Chill Brands Group PLC

Annual Report and Consolidated Financial Statements

For the year ended 31 March 2024

CHILL BRANDS GROUP PLC

(“Chill”, the “Company”, or the “Group”)

ANNUAL REPORT AND CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2024

Company Registered Number: 09309241

Table of Contents

Page

1 Officers and Professional Advisers

2 Chief Executive’s Review and Strategic Report

11 Chief Executive’s Financial Review

15 Chief Executive’s Review and Strategic Report – Other Matters

28 Key Personnel

31 Directors’ Report

Directors’ Remuneration Report

Directors’ Responsibilities Statement

47 Independent Auditor’s Report to the Members of Chill Brands Group PLC

55 Consolidated Statement of Comprehensive Income

56 Consolidated Statement of Financial Position

57 Company Statement of Financial Position

58 Consolidated Statement of Changes in Equity

59 Company Statement of Changes in Equity

60 Consolidated Statement of Cash Flows

61 Company Statement of Cash Flows

62 Notes to the Financial Statements

Officers and Professional Advisers

Directors

Callum Sommerton

Aditya Chathli

Graham Duncan

Nicholas Tulloch

Company Secretary MSP Corporate Services Limited

Registered Office

Eastcastle House

27/28 Eastcastle Street

London W1W 8DH

Independent Auditor PKF Littlejohn LLP

Statutory Auditor

15 Westferry Circus

London E14 4HD

Brokers and Financial

Advisors

Allenby Capital Limited

5 St Helen’s Place

London EC3A 6AB

Solicitors DMH Stallard LLP

6 New Street Square

New Fetter Lane

London EC4A 3BF

Registrars

Share Registrars Limited

The Courtyard

17 West Street

Farnham

Surrey GU9 7DR

Company Website www.chillbrandsgroup.com

Product Websites

www.chill.com

CHIEF EXECUTIVE’S REVIEW AND STRATEGIC REPORT

Introduction

I am pleased to present the Group’s results for the financial year ended 31 March 2024 (“FY24” or the “Period”), a

year marked by substantial operational progress against the backdrop of challenging conditions in both the capital

and consumer markets.

During the Period, Chill Brands achieved a number of significant commercial milestones, most notably the launch

of our Chill ZERO nicotine-free vape products in the UK market. This initiative drove a material increase in revenue

from £82,840 to over £1.9 million, while reducing our overall loss from £4.2 million to £3.4 million.

While the progress made during the financial period has been somewhat overshadowed by proposed regulatory

changes in vaping and corporate challenges after the year end, the advancements made by the Company demonstrate

our ability to secure distribution in a competitive consumer market and deliver in-demand products that generate

value for the Company and its shareholders.

Our pivot from a prior focus on CBD products to our current base of business exemplifies the Company's

adaptability in the face of market changes. This proven ability to evolve while maintaining strong retail relationships

gives us confidence that we can continue to utilise our sales and distribution capabilities to take advantage of trends

in highly regulated market segments. When operating in a complex regulatory environment we will need to rely on

that same agility in identifying and pursuing emerging opportunities to enable us to adapt to future market dynamics.

This is particularly true following a period of regulatory change for the Company’s core range of vaping products

and a year of corporate and legal hurdles. After its recent history, the Company must now focus on creating long-

term value by strengthening its distribution network, establishing a scalable platform that remains a constant asset

irrespective of future shifts in product category or consumer trends.

I acknowledge that this report comes much later than the customary reporting timeframe, however this delay reflects

a period of significant upheaval both during and after the financial year. The Company has faced and overcome

substantial challenges during this time, emerging as a resilient organisation with strengthened governance through

the involvement and input of experienced capital markets professionals who now populate the Board. In navigating

this turbulent period, we have developed robust foundations for future growth. This report therefore aims to provide

a comprehensive overview of the events and factors that shaped our year, their impact on our business, and

importantly, how they inform our strategy and prospects going forward.

Overview of the Financial Year

The Period began with the foundations already laid for us to execute on our strategy which had developed during

the previous year from a focus on CBD products towards an interest in the wider wellness and alternative products

market. Prior to FY24, we had successfully launched our first-generation 600-puff nicotine-free disposable vapes

in the US market, where our team had started to establish distribution channels. February 2023 marked our first step

into marketplace operations, with the introduction of our inaugural third-party brand products on Chill.com,

cementing our commitment to developing a comprehensive e-commerce platform.

We entered the year well-capitalised, supported by new investors focused on providing growth capital for our twin

objectives: the development and commercialisation of our vape products, and resourcing marketing initiatives to

drive relevant consumer traffic to the Chill.com e-commerce website.

A significant milestone was reached through our partnership with The Vaping Group to develop our UK distribution

model. This collaboration included the establishment of a dedicated field sales team to build a network of

independent retail stores, complemented by comprehensive marketing support – key operational areas that were

taken back in-house during the final quarter of 2024. Relative to our status as a fledgling brand with a new product,

our Chill ZERO range quickly gained traction following its UK launch in August 2023, with our focus on nicotine-

free products filling a largely overlooked market niche.

This early success paved the way for the rapid expansion of our UK retail presence. In October 2023, just months

after launch, we secured listings in high-footfall WH Smith travel stores, providing valuable exposure for building

brand recognition. This was swiftly followed by our launch on Amazon.co.uk and the commencement of

distribution partnerships securing the sale of our products into Morrisons supermarket and convenience stores, as

well as Rontec forecourt locations operating under various major fuel retail brands including Shell, BP and Esso.

By the end of the Period, our products were available in thousands of retail locations across the UK.

Despite a successful launch and strong retail distribution partnerships, our first foray into the UK vape market came

amidst tempestuous conditions in the domestic vaping industry. After months of adverse media coverage largely

focused on illegitimate operators and their non-compliant products and activities, the landscape shifted dramatically

in January 2024 when the UK government announced its intention to ban disposable vape products. This effectively

paused our efforts to expand our distribution network with additional major retailers, as many procurement

departments stopped to reassess their approach to the industry. These circumstances were also partly responsible

for delays in the receipt of a proportion of funds owed to the Company in connection with sales made into major

distribution channels, a portion of which in the spirit of prudence we have chosen to make a provision for in these

accounts despite our confidence that those outstanding funds remain recoverable. The majority of the remaining

balance due to the Company was remitted between April and October 2024, and the Company continues to work

with its distribution partners to create a path forward that will recover residual values owed while maintaining as

broad a route to market as possible in an industry that has been rocked by regulatory change.

In light of the apparent trajectory of the UK and European vaping industry, we began to make early-stage plans

relating to the development and release of new non-disposable vaping products. During this same period, the

Company made good headway with distribution into Smoker Friendly Stores, which despite reduced sales compared

to previous periods established a market for our vaping products in the United States where no comparable

restrictions on disposable devices existed.

Parallel to our vaping business, we continued to develop the Chill.com e-commerce marketplace. What began with

a single third-party brand, Mad Tasty, in February 2023, has grown into a diverse collection of both new, emerging

and market-leading brands from the US and UK. Our product offering expanded well beyond our original CBD

focus to encompass the broader wellness category including nootropics, nutritional supplements, sleep aids, and

various other products.

The Period also saw important developments in our capital structure, including the completion of the Company's

prospectus and the conversion of CLNs into shares, as planned since our 2022 fundraising. Despite challenging

market conditions and negative media sentiment surrounding vaping, we engaged in additional fundraising activity

in January 2024, demonstrating continued investor confidence in our strategic direction.

Vaping: Market Entry and Operational Progress

The Company's expansion into the vaping industry was an organic development stemming from our endeavour to

create and launch a product focused on tobacco and smoking cessation, while ensuring compliance with regulations

in our primary markets.

In early 2023, the Company launched a nicotine-free disposable vape product in the United States, featuring a 2-

milliliter tank delivering roughly 600 puffs per device, with three initial flavours. The device was designed to be

legally sold in the United States without the need for a costly Premarket Tobacco Product Application (PMTA),

which would have been required for a device containing nicotine or capable of having nicotine added to it.

Subsequently, the Company developed devices for the UK market, which were also nicotine-free disposable vapes.

These included a 4-milliliter 1500 puff device and a 7-milliliter 3000 puff device, both available in five flavours.

The high puff count of these products was a unique selling point since a product containing nicotine would be

confined to a tank size of 2-milliliters, limiting it to delivering roughly 600 puffs.

The UK launch of our Chill ZERO nicotine-free vape products in August 2023 marked a pivotal moment for the

Group. Through strategic partnerships and focused execution, we rapidly secured distribution across significant

retail channels including WH Smith travel stores, Morrisons supermarkets and convenience stores, and Rontec

forecourt stores. This swift market penetration demonstrates both the appeal of our products and the effectiveness

of our aggressive commercial strategy when applied to a high-growth product category.

The UK vaping market is valued at more than £1.7 billion (although some statistics place its value much higher)

and comprises over 4.5 million users. Within this market, and in a relatively short space of time, Chill ZERO has

established itself as a leading nicotine-free brand available in mainstream retail channels. This validates our strategic

focus on this growing but niche segment and, while sales of nicotine-free products represent a small proportion of

the overall vaping market, there is a clear demand for them both from retailers and their customers.

While demonstrating the potential of our business model, the rapid expansion of our distribution network required

significant capital investment, particularly in the form of slotting fees and the resourcing of personnel and marketing

collateral. We operate in a highly competitive landscape alongside long-standing businesses, some with over a

century of market presence and in particular the traditional ‘big’ tobacco companies who possess substantial

resources to deploy in this sector. Despite our comparably limited reach, we have successfully carved out our

position through a unique proposition, focused strategy and efficient execution.

As explained below, the regulatory changes that coincided with the launch of our products into mainstream retail

channels created a highly disrupted market environment, leaving us without sufficient time in stores during orderly

market conditions to secure material re-orders from major distributors. Upon news of the regulatory shift, retailers

rapidly switched their focus toward damage limitation and evaluating their next steps beyond disposables, leaving

limited time for the usual commercial follow-through. Despite this, we have maintained our retail relationships and,

importantly, established the Company as a credible operator within this tier of national distribution. This experience

has broadened our commercial reach and, while any future retail rollout will come with its own costs of renewal -

particularly in major supermarket channels - we believe we are now better positioned to secure wide-scale retail

distribution in future product cycles.

Looking ahead, we consider it important to engage consumers earlier in their tobacco cessation journey, which may

necessitate the launch of products that contain nicotine. As regulators tighten controls on the marketing and

positioning of vaping and nicotine products, it is also clear that brand name and visual design alone may no longer

be sufficient. To compete effectively, we will need to deliver something genuinely novel, whether in format,

formulation, or function. We remain confident in our ability to do so, but this will require time, investment, and

careful execution. For this reason, we have continued to diversify the Company’s interests by working closely with

partners and customers, allowing us to support their growth through our established network while simultaneously

generating value for our own business.

Regulatory Changes and Retail Trends

The wider vaping market has experienced significant turbulence, particularly following media attention and

regulatory scrutiny regarding disposable vapes. The UK government's January 2024 announcement of proposed

restrictions on disposable vapes presents both challenges and opportunities. We have been proactive in our response,

focusing on the development of compliant, reusable vape products and seeking collaboration opportunities with

external brands to broaden our exposure both to vape products and other products in the fast-moving consumer

goods category. We have also expanded our product portfolio to include vape e-liquid products that were first

launched during March 2025.

The regulatory landscape continues to evolve, with the UK government's announced ban on disposable vaping

having taken effect on 1 June 2025. While this will impact our legacy generation of Chill ZERO products, we

continue to advance our plans to distribute new rechargeable, reusable pod devices. We have also developed the

aforementioned nicotine-free e-liquids specifically targeted at specialist vape stores and their consumers. Our aim

is to ensure that our product offering can translate into a wide and varied distribution network spanning both the

mass market of supermarkets and convenience stores, along with more specialised channels such as vape stores and

pharmacies. We have already commenced sales of new, fully compliant rechargeable pod-based vaping products

and expect to continually expand and evolve the range of products we distribute in this category, whether through

the release of our own proprietary innovations or in collaboration with trusted partners.

We have broken into the market, gaining recognition among trade customers who understand our focus on cessation

products that provide low or no nicotine strength options. Direct conversations with some retailers reveal that we

are their preferred choice for zero nicotine products, which are increasingly seen as an essential part of a

comprehensive vaping range. This foundation of brand awareness provides a solid platform for us to continue

building our name and expanding our offering.

We have observed significant shifts in both retailer preferences and consumer behaviour during the Period. The

market has seen increasing demand for larger multi-pod devices, alongside a surge in the popularity of oral nicotine

pouches. While we anticipate that the pouch market will likely face regulatory scrutiny in the near future, we see

significant opportunity within this segment. Rather than developing our own products in this category, we intend to

explore these opportunities through partnerships with third-party brands who can benefit from exposure to our

growing network and the expertise of our sales team. This approach aligns with our broader strategy of leveraging

our distribution capabilities and market presence to create new revenue stream, which I will elaborate on further

later in this report.

Looking ahead, we will continue to focus on vaping products, particularly in the low and no-nicotine segment.

There are interesting parallels to be drawn with the evolution of the low and no-alcohol beverage market. Not long

ago, alcohol-free alternatives were dismissed as an uncommercial fad, yet today they command significant shelf

space in every major supermarket, with dedicated aisle sections and premium positioning. This transformation

reflects a broader societal shift towards healthier lifestyle choices and increased consumer demand for alternatives

to traditional products. We see similar potential in the nicotine-free vaping category. Just as consumers now actively

seek out alcohol-free options for social occasions or as part of a balanced lifestyle, we believe there is growing

demand for no and low-nicotine alternatives in the vaping sector. This parallel gives us confidence in our strategic

focus and the long-term commercial viability of our position in this ever-changing market.

Chill.com – Developing an Online Wellness Destination

During the Period, we made significant progress in expanding our e-commerce marketplace on Chill.com, growing

from a single third-party brand in February 2023 to now hosting more than 65 brands offering hundreds of products.

This expansion in brand partnerships reflects a clear market demand for additional digital sales channels from both

wellness brands from market leaders to ambitious start-ups, all seeking to improve their reach through exposure to

new consumers.

The evolution of our marketplace strategy is rooted in our experience of the market dynamics of consumer products.

Our origins as a CBD company provided valuable insights into how wellness trends operate cyclically, with various

ingredients and product types moving in and out of consumer favour. CBD, often cited as a wellness trend,

exemplifies this pattern. While we maintain our belief in CBD's potential and continue to value this market segment,

we recognise that building a business solely exposed to any one such cyclical trend does not provide a foundation

for reliable, sustained growth. These trends are often characterised by speculative bubbles, leading to volatile boom-

and-bust cycles that can be challenging for product manufacturers and brands. Our marketplace approach represents

a more balanced strategy - rather than committing significant resources to product development across multiple

categories, we can provide a platform that showcases a diverse range of wellness products and brands. This model

allows us to capitalise on emerging trends and benefit from consumer interest in various wellness categories, while

significantly reducing our exposure to the inherent risks of product development and inventory management. When

certain ingredients or product types gain popularity, our marketplace can quickly adapt to meet demand, and when

trends subside, we can pivot without the burden of obsolete stock or stranded development costs.

The willingness of brands to join our platform proves out our marketplace model, but also highlights the potential

we must now work to realise. A successful e-commerce marketplace requires several key elements: a diverse and

quality product selection, which we have now established; an intuitive user experience; efficient fulfilment

capabilities; and most critically, a steady flow of engaged consumers. While we have accomplished the first of these

elements, we recognise that attracting and retaining customers requires significantly more focus and resources.

Our marketplace currently operates on a dropshipping model, where brands integrate with our e-commerce website.

When an order is placed, we process the payment and route the order to the respective brand for fulfilment, taking

a commission from the sale. This approach is functional and allows us to offer a wide range of products without

holding large inventories. However, the dropshipping model has its drawbacks. Leading marketplaces like Amazon

operate their own fulfilment centres, giving them control over many aspects of the consumer experience and

associated logistics. They can ship orders containing multiple products from different brands in a single box with

the same courier, saving on shipping fees. They also control packaging standards and simplify the returns process.

Recognising these advantages, we are exploring ways to achieve a similar approach to fulfilment on a smaller scale.

This will likely involve setting up our own fulfilment facilities, where brands would need to allocate inventory.

While this approach offers greater control over the consumer experience, it also comes at a higher cost than

dropshipping. Moreover, it requires brands to buy into the platform on a deeper level, as they would need to allocate

inventory to our facility without us purchasing it. Despite these challenges, we believe that this model could enhance

our service quality and provide a more cohesive and efficient experience for our customers.

We must also be candid in acknowledging that while we have succeeded in creating an attractive platform for

brands, we have not yet achieved the level of consumer engagement necessary for the marketplace to reach its full

potential. Simply waiting for organic growth will not be sufficient to achieve our ambitions for the platform. This

requires dedicated attention and appropriate resource allocation to drive meaningful traffic and conversion.

Historically, our e-commerce marketing efforts have been hampered by material restrictions from major platforms

regarding the promotion of CBD products, vaping products, and other regulated items. These constraints have

limited our ability to deploy traditional digital marketing techniques effectively. However, we have now identified

viable solutions to overcome these challenges and have developed a comprehensive marketing strategy that we are

in the process of implementing.

Looking ahead, we are committed to resourcing a full range of marketing activities to drive traffic and engagement.

This includes a renewed focus on search engine optimisation, an expanded content creation programme designed

to attract and inform potential customers, and targeted pay-per-click advertising campaigns to reach relevant

audiences.

We are also developing programmes to drive awareness and engagement with Chill.com by partnering with gyms,

offices, and other similar venues to provide membership benefits. During the final quarter of the 2024 calendar

year, the Company engaged with over 100 branches of one of the UK’s leading gym brands, each of which was

keen to offer exclusive, limited-time Chill.com discounts to their members. While these initiatives will require

ongoing investment, we view this expenditure as critical to unlocking the value of our digital asset and establishing

Chill.com as a destination for wellness consumers.

As I commented in our annual financial report for the period ending 31 March 2023, the growth and development

of the Chill.com marketplace remains a long-term endeavour. If scale (both of user numbers and sales volumes) can

be achieved, the project has vast potential. Goop, the luxury lifestyle and health marketplace, reportedly generated

£81,000 of sales in 2011 but has since increased that figure to many millions of pounds each year. While celebrity

endorsement has certainly been a factor in their success, it is clear that there are other parts of the formula that we

can and should follow. It is incumbent on us to chase growth by enticing more relevant consumers to our site by

delivering more engaging content, more frequently and across more platforms than we have done in the past.

Events After the Financial Period

While the Financial Period itself was highly significant for Chill Brands, the dramatic events in the months

immediately following have been extremely tasking on the Company and its investors.

