |
| Total trade and other payables | 16,868 | 16,031 |
| After more than one year | ||
| Disclosure of information about terms and conditions of hedging instruments and how they affect future cash flows [line items] | ||
| Deferred fees and charges | £ 3,922 | £ 4,153 |
Warrant Liability - Warrants were issued but not exercised (Details) - shares |
12 Months Ended | |
|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
| Warrants | ||
| Outstanding, end of period | 19,264,935 | 19,264,935 |
| Public Warrants | ||
| Warrants | ||
| Outstanding, end of period | 15,264,935 | 15,264,935 |
| Mudrick Warrants | ||
| Warrants | ||
| Outstanding, end of period | 4,000,000 | 4,000,000 |
Warrant Liability - Change in fair value (Details) - GBP (£) £ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
| Warrant Liability | ||
| Beginning balance | £ 4,961 | £ 10,730 |
| Change in fair value recognized in profit or loss | (3,873) | (5,880) |
| Reclassification to equity | (1,010) | |
| Foreign exchange movements | (181) | 1,121 |
| Ending balance | £ 907 | £ 4,961 |
Warrant Liability - Additional information (Details) |
12 Months Ended | ||
|---|---|---|---|
|
Dec. 31, 2023
D
$ / shares
shares
|
Dec. 31, 2022
shares
|
Dec. 15, 2021
$ / shares
shares
|
|
| Mudrick Capital Management | |||
| Warrants | |||
| Number of shares entitled per public warrant | shares | 1 | ||
| Number of warrants issued | shares | 2,000,000 | 4,000,000 | |
| Exercise price of warrants | $ 11.50 | ||
| Public Warrants | |||
| Warrants | |||
| Warrants expiration period | 5 years | ||
| Redemption price | $ 0.01 | ||
| Trigger price | $ 18.00 | ||
| Threshold trading days for redemption of warrants | D | 20 | ||
| Threshold consecutive trading days for redemption of warrants | D | 30 | ||
| Number of shares entitled per public warrant | shares | 1 | ||
| Exercise price of warrants | $ 11.50 |
Pension and other schemes (Details) - GBP (£) £ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
| Pension and other schemes | ||
| Pension cost, contributions payable | £ 2,231 | £ 1,070 |
| Outstanding defined contribution pension costs | £ 15 | £ 220 |
Share-based payments - Movements in the number of share options (Details) - Options |
12 Months Ended | 24 Months Ended | |
|---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2023 |
|
| 2021 Incentive Plan | |||
| Share-based payments | |||
| Outstanding, start of period | 4,355,669 | ||
| Granted during the period | 7,370,598 | 5,012,495 | |
| Forfeited during the period | (715,773) | (656,826) | |
| Exercised during the period | (1,024,523) | ||
| Outstanding, end of period | 9,985,971 | 4,355,669 | 9,985,971 |
| EMI Scheme | |||
| Share-based payments | |||
| Outstanding, start of period | 21,011,084 | 19,670 | 19,670 |
| Granted during the period | 0 | ||
| Grant arising due to scheme modification | 23,213,933 | ||
| Forfeited during the period | (1,621,848) | (1,576,948) | |
| Exercised during the period | (7,686,919) | (645,571) | |
| Outstanding, end of period | 11,702,317 | 21,011,084 | 11,702,317 |
Share-based payments - Share options outstanding (Details) |
12 Months Ended | ||
|---|---|---|---|
|
Dec. 31, 2023
Options
£ / shares
|
Dec. 31, 2022
Options
£ / shares
|
Dec. 31, 2021
Options
£ / shares
|
|
| 2021 Incentive Plan | |||
| Share-based payments | |||
| Weighted average exercise price | £ / shares | £ 0.12 | £ 1.44 | |
| Number of share options outstanding | Options | 9,985,971 | 4,355,669 | |
| Expected weighted average remaining vesting period (years) | 3 years 3 months 18 days | 3 years 2 months 12 days | |
| EMI Scheme | |||
| Share-based payments | |||
| Weighted average exercise price | £ / shares | £ 0.25 | £ 0.19 | £ 308.06 |
| Number of share options outstanding | Options | 11,702,317 | 21,011,084 | 19,670 |
| Expected weighted average remaining vesting period (years) | 1 year 9 months 10 days | 2 years 1 month 20 days | |
Share-based payments - Fair value of options granted (Details) - £ / shares |
12 Months Ended | |
|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
| 2021 Incentive Plan | ||
| Share-based payments | ||
| Average share price at date of grant | £ 0.95 | £ 7.77 |
| Expected volatility (%) | 89.58% | 84.30% |
| Risk-free interest rate (%) | 4.78% | 4.09% |
| EMI Scheme | ||
| Share-based payments | ||
| Average share price at date of grant | £ 5.07 | |
| Expected volatility (%) | 50.00% | |
| Vesting period in years | 2 years 9 months | |
| Risk-free interest rate (%) | 1.25% | |
| Company share option plan options | ||
| Share-based payments | ||
| Average share price at date of grant | £ 0.62 | |
| Expected volatility (%) | 90.00% | |
| Vesting period in years | 2 years 7 months 17 days | |
| Risk-free interest rate (%) | 4.80% | |
Derivative financial liabilities - Convertible Senior Secured Notes (Details) £ in Thousands |
12 Months Ended |
|---|---|
|
Dec. 31, 2023
GBP (£)
| |
| Financial liabilities | |
| Beginning balance | £ 143,918 |
| Ending balance | 133,864 |