The chain of events commenced in mid-April 2024, when the Company received a requisition letter from its largest

shareholder, Jonathan Swann, seeking by way of shareholder vote to remove Antonio Russo and Trevor Taylor, and

to instate two new directors in their place.

Following the announcement of this requisition notice, the Board at the time took the decision to suspend me as the

Company’s CEO pending an investigation into allegations relating to the use of inside information. This

investigation ultimately determined that the allegations made were unsubstantiated and absolved me of wrongdoing,

but not before both the Company and I had attracted significant adverse media attention and coverage. I was

reinstated on 4 June 2024 after a new Board of Directors had been constituted following a shareholder vote which

resulted in the removal of our previous Chief Commercial Officer Antonio Russo and Chief Operating Officer

Trevor Taylor, and the appointment of Non-Executive Chairman Harry Chathli and Finance Director Graham

Duncan.

The Company’s shares were suspended from trading on 3 June 2024, a day prior to the General Meeting and the

constitution of the new Board. This suspension was at the Company’s request as the directors actively managing

the business at the time were unable to provide the market with an accurate update regarding the Company's trading

status. This suspension continued as the newly constituted Board could not issue a trading update until such time as

it had resumed control of, and access to, the Company’s bank accounts and financial records – thereby enabling the

Board to provide an accurate update regarding the Company’s financial and trading position. This was a protracted

process as a result of the Company’s legacy banking providers determining that they would no longer offer banking

facilities to the business. This prevented the Company from issuing payments to vendors and effectively halted most

trading activities for a period of time. While the Company has ultimately been able to secure alternative banking

facilities, these challenges delayed our ability to continue with the audit process and publish our annual financial

report for the Period by the required reporting deadline of 31 July 2024. The suspension of the Company’s shares

has therefore been ongoing pending the completion and publication of our 2024 annual financial report.

Logistical issues relating to the transfer of company management and third-party providers were not the only

challenges for the new Board. It was identified that a transfer of the Company’s largest asset, the Chill.com domain,

had been effected alongside the transfer of other cash assets prior to the 3 June 2024 General Meeting and the

constitution of the new Board. This discovery prompted the Company to instruct leading US Counsel to commence

legal action in the U.S. District Court for the District of Colorado on 24 July 2024. The legal action concluded in

December 2024 with an out-of-court settlement between the Company and its former Directors, Antonio Russo and

Trevor Taylor. As a result, the Chill.com domain and related trademarks are now under the Company’s ownership

and management.

I do not have any further useful comment to provide on this matter. It is in everyone's best interest to move forward

after this challenging episode, and we are pleased to have avoided a more protracted legal battle. The Company can

now focus its time and resources on the development of its business. What’s done is done, and we can now channel

our efforts towards future growth and opportunities.

New Opportunities and a Refined Operating Model

Since my reinstatement, I have been working diligently with the new Board of Directors to put the Company back

on an even footing. Our internal challenges, coupled with the volatility in our industry over the past 18 months,

have given us significant pause for thought regarding our future direction. This period has prompted us to reassess

and redefine our corporate governance structure and our broader vision for the business, ensuring that we are well-

positioned to develop Chill Brands into a performing asset that delivers value for all shareholders.

On a corporate level, we have elected a non-executive Chairman in Harry Chathli and re-established audit,

remuneration, and nominations committees. We have also welcomed the Company’s former CEO from 2019-2020,

Nick Tulloch, to the Board as an independent non-executive Director, following the resignations of Eric Schrader

and Scott Thompson on 7 June 2024 and 30 September 2024 respectively. Nick brings with him a wealth of listed

company and capital markets experience, alongside knowledge of the Company’s history. We have also been

working to establish new, more robust financial controls, bookkeeping, and financial reporting functions under the

guidance of our finance director, Graham Duncan.

There have also been major operational changes for Chill Brands. One of the most notable adjustments is that we

have taken our UK sales team in-house, having previously relied on The Vaping Group to provide us with a swift

route to market and activation of our new brand. This strategic move allows us to save costs by hiring directly and

grants us complete control over this critical human resource. Given the extensive changes and shocks to the vaping

industry in recent times, having an in-house team enables us to scale flexibly in line with market conditions, ensuring

that we can respond swiftly and efficiently to industry dynamics.

Furthermore, this transition has opened up new income opportunities for Chill Brands. As highlighted in this report,

wellness trends are cyclical, bringing a constant influx of new products and active ingredients that require effective

exposure and distribution to succeed. This need is as pertinent in the retail world as it is online, where our solution

is the development of the chill.com marketplace. Just as they may struggle with generating online sales, many

brands often lack the resources, knowledge, and connections to establish a solid retail distribution footprint. Having

launched our own brand in the UK market, and in a challenging and often controversial industry, we have developed

substantial expertise and networks. We can now leverage this asset by contracting with other brands, providing

them with sales personnel, contacts, and a route to market for a monthly fee. This not only provides recurring

revenue to Chill Brands but also offers the potential upside of commissions from sales generated through strong

performance. Our catalogue approach, where our sales personnel build a distribution network into which multiple

complementary products can be sold, allows us to offer this service at an affordable rate, making it accessible to a

wide range of brands who may not be in a position to resource a dedicated sales team.

We have achieved early traction with this new business activity, securing a number of clients, including leading

suppliers of oral nicotine pouches, a European brand launching a line of sugar-free energy drinks, and a prominent

vape e-liquid brand. Our ongoing efforts to develop our pipeline and attract additional potential clients are very

promising and we expect this business-to-business revenue stream to make a substantial contribution to the

Company’s financial growth. Partnering with third party brands also provides an opportunity to diversify our

offering, helping to ensure that we are not solely exposed to the unpredictability of the vape market.

Besides enabling us to identify and pursue new opportunities, this period of reflection has also provided us a chance

to assess non-performing elements of the business. The Company now intends to shutter its US retail operations

while it focuses on developing its core business. The vaping market in the United States is particularly tough due

to the patchwork of regulations and the approach taken by the US Food and Drug Administration, which imposes

the obligation of a costly PMTA on any brand wishing to sell a product containing, or even capable of containing,

nicotine. These difficulties have a major impact on the industry, making it difficult for businesses to plan for the

future. This has led to the closure of many, including the Company’s primary US distributor based in Denver.

However, there are shoots of hope as a number of legal challenges to the status quo have been mounted, including

some reaching the Supreme Court. We are actively working to identify distribution partners in the US and, on a

longer-term basis, operators for a business unit there. In the meantime, however, we will focus on development in

the UK and Europe – believing it better not to stretch our limited resources over multiple territories and in doing so

deny each the full and proper attention they deserve.

Strategic Outlook

The 2024 financial period was marked by substantial growth for Chill Brands, despite the turbulence faced in its

core market of vaping and corporate challenges post-year-end. Once again, the business has faced adversity and

external headwinds during the critical early stages of its journey into the consumer goods sector. The Company has

had to continually reinvent itself to survive and remain relevant, rather than finding itself able to rely on the

compounding effect of slow but stable growth. This would not have been possible without the continued support of

investors, and I believe the Company’s adaptive approach can be viewed positively. This ability to pivot has allowed

the Company to remain trading and pick up various assets and strengths along the way. During this Period, the

Company developed UK business infrastructure and built a robust retail network that will enable it to capitalise on

opportunities relating to current and future vaping products while diversifying into other categories of consumer

goods.

Looking ahead, Chill Brands is now positioned with three clear divisions, each with distinct growth potential:

1. Chill-Branded Vaping Products: our focus within this remains the development and distribution of compliant,

reusable vape products and e-liquids for the UK market – both under our own brand and those of external

partners. This builds on our successful entry into the vaping sector while adapting to evolving regulatory

requirements.

2. Chill.com E-Commerce Marketplace: With renewed focus on driving traffic and user engagement, our

Chill.com platform represents a significant opportunity for growth after the onboarding of a multitude of brands

during and after the Period. Enhanced marketing efforts, including paid advertising initiatives, aim to unlock

the full potential of this digital asset.

3. Third-Party Brand Distribution: Leveraging our established retail relationships and sales expertise, we are

expanding our role as a services business, representing other brands in the UK market. This division has already

experienced promising growth into categories such as oral nicotine pouches and energy drinks, providing an

additional revenue stream without incurring the costs of developing and launching these products ourselves.

This summary distils the focus of our business into three core areas, yet the Company is more complex than it may

appear due to the legacy left by its previous iterations. Until relatively recently, we were still addressing

administrative matters related to the former oil and gas operations of Highlands Natural Resources, while also

concluding the feminised hemp seed project initiated in 2019, when CBD-rich hemp seeds were in high demand.

While addressing these legacy issues has at times been difficult, it has also brought some associated benefits.

Notably, during the latter part of 2024, after the end of the Period, the Company reached an agreement with a former

project partner for the return of more than $40,000. These funds, connected with maturing bonds issued in relation

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to natural resources sites in Colorado, provided welcome financial support. Despite these legacy issues, we remain

determined to push ahead with a more focused and streamlined approach as outlined in this report.

Although challenges remain, the entire Chill Brands team remains driven to develop the Company into the scaled,

stable business that it ought to be. We are committed to growth and will execute on the focus areas I have outlined

in this report while continuing to adapt to the ever-changing market landscape. We are dedicated to building a robust

and resilient company that can weather industry fluctuations and emerge stronger, ensuring long-term success for

our stakeholders.

I would like to extend my gratitude to our shareholders for their ongoing support and look forward to brighter times

ahead.

Callum Sommerton

Chief Executive Officer – Chill Brands Group PLC

EXECUTIVE’S FINANCIAL REVIEW

During the Period, the Group concentrated on the launch, marketing, and distribution of its nicotine-free vape

products. Alongside this, efforts were made to develop an online e-commerce marketplace for wellness products

from third-party brands, accessible on the Company’s the Chill.com website. The Company significantly ramped

up its distribution efforts during this time, particularly in the UK, where it established critical sales and distribution

infrastructure for the first time.

The Group recorded a reduced loss for the year of £3,370,293 (2023: £4,312,132), a 22% decrease that is largely

reflective of Chill Brands’ improved sales performance during the Period. The Period also saw the Group generate

a gross profit on the sales made of £472,810 (2023 loss: £206,859). While the Group made an overall loss, the

Period was the first since the year ending 31 March 2020 in which the Group was able to achieve a gross profit on

the sale of its products.

The loss recorded during the Period can be primarily attributed to the ongoing costs associated with the Company’s

operations and maintaining its listed status. Additionally, significant investments were made in the development of

new business activities, particularly the establishment of distribution networks in the US and UK for the Company’s

nicotine-free vape products. These strategic expenditures are essential for positioning the Company for future

growth, despite their impact on the current financial results.

During the year, the Company undertook significant commercial activities that reflected a strategic shift away from

its legacy interests in CBD towards the sale of vape products. The first batch of these products was introduced in

the US at the end of March 2023, just prior to the reporting period. This launch laid the groundwork for the

Company's future endeavours in the vape product market and demonstrated that there was a demand amongst

relevant consumers for nicotine-free alternatives to more standard vape products containing nicotine. Throughout

the Period the Company continued to expand the distribution of its vape products in the US, including through

Smoker Friendly stores. The Company supported the launch of its product with promotional offers to secure

consumer trial, along with visits to individual retail stores and regional meetings of convenience location operators

to educate them on the products and facilitate informed conversations with consumers. As explained elsewhere in

this report, and due to a combination of factors including the corporate challenges that have limited our operational

capacity in the US and the need to allocate resources where they are likely to generate the greatest return, the

Company expects to place less strategic emphasis on the US market in the near term.

In May 2023, the Company extended its reach by entering into an agreement with The Vaping Group to provide

comprehensive sales and distribution services in anticipation of a UK launch of the nicotine-free vape products.

This collaboration was crucial as it enabled the Company to leverage a specialised UK field sales team, secure

warehousing, and efficient fulfilment of both online and offline orders. The Vaping Group's focus on the

independent convenience store market aligned with the Company’s objective to penetrate this specific retail sector.

The Vape Group also provided marketing services, including email marketing campaigns, representation at trade

shows, and advertising in digital and print media. In Q4 2024, the Company brought its UK sales function in-house

to build on the groundwork laid by The Vaping Group. Establishing these capabilities internally has since enabled

the Company to diversify its operations by offering sales and distribution services to third-party brands, further

leveraging its growing retail network.

The importance of having a turnkey launch cannot be overstated. This partnership allowed the Company to swiftly

establish its UK operations, a feat that would have been challenging given that the Company had not previously

developed its own UK trading infrastructure. Historically, the Company's commercial focus had been almost

entirely on the US market. The Vaping Group's infrastructure enabled the Company to stand up the UK operation

efficiently and effectively, ensuring that the nicotine-free vape products were introduced smoothly to the market

upon their launch in August 2023.

As a result of these efforts, the Company was able to quickly gain a foothold in the UK market, developing

distribution networks that increased its store distribution footprint from a fresh start in August to more than 2,365

committed retail stores in less than a year. This included arrangements with the leading distributor of vaping

products, Phoenix 2 Retail, which saw the Company’s products sold into WH Smith travel stores, Morrisons stores,

and Rontec forecourt stores. Each of these landmark retail accounts came with an associated slotting fee, as is

typical for brands entering established high street retail stores. Sales into these major retailers accounted for the

majority of sales made during the Period, during which the Company delivered the products. The regulatory changes

and resulting market upheaval in the vaping sector contributed to delays in the receipt of payments from certain

distribution partners, particularly in relation to sales made through major retail channels. These disruptions created

uncertainty across the supply chain and led some partners to adopt a more cautious financial posture. The majority

of the outstanding amounts due to the Company were remitted between April and October 2024. The Company

continues to work collaboratively with its distribution partners to recover residual balances while preserving and

strengthening its access to key routes to market during a period of ongoing industry transition.

Revenue

During the Period the Company recorded revenues of £1,908,020 (2023: £82,840), a 23-fold increase. The material

increase in revenue is largely a result of the sales of the Company’s nicotine-free disposable vape products, which

were launched in the UK during August 2023. A significant portion of this revenue comes from sales into WH

Smith's travel stores, Morrisons supermarkets and convenience stores, and Rontec-operated forecourt stores – all of

which were facilitated through a distributor relationship with Phoenix Wholesale and Distribution. Additionally,

sales were made into independent retail stores including convenience stores, pharmacies and specialist vape shops.

In the US, the Company's nicotine-free vape products were predominantly sold into Smoker Friendly stores. While

there were online sales both through Amazon.co.uk and the Company’s own chill.com website, they did not

constitute a material part of the Company’s overall revenue during the year.

Certain trade receivables remain outstanding following the end of the Period. Due to recent changes in the vaping

industry, which have impacted distributors and retailers, the Company has agreed to offer extended and flexible

payment arrangements to these remaining debtors. The Company maintains confidence in the recoverability of these

trade receivables and believes that the adjusted payment terms will facilitate their eventual collection along with a

positive ongoing relationship with these key distribution partners.

In line with the Company’s commitment to prudent financial management and in accordance with applicable

accounting standards, an expected credit loss provision of £180,000 has been recognised in respect of outstanding

receivables from a major distribution partner. While the total balance outstanding is circa £361,000, management

believes that, on balance, the full amount remains recoverable. The provision reflects the extended period since the

original due date and the Company's desire to present a conservative and responsible financial position. The

Company continues to engage constructively with the counterparty, and discussions regarding future strategic

cooperation are ongoing.

Due to changes in the vaping regulatory environment and events that occurred after the end of the financial year, as

outlined in this report, the Company will record considerably lower revenues in the financial year ending 31 March

2025. Going forward, the Company’s revenue will be generated by three divisions: sales of own-branded vaping

products, sales of products from third-party brands on the chill.com e-commerce marketplace, and fees for the

provision of sales services to clients.

Expenditure

During the year, the Group's administrative expenses rose to £3,523,507 (2023: £2,636,115). This increase in

expenses was primarily driven by expanded trading activity, particularly in the UK, where the Company’s

commercial activities were almost entirely established during the Period. The launch of new products, the

development of distribution channels, and the marketing efforts necessary to introduce these products to the market

significantly contributed to the rise in costs and correlate to an associated increase in revenue.

These costs reflect payments to vendors and expenses associated with the establishment of distribution channels,

including payments for the development and management of a sales team by The Vaping Group, slotting fees for

major retail accounts, and logistics. The majority of these additional costs relate to the launch and distribution of

the Company’s nicotine-free vaping products. At the same time, there was a reduction in costs relating to the

marketing and distribution of legacy CBD products as the Group’s focus shifted away from that category.

In line with an increase in sales to £1,908,020 (2023: £82,840) there was an associated increase in the cost of sales

to £1,040,053 (2023: £61,798). This increase reflects the costs of inventory acquisition, freight, warehousing and

other matters relating to the sale of the Company’s nicotine-free vape products.

As is common among businesses engaged in the retail of consumer goods, the Company faced cash flow challenges

throughout the Period. This was primarily due to the necessity of funding the large-scale rollout of its products,

which involved the payment of slotting fees and inventory procurement, while selling to major retail stores under

typical payment terms that often result in a delay of more than 90 days between the ordering of inventory by the

Company and receipt of payment from distributors and retailers. These conditions require meticulous financial

planning and careful liquidity management to ensure the Company sustains its operations and continues to grow its

market presence.

During the financial year commencing on 1 April 2024, the Group incurred costs relating to the corporate events

outlined in the Chief Executive’s Review and Strategic Report, including significant legal costs. Going forward, the

Company will incur costs relating to the maintenance of its listing on the London Stock Exchange and the

development of its business, primarily in the UK.

Liquidity, Cash and Cash Equivalents

At the year end, the Group held £1,315,289 at the bank (2023: £3,767,426).

Funding and Going Concern

During the Period the Group’s activities were resourced by fundraising activity immediately prior to the

commencement of the financial year. On 16 March 2023, during the prior period, the Company raised £560,000

before costs from the issue of 16,000,000 new ordinary shares at a price of 3.5 pence per share. On 31 March 2023,

and as announced on 3 April 2023, the Company raised a further £2,600,000 (before costs). This was comprised of

a subscription for 25,000,000 new ordinary shares at a price of 4 pence per share (for a total of £1,000,000) and the

issue of unsecured convertible loan notes with a value of £1,600,000. The convertible loan notes originally carried

a coupon of 12% per annum for a term of three years from the date of issue on 31 March 2023 and were convertible

into Ordinary Shares at 8 pence per share. The first annual interest payment due in respect of the convertible loan

notes was capitalised into new ordinary shares as part of fundraising activity in January 2024, as explained below.

As announced on 23 May 2025, the Company and lender mutually agreed to vary the terms of these convertible

loan notes such that their maturity date is extended to 15 May 2028, and their conversion price is amended to 2.15

pence per ordinary share, resulting in a potential issuance of up to 74,418,605 conversion shares.

On 20 December 2023, the Company announced that it had secured a supply chain debt financing facility from its

major shareholder, Mr Jonathan Swann. The unsecured debt facility had a total credit limit of £1,000,000 and carried

a monthly interest rate of 2% on funds drawn down. The funds were drawn to finance inventory acquisition and

commercial slotting agreements connected with the sale of the Company’s nicotine-free vape products into major

retailers, as announced in December 2023. Liabilities accrued in connection with the debt facility were capitalised

in line with fundraising activity in January 2024, as explained further below.

On 26 January 2024, the Company announced a new equity fundraising of approximately £2,400,000. This

consisted of a placing of 28,553,800 new ordinary shares and a subscription for 3,466,700 new ordinary shares for

a total of 32,000,000 shares, each priced at 3.75 pence and raising in aggregated £1,200,018 (before costs).

Concurrently, the Company capitalised £1,200,000 of liabilities to Mr Jonathan Swann, comprising the first annual

interest payment accrued against the convertible loan notes issued to Mr Swann in April 2023, and the £1,000,000

debt facility provided in December 2023 along with interest accrued against that facility.

As a result of capitalising Mr Swann’s debt financing facility, the Company was able to use the proceeds from the

sale of its nicotine-free vape products into major UK retailers for working capital purposes. This strategic decision

meant that the funds did not need to be earmarked for the repayment of the previously accrued liabilities linked to

Mr Swann's facility. Consequently, the Company could use these financial resources for general working capital

purposes. During the financial year beginning 1 April 2024, the Company’s operations have been sustained by a

combination of the funds raised in January 2024 and payments from retailers, wholesalers and distributors

connected with the sale of its nicotine-free vape products.

In the time since the end of the Period, the Company’s operations were primarily supported through revenue

generated from commercial activities undertaken in the prior financial year, supplemented by funds raised in a

financing round completed in January 2024. This period required particularly careful cash management, as the

Company’s financial position was impacted by the significant legal and professional costs incurred in relation to

corporate disputes and associated matters.

Looking ahead to the financial year commencing 1 April 2025, the Board expects the Company’s financial

requirements to be met through further capital raising activities. On 23 May, the Company announced that it had

raised £1 million from subscriptions for the issue of convertible loan notes carrying an annual interest rate of 10%,

a three-year maturity, and convertible into ordinary shares at a price of 1.5 pence per share. In addition, investors

will receive warrants attached to the CLNs, priced in line with the volume-weighted average price (VWAP) of the

Company's shares at the time of each drawdown.

The Board considers that the capital provided under the current financing facility will be sufficient to support the

continuation of the Company’s core commercial operations throughout the financial year ending 31 March 2026.

Nevertheless, it may be necessary for the Company to raise additional funding in the future in order to remain viable

as a going concern, particularly in the event of unforeseen operational costs or if strategic growth opportunities are

to be pursued.

Based on the Company’s demonstrated ability to secure financial backing from both new and existing investors in

recent periods, and the continued support of major shareholders, the Directors are confident in their ability to raise

further funds if and when required.

However, there remains a material uncertainty which may cast significant doubt on the Company’s ability to

continue as a going concern. The ability of the Company to continue its operations is dependent on the successful

raising of additional funding as and when required. These conditions indicate the existence of a material uncertainty

which may cast significant doubt upon the Company’s ability to continue as a going concern and, therefore, it may

be unable to realise its assets and discharge its liabilities in the normal course of business.

Notwithstanding this material uncertainty, after making enquiries and considering the options available to the

Company, the Directors have a reasonable expectation that the Company has adequate resources to continue in

operational existence for at least 12 months from the date of approval of these financial statements. Accordingly,

the Directors continue to adopt the going concern basis of accounting in preparing these financial statements.

CHIEF EXECUTIVE’S REVIEW AND STRATEGIC REPORT – OTHER MATTERS

Board Changes and Operational Composition

On 4 June 2024, the Group announced a reorganisation of its executive management team with the removal of the

Company’s Chief Commercial Officer, Antonio Russo, and Chief Operating Officer, Trevor Taylor, and the

appointment of Aditya Chathli and Graham Duncan as Non-Executive Chairman and Chief Finance Officer,

respectively. On 7 June 2024, Eric Schrader resigned as a Non-Executive Director and Nick Tulloch was appointed

as a Non-Executive Director on 5 September 2024.

Development of New Compliant Vaping Products

During the Period and in the months since, the UK government announced significant changes to the regulation of

vapes in the UK. In particular, a ban on the sale of disposable vape products was implemented from 1 June 2025.

Disposable vape products are defined as products that are either not rechargeable, not refillable, or neither

rechargeable nor refillable. In practice, this means that for a vape product to be considered compliant for sale in the

UK after 1 June 2025, users must be able to recharge the battery, replace the coil (the heating element that enables

the device to produce vapour), and refill the device either with e-liquid or a new replacement pod.

This regulatory change directly impacts the Company's Chill ZERO range of nicotine-free disposable vapes. Despite

the 7ml 3,000 puff products being capable of recharging via a USB-C charging port, they are not refillable. As a

result, the Company is phasing out its existing range of Chill ZERO disposable vape products.

In response to these regulatory changes, as announced in December 2024, the Company launched a new range of

nicotine-free e-liquid products in March 2025. These products are predominantly intended to be sold into specialist

vape shops where there is a market for shortfill e-liquids. Shortfills are larger bottles of the fluids used to produce

vapour, with space to add nicotine shots if desired, thus providing flexibility for users while complying with

regulatory restrictions.

The Company is working with its manufacturing partners to scope and develop compliant vaping devices with

replaceable pods that will be both rechargeable and refillable. These efforts are aimed at ensuring that the

Company's own proprietary product offerings remain compliant with the new regulations while continuing to meet

the needs and preferences of its customers. Since the end of the Period, the Company has also begun to offer sales

and distribution support services to other brands including those involved in the development and sale of vape and

other novel nicotine products. Following the UK ban on disposable vape products commencing 1 June 2025, the

Company has continued selling compliant products from brand partners.

Feminised Hemp Seed Programme

Under its previous guise as Zoetic International the Group had a significant focus on cannabidiol (CBD) products.

During this period, the Group planned to develop, cultivate, and sell its own varieties of hemp seeds. The Company's

accounts therefore reflect a notable carrying value of feminised hemp seeds and specifically an inventory of

proprietary varieties of seeds intended to yield plant matter high in CBD content and low in tetrahydrocannabinol

(THC – the principal psychoactive compound found in cannabis). These particular traits were considered highly

attractive at the time, especially when the market for CBD products was projected to grow exponentially.

To effectively market these seed varieties within Europe, it was necessary for them to undergo rigorous testing to

secure entry into the European Seed Catalogue. Inclusion on this register would have allowed for the sale of these

seeds to licensed cultivators within the European Union. However, during a final testing cycle, the Company's

testing partners identified anomalies relating to the colour of the plant matter and the presence of off types within

the cultivation area.

As the Company's strategic focus began to shift away from CBD products towards other categories of consumer

goods, it was determined that further resources should not be allocated to potentially costly testing exercises. This

strategic pivot was further supported by an observed decline in the market for hemp seeds, specifically those rich

in CBD but low in THC content. The market dynamics had dramatically changed from the initial projections in

2019 and 2020. For instance, the downstream market for CBD isolate saw a steep reduction in value, where a

kilogram of CBD isolate that once exceeded £1,000 in 2020 could be sourced for as little as a few hundred pounds

by 2024.

Due to the sustained decline in the market for raw materials rich in CBD and analogous non-intoxicating

cannabinoids, coupled with the strategic shift of the Group's focus away from CBD production and towards other

consumer goods, it was not considered appropriate to allocate significant additional resources to the attempted

commercialisation of the hemp seed project. Consequently, the Directors have determined that there is limited

prospect of realising significant value from the Group's inventory of feminised hemp seeds.

As a result of this decision, the carrying value of the seeds has been impaired in its entirety. While the Company

will continue its attempts to either liquidate or find a commercial use for the inventory of hemp seeds, it cannot

guarantee that any funds will be realisable from them.

UK Novel Foods Authorisation

In order to sell ingestible CBD products in the UK, the Company has progressed through the novel foods application

process by submitting relevant applications to the Food Standards Agency (FSA). Novel Foods are defined as food

items were not widely consumed in the European Union before May 1997.

The Company’s Zoetic tinctures and Chill gummies have now been added to an updated FSA list of CBD food

products that are linked to a credible application for authorisation. Products that have reached the validation stage

undergo risk assessments and further examination by the FSA to determine their safety profile and suitability for

sale in the UK market. The FSA has provided that the products can remain on sale during this stage of the Novel

Foods application process.

During the Period, the Food Standards Agency (FSA) updated its precautionary advice on CBD, recommending

that healthy adults limit their consumption to just 10mg per day. This adjustment represents a significant reduction

from the previous limit of 70 mg per day. The Company’s application relating to CBD gummies involves a product

with a CBD content of 25mg per gummy. It is not feasible for the Company to make adjustments to its product to

reflect this recommended dosage, as pursuant to the FSA’s Novel Foods regime, only products that were on the

market prior to February 13 2020, and had applications submitted by March 31 2021, are allowed to remain on sale

pending validation and further approval.

While the Company will continue to maintain its Novel Foods applications in concert with its manufacturing

partners, its strategic focus has shifted away from this product category. Furthermore, it is not expected that the

conclusion of the Novel Foods application process and subsequent approval would lead to uptake of the Company’s

products by major retailers without significant further investment, including the payment of slotting fees and

allocation of marketing budgets. A number of major UK retailers including supermarkets and highstreet health and

beauty stores have previously sold CBD products from other brands however in many cases these have since been

removed from their ranges demonstrating a declining appetite by retailers to distribute CBD products.

The Company will provide further updates relating to the progress of the Novel Foods process as appropriate,

however own-brand CBD products are no longer a significant area of focus for the Group.

Zoetic

During the Period, the Company continued to sell its remaining inventory of Zoetic CBD oils on its chill.com e-

commerce marketplace website. Sales of these products were not material as a proportion of the Company’s overall

revenue.

Further development of the Zoetic brand was not a strategic priority during the Period while the Company

predominantly worked on the development and distribution of its Chill ZERO line of nicotine-free vapes. Going

forward it is management’s view that, rather than applying further resources to this brand, the Company should

focus its efforts on the development of Chill own-branded products, the chill.com marketplace of third-party

wellness products, and the provision of sales services to other brands. The Company has already substantively

concluded its prior strategy of developing and distributing CBD products and, in line with this strategy, the Zoetic

brand will continue only as a range of CBD tinctures sold on the chill.com website. The Company will reassess this

position should there be a change or update to the Novel Foods regime that governs the sale of ingestible cannabidiol

products.

Risks and Uncertainties Facing the Group

As a business involved in the development, marketing, and supply of consumer packaged goods products, the Group

faces risks typical of other consumer goods brands. This is particularly relevant for the Group’s vaping products,

which are subject to evolving regulatory risks. Additionally, the Group faces general financial risks that are common

amongst similar enterprises at an early stage of their development and growth.

The Board continues to monitor and mitigate a detailed list of risks that face the Group, but those listed below are

considered to be of the highest importance given the likelihood of their occurrence or the materiality of their

potential impact.

General Risks Relating to the Group’s Financial Position

While revenues from the Group’s consumer-facing activities have grown during the Period in review, the Group

anticipates a decline in revenues during the financial year commencing 1 April 2024. This expectation reflects a

combination of factors, including regulatory changes in the markets in which the Group operates (particularly

relating to disposable vaping products), recent strategic shifts in market focus, and corporate and operational

challenges which have impacted the pace of the Company’s commercial development.

The Board has considered a range of trading scenarios, including those that assume continuing reductions or

stagnation in sales volumes, limited uptake of new products, and delays in implementing its broader commercial

strategy. In response to such scenarios, the Board is prepared to take appropriate mitigating actions, including the

reduction or elimination of certain operational expenditures such as staffing costs, marketing, and retail activities,

in order to preserve the Group’s financial position.

The Group has historically been, and continues to be, reliant on access to external financing, including through the

issuance of new equity and debt instruments, to fund its ongoing operations and strategic initiatives. Whilst the

Directors remain confident in their ability to secure further funding, there is no certainty that such funding will be

available in the necessary amounts or on acceptable terms at the required time.

As such, the Group’s continued operation remains dependent on timely access to additional capital. If the Group is

unable to secure such funding as and when required, it may not be able to continue to operate at its current scale,

and may be required to significantly curtail, restructure or cease certain aspects of its commercial activities. These

factors represent a material uncertainty which may cast significant doubt on the Group’s ability to continue as a

going concern.

Risks Relating to Logistics and the Supply of Products

Various geopolitical events pose a risk to the Group’s supply chain and logistics activities. Industry-wide issues

relating to driver shortages, warehousing, international logistics, and transport may affect the availability and timely

movement of the Group’s products. Furthermore, some of the finished products sold by the Group are sourced from

multiple component parts that are manufactured internationally. As a result of this, there remains a risk that local

regulations could prevent the timely export of products, resulting in delays and disruption to the Group’s operations.

The Company is involved in the sale of a product portfolio primarily consisting of goods that are manufactured

overseas - most notably in China - and subsequently imported into the countries where they are sold. As a result,

the Group is exposed to the impact of international tax regimes, customs duties, and any changes in tariffs or trade

policies that may affect cross-border commerce. Fluctuations in these areas could influence the Company’s cost

base, pricing strategy, and overall margin structure.

The Board has engaged with all suppliers and partners to secure the continuity of its operations and continues to

develop controls and procedures to limit the impact of any such risks.

Risks Associated with Laws and Regulations Relating to Vaping Products

Given the Group’s focus on vape products, it is subject to risks that are specific to this category of goods. Vaping

products are subject to evolving regulations, including age restrictions, packaging requirements, advertising

restrictions, and product safety standards. Failure to comply with these regulations can result in fines, and penalties

along with reputational damage that could hamper the Group’s ability to operate in the space.

Vape products are complex electronic devices, and any defects or malfunctions could result in injuries or property

damage. Furthermore, the sale of vape products may expose the Group to risks related to public health concerns as

the long-term effects of vaping are still being studied. A significant body of evidence suggests that vape products

are significantly safer than cigarettes and other tobacco products, however it cannot be asserted that there are no

health risks related to vaping.

Finally, the volatile nature of the regulatory landscape can affect the availability and accessibility of vape products.

Changes in laws or public sentiment may restrict sales channels, limit product availability, or impose additional

taxes, which could significantly impact the Group’s financial performance.

Between August 2023 and January 2025, the UK implemented and proposed several regulatory changes concerning

vaping products, focusing particularly on disposable vapes and youth access.

In January 2024, the UK government announced a proposed ban on the sale and supply of disposable vapes. The

ban was implemented on 1 June 2025. This ban includes both nicotine and non-nicotine disposable vapes and has

been prepared under existing frameworks for environmental law. Retailers had until 1 June 2025 to sell existing

stock, after which time any further sales would be illegal necessitating the destruction or disposal of any residual

stocks.

The UK Government is currently progressing its proposed Tobacco and Vapes Bill with the aim of creating a smoke-

free generation by prohibiting the sale of tobacco products to anyone born on or after 1 January 2009. This

legislation also seeks to implement several measures to address concerns regarding the appeal of vape products to

minors. The proposed measures include restricting vape flavours, packaging, and display to decrease their appeal

to children; banning many advertising and sponsorship initiatives; implementing fixed penalty notices for retailers

who sell vapes to individuals under the age of 18; and introducing a new retail licensing scheme for both tobacco

and vape products.

The proposed measures, including the ban on the sale of disposable vapes, may significantly impact the Group’s

ability to generate reliable revenues from the sale of vaping products. These regulations could limit the viability of

the Group’s proposed future products, the breadth of available channels into which those products can be sold,

impose additional compliance costs, and decrease the appeal of vape products to consumers. Consequently, the

Group may face reduced market opportunities and increased operational challenges, affecting its overall financial

performance.

The regulatory landscape for vaping products in the United States is equally complex and brings its own risks to

the Group’s business. Oversight is exercised through a combination of federal, state, and local regimes, each with

their own set of requirements and restrictions. At the federal level, the Food and Drug Administration (FDA)

regulates vaping products under the Tobacco Control Act, mandating that any product containing nicotine or

capable of being used with nicotine must undergo the costly and unpredictable Premarket Tobacco Product

Application (PMTA) process. Only a limited number of products have successfully navigated this pathway.

Simultaneously, state and local authorities impose additional layers of regulation, including flavour bans, taxation,

sales restrictions, and varying enforcement practices. This fragmented and frequently evolving regulatory

environment creates uncertainty for manufacturers and distributors, significantly increases the cost of doing

business, and may limit the Company’s ability to launch or sustain product lines in this category in the US market.

Product Viability

If the products the Group sells are not perceived to have the effects expected by the end-user, its business may

suffer. Many of the Group’s products contain innovative ingredients or combinations of such ingredients. There is

little long-term data with respect to efficacy, unknown side effects and/or interaction with individual human

biochemistry. Whilst the Group conducts extensive testing of its product stocks, there remains a risk that its products

may not have the desired effect.

Product Liability

The Group’s products are produced for sale to end consumers, and therefore there is an inherent risk of exposure to

product liability claims, regulatory action and litigation if the products are alleged to have caused loss or injury.

Accordingly, the Group maintains product liability insurance policies to safeguard against the implications of any

claims that may arise.

Success of Quality Control Systems

The quality and safety of the Group’s products are critical to the success of its business and operations. As such, it

is imperative that the Group’s (and its service providers) quality control systems operate effectively and

successfully. Although the Group strives to ensure that all of its service providers have implemented and adhere to

high calibre quality control systems, any significant failure or deterioration of such quality control systems could

have a materially adverse effect on the Group’s business and operating results.

Product Recalls

Manufacturers and distributors of products are sometimes subject to the recall or return of their products for a

variety of reasons, including product defects, such as contamination, unintended harmful side effects or interactions

with other substances, packaging safety and inadequate or inaccurate labelling disclosure.

If any of the Group’s products are recalled for any reason, the Group could incur adverse publicity, decreased

demand for the Group’s products and significant reputational and brand damage. Although the Group has detailed

procedures in place for testing its products, there can be no assurance that any quality, potency or contamination

problems will be detected in time to avoid unforeseen product recalls.

Industry Competition

The consumer-packaged goods industry is competitive and evolving, particularly for emerging products including

vape and wellness products. The Group faces strong competition from both existing and emerging companies that

offer similar products. Some of its current and potential competitors may have longer operating histories, greater

financial, marketing and other resources and larger customer bases than the Group has. Given the rapid changes

affecting the global, national, and regional economies generally, the Group may not be able to create and maintain

a competitive advantage in the marketplace.