| Financial liabilities at fair value through profit and loss category | Convertible senior secured notes | |
| Financial liabilities | |
| Beginning balance | 115,247 |
| Fair value movements | (15,705) |
| In-kind interest paid | 16,160 |
| Exchange differences on translation | (6,411) |
| Ending balance | £ 109,291 |
Financial instruments - Financial assets at amortized cost (Details) - Financial assets at amortized cost - GBP (£) £ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Financial assets | ||
| Carrying value | £ 71,731 | £ 136,208 |
| Fair value | 71,731 | 136,208 |
| Cash and cash equivalents | ||
| Financial assets | ||
| Carrying value | 48,680 | 62,927 |
| Fair value | 48,680 | 62,927 |
| Short term deposits | ||
| Financial assets | ||
| Carrying value | 59,886 | |
| Fair value | 59,886 | |
| Trade and other receivables | ||
| Financial assets | ||
| Carrying value | 21,351 | 11,695 |
| Fair value | 21,351 | 11,695 |
| Restricted cash | ||
| Financial assets | ||
| Carrying value | 1,700 | 1,700 |
| Fair value | £ 1,700 | £ 1,700 |
Financial instruments - Financial liabilities at amortized cost (Details) - Financial liabilities at amortised cost - GBP (£) £ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Financial liabilities | ||
| Carrying Value | £ 22,414 | £ 22,268 |
| Fair Value | 22,414 | 22,268 |
| Trade and other payables | ||
| Financial liabilities | ||
| Carrying Value | 19,794 | 19,107 |
| Fair Value | 19,794 | 19,107 |
| Lease liabilities | ||
| Financial liabilities | ||
| Carrying Value | 2,620 | 3,161 |
| Fair Value | £ 2,620 | £ 3,161 |
Financial instruments - Financial liabilities at fair value through profit or loss (Details) - Financial liabilities at fair value through profit and loss category - GBP (£) £ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Financial instruments | ||
| Carrying Value | £ 110,198 | £ 120,208 |
| Fair Value | 110,198 | 120,208 |
| Convertible senior secured notes | ||
| Financial instruments | ||
| Carrying Value | 109,291 | 115,247 |
| Fair Value | 109,291 | 115,247 |
| Warrant liabilities | ||
| Financial instruments | ||
| Carrying Value | 907 | 4,961 |
| Fair Value | £ 907 | £ 4,961 |
Financial instruments - Fair value of the convertible senior secured notes (Details) - Convertible senior secured notes - Financial liabilities at fair value through profit and loss category - Level 3 |
Dec. 31, 2023
Y
|
Dec. 31, 2022
Y
|
|---|---|---|
| Interest rate | ||
| Financial instruments | ||
| Significant unobservable input liabilities | 0.090 | 0.090 |
| Credit spread | ||
| Financial instruments | ||
| Significant unobservable input liabilities | 0.2638 | 0.2750 |
| Expected life | ||
| Financial instruments | ||
| Significant unobservable input liabilities | 4.0 | 3.0 |
| Risk-free rate | ||
| Financial instruments | ||
| Significant unobservable input liabilities | 0.041 | 0.040 |
| Dividend yield | ||
| Financial instruments | ||
| Significant unobservable input liabilities | 0 | 0 |
| Volatility | ||
| Financial instruments | ||
| Significant unobservable input liabilities | 0.650 | 0.900 |
Financial risk management and impairment of financial assets - Credit risk and impairment (Details) £ in Thousands, $ in Thousands |
Dec. 31, 2023
GBP (£)
|
Dec. 31, 2023
USD ($)
|
Dec. 31, 2022
GBP (£)
|
|---|---|---|---|
| Financial risk management and impairment of financial assets | |||
| Restricted cash | £ 7,845 | ||
| Restricted cash in relation to rent guarantees | |||
| Financial risk management and impairment of financial assets | |||
| Restricted cash | 1,700 | £ 1,700 | |
| Restricted cash included in cash at bank in order to satisfy certain covenants | |||
| Financial risk management and impairment of financial assets | |||
| Restricted cash | 7,845 | 8,306 | |
| USD | |||
| Financial risk management and impairment of financial assets | |||
| Balances with banks | $ | $ 20,887 | ||
| Credit risk | |||
| Financial risk management and impairment of financial assets | |||
| Maximum exposure to credit risk | 872 | 790 | |
| Credit risk | Trade receivables | Accumulated impairment | |||
| Financial risk management and impairment of financial assets | |||
| Financial assets | £ 0 | £ 0 |
Related party transactions - Key management personnel compensation (Details) - GBP (£) £ in Thousands |
12 Months Ended | |
|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
| Related party transactions | ||
| Salaries and other short term employee benefits | £ 883 | £ 1,266 |
| Payments to defined contribution pension schemes | 1 | 12 |
| Share-based payment expense | 795 | 144 |
| Termination benefits | 368 | |
| Key management compensation | £ 1,679 | £ 1,790 |
Non adjusting events after the reporting period (Details) - Equity investment by related party - Imagination Aero - Maximum $ in Millions |
Feb. 22, 2024
USD ($)
shares
|
|---|---|
| Disclosure Of Non adjusting Events After Reporting Period [Line Items] | |
| Investment commitment by related party | $ | $ 50 |
| Number of warrants to be issued | shares | 50,000,000 |