Risks Relating to Legacy Oil and Gas Assets

Despite having discontinued the operation of its legacy natural resource assets, the Group continues to monitor for

risks relating to any liabilities arising from its former activities.

While the Group no longer owns any of its former legacy assets or sites, there remains a risk that the Group may be

subject to costs and liabilities arising from any lawsuit, civil or regulatory action that may commence in respect of

historical mining, drilling, extraction or other activities that the Group may have previously engaged in.

IT Security and Brand Protection Risks

As the Group’s activities and profile expand, its digital assets and intellectual property rights – including the

ownership of website domains and trademarks - may be challenged both legally by competitors and illegally by bad

actors. With these risks in mind, the Group has engaged with numerous initiatives, protections, and countermeasures

to ensure that its interests and those of its shareholders and customers are insulated against these risks. Our

intellectual property rights are well protected through a series of international trade marks and patent applications.

Since the end of the Period, the Company has taken additional steps to secure its IT facilities, has engaged with IT

security professionals, and has secured additional protection packages to prevent any removal or wrongful

divestment of its digital assets.

Statement of the Directors in Performance of Their Statutory Duties in Accordance with s172(1) Companies

Act 2006

The Directors are mindful of their duties under Section 172(1) of the Companies Act 2006 to promote the success

of the Company for the benefit of its members as a whole, having regard to the interests of stakeholders in their

decision-making. The Board continues to take account of the impact of its decisions on all our stakeholders, who

include employees, customers, suppliers, partners, regulatory bodies, and the wider community. We explain below

how the Board has discharged its duties under Section 172 during the year.

Product Portfolio Evolution and Environmental Responsibility

The Board oversaw significant expansion in the distribution and sales of the Company’s nicotine-free disposable

vape products during the Period. Recognising our environmental responsibilities, we actively engaged with our

major distribution partners to identify and work towards participation in recycling and battery reclaim programmes.

This decision reflected our commitment to reducing environmental impact while growing our business sustainably.

The Directors have maintained active oversight of emerging regulatory developments, particularly the proposed

UK ban on disposable vapes. In response, we have invested in research and development of new compliant products,

including e-liquids and non-disposable vapes. This proactive approach demonstrates our commitment to long-term

business sustainability while ensuring compliance with evolving regulations and meeting changing consumer needs.

Public Health Considerations

In line with our commitment to responsible business practices, the Board made the strategic decision to cease sales

of legacy combustible CBD hemp products. While primarily driven by commercial considerations, this decision

aligned with our broader objective to minimise any potential contribution to negative public health outcomes

associated with combustible products.

Stakeholder Engagement

Throughout the year, the Company maintained consistent dialogue with its distribution partners to understand their

operational capabilities and requirements regarding environmental responsibility. This engagement has been crucial

in developing effective environmental initiatives that work within existing retail infrastructure and the Company

has been fortunate that many of its distribution partners already implement environmentally-focused product return

programmes by providing retailers with collection point infrastructure. We have also invested in product

development to ensure we can continue serving our customer base effectively as the regulatory landscape evolves,

maintaining our commitment to providing high-quality, compliant products that meet consumer needs.

Throughout the Period we have closely monitored legislative developments affecting our industry. This vigilant

approach has enabled us to anticipate and prepare for regulatory changes, particularly regarding disposable vape

products. We continue to invest in product development to ensure we remain well-positioned to meet both current

and anticipated regulatory requirements.

The Company's approach to product development is fundamentally driven by consumer demand as communicated

by our distribution partners and retailers. Since the end of the Period, we have increasingly reinforced our objective

of offering a genuine alternative to combustible smoking products through our vaping products. This commitment

was exemplified by our participation in the 2024 Pharmacy Show, where we actively engaged with pharmacists,

medical professionals, and operators of health-focused retail outlets to better understand the evolving needs and

preferences of our consumers.

The Company recognises its responsibility to all stakeholders, including shareholders. After the end of the Period,

shareholders exercised their democratic rights by calling a general meeting, at which they voted to remove two

former directors - Chief Commercial Officer Antonio Russo and Chief Operating Officer Trevor Taylor - and

appoint two new directors, Non-Executive Chairman Harry Chathli and Finance Director Graham Duncan. This

shareholder-led governance action illustrates that the Company is subject to open and transparent corporate

processes.

The Company’s Chief Executive Officer maintains regular correspondence with investors of all sizes, discussing a

broad range of topics from operational performance and strategic direction to product availability, branding, and

digital presence. Where appropriate, shareholder feedback is shared with the wider Board for consideration. This

open and responsive approach is a key feature of the Company’s stakeholder engagement model and reflects the

Board’s intention to remain accessible and accountable.

Looking Forward

The Board remains committed to maintaining an effective dialogue with all stakeholders and taking their interests

into account in its decision-making. We will continue to adapt our business model and practices to meet evolving

regulatory requirements while maintaining our focus on sustainable growth and responsible business practices.

The Board acknowledges the importance of balancing the needs and expectations of stakeholders but is often

required to make difficult decisions based on competing priorities where the outcome may not be positive for all

stakeholders. Decisions are always taken with the utmost regard and respect for all stakeholders, and the decision-

making process has been formulated to ensure directors evaluate the merits and risks of proposed activities and their

likely consequences over the short, medium and long-term. The Directors recognise the importance of acting fairly

between shareholders and are committed to promoting the success of the Company for the benefit of its members

as a whole even if certain decisions do not provide short-term benefits to individual members.

Key Performance Indicators

Given the evolving nature of the Group’s operations and the ongoing changes to its business model and product

mix, the Board has not yet established a formal suite of key performance indicators (KPIs) applicable to all aspects

of the Group's activities. However, at this stage of development, the primary KPI used by the Board to assess overall

performance has been revenue generation.

Revenue is considered the most relevant measure at this stage, as it reflects the Group's ability to attract and retain

customers, secure distribution relationships, and generate cash inflows to support ongoing operations and

investment. Given the pace of change in the Group’s commercial strategy and the regulatory environment, more

detailed operational KPIs are being monitored on an informal basis but have not yet been formalised for external

reporting.

The Board anticipates that as the Group's activities become more established and its operations stabilise, additional

KPIs will be introduced to monitor performance across sales, marketing, operational efficiency, customer

engagement, and environmental responsibility. In the digital channel, such KPIs may include website traffic,

conversion and retention rates, and average customer spend. In respect of physical retail sales, relevant KPIs may

include unit sell-through rates and distribution footprint metrics.

The Board continues to review its internal and external reporting framework to ensure that appropriate KPIs are

adopted and disclosed as the business matures.

Gender Analysis During the Financial Year Ending 31 March 2024

The Group is committed to establishing a diverse Board of Directors but is equally conscious of the importance of

appointing the people best suited to those roles. A split of our employees and Directors by gender at the year-end is

shown below:

Male

Female

Directors

None

Employees

The data presented in the diversity and inclusion disclosures, including the table below, has been collected through

internal records maintained by the Group. Given the size and structure of the Group, personal data relating to gender

and related characteristics is obtained at the point of appointment for Directors and during onboarding for

employees, typically through self-identification or documentation provided at hire.

The Board considers the information to be reliable and complete based on the current size and scope of the Group’s

operations, and no external verification or third-party assurance has been obtained in respect of the reported data.

At present, the Group does not operate formal diversity monitoring systems or collect data beyond binary gender

identification. As the Group develops and grows, its approach to diversity data collection and monitoring may be

reviewed and enhanced in line with regulatory requirements and best practice standards.

The Company acknowledges that, as at the end of the reporting period, the gender composition of its Board does

not meet the targets specified under the UK Listing Rules and DTR requirements. Specifically, the Board was

composed entirely of male directors, while the wider Group included one male and three female employees.

The Directors consider that the current gender imbalance on the Board primarily reflects the early-stage nature of

the Company’s operations and the significant resource constraints and challenges it has faced in recent periods -

including navigating complex regulatory changes, commercial volatility, and corporate restructuring. During this

time, the primary focus of the Board has been on stabilising the business and ensuring operational continuity. As

such, Board composition has not been a strategic priority.

Nonetheless, the Board recognises the importance of gender diversity and remains committed to aligning with best

practice over time. As the business matures and becomes more stable, the Company intends to broaden the

composition of the Board through future appointments, including with respect to gender diversity, in accordance

with the expectations of the Listing Rules and associated governance frameworks.

Corporate Social Responsibility

The Company maintains an unwavering commitment to operating with transparency and integrity in all aspects of

its business. We recognise our responsibility to balance the interests of all stakeholders, including shareholders,

employees, customers, and the wider community. Through regular engagement and clear communication, we strive

to keep our shareholders informed of material developments while maintaining appropriate commercial

confidentiality.

Our employees are fundamental to our success, and we are dedicated to fostering a safe, healthy, and inclusive

working environment. We understand that different individuals have different needs and circumstances, and we

endeavour to provide appropriate flexibility where possible. This approach allows us to attract and retain talented

individuals while ensuring we maintain our operational effectiveness and meet our business objectives. Our flexible

working practices and remote working policies are designed to support both individual well-being and business

performance.

As a company operating in the vaping industry, we recognise our heightened responsibility to ensure our products

are developed and marketed responsibly. While vaping remains a topic of public debate, our position is clear: vaping

products serve a vital role in tobacco harm reduction and smoking cessation. Our strategic focus has been to support

individuals not only in their journey away from tobacco products but also in reducing nicotine dependency

altogether. This is reflected in our core product range of zero-nicotine vaping products, which provide the sensory

aspects of vaping that many users find helpful in their cessation journey, without perpetuating nicotine addiction.

We take our responsibility to prevent youth access to our products extremely seriously. Our approach includes

several deliberate measures to minimise this risk. We have implemented strict distribution controls, preferentially

partnering with retailers who maintain Challenge 25 policies. Our product development strategy specifically avoids

confectionery-based flavours that might disproportionately appeal to young people. Furthermore, our pricing

strategy positions our products at a premium price point that places them outside the pocket money spending range.

Looking ahead, we are evolving our brand identity to adopt a more sophisticated, adult-oriented aesthetic, beginning

with our forthcoming shortfill e-liquid range. This forms part of our ongoing commitment to responsible product

development and marketing.

Corporate Environmental Responsibility

As a consumer goods company with heritage in the natural resources sector, we maintain an acute awareness of our

environmental responsibilities and the importance of sustainable business practices. We recognise that our activities

have an environmental impact and are committed to continuously improving our environmental performance

through thoughtful strategic decisions and operational improvements.

A key focus of our environmental strategy centers on our transition from disposable vape products towards reusable,

rechargeable devices. This shift represents a significant opportunity to reduce our environmental footprint,

particularly regarding electronic waste and battery disposal. Reusable devices substantially reduce the volume of

batteries and electronic components entering the waste stream, as a single device can potentially replace hundreds

of disposable units over its lifetime. This transition aligns with both our commercial objectives and our

environmental responsibilities.

We recognise that our environmental impact extends beyond our direct operations. Where possible, we carefully

select suppliers and partners who demonstrate strong environmental credentials and compliance with regulatory

requirements.

While our business model relies on third-party manufacturers and logistics providers, we maintain oversight of the

environmental impact of these operations. We do not operate retail locations directly, and our use of outsourced

storage and transportation services attempts to balance environmental considerations with the commercial needs of

the business.

We intend to develop more comprehensive systems to measure and report our environmental impact, enabling us

to set meaningful targets for improvement and track our progress towards these goals. This includes monitoring our

carbon footprint, waste generation, and resource usage across our value chain.

We acknowledge that environmental responsibility requires ongoing commitment and continuous improvement.

We remain dedicated to identifying and implementing new ways to reduce our environmental impact, whether

through product innovation, operational improvements, or supply chain optimisation.

Further information regarding the Group’s carbon emissions can be found at page 37 of this report.

Task Force on Climate-Related Financial Disclosures (TCFD) Statement

The Company acknowledges its obligations under the Financial Conduct Authority's Listing Rule 6.6.6R regarding

climate-related disclosures consistent with the recommendations of the Task Force on Climate-Related Financial

Disclosures (TCFD). This statement provides a summary of the Group's current position with reference to the four

TCFD pillars: Governance, Strategy, Risk Management, and Metrics and Targets. As an early-stage growth business

operating in a highly regulated and rapidly evolving sector, our focus has been on building a stable and compliant

operating model. We do, however, recognise the increasing importance of environmental factors and are committed

to progressively enhancing our climate-related governance and disclosure practices over time.

1. Governance

The Board of Directors is responsible for overseeing climate-related risks and opportunities. Given the Company's

size and the direct involvement of Board members in day-to-day operations, climate-related issues are monitored

alongside other operational and regulatory matters.

To date, climate-related risks have not formed a material part of the Board's formal consideration of strategy,

budgets, performance objectives or capital expenditure. This is primarily due to the early-stage nature of the

Company, the regulatory and commercial turbulence it has faced, and the urgent need to focus on operational

viability, regulatory compliance, and financial performance.

Nonetheless, the Board remains mindful of the importance of aligning with climate goals. It has acknowledged that,

as the business matures, more structured oversight mechanisms must be developed. These will include clear internal

objectives, regular reviews, and progress tracking against climate-related performance indicators.

In recent times, the Company has ensured compliance with applicable environmental regulations such as the Waste

Electrical and Electronic Equipment (WEEE) Regulations and battery recycling schemes. These have been the

primary focus of the Board’s environmental oversight to date.

2. Strategy

The Group recognises that climate-related risks and opportunities will play a more prominent role in its future

strategic and operational planning, particularly as a consumer packaged goods business. The immediate impact of

climate change on our operations is currently limited, but medium to long-term risks relating to packaging waste,

product lifecycle sustainability, and consumer preference shifts are anticipated.

Climate-related risks and opportunities are particularly relevant to businesses involved in selling consumer-

packaged goods (CPG), where supply chains, packaging choices, and end-of-life product treatment directly affect

environmental impact and stakeholder perception. In the future, the Board expects to give greater weight to climate-

related considerations when reviewing strategic decisions, including product design, materials sourcing, logistics,

and retail partnerships. For example, rising consumer and regulatory expectations around recyclability and carbon

footprint may shape our packaging strategy, while increased scrutiny on supplier emissions could influence our

procurement policies. As the business matures, we anticipate developing a climate-informed (if not climate led)

approach to innovation, where product development and marketing strategies align with sustainability goals. Over

time, climate performance may become integrated into strategic KPIs, investment decisions, and brand positioning,

as this will support long-term competitiveness in an environmentally conscious marketplace.

3. Risk Management

The Company does not yet maintain a standalone climate risk register, and climate-related risks are currently

assessed by the Board alongside broader business risks. All principal risk matters are addressed collectively by the

Board due to the Company’s size and the integrated nature of its management structure. As our governance

framework evolves, we intend to formalise climate risk assessment processes in line with broader enterprise risk

management practices.

The most significant environmental risk identified to date has been the impact of disposable vape products on

electronic and battery waste output. This has informed the Company’s decision to develop and commercialise more

sustainable reusable alternatives, working with manufacturing partners to improve product design, recyclability,

and consumer disposal behaviours. While our intended transition to reusable products and reduced reliance on

disposable formats was primarily driven by regulatory changes, it also reflects our approach to responding to any

risks identified, reviewing all key matters at a Board level before executing across the business.

As part of its broader risk management efforts, the Company intends to introduce more structured processes to

identify, evaluate, and mitigate climate-related risks. This includes building internal capacity, formalising risk

governance procedures, and integrating these into enterprise risk management as part of the Group’s evolution.

4. Metrics and Targets

The Company has not yet developed climate-specific metrics or targets. Several practical factors have contributed

to this:

 The Company’s ongoing strategic transformation has made historical data irrelevant for future

measurement;

 Supply chain volatility has complicated data collection and environmental performance tracking;

 Resource constraints have required prioritisation of commercial, regulatory, and financial status over

environmental concerns;

 Climate-related matters have not been integrated into business KPIs, capital allocation decisions, or

performance reviews.

Despite its current status, the Company recognises that in order to effectively manage climate-related risks and

opportunities, these limitations must be addressed. In future, the Board plans to:

 Establish baseline measurements of environmental impact;

 Develop key performance indicators relevant to climate-related priorities;

 Integrate environmental data into operational systems and reporting frameworks;

 Set medium and long-term targets for emissions, packaging waste, and product lifecycle sustainability.

Notwithstanding the above, the Company does monitor and estimate the environmental impact attributable to certain

core activities in line with the Streamlined Energy and Carbon Reporting (SECR) regulations. Further information

can be found on page 43 of this report.

Current State of Compliance and Forward Commitment

The Company is at a critical stage in its development, characterised by strategic adaptation to evolving regulatory

requirements and market conditions. During and since the Period, we have had to make fundamental decisions about

our business model and product offering, particularly in response to regulatory changes in the vaping industry.

While we maintain a strong commitment to environmental responsibility, the immediate demands of business

transformation and regulatory compliance have necessarily taken precedence in our resource allocation and strategic

planning.

As a public company committed to responsible growth, we understand that alignment with TCFD principles is

essential. This disclosure reflects our current position and outlines the steps we are taking to improve compliance.

As our business stabilises and scales, we expect our TCFD disclosures and climate governance to evolve in tandem

with the Group’s operational maturity and sustainability commitments.

The Company views this statement as a foundation for future development. While climate-related concerns have

not yet formed a central part of our strategic planning, we are committed to integrating them more formally as our

capacity and maturity increases. Future disclosures will build on the principles outlined here, reflecting our intention

to meet the expectations of investors, regulators, and other stakeholders regarding responsible environmental

stewardship and climate risk management.

The Company recognises the UK’s legally binding net zero target and is committed to aligning with it over time.

As our operations mature, we will assess our emissions, embed decarbonisation into planning, and develop a

credible roadmap to support the national transition in a commercially sustainable way.

We believe this approach represents a realistic and responsible balance between our growth objectives and our

environmental responsibilities, while acknowledging the practical limitations faced by early-stage companies in

achieving comprehensive TCFD compliance.

Disclosures and Considerations Relating to Vape Products

As part of its ongoing commitment to responsible environmental stewardship, the Company recognises the

importance of complying with all applicable environmental regulations, particularly those relating to the handling

and disposal of electrical and electronic equipment. This includes obligations under the Waste Electrical and

Electronic Equipment (WEEE) Regulations and similar requirements that apply to businesses importing and

distributing vape products containing batteries.

The Company acknowledges that the disposal of batteries associated with vape devices presents a material

environmental risk if not managed appropriately. Accordingly, the Board is committed to ensuring that the Group’s

operations remain fully compliant with environmental law, including the proper registration, reporting, and

financing of battery collection and recycling schemes where required.

In line with this commitment, the Company's strategic approach will be to minimise battery waste wherever

possible. This includes working with suppliers and manufacturing partners to explore alternatives to single-use

formats, improving product design to facilitate recyclability, and engaging with customers and retailers to raise

awareness about responsible disposal practices. The Company will also continue to monitor evolving regulatory

frameworks in its key markets to ensure that it remains compliant and aligned with best practice in environmental

management.

These initiatives form part of a broader sustainability strategy that aims to reduce the environmental impact of the

Company’s operations and support the transition to a more circular economy. The Board recognises that responsible

management of environmental risks, including those related to climate and waste, is essential to the Group’s long-

term resilience and value creation.

The Company recognises that climate-related regulation and shifting consumer preferences present both risks and

opportunities to its long-term strategy. In the short to medium term, our transition towards reusable vaping formats

is expected to reduce environmental exposure and align with anticipated regulatory shifts in the UK and other core

markets. Over the longer term, we believe our focus on sustainable product innovation will offer a strategic

advantage as environmental criteria become increasingly important to consumers, distributors, and regulators alike.

As such, climate-related considerations are expected to play a growing role in our financial and operational

planning.

KEY PERSONNEL

Callum Sommerton

Chief Executive Officer

As a former legal professional with brand protection and regulatory experience,

Callum has helped to create, develop and protect major brands in multiple

industries and across numerous jurisdictions. Prior to joining the Company he

worked within the intellectual property team of renowned London law firm

Mishcon de Reya where he gained extensive exposure to brand protection,

litigation and corporate matters.

He went on to establish his own digital marketing and business growth

consultancy practice providing strategic direction and support to a client base

of public and private companies operating within the consumer goods, luxury

lifestyle, and professional services sectors.

Before being appointed to his current position, Mr Sommerton served as

International Brand Director providing holistic support to the Group’s business

both in the UK and the United States.

Harry Chathli

Non-Executive Chairman

Harry is a capital markets and media strategist who has developed and designed

successful communication campaigns to raise the profile of organisations,

companies and government policies over the past 25 years.

Harry has been the key PR adviser to clients ranging from FTSE 100 to AIM-

listed businesses. He has a demonstrable track record of success in technology-

led businesses (TMT, Cleantech, Med-tech, Biotech), FMCG, Healthcare,

Industrial & Support Services and Property sectors across UK, Europe, Middle

East, Asia, US and Africa.

He is also an entrepreneur with a track record of growing successful businesses,

mentoring start-up management teams and identifying sources of growth

capital for businesses. He founded his first PR agency, Corfin Public Relations,

which was acquired by Luther Pendragon in October 2011. After eight years at

Luther, in 2019 he conducted a management buy out to set up the company now

trading as Gracechurch Group.

- 29 -

Graham Duncan

Finance Director

Graham is a UK-based chartered accountant with more than 25 years’ of

capital markets experience. He also holds a Corporate Finance Diploma

issued by the Institute of Chartered Accountants in England and Wales.

Since 2013, Graham has operated a consultancy business providing

transactional support and financial reporting advice to growing private and

public companies in the UK and internationally, including advising on new

admissions to the Official List of the London Stock Exchange.

He is Chairman of RentGuarantor Holdings Plc, a company listed on the Apex

segment of the Aquis Stock Exchange. Prior to this, Graham was a capital

markets director with a major firm of Chartered Accountants in London.

Graham has considerable international experience, including four years in

Hong Kong where he advised on corporate transactions in the Asia Pacific

region.

Nick

Tulloch

Non-Executive Director

Nick Tulloch advised companies on the UK capital markets for over 20 years,

working for several well-known investment banks and stockbrokers,

including Cazenove, Arbuthnot and Cantor Fitzgerald.

He is CEO of Mendell Helium plc (formerly Voyager Life plc), which he

founded as a plant based health & wellness company before overseeing its

transformation into a helium business with production assets in Kansas,

USA. This marks the second time in his career that he has carried out a

business transformation. He was finance director and then subsequently CEO

of Chill Brands Group plc in 2019 – 2020 (at which time it was called

Highlands Natural Resources plc and then Zoetic International plc) when he

led the company’s pivot from oil & gas and into what became its current

operations.

Nick began his career as a solicitor with Gouldens and he holds a masters in

law from Oxford University. Nick is also Chairman of ECR Minerals plc.

DIRECTORS’ REPORT

The Directors present their report and the financial statements for the year ended 31 March 2024.

Principal Activities

The Group’s principal activities are the development, production and distribution of nicotine-free vape products

and other consumer packaged goods. The Group is also focused on the development of an e-commerce marketplace

for wellness and recreational products made with natural, functional ingredients including CBD products,

nootropics, supplements and others.

A detailed review of the activities for the period is given in the Chief Executive’s Review and Strategic Report.

Results

The Group recorded a loss for the period after taxation from continuing and discontinued activities of £3,370,293

(2023: loss £4,287,891) and further details are given in the preceding Financial Review. No dividend has been paid

during the period nor do the Directors recommend the payment of a final dividend (2023: nil).

Directors

The Directors who served at any time during the period up to the date of publication were:

C Sommerton

Chief Executive Officer

A Russo

Chief Commercial Officer

(Removed 4 June 2024)

T Taylor

Chief Operating Office

(Removed 4 June 2024)

E Schrader

Non-Executive Director

(Resigned 7 June 2024)

Scott E. Thompson

Independent Non-Executive Director

(

Resigned 30 September 2024

)

A Chathli

Non-Executive Chairman

(Appointed 4 June 2024)

G Duncan

Finance Director

(Appointed 4 June 2024)

N Tulloch

Non-Executive Director

(Appointed 5 September 2024)

Details of the Directors’ interests in the shares and warrants of the Company are set out in the Directors’

Remuneration Report on page 34.

Further details of the interests of the Directors in the share options and warrants are set out in Note 20 to the financial

statements.

Substantial Interests

At 30 May 2025 the Company had been informed of the following substantial interests in the issued share capital

of the Company:

Number of Issued Shares Percentage of Capital

Jonathan Mark Swann*

68,075,000

13.45

Distributing**

42,739,994

8.44

* Mr Swann also holds convertible unsecured loan notes with a value of £1.6 million. The convertible loan notes

carry a coupon of 12% annuum, have a maturity date on 15 May 2028, and will be convertible into Ordinary Shares

at 2.15 pence per Ordinary Share, representing a further 74,418,605 potential shares on conversion of the loan notes.

The terms of these £1.6 million convertible loan notes were revised by mutual agreement with Mr Swann during

May 2025.

**Includes shares held personally by members of the Schrader family.

Share Capital

Chill Brands Group PLC is incorporated as a public limited company and is registered in England and Wales with

the registered number 09309241. Details of the Company's issued share capital, together with the details of the

movements during the period, are shown in Note 19. The Company has one class of ordinary shares and all shares

have equal voting rights and rank pari passu for the distribution of dividends and repayment of capital.

Corporate Governance Statement

The Board is committed to maintaining appropriate standards of corporate governance, recognising its responsibility

to ensure effective oversight and management of the Group’s affairs in the interests of shareholders and other

stakeholders. The statement below explains how the Company has approached corporate governance during the

period and includes the information required under section 7 of the Disclosure Guidance and Transparency Rules

of the UK Financial Conduct Authority.

The Company is listed on the Main Market of the London Stock Exchange and is aware of the provisions of the UK

Corporate Governance Code ("the Code"). However, the Company has not formally adopted the Code and does not

apply it in full, given its current size, scale and resources. The Board instead seeks to observe and apply the

principles of good governance contained in the Code to the extent considered appropriate and proportionate to the

Company’s circumstances. The Board continues to review its corporate governance framework regularly and

intends to adopt additional elements of the Code as the Group grows and its operations mature.

Approach to Governance, Strategy and Risk Management

The Group operates as a consumer packaged goods distribution company, focused on the distribution of wellness

products and fast-moving consumer goods (FMCG), including nicotine pouches, vapes, beverages, supplements

and wellness products through both its e-commerce platform and its Chill Connect distribution division.

The Board recognises that effective governance plays a central role in supporting the Group’s ability to deliver its

strategic objectives and create long-term shareholder value. The Board maintains oversight of all key matters,

including capital allocation, entry into material contracts and partnerships, regulatory compliance, and financial

reporting. The Board receives regular updates from the executive team and engages in active oversight of business

performance, strategic direction, key transactions and risk exposure.

The principal strategic risks considered by the Board include:

 The regulatory environment in relation to the sale, marketing and distribution of regulated consumer

products, for which the Group obtains legal advice as appropriate;

 Cash flow and working capital management, common to all product-based trading businesses, now

addressed through enhanced financial planning under the oversight of the Group’s Chief Financial Officer;

 The viability and market acceptance of product lines, requiring active management of product mix and

commercial partnerships.

The Board actively monitors these risks and oversees management’s response to them as part of its regular cycle of

meetings and decision-making.

Sustainability of the Business Model

The Board is focused on building a resilient and scalable operating platform to support the Group’s long-term

growth. In prior years, many of the Group’s business functions were outsourced to external partners. The current

strategic focus is on building internal operational capabilities and diversifying the product offering to adapt to

changing consumer preferences and evolving regulatory requirements. The Board considers that these steps are

critical to the long-term sustainability of the business model.

While the Group does not yet operate formal ESG or sustainability programmes, the Board recognises the growing

importance of such considerations and will keep its approach to sustainability, governance and stakeholder

engagement under review as the Group grows.

Board Composition and Committees

Since the constitution of the new Board of Directors on 4 June 2024, steps have been taken to strengthen the

Company’s corporate governance framework. The Board currently comprises four directors, including two

independent non-executive directors. Following recent changes, the Audit Committee and the Remuneration

Committee have both been reconstituted, although further development of their roles and procedures is ongoing.

The Board is informed regularly by the executive team to ensure that non-executive directors are kept abreast of

material developments and operational performance.

The Board remains committed to keeping its governance arrangements under regular review and will seek to

implement further governance measures as appropriate to the Group’s size, complexity and stage of development.

Board of Directors

During the year ended 31 March 2024, the Group’s Board consisted of three Executive Directors and two Non-

Executive Directors. Mr Callum Sommerton serves as the Group’s Chief Executive Officer. Subsequent to the year-

end, Mr Antonio Russo and Mr Trevor Taylor, Chief Commercial Officer and Chief Operating Officer, respectively

were removed from the Board of Directors and replaced by Aditya Chathli and Graham Duncan as Non-Executive

Chairman and Finance Director, respectively. Mr Eric Schrader, a Non-Executive Director resigned from his

position on 7 June 2024 and Mr Scott E. Thompson resigned on 30 September 2024. Nick Tulloch was appointed

as a Non-Executive Director on 5 September 2024.

The Board meets regularly throughout the year to discuss key issues and to monitor the overall performance of the

Company. All corporate and operational matters are considered by the Board as a whole while consideration of

matters relating to the preparation of financial statements, audit of such statements, the nomination of directors and

their remuneration are deferred to the relevant committees. More information about the Board can be found on the

Group’s corporate website www.chillbrandsgroup.com.

The Board confirms that it has carried out a robust assessment of the Company’s emerging and existing risks,

including those that could threaten its business model, future performance, solvency or liquidity. The principal risks

and uncertainties facing the Group are described elsewhere in this report. The Board continues to monitor these

risks on an ongoing basis and ensures that appropriate controls and mitigating actions are in place to support the

Company’s long-term viability.

As the Company continues to expand its operations and build internal capabilities, the Board recognises the

importance of investing in and incentivising its growing workforce. In support of this, the Board intends to establish

a range of incentive structures designed to attract, motivate and retain talent. These will include performance-driven

cash incentive schemes, particularly focused on rewarding the sales teams for commercial success, as well as the

development of a broader equity-based incentive plan that will allow employees to participate in the long-term

growth and value creation of the Company by receiving a direct stake in its future performance.

The Board is committed to adopting a formal Code of Corporate Governance when it is appropriate to do so.

Audit Committee

The Board seeks to present a balanced and understandable assessment of the Group’s position and prospects in all

interim, final and price-sensitive reports and information required to be presented by statute.

The Group established an audit committee during the Period, comprising Callum Sommerton, Trevor Taylor, and

Scott Thompson. Following Trevor Taylor’s removal from the Board, and Scott Thompson’s resignation, the audit

committee now comprises the Company’s Non-Executive Directors, Harry Chathli and Nick Tulloch. For a business

of the Company’s size, the UK Corporate Governance Code states that an audit committee should comprise of at

least two independent non-executive directors and that the chair of the Board should not be a member of the

committee. Whilst the audit committee is not formed of members in accordance with Corporate Governance

guidelines, the Group believe the composition is commensurate with the size and scope of the Group and its

operations. In particular, the Board presently consists of two executive directors and two non-executive directors,

including the non-executive Chairman. On that basis it is considered appropriate for the Chairman to sit as part of

the audit committee until such time as the Company appoints additional independent non-executive directors. The

committee is in the process of establishing its rules and operating procedures. This annual report and the financial

statements contained herein were considered by the Board as a whole.

External Independent Auditor

The audit committee will meet with the auditor at least twice a year to consider the results, internal procedures and

controls and matters raised by the auditor. The Board considers auditor independence and objectivity and the

effectiveness of the audit process. It also considers the nature and extent of the non-audit services supplied by the

auditor reviewing the ratio of audit to non-audit fees and ensures that an appropriate relationship is maintained

between the Company and its external auditor. The Company has a policy of controlling the provision of non-audit

services by the external auditor in order that their objectivity and independence are safeguarded.

As part of the decision to recommend the appointment of the external auditor, the Board takes into account the

tenure of the auditor in addition to the results of its review of the effectiveness of the external auditor and considers

whether there should be a full tender process. There are no contractual obligations restricting the Board’s choice of

external auditor.

During the Period, PKF Littlejohn LLP was engaged Reporting Accountant in connection with the Company’s

prospectus. This task was specifically allocated to PKF Littlejohn's capital markets team, ensuring that there was

appropriate separation from the audit team to maintain auditor independence and objectivity.

Remuneration Committee

There was no separate Remuneration Committee during the Period, instead all remuneration matters were to be

considered by the Board as a whole. Since the end of the Period, the Company has established a Remuneration

Committee that initially comprises the Company’s Non-Executive Directors, Harry Chathli and Nick Tulloch. The

Remuneration Committee will meet when required to consider all aspects of directors’ and staff remuneration, share

options and service contracts.

Nominations Committee

The Company has not yet established a nominations committee. Instead, nominations are considered by the Board

as a whole with input from professional advisors and other key stakeholders. The Company intends to establish a

Nominations Committee which is expected to initially comprise of the Company’s Non-Executive Directors.

Internal Financial Control

The Company has instituted a range of internal financial controls aimed at safeguarding its assets and ensuring the

maintenance of accurate and reliable accounting records. The Company is committed to continuous improvement

and enhancement of these measures to protect its assets effectively and the policy outlined here has been adopted

by the current Board as constituted on 4 June 2024.

The maintenance of proper records is a key component of these internal financial controls. This responsibility is

overseen by the Finance Director, Graham Duncan, and the records are meticulously prepared by an independent

bookkeeper appointed specifically for this function in the UK. This separation of duties ensures that the records are

not only accurate but also impartial, providing a strong foundation for the Company's financial reporting and

decision-making processes.

To further safeguard assets, the Company involves the entire Board and its advisors in all decisions related to the

treatment and potential disposal of any assets. This collective approach ensures that all perspectives are considered,

and the best possible decisions are made in the interest of the Company and its stakeholders.

Additionally, a stringent payments policy has been implemented wherein all payments require the approval of both

the CEO and the Finance Director. This dual-approval mechanism acts as a critical checkpoint, preventing

unauthorised or potentially detrimental financial transactions.

The Board continues to evaluate procedures to ensure thorough transaction approval, comprehensive risk

assessment, and careful consideration of capital expenditures. By adopting these strategies, the Board aims to

maintain robust financial controls that are suitable for a business of the Company’s size. This proactive approach is

designed to create a secure financial environment that supports the Company's growth and operational integrity.

The Board is particularly mindful of the need for these measures, and for additional financial safeguards, in light of

the issues that arose in the months following the year end - specifically those relating to the treatment of the

Company’s capital and assets. These events have reinforced the Board’s commitment to rigorous internal controls

and heightened oversight of all financial transactions.

Shareholder Communications

The Company considers open and transparent communication with its shareholders to be a high priority and is

committed to sharing as much information as possible while protecting the Company’s legitimate interests and

position with vendors, suppliers, customers, and partners. The Group uses its corporate website

(www.chillbrandsgroup.com) to publish information relating to the company, providing a feed of RNS

announcements and relevant company documents to all stakeholders. The Company’s Directors also seek to engage

with other forms of media that may be helpful in promoting the Company and investment case, alongside providing

news and context. These include webinars, such as the session held in response to the Government’s proposals to

ban disposable vape products, podcasts, and other media formats. Through this multi-channel approach the

Company aims provide a more discursive and transparent insight into the business and its operations.

The Group also makes use of social media, both to provide non-material corporate updates regarding its activities

and to market its products to relevant consumers. Content posted to social media platforms such as Instagram are

intended as a form of engagement with customers and not as a forum for the discussion of corporate matters,

however such posts may also be of interest to shareholders.

DIRECTORS’ REMUNERATION REPORT

The Directors’ Remuneration Report for the year ended 31 March 2024 and the Directors’ Remuneration Policy

will be proposed for approval by shareholders at the Group’s reconvened Annual General Meeting that will be

announced shortly.

The Annual Report was not published prior to the AGM held on 30 September 2024, as a result, the AGM will be

adjourned in relation to those resolutions connected to the Annual Report (including the Directors’ Remuneration

Report for the year ended 31 March 2024 and the Directors’ Remuneration Policy).

It is the intention of the Board to balance the incentivisation of Directors for future success with the current financial

performance of the Company when determining rates of remuneration. The Renumeration Policy has also been

reviewed in line with the wider working and pay conditions for employees across the Group with a view to

implementing a policy that is substantively fair and reflective of performance.

The current Executive Directors’ remuneration comprises a basic fee which is reviewed semi-annually and which

may be taken as salary or pension contribution, plus suitable health insurance provision for US Directors.

The service contracts are reviewed annually.

Future policy table

Base Salary

Pension

Contribution

Benefits in

kind

Bonus or

incentive plan

Executive Directors

C Sommerton

GBP £85,000

Statutory

Minimum

Nil

Ad hoc basis

see below

G Duncan

GBP £

36,000

Statutory

Minimum

Nil

Ad hoc basis

see below

Non-Executive Directors

A Chathli

GBP £24,000

Nil

Tulloch

GBP £24,000

Nil

Benefits in Kind

During the Period, the Group paid healthcare premiums for its US staff at the prevailing rates.

Bonus or Incentive Plan

Executive Directors are eligible to participate in the Long Term Incentive Plan (LTIP) established by the Company

to align the interests of shareholders with the interests and incentives of the executive management team, under

which share options and conditional share awards (restricted share units) may be granted on a discretionary basis.

There is no maximum opportunity under the LTIP. Awards will normally vest over a number of years, subject to

time-based and/or performance conditions. Under the LTIP the Board has discretion to adjust the vesting of awards

to avoid formulaic outcomes. Vested and unvested awards are subject to malus and claw back provisions. Annual

bonuses may also be awarded at the discretion of the Board under the Company’s Short Term Incentive Plan (STIP)

which is intended to motivate exceptional performance and effort over the short term. Cash awards made under the

STIP may be subject to performance conditions and must be approved by the Board as a whole.

During the Period, the Company proposed the grant of options to its executive Directors, as announced on 11

September 2023 and considered by Shareholders at the 2023 Annual General Meeting. Subsequently, the Enterprise

Management Incentive (EMI) plan relevant to the award to the Company’s CEO was not formally adopted by the

Board, and no award certificates or letters were issued under the Company’s Long Term Incentive Plan (LTIP). The

Board intends to consider appropriate management incentives in light of the Company’s current status and will

provide further information in the future. It is not expected that the Company will choose to enact or adopt those

proposals announced on 11 September 2023.

Service Contracts

Mr. Sommerton was initially employed from 1 December 2021 in his previous capacity as International Brand

Director. His Director’s Service Contract in relation to his role as Chief Executive Officer commenced on 15 April

2022. Mr. Sommerton is paid at an annual rate of GBP £85,000 per annum plus contributions to the Group’s

statutory workplace pension scheme and the ability to participate in any bonus awards.

Mr. Russo and Mr. Taylor were employed on an initial fixed term of one year from 1 April 2019 and their contracts

automatically renewed annually for a further one year period unless either party gave at least 60 days’ notice of

termination prior to a renewal date, save in the case of a material breach of contract when the Executive could be

dismissed without notice. Mr. Russo was paid at a rate of $175,000 per annum. Mr. Taylor was paid at a rate of

US$100,000 per annum with provisions for his salary to increase in line with revenue and at the confirmation of the

Board. Both Mr. Russo and Mr. Taylor received healthcare benefits and participated in any bonus awards.

Mr. Thompson was appointed as an Independent Non-Executive Director in accordance with the terms of an

appointment letter dated 21 January 2021. For his service, he was entitled to fees amounting to $15,000 and did not

receive any additional financial benefits. Upon his appointment, he was awarded 100,000 ordinary shares.

Mr. Schrader was appointed as a Non-Executive Directors in accordance with the terms of an appointment letter

dated 27 May 2022. For his service on the Board he was entitled to fees amounting to $10,000 and was further

contracted to provide sales services at a rate of $2,500 per month. This fee was revised to $5,000 per month from

February 2024.

Mr. Duncan was appointed on 4 June 2024 following a General Meeting of the Company’s shareholders. He has

provided his services to the Company at a rate of £2,000 per month pending the issuance of an employment contract

for his services as an executive director. Henceforth, he will be paid at a rate of £36,000 per annum to be reviewed

by the Company’s remuneration committee during Summer 2025 and semi-annually thereafter.

Mr. Chathli was appointed on 4 June 2024 following a General Meeting of the Company’s shareholders. He

provides his services to the Company in accordance with a letter of appointment dated 16 July 2024 and is paid at

a rate of £24,000 per annum.

Mr. Tulloch was appointed to the Board on 5 September 2024 and he provides his services to the Company in

accordance with a letter of appointment dated 4 September 2024. He is paid at a rate of £24,000 per annum for his

services.

In the event of a termination or loss of office the Director is entitled only to payment of his basic salary (plus

contractual benefits if applicable) in respect of his notice period. In the event of a termination or loss of office in

the case of a material breach of contract the Director is not entitled to any further payment. Executive Directors are

allowed to accept external appointments with the consent of the Board, provided that these do not lead to conflicts

of interest. Executive Directors are allowed to retain the fees paid.

The service contracts are available for

inspection at the Company’s registered office.

Approval by Members

The Group’s remuneration policy will be put before the members for approval at the reconvened Annual

General Meeting to be held on the earliest practical date in 2025 following the publication of this report.

Further information regarding this reconvened meeting will be announced in due course.

IMPLEMENTATION REPORT

Particulars of Directors’ Remuneration (audited)

Particulars of directors’ remuneration, including directors’ warrants which, under the Companies Act 2006 are

required to be audited, are given in Notes 6 and 21 and further referenced in the Directors’ report.

Remuneration paid to the Directors during the year ended 31 March 2024 was:

Executive

Director

Base Salary

Benefits in

Kind

Pension

contributions

Compensation

for Loss of

Office

Total

C Sommerton*

85,000

2,642

Nil

642

A Russo

140,382

23,998

Nil

164,380

T Taylor

82,720

25,223

Nil

107,943

E Schrader

25,9

Nil

986

S Thompson

13,993

Nil

13,993

The benefits in kind represents healthcare and pension premiums that the Group pays for its directors at the

prevailing rates.

Remuneration paid to the Directors during the year ended 31 March 2023 was:

Executive Director

Base Salary

Benefits in

Kind

Pension

contributions

Compensation

for Loss of

Office

Total

C Sommerton*

90,000

A Russo

142,344

22,835

165,179

T Taylor

112,972

23,452

136,424

E Schrader

7,833

S Thompson

11,749

2,350

14,099

The benefits in kind represents healthcare and pension premiums that the Group pays for its directors at the

prevailing rates.

*C Sommerton was appointed as a director in April 2022. In June 2022, his salary was adjusted to £85,000 from a

previous salary of £115,000.

Payments to Past Directors (audited)

There were no payments to past directors during the year ended 31 March 2024.

Payments for Loss of Office (audited)

There were no payments to past directors for loss of office during the year ended 31 March 2024.

Bonus and Incentive Plan (audited)

On 11 September 2023, the Company announced a new Management Incentive Plan aimed at aligning the interests

of its executive directors with those of its shareholders. The plan involved granting share options to the three

Executive Directors, subject to shareholder approval at the Annual General Meeting (AGM) held on 19 September

2023. Following approval by shareholders, the plan was subject to final authorisation by the Board. The plan was

not formally adopted by the Board and no award certificates or letters were issued. As a result, the options proposed

to be issued under the new Management Incentive Plan were not ultimately granted.

Percentage Change in the Remuneration of the Chief Executive (audited)

The following table shows the percentage change in the remuneration of the Chief Executive in 2024 and 2023

compared to that of all employees, except directors, within the Group.

2024

2023

Change

Base Salary

Chief Executive

85,000

90,000

(5.55%)

All*

384

,359

446,049

(13.83%)

Bonuses

Chief Executive

0.00%

All*

0.00%

Benefits in Kind

Chief Executive

0.00%

All*

57,281

46,287

23.75%

Total Remuneration

Chief Executive

85,000

90,000

(5.55%)

All*

441,640

519,386

(14.96%)

*The figure for “all employees” excluding the Chief Executive.

- 39 -

Relative Importance of Expenditure on Remuneration

2024

2023

Year on

Year

Total Chief Executive’s

Remuneration (including

share based payments)

85,000

90,000

(5.55%)

Distributions to

Shareholders

N/A

Included in total remuneration is salary, bonuses, issued shares, compensation for loss of office and benefits.

Total Shareholder Return

The following graph illustrates the percentage movement in the Company’s share price over the year compared to

the percentage movements over the same period of the S&P/ASX 200 and FTSE-Small Cap indices.

Historic Remuneration of the Chief Executive

Year

Salary

Bonus

Benefits in

Kind

Share Based

Payments

Total

£ £ £ £ £

2020

193,151

39,718

232,869

2021*

152,673

36,998

1,410,268

1,599,939

2022*

188,829

53,831

470,090

712,750

2023

90,000

2024

85,000

*The role of Chief Executive was fulfilled by two individuals concurrently during the years ended 31 March 2022

and 2021. The figures for “Chief Executive” are the combined total payments for the two individuals during the

period. Additionally in the year ended 31 March 2020, the Chief Executive role was performed by other individuals.

Directors’ Interest in Shares (audited)

The Company has no Director shareholding requirement.

The beneficial interest of the Directors in the ordinary share capital of the Company at both 31 March 2024 and 31

March 2025 was:

Number of Shares

Percentage of Issued Shared

Capital

Percentage

Change

Director

31 March

2024

31 March

2025

31 March

202

31 March

2025

A Russo

6,950,000

2.67%

2.42%

(0.25%)

T Taylor

6,950,227

2.67%

2.42%

(0.25%)

C Sommerton

266,668

0.00%

E Schrader

26,755,416

10.25%

9.41%

(0.84%)

S Thompson

100,000

0.00%

G Duncan

A Chathli

N Tulloch

The below Directors held the following options and warrants at the beginning and end of the period:

Director

At 1 April

2023

Granted in

the Period

Exercised in

the Period

Lapsed in

the Period

At 31 March

2024

A Russo

2,887,500

T Taylor

2,887,

273

2,887,273

Total

5,775,000

Remuneration Committee

The Remuneration Committee, which was formed after the end of the Period in review following the appointment of new

directors on 4 June 2024, is comprised of the Company’s two non-executive directors, Harry Chathli and Nick Tulloch. The

Committee meets as required to consider all aspects of directors’ and staff remuneration, including share options and service

contracts.

Where appropriate, the Committee may consult with the wider Board and external advisors, but decisions on remuneration are

taken independently by the non-executive members.

Shareholder Voting at the Annual General Meeting

The Directors’ Remuneration Report for the year ended 31 March 2023 and the Directors’ Remuneration Policy

were approved by the shareholders at the Annual General Meeting held on 19 September 2023.

- 41 -

The votes cast were as follows:

Directors’ Remuneration Report

Number of Votes

% of Votes Cast

For

78,693,137

99.87%

Against

37,278

0.05%

Number of Votes Withheld

65,248

0.08%

Total Votes Cast

78,795,663

100%

Directors’ Remuneration Policy

For

78,667,131

99.84%

Against

63,284

0.08%

Number of Votes Withheld

65,248

0.08%

Total Votes Cast

78,795,663

100%

This is the Company’s eighth period of operation. There have been no major changes during the period either in the

policy on directors’ remuneration or its implementation, including terms of service for the Directors.

This Directors’ Remuneration Report was approved by the Board and signed on its behalf by:

Callum Sommerton, Chief Executive Officer

STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND

THE FINANCIAL STATEMENTS

The Directors are responsible for preparing this report and the financial statements in accordance with applicable

United Kingdom law and regulations and those UK adopted International Accounting Standards (“IAS”). Company

law requires the Directors to prepare financial statements for each financial period which present fairly the financial

position of the Company and the financial performance and cash flows of the Company for that period.

In preparing those financial statements, the Directors are required to:

 select suitable accounting policies and then apply them consistently;

 make judgements and estimates that are reasonable and prudent;

 present information, including accounting policies, in a manner that provides relevant, reliable, comparable

and understandable information;

 state whether applicable UK adopted IAS have been followed, subject to any material departures disclosed

and explained in the financial statements;

 prepare the financial statements on the going concern basis unless it is inappropriate to presume that the

Company will continue in business; and

 provide additional disclosures when compliance with the specific requirements in UK adopted IAS is

insufficient to enable users to understand the impact of particular transactions, other events and conditions

on the entity’s financial position and financial performance.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the

Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company

and enable them to ensure that the Company financial statements comply with the Companies Act 2006 and Article

4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and hence for taking

reasonable steps for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors’

Report, Directors’ Remuneration Report and Corporate Governance Statement that comply with that law and those

regulations, and for ensuring that the Annual Report includes information required by the Listing Rules of the

Financial Conduct Authority.

So far as the Directors are aware, there is no relevant audit information, as defined by Section 418 of the Companies

Act 2006, of which the Group’s auditors are unaware and each Director has taken all the steps that he ought to have

taken as a director to make himself aware of any relevant audit information and to establish that the Group’s auditors

are aware of that information.

The Consolidated Financial Statements are published on the Group’s website http://www.chillbrandsgroup.com.

The Directors are responsible for the maintenance and integrity of the website. Visitors to the website need to be

aware that legislation in the United Kingdom covering the preparation and dissemination of the financial statements

may differ from legislation in their jurisdiction.

We confirm that to the best of our knowledge:

 the Company financial statements, prepared in accordance with UK adopted IAS give a true and fair view

of the assets, liabilities, financial position and profit of the Company;

 this Annual Report includes a fair review of the development and performance of the business and the

position of the Company together with a description of the principal risks and uncertainties that it faces;

and

 the Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and

provide the information necessary for shareholders to assess the Company’s performance, business model

and strategy.

ENVIRONMENTAL RESPONSIBILITY AND GREENHOUSE GAS DISCLOSURES

The Directors recognise the importance of assessing and managing the impact of the business and its operations on

the environment. Given that the Company is at an early stage of its growth under its current business model, it has

it not always appropriate or possible to fully measure the Company’s emissions and environmental impact as its

operations are in a state of transition. The Company is committed, however, to adopting a compliant approach to

all relevant rules and regulations.

The primary environmental risks that are relevant to the Company include the production of carbon emissions from

manufacturing processes, transportation and energy consumption; the management of waste including from

packaging and products; and the sourcing of raw materials. As the Company’s vape products business develops,

sourcing and waste management will become ever more important issues, especially in relation to the batteries

contained within the devices. The Directors are committed to working with stakeholders and partners to ensure that

the environmental impact of these products is minimised.

Under the Companies (Directors’ Report) and Limited Liabilities Partnerships (Energy & Carbon Report)

Regulations 2019, we are mandated to disclose our UK energy use and associated greenhouse gas (GHG) emissions.

Specifically, and as a minimum, we are required to report those GHG emissions relating to natural gas, electricity

and transport fuel as well as an intensity ratio, under the Streamlined Energy & Carbon Reporting (SECR)

Regulations.

In calculating its greenhouse gas emissions, the Company used The Climate Registry’s default electricity and

natural gas square footage emission intensities to estimate electricity and natural gas usage for each office space.

The result in kilowatt hours of electricity or cubic feet of natural gas used was multiplied by appropriate default

emission factors to calculate metric tonnes of carbon dioxide equivalent (CO2e). Owing to the Company’s use of a

model that outsources most major operational functions to third party vendors, it has confined its measurement and

reporting approach to those direct outputs from the Company’s staff, calculated in line with the methodology used

by external experts engaged to quantify the Company’s output in the prior year. The Directors consider it appropriate

to adopt this approach as no material changes to those operations of Company that are captured by this reporting

obligation took place during the Period.

For reporting purposes, emissions have been classified in accordance with the Greenhouse Gas Protocol. The

Company did not record any Scope 1 emissions during the period, as it does not own or operate any vehicles,

combustion facilities or refrigeration equipment. Scope 2 emissions arose from the purchase of electricity for office

space and home working arrangements used by Company staff. Scope 3 emissions, including those associated with

supply chain activity and product distribution, have not been calculated, as the majority of such operations remain

outsourced to third-party vendors.

All reported energy consumption and associated greenhouse gas emissions during the period occurred outside the

United Kingdom, reflecting the geographic location of the Company’s internal workforce during the period. The

principal energy efficiency measure undertaken remains the Company’s use of a remote working model, which

reduces energy consumption associated with office occupancy, business travel and commuting.

The table below provides more information relating to the Company’s greenhouse gas emissions and energy usage

for its offices globally.

Consumption: kWh Consumption: Cubic Feet of Gas Emissions: tC02e

Electricity 65,174 - 30.60

Natural Gas - 109,853 5.99

Total: 36.59

The Company will continue to monitor its environmental footprint and seek to minimise its carbon emissions,

balancing commercial needs with environmentally responsible choices. In particular, we intend to take proactive

steps to reduce environmental harms associated with the production and distribution of batteries in our vape

products. As part of our broader energy efficiency strategy, we are planning to reduce reliance on air freight by

shifting to sea and consolidated freight wherever feasible, and to adopt more efficient packaging and distribution

practices across our consumer goods portfolio. Further reporting, analysis and commentary will be provided in

future reports as the Company’s operations mature.

DISCLOSURE AND TRANSPARENCY RULES

Details of the Company’s share capital and share options and warrants are given in Notes 20 and 21 respectively.

There are no restrictions on transfer or limitations on the holding of the ordinary shares. None of the shares carry

any special rights with regard to the control of the Company. There are no known arrangements under which the

financial rights are held by a person other than the holder and no known agreements or restrictions on share transfers

and voting rights.

As far as the Company is aware there are no persons with significant direct or indirect holdings other than the

Directors and other significant shareholders as shown on page 24.

The provisions covering the appointment and replacement of directors are contained in the Company’s articles, any

changes to which require shareholder approval. There are no significant agreements to which the Company is party

that take effect, alter or terminate upon a change of control following a takeover bid and no agreements for

compensation for loss of office or employment that become effective as a result of such a bid.

REQUIREMENTS OF THE LISTING RULES

The following table provides references to where the relevant information required by listing rule 9.8.4R is

disclosed:

Listing Rule requirement

Details of long-term incentive schemes as required by Listing Rule

9.4.3R

See Directors’ Remuneration

Report page

Details of any arrangement under which a Director of the Company

has waived emoluments from the Company

n/a

Details of any allotment for cash of equity securities made during the

period otherwise than to the holders of such equity shares other than

in proportion to their holdings of such equity shares and which has

not been specifically authorised by the Company

’s shareholders

Note 19 on page 82

Details of any contract of significance subsisting during the period to

which the Company is a party and to which a Director of the Company

is or was materially interested

Note 26 on page 89

Details of remaining service contract period for director standing for

election this year

See service contracts details on

page

FINANCIAL INSTRUMENTS

The Company has exposure to credit risk, liquidity risk and market risk. Note 25 presents information about the

Company’s exposure to these risks, along with the Company’s objectives, processes and policies for managing the

risks.

EVENTS AFTER THE REPORTING PERIOD

Following the end of the Period, there was a dispute related to the removal of certain Directors by shareholder vote,

prompted by the receipt of a requisition letter calling for a General Meeting on 16 April 2024. This dispute resulted

in the withdrawal of almost $400,000 from the Company’s accounts and increased professional advisory costs,

particularly for legal advice in the UK and US. Additionally, it led to the temporary removal of the Company’s

intangible domain asset, Chill.com, from its ownership and control between June 2024 and December 2024, when

an out-of-court settlement was reached. The Chill.com domain asset is now under the management and control of

the Company.

Since the end of the Period, the UK Government has introduced legislation that banned the sale of disposable vapes

in the UK with an effective date of 1 June 2025. The Company’s existing range of Chill ZERO nicotine-free

disposable vapes will be included in this ban and the Company will therefore need to develop and launch new,

complaint devices in order to maintain a revenue stream derived from sales of vape products in the UK.

On 24 April 2025, the Company announced that its largest shareholder, Jonathan Swann, had committed to

underwrite a convertible loan note facility with a principal value of £1,000,000. Other investors were invited to

subscribe for convertible loan notes on identical terms, with those investing up to £50,000 required to remit funds

at the point of subscription, and those investing more than £50,000 subject to drawdown mechanics at the discretion

of the Company. The Convertible Loan Notes were priced at 1.5 pence per loan note, have a term of three years,

and carry interest of 10 per cent per annum. Each entitles the subscriber to a new ordinary share of 1 pence per

share. As part of the fundraising, subscribers are also entitled to a 1-1 warrant priced at 125% of the 10-day moving

average at the time of funds being drawn. For any funds drawn prior to the Company’s shares returning to trading

following their suspension commenced on 3 June 2024, the average share price used for calculation of the warrant

price shall be 1.5 pence per share.

No other matters or events occurring after 31 March 2024 are expected to have an impact on the Company’s

financial statements for the Period.

DIRECTORS’ INDEMNITY PROVISIONS

The Group has implemented Directors and Officers Liability Indemnity insurance throughout the Period.

- 46 -

GOING CONCERN

The Directors have considered the appropriateness of preparing the financial statements on a going concern basis.

In conducting this assessment, they have taken into account the Group’s current financial position, recent and

anticipated fundraising activities, and the forecast cash flows for the foreseeable future.

During the period following the end of the financial year, the Group’s operations were principally supported by

revenue derived from commercial activity undertaken in the previous financial year, together with proceeds received

pursuant to a financing round completed in January 2024. The period was characterised by constrained liquidity,

due in part to substantial legal and professional costs arising from corporate dispute matters. Despite these pressures,

the Group maintained continuity of operations through prudent cash management and targeted capital deployment.

In respect of remainder of the 2025 calendar year and financial periods commencing during that time, the Board

anticipates that the Group’s operational funding requirements will be met through further capital raising initiatives.

Notably, the Group’s largest shareholder, Jonathan Swann, has underwritten a commitment of up to £1 million,

which is being made available to other through a Convertible Loan Note (CLN) facility. The CLNs carry a fixed

annual interest rate of 10%, mature after three years, and are convertible into ordinary shares at a price of 1.5 pence

per share. Warrants are attached to each CLN tranche, with the exercise price to be determined based on the volume-

weighted average price (VWAP) of the Company’s shares at the time of drawdown.

The Board believes that the capital available under this facility will provide adequate financial resources to support

the Group’s core commercial operations for the duration of the next financial year. However, the Board

acknowledges that further funding may be required in due course in order to respond to unforeseen challenges or to

pursue future strategic opportunities.

The Directors have assessed the Group’s ability to continue as a going concern and, in doing so, have considered

the Group’s current cash position, expected trading performance, committed funding arrangements and the

requirement for further fundraising activities. Based on this assessment, the Directors have concluded that a material

uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. In particular,

the Group’s continued ability to operate is dependent on securing additional funding beyond the resources currently

committed, and there can be no certainty that such funding will be available at the necessary time or on acceptable

terms.

Notwithstanding this material uncertainty, having considered the mitigating actions available to the Group,

including the ability to reduce operating costs if required, and having regard to the Group’s historical ability to raise

external finance, the Directors have a reasonable expectation that the Group will have access to adequate resources

to continue in operational existence for at least twelve months from the date of approval of these financial

statements. Accordingly, the financial statements continue to be prepared on a going concern basis.

DONATIONS

The Company made no political donations during the period.

These statements of the Directors’ Responsibilities were approved by the Board and signed on its behalf by:

Callum Sommerton, Chief Executive Officer

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CHILL BRANDS GROUP PLC

Opinion

We have audited the financial statements of The Chill Brands Plc (the ‘parent company’) and its subsidiaries

(the ‘group’) for the year ended 31 March 2024 which comprise the Consolidated Statement of Comprehensive

Income, the Consolidated and Parent Company Statements of Financial Position, the Consolidated and

Parent Company Statements of Changes in Equity, the Consolidated and Parent Company Statement of

Cashflows and notes to the financial statements, including significant accounting policies. The financial

reporting framework that has been applied in the preparation of the group and Parent Company financial

statements is applicable law and UK-adopted international accounting standards.

In our opinion, the financial statements:

 give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 March

2024 and of the group’s loss for the year then ended;

 have been properly prepared in accordance with UK-adopted international accounting standards; and

 have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and

applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities

for the audit of the financial statements section of our report. We are independent of the company in

accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,

including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other

ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

We draw attention to Note 2.2 in the financial statements, which indicates that the going concern status is

dependent on the group’s ability to raise further funds across the going concern period where actual revenue

is lower than forecasted amounts by management. Alongside this matter, the Group incurred a net loss of

£3,370,293 during the year ended 31 March 2024 (2023: £4,287,891) and has historically been loss making

in prior financial periods, indicating an inability of the underlying business to support the parent company and

group. As stated in Note 2.2, these events or conditions, along with the other matters as set forth in note 2.2,

indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue

as a going concern. Our opinion is not modified in respect of this matter.

In auditing the financial statements, we have concluded that the director’s use of the going concern basis of

accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’

assessment of the company’s ability to continue to adopt the going concern basis of accounting included, but

was not limited to, the following procedures:

 Obtaining and documenting our understanding of the controls in place around the preparation of the

going concern forecast and future plans for the group through discussions with management;

 Obtaining management’s assessment for going concern for the 15-month period to 31 October 2026

and checking the mathematical accuracy of the cash flow forecasts and budgets prepared;

 Comparing budgeted performance for the year ended 31 March 2024 against actual to assess

management’s historical forecasting accuracy;

 Challenging management where appropriate on the reasonableness of key inputs and assumptions

underpinning the going concern model. These challenges included but not limited to:

o Performing sensitivity analysis on key inputs and assumptions to assess the headroom across

the going concern period. Key inputs and assumptions included: (i) sales growth rates, (ii)

long-term profitability/margins, (iii) levels of operating expenditure, and (iv) cost-saving

initiatives;

o Assessing management’s worst-case scenario testing performed and corresponding

mitigating actions;

o Assessing management’s assumptions against external factors and market trends for

appropriateness;

o Agreeing the opening cash position at 1 May 2025 in the going concern forecast; and

o Assessing the prospective accuracy of management’s forecast in 2025 against post year-end

bank statements and management accounts;

 Reviewing the terms of debt financing facilities within the group to confirm their availability across the

forecast period;

 Undertaking a review of subsequent events on matters impacting the going concern assessment; and

 Considering the adequacy of the disclosures and accounting policies in the financial statements.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the

relevant sections of this report.

Our application of materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds

for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit

and the nature, timing and extent of audit procedures on the individual financial statement line items and

disclosures in evaluating the effect of misstatements, both individually and in aggregate, on the financial

statements as a whole.

Financial statements - group

Financial statements – parent

company

Overall

materiality £225,000 (2023: £221,000) £99,000 (2023: £59,000)

Basis for

determining

overall

materiality

8% (2023: 8%) of loss before

taxation adjusted for non-recurring

transactions

8% (2023: 8%) of loss before taxation

adjusted for unusual and non-

recurring transactions

Rationale for the

benchmark

applied

We considered the nature of the

group and its business operations,

being one of development,

marketing and distribution of

wellness and recreational

products. The group’s core

activities result in profitability being

the main driver, with profit or loss

before taxation being deemed a

key metric for measure of

performance by both group

management and external users of

the financial statements,

shareholders and wider

Rationale for the parent company

overall materiality parallels with that of

the group.

stakeholders as the group seeks to

reduce their cost base and refocus

their business strategy in light of

legislative and operational

changes.

On this basis, adjusted loss before

taxation was determined to be an

appropriate basis for determining

overall materiality.

Financial statements

group

Financial statements

–

parent

company

Performance

materiality

£157,000 (2023: £154,200) £69,000 (2023: £41,300)

Basis for

determining

performance

materiality

70% (2023: 70%) of overall group

materiality

70% (2023: 70%) of overall parent

company materiality

Rationale for the

benchmark

applied

In determining the performance materiality, we have considered the

following factors:

 The level of significant judgements and estimates;

 The risk assessment and aggregation of risk and the effectiveness

of controls;

 The control environment and the group’s financial reporting controls

and processes; and

 The stability of key management personnel.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of

uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance

materiality in determining the nature and extent of our testing of account balances, classes of transactions

and disclosures, for example in determining sample sizes.

We agreed with the Audit Committee that we would report to them misstatements identified during our audit

above £11,000 for the audit of the group and £4,000 for the parent company as well as misstatements below

those amounts that, in our view, warranted reporting for qualitative reasons.

Our approach to the audit

In designing our audit approach, we determined materiality and assessed risk of material misstatement in the

financial statements. In particular, we looked at areas involving significant accounting estimates and

judgements by the directors, including the recognition of revenue, the carrying value and recoverability of

intangible assets and going concern. Procedures were then performed to address the risk identified and for

the most significant assessed risks of misstatement, the procedures performed are outlined below in the key

audit matters section of this report. We re-assessed the risks throughout the audit process and concluded that

the scope remained in line with that determined at the planning stage of the audit.

The group includes the listed parent company and US-based subsidiaries, of which only Chill Corporation was

considered to be a financially significant component. We tailored the scope of our audit to ensure that we

performed enough work to be able to give an opinion on the financial statements as a whole, taking into

account the structure of the group and the company, the accounting processes and controls, and the industry

in which they operate.

No component auditors have been used and as group auditors we audited the significant component in the

United States for the year ended 31 March 2024. This gave us sufficient appropriate audit evidence for our

audit opinion on the group financial statements.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit

of the financial statements of the current period and include the most significant assessed risks of material

misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the

overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement

team. These matters were addressed in the context of our audit of the financial statements as a whole, and in

forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the

matter described in the Material uncertainty related to going concern section we have determined the matters

described below to be the key audit matters to be communicated in our report.

Key Audit Matter How our scope addressed this matter

Revenue recognition (note 3)

Under ISA (UK) 240, there is a rebuttable

presumption that revenue recognition is a

significant fraud risk.

During the year ended 31 March 2024 the

parent company entered into a series of

sales and distribution agreements in the

UK. These new agreements allowed the

Group to penetrate the vaping industry,

with revenue increasing to £1.9m in the

financial period (2024: £0.1m).

We consider the risk in relation to the

potential manipulation of revenue arises

from the incorrect recognition of revenue

transactions and postings of inappropriate

journal entries via management override.

The performance obligations within the

main sales and distribution agreements are

both satisfied at a point in time, either upon

delivery to Phoenix 2 Retail or upon

delivery to final consumer under The

Vaping Group agreement. While there is

limited judgement required by

management in applying the Group’s

revenue recognition policy, the differences

in the timing of when revenue is to be

recognised increases the risk of

Our work in respect of this key audit matter

included:

 Obtaining and documenting an

understanding of the internal control

environment in operation and

undertaking walk-throughs to assess

whether key controls within the

revenue processes and systems have

been designed and implemented

effectively;

 Reviewing the revenue recognition

policies against the requirements of

IFRS 15 Revenue from contracts with

customers and assessing the

adequacy of disclosures made within

the financial statements;

 Analysing the population of all material

journals posted to revenue nominal

codes using data analytics to identify

instances of manipulation or incorrect

recognition;

 Performing, on a sample basis,

substantive tests of detail on revenue

transactions to ensure the accuracy

and occurrence of revenue through to

supporting documents including sales

inappropriate revenue recognition under

IFRS 15 Revenue from contracts with

customers.

A material error in this balance could affect

the financial statement user’s decision, and

therefore revenue recognition is deemed to

be a key audit matter for the year ended 31

March 2024.

invoices, shipping documentation and

bank statements; and

 Testing the cut-off of revenue for the

year by selecting samples from pre

and post yearend revenue reports to

ensure that revenue was appropriately

recognised in the correct period.

Key observations

Based on the audit procedures performed

above, we did not identify any instances of

management override and are satisfied that

revenue has been recognised in accordance

with the recognition criteria set out in IFRS 15.

Carrying value and recoverability of

intangible assets (note 13)

The group has recognised an intangible

asset of £1.1m at the year-end, pertaining

to the domain name “Chill.com” which was

acquired by the Group in the year ended 31

March 2022.

The domain name is considered by

management to be critical to the long-term

success of the group, with value being

attributed to future cash inflows derived

directly from the intangible fixed asset.

Under IAS 36 Impairment of Assets, the

domain name should be assessed at the

end of each reporting period for indicators

of impairment. Where indicators of

impairment are subsequently identified in

the financial period, an assessment of the

asset’s carrying value must be performed

by management against its recoverable

amount.

There is a prevailing risk that the carrying

value of the domain name exceeds the

recoverable amount as at 31 March 2024,

given that the group has made a significant

trading loss for the year ended 31 March

2024 and historically in successive

financial periods.

Any impairment assessment on the

carrying value of the Chill.com domain

name will involve significant judgement

and estimation from management due to

the inherent uncertainty and subjectivity

Our work in respect of this key audit matter

included:

 Evaluating the carrying value as at 31

March 2024 in line with the

requirements of IAS 38 Intangible

Assets;

 Reviewing for indicators of impairment

in accordance with the requirements of

IAS 36;

 Obtaining management’s impairment

assessment and reviewing for

mathematical accuracy;

 Reviewing and challenging

management’s assessment of

impairment of the intangible asset and

all underlying inputs and assumptions

used therein;

 Discussing with management the

rationale and usage of the domain

name as part of considerations of the

wider business operations and future

plans; and

 Considering the adequacy of the

disclosures and accounting policies in

respect of intangible assets in the

financial statements.

Key observations

Based on the audit procedures performed, we

are satisfied with management’s assessment

and conclusion that no impairment is required

on the intangible asset.

around key assumptions incorporated into

the assessment.

Due to the estimation uncertainty on the

determination of an appropriate

recoverable amount and the material nature

of the carrying value of the domain name,

this was considered to be a key audit

matter in the audit for the year ended 31

March 2024.

Other information

The other information comprises the information included in the annual report, other than the financial

statements and our auditor’s report thereon. The directors are responsible for the other information contained

within the annual report. Our opinion on the group and parent company financial statements does not cover

the other information and, except to the extent otherwise explicitly stated in our report, we do not express any

form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so,

consider whether the other information is materially inconsistent with the financial statements or our knowledge

obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material

inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a

material misstatement in the financial statements themselves. If, based on the work we have performed, we

conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in

accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

 the information given in the strategic report and the directors’ report for the financial year for which the

financial statements are prepared is consistent with the financial statements; and

 the strategic report and the directors’ report have been prepared in accordance with applicable legal

requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment

obtained in the course of the audit, we have not identified material misstatements in the strategic report or the

directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006

requires us to report to you if, in our opinion:

 adequate accounting records have not been kept by the parent company, or returns adequate for our

audit have not been received from branches not visited by us; or

 the parent company financial statements and the part of the directors’ remuneration report to be

audited are not in agreement with the accounting records and returns; or

 certain disclosures of directors’ remuneration specified by law are not made; or

 we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement, the directors are responsible for the

preparation of the group and parent company financial statements and for being satisfied that they give a true

and fair view, and for such internal control as the directors determine is necessary to enable the preparation

of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the group and parent company financial statements, the directors are responsible for assessing

the group’s and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters

related to going concern and using the going concern basis of accounting unless the directors either intend to

liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free

from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our

opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in

accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise

from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be

expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of

irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,

including fraud is detailed below:

 We obtained an understanding of the group and parent company and the sector in which they operate to

identify laws and regulations that could reasonably be expected to have a direct effect on the financial

statements. We obtained our understanding in this regard through discussions with management, industry

research, application of cumulative audit knowledge and experience of the sector.

 We determined the principal laws and regulations relevant to the group and parent company in this regard

to be those arising from Companies Act 2006, Listing Rules, Disclosure and Transparency Rules, The

Proceeds of Crime Act, The Food Standards Agency (FSA), The Federal Food, Drug, and Cosmetic Act

(FD&C Act) as regulated by the FDA which regulates the synthetic nicotine in the USA.

 We designed our audit procedures to ensure the audit team considered whether there were any indications

of non-compliance by the group and parent company with those laws and regulations. These procedures

included, but were not limited to:

o Enquiries of management;

o Review of Board and other Committee minutes;

o Review of Regulatory News Announcements (RNS); and

o Review of legal and regulatory correspondence.

 We also identified the risks of material misstatement of the financial statements due to fraud. We

considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management

override of controls.

 As in all of our audits, we addressed the risk of fraud arising from management override of controls by

performing audit procedures which included, but were not limited to: the testing of journals; reviewing

accounting estimates for evidence of bias; and evaluating the business rationale of any significant

transactions that are unusual or outside the normal course of business. In this context we view the

significant estimates as being the carrying value and recoverability of the intangible asset, the valuation

of inventory and the valuation and classification of convertible loan notes and the valuation of share-based

payments.

- 54 -

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including

those leading to a material misstatement in the financial statements or non-compliance with regulation. This

risk increases the more that compliance with a law or regulation is removed from the events and transactions

reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.

The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves

intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial

Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our

auditor’s report.

Other matters which we are required to address

We were appointed by the Board of Directors on 2 April 2024 to audit the financial statements for the period

ending 31 March 2024 and subsequent financial periods. Our total uninterrupted period of engagement is 6

years, covering the periods ending 31 March 2019 to 31 March 2024.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent

company and we remain independent of the group and the parent company in conducting our audit.

Our audit opinion is consistent with the additional report to the audit committee.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of

the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s

members those matters we are required to state to them in an auditor’s report and for no other purpose. To

the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the

company and the company's members as a body, for our audit work, for this report, or for the opinions we

have formed.

Timothy Harris (Senior Statutory Auditor) 15 Westferry Circus

For and on behalf of PKF Littlejohn LLP Canary Wharf

Statutory Auditor London E14 4HD

20 June 2025

Chill Brands Group PLC

Consolidated Statement of Comprehensive Income

For the years ended 31

March 202

and 202

Notes

Year ended 31

March 2024

Year ended 31

March 2023

Revenue

1,908,020

82,840

Cost of sales

(1,040,053)

(61,798)

Obsolete inventory expense

(395,157)

(227,901)

Gross profit / (loss) 472,810

(206,859)

Administrative expenses

(3,523,507)

(2,636,115)

Share expenses for options granted

(1,126,846)

Operating Loss

(3,050,697)

(

3,969,820

)

Finance income

87,033

24,159

Finance cost

(377,082)

(323,556)

Other income

270

6,203

Loss on ordinary activities before taxation (3,340,476)

(4,263,014)

Taxation on loss on ordinary activities

Loss for the period from continuing activities

(

3,340,476

)

(4,263,014)

Loss for the period from discontinued activities

(29,817)

(24,877)

Loss for the period

(

3,370,293

)

(4,287,891)

Other comprehensive income

Items that may be re-classified subsequently to profit or loss:

Foreign exchange adjustment on consolidation

(32,832)

(24,241)

Total comprehensive income for the

period attributable to the equity holders (3,403,125)

(4,312,132)

Basic and diluted earnings per share attributed to the equity

holders:

Attributable to continuing activities

(0.96)

(1.75)

Attributable to discontinued activities

(0.01)

Total

(0.97)

(1.76)

The notes on pages 62 to 90 form an integral part of the financial statements.

- 56 -

hill Brands Group PLC

Registered Number: 09309241

Consolidated Statement of Financial Position

At 31 March 202

and 202

Notes

At 31 March

2024

At 31 March

2023

Non-Current Assets

Property, plant, and equipment

28,780

42,612

Right of use lease asset

178,118

210,216

Intangible assets

1,135,497

1,209,424

Total Noncurrent Assets 1,342,395

1,462,252

Current Assets

Inventories, net

of provisions

139,838

464,028

Trade and other receivables

2,467,704

447,367

Cash and cash equivalents

1,315,289

3,767,426

Total Current Assets 3,922,831

4,678,821

Total Assets

5,265,226

6,141,073

Non

Current Liabilities

Long

term debt, excluding current maturities

1,411,755

4,034,726

Right of use lease liability, net of current portion

92,243

149,755

Total Non-current Liabilities 1,503,998

4,184,481

Current Liabilities

Current maturities of

long

term debt

211,017

468,893

Trade

other payables

and accrued liabilities

886,941

540,641

Right of use lease

liability, current portion

92,393

68,386

Total Current Liabilities

1,190,351

1,077,920

Total Liabilities

2,694,349

5,262,401

Net Assets

2,570,877

878,672

Equity

Share capital

4,953,169

2,611,153

Share premium account

14,755,570

10,923,000

Shared based payment reserve

4,516,608

Compound loan note equity component reserve

19,052

419,168

Shares to be issued

reserve

1,079,256

Foreign currency translation reserve

203,704

236,536

Other reserve

400,116

Retained loss

(22,277,342

)

(18,907,049)

Total Equity 2,570,877

878,672

The notes on pages 62 to 91 form an integral part of the financial statements. The financial Statements were approved by the

Board of Directors on 20 June 2025 and signed on their behalf by:

Callum Sommerton

–

Chief Executive Officer

- 57 -

Chill

Brands Group PLC

Registered Number: 09309241

Company Statement of Financial Position

At 31 March 202

and 202

Notes

At 31 March

2024

At 31 March

2023

Current Assets

Inventories

, net of provisions

735

21,082

Trade and

other receivables

4,00

122,647

Cash and cash equivalents

1,225,912

3,544,243

Total Current Assets

3,687,972

Total Assets 3,646,649

3,687,972

Non

Current Liabilities

Long

term debt,

excluding current maturities

1,411,001

4,024,766

Total Noncurrent Liabilities

1,411,001

4,024,766

Current Liabilities

Current maturities of long

term debt

202,000

459,792

Trade

and

other payables

8,40

164,463

Total Current Liabilities

730,40

624,255

Total Liabilities 2,141,404

4,649,021

Net Assets / (Liabilities) 1,505,245

(961,049)

Equity

Share capital

4,953,169

2,611,153

premium account

14,755,570

10,923,000

Shared based payment reserve

4,516,608

Compound loan note equity component reserve

19,052

419,168

hares to be issued reserve

1,079,256

Other reserve

400,116

Retained loss

(23,139,270)

(20,510,234)

Total Equity

(961,049)

The Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own profit and loss

account in these financial statements. The loss for the financial period dealt with in the accounts of the Company amounted to

£2,629,036 (2023: loss £4,588,573). The Parent Company has elected to prepare its financial statements in accordance with

adopted I

The notes on pages 62 to 91 form an integral part of the financial statements.

The financial Statements were approved by the Board of Directors on 20 June 2025 and signed on their behalf by:

Callum Sommerton – Chief Executive Officer

Chill Brands Group Plc Consolidated Statement of Changes in Equity for the years ended 31 March 2024 and 2023

The notes on pages 62 to 91 form an integral part of the financial statements.

capital

premium

based

payment

reserve

Loan Note

Equity

Component

reserve

Shares to

be issued

reserve

Foreign

currency

translation

reserve

Other

reserve

Retained

losses

Total

£ £ £ £ £ £ £ £ £

At 1 April 2022

2,120,700

10,298,440

3,389,762

89,517

260,777

(14,619,158)

1,540,038

Loss for the year

(4,287,891)

Other comprehensive

loss

(24,241)

Transactions with

owners:

Issue of warrants and

options

1,126,846

Shares to be issued

1,072,743

Issue of shares

490,453

799,471

(83,004)

1,206,920

Costs of share issues

(174,911)

Equity component of

loan notes

419,168

At 31March 2023 2,611,153 10,923,000 4,516,608 419,168 1,079,256 236,536 - (18,907,049) 878,672

Loss

for the year

(3,370,293)

Other comprehensive

loss

(32,832)

Transactions with

owners:

Issue of shares

2,342,016

3,992,025

(1,060,000)

5,274,041

Costs of share issues

(159,455)

Transfer on

conversion of

convertible loan

notes

(400,116)

400,116

Termination of

shares to be issued

(19,256)

At 31 March 2024 4,953,169 14,755,570 4,516,608 19,052 - 203,704 400,116 (22,277,342) 2,570,877

Chill Brands Group Plc Company Statement of Changes in Equity for the years ended 31 March 2024 and 2023

The notes on pages 62 to 91 form an integral part of the financial statements.

capital

premium

based

payment

reserve

Loan Note

Equity

Component

reserve

Shares to

be issued

reserve

Other

reserve

Retained

losses

Total

£ £ £ £ £ £ £ £

At 1 April 2022

2,120,700

10,298,440

3,389,762

89,517

(15,921,661)

(23,242)

Loss for the year

(4,5

8,573)

(4,5

8,573)

Other comprehensive

loss

Transactions with

owners:

Issue of warrants and

options

1,126,846

Shares to be issued

1,072,743

Issue of shares

490,453

799,471

(83,004)

1,206,920

Costs of share issues

(17

11)

(17

11)

Equity component of

loan notes

419,168

At 31March 2023

2,611,153

10,923,000

4,516,608

419,168

1,079,256

(20,510,234)

(961,049)

Loss for the year

(2,629,036)

Other comprehensive

loss

Transactions with

owners:

Issue of shares

2,342,016

3,992,025

(1,060,000)

5,274,041

Costs of share issues

(159,455)

Transfer on

conversion of

convertible loan

notes

(400,116)

400,116

Termination of

shares to be issued

(19,256)

At 31 March 2024 4,953,169 14,755,570 4,516,608 19,052 - 400,116 (23,139,270) 1,505,245

Chill Brands Group PLC

Consolidated

Statement of Cash Flows

For the years ended 31 March 202

and 202

2024 £ 2023 £

Cash Flows From Operating Activities

Loss for the period

(3,370,293)

(4,287,891)

Adjustments for:

Depreciation and

amorti

ation charges

216,760

132,779

nventory i

mpairment provision

395,157

227,901

Provision for expected credit losses

180,000

Promotional product

in lieu of fees

41,818

Share expenses for options granted

1,126,846

Termination of shares to be issued

(19,256)

Imputed interest on convertible loan notes

343,300

177,722

Shares issued as compensation

40,739

Foreign exchange translation adjustment

(14,908)

1,157

Operating cash

out

flow before working capital movements

(2,269,240)

(2,538,929

)

Increase in inventories

(63,181)

(30,029)

(Increase)/decrease in trade and other receivables

(2,200,336)

288,864

Increase/(decrease) in trade

and other payables

346,300

(

234,692

)

Net Cash outflow from Operating Activities

(4,186,457

)

(2,514,786)

Cash Flows From Investing Activities

Payment on purchase

of intangible assets

(639,192)

Net Cash generated from/(used in) Investing Activities

(639,192)

Cash Flows From Financing Activities

Net proceeds from issue of shares

and shares to be issued

2,037,197

2,004,013

roceeds from issue of

convertible loan notes

4,693,504

Payments on long

term debt

(19,289)

(18,859)

Interest paid

(

127,490)

Payments of lease liabilit

ies

(151,873)

(66,173)

Net Cash

enerated from

Financing Activities

1,749,912

6,612,485

Net (decrease)

/ increase

in cash and cash equivalents

(2,447,912)

3,458,507

Cash and cash equivalents at beginning of period

3,767,426

420,405

Foreign exchange adjustment on opening balances

(4,225)

(111,486)

Cash and cash equivalents at end of period

1,315,289

3,767,426

Non

cash Items

(not included in the cash flows above)

Shares to be issued for prepaid consulting fees

60,000

Conversion of loan notes to ordinary shares

3,285,505

The notes on pages 62 to 91 form an integral part of the financial statements.

Chill Brands Group PLC

Company Statement of Cash Flows

For the years ended 31 March 202

and 202

2024 £ 2023 £

Cash Flows From Operating Activities

Loss for the period

(2,629,036)

(4,588,573)

Adjustments for:

Share expense for options granted

1,126,846

Termination of shares to be issued

(19,256)

Shares issued as compensation

40,739

Imputed interest on convertible loan notes

331,933

177,722

Inventory impairment provision

27,650

88,564

Provision for expected credit losses

180,000

Impairment provision

advances made

to subsidiary

1,093,789

2,251,265

Operating cash flow before working capital movements

(1,014,920)

(903,437)

(Increase)/decrease in inventories

(113

,303)

14,964

(Increase)/decrease in trade and other receivables

(2,371,354)

35,023

Increase/(decrease) in trade, other payables and

accrued liabilities

363

961

(218,825)

Net Cash outflow from Operating Activities

(3,135,616)

(1,072,275)

Cash Flows From Investing Activities

Investment in and loan to subsidiary

(1,093,789)

(2,251,265)

Net Cash Used from Investing Activities

(1,093,789)

(2,251,265)

Cash Flows From Financing Activities

Net proceeds from issue of shares

and shares to be issued

2,048,564

2,004,013

Proceeds from issuance of loan notes

4,693,504

Payments on long

term debt

(10,000)

Interest paid

(127,490)

Net Cash Generated from Financing Activities

1,911,074

6,687,517

Net increase (decrease) in cash and cash equivalents

(2,318,331)

3,363,977

Cash and cash equivalents at beginning of period

3,544,243

180,266

Cash and cash equivalents at end of period

1,225,912

3,544,243

Non

cash Items

(not included in the cash flows above)

Shares to be issued for prepaid consulting fees

60,000

Conversion of loan notes to ordinary shares

3,285,505

The notes on pages 62 to 91 form an integral part of the financial statements.

Notes to the Financial Statements

General Information

1.1

Group

Chill Brands Group, PLC (“the Company”) and its subsidiaries (together “the Group”) are involved in the sale and

distribution of nicotine-free vape products and other fast-moving consumer packaged-goods products. The

Company, a public limited company incorporated and domiciled in England and Wales, is the Group’s ultimate

parent company. The Company was incorporated on 13 November 2014 with Company Registration Number

09309241 and its registered officed and principle place of business is 27/28 Eastcastle Street, London W1W 8DH.

1.2

Company Income Statement

The Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own profit

and loss account in these financial statements. The loss for the financial period dealt with in the accounts of the

Company amounted to

£2,448,403 (2023: loss £4,588,573). The Parent Company has elected to prepare its

financial statements in accordance with UK-adopted IAS.

Basis of Preparation

The Consolidated Financial Statements of the Group have been prepared in accordance with UK-adopted

International Accounting Standards . The Consolidated Financial Statements have been prepared under the

historical cost convention as adjusted to fair values where applicable. The principal accounting policies are set out

below and have, unless otherwise stated, been applied consistently for all periods presented in these Consolidated

Financial Statements. The financial statements are prepared in pounds sterling and presented to the nearest pound.

2.1

Basis of Consolidation

The Group financial information incorporates the financial information of the Company and its controlled

subsidiary undertakings, drawn up to 31 March 2024. Control is achieved where the Company:

● Has power over the investee;

● Is exposed, or has rights, to variable return from its involvement with the investee; and

● Has the ability to use its power to affect its returns.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the

Company loses control of the subsidiary.

Where necessary, adjustments are made to the financial information of subsidiaries to bring accounting policies

into line with those used for reporting the operations of the Group. All intra-group transactions, balances, income

and expenses are eliminated on consolidation.

2.2

Going Concern

The financial statements have been prepared on a going concern basis, which assumes that the Group will continue

in operational existence for the foreseeable future, being a period of at least twelve months from the date of

approval of these financial statements. In forming their conclusion, the Directors have undertaken a comprehensive

assessment of the Group’s current financial position, cash flow forecasts, available funding arrangements, and

associated risks.

In the time since the end of the Period, the Company’s operations were primarily supported through revenue

generated from commercial activities undertaken in the prior financial year, supplemented by funds raised in a

financing round completed in January 2024. This period required particularly careful cash management, as the

Company’s financial position was impacted by the significant legal and professional costs incurred in relation to

corporate disputes and associated matters.

Looking ahead to the financial year commencing 1 April 2025, the Board expects the Company’s financial

requirements to be met through further capital raising activities. On 23 May, the Company announced that it had

raised £1 million from subscriptions for the issue of convertible loan notes carrying an annual interest rate of 10%,

a three-year maturity, and convertible into ordinary shares at a price of 1.5 pence per share. In addition, investors

will receive warrants attached to the CLNs, priced in line with the volume-weighted average price (VWAP) of the

Company's shares at the time of each drawdown.

The Board considers that the capital provided under the current financing facility will be sufficient to support the

continuation of the Company’s core commercial operations throughout the financial year ending 31 March 2026.

Nevertheless, it may be necessary for the Company to raise additional funding in the future in order to remain

viable as a going concern, particularly in the event of unforeseen operational costs or if strategic growth

opportunities are to be pursued.

Based on the Company’s demonstrated ability to secure financial backing from both new and existing investors

in recent periods, and the continued support of major shareholders, the Directors are confident in their ability to

raise further funds if and when required.

However, there remains a material uncertainty which may cast significant doubt on the Company’s ability to

continue as a going concern. The ability of the Company to continue its operations is dependent on the successful

raising of additional funding as and when required. These conditions indicate the existence of a material

uncertainty which may cast significant doubt upon the Company’s ability to continue as a going concern and,

therefore, it may be unable to realise its assets and discharge its liabilities in the normal course of business.

The Directors have reviewed detailed cash flow projections covering the period to 30 June 2026, which take into

account the anticipated timing of drawdowns under the CLN facility and the projected cost base of the Group

under various trading scenarios. These projections indicate that the Group will have sufficient financial resources

to meet its liabilities as they fall due, subject to successful execution of the fundraising strategy and timely access

to committed capital.

However, the Directors acknowledge that material uncertainty exists in relation to the Group’s ability to raise

additional capital beyond the currently committed facility in the event that revenue growth does not accelerate in

line with management expectations. In such a scenario, it may be necessary to implement further cost reduction

measures to preserve liquidity. These may include the deferral or reduction of Directors’ remuneration, the scaling

back of commercial operations to a core cost base, the renegotiation or termination of supplier agreements, and a

reduction in personnel. While these actions could have an adverse impact on commercial performance, they are

expected to materially reduce operating expenses and thereby extend the Group’s cash runway.

Notwithstanding this material uncertainty, after making enquiries and considering the options available to the

Company, the Directors have a reasonable expectation that the Company has adequate resources to continue in

operational existence for at least 12 months from the date of approval of these financial statements. Accordingly,

the Directors continue to adopt the going concern basis of accounting in preparing these financial statements.

2.3

Business Combinations

There were no Business Combinations as defined by IFRS 3 (revised) during the period.

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The cost of acquisition

is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or

assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs

directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent

liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair values at the acquisition

date.

2.4

Revenue Recognition

The Group has received revenue during the period from the sale of nicotine-free vape products and other

related products. The Group has both online sales of these products and retail sales through distribution

channels in the United States and United Kingdom.

Online sales; the Group recognises revenues from the sales of products as the performance obligations are met.

These performance obligations are met once the product has been invoiced and shipped to the purchaser under the

terms of the contract and the significant risks and rewards of ownership have been transferred to the customer.

Retail sales; the Group has distribution agreements with wholesale distributors who distribute the products to retail

stores throughout the United States and United Kingdom. Revenue on distributor sales is recognised as the

performance obligation is satisfied when the distributor initiates a purchase order and the product has shipped.

For retail customer revenue, the performance obligation is satisfied when all contractual terms are met and

ownership has been transferred to the customer.

Market Place Arrangement Sales; the Group has marketplace agreements with vendors who sell products on the

Chill.com domain and pay Chill a commission fee. Revenue on Market Place Arrangement sales is recognised as

the performance obligation is satisfied once the product owned by the vendor has been delivered to the purchaser

under the terms of the contract and the significant risks and rewards of ownership have been transferred to the

customer.

All revenues have been recognised at a point in time under IFRS 15 Revenue from Contracts with Customers.

2.5

Segmental Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating

decision-maker (“CODM”). The CODM, who is responsible for allocating resources and assessing performance

of the operating segments, is Callum Sommerton, CEO.

A business segment is a group of assets and operations engaged in providing products or services that are subject

to risks and returns that are different from those of other operating segments.

The Board of Directors assess the performance of the operating segments (by geographical location, being the UK

and US) based on the measures of revenue, gross profit, operating profit and assets employed.

2.6

Foreign Currency Translation

The Company’s consolidated financial statements are presented in Sterling (£), which is also the functional

currency of the parent company. The individual financial statements of each group entity are presented in the

currency of the primary economic environment in which the entity operates (its functional currency). For UK

based companies the functional currency is Sterling and for all USA based companies the functional currency is

US Dollars.

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s

functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the

transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the

rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign

currencies are retranslated at the rates prevailing on the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are

included in the income statement for the period. When a gain or loss on a non-monetary item is recognised directly

in equity, any exchange component of that gain or loss is also recognised directly in equity. When a gain or loss on a non-

monetary item is recognised in the income statement, any exchange component of that gain or loss is also recognised in

the income statement.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign

operations (including comparatives) are expressed in Sterling using exchange rates prevailing on the balance sheet

date. Income and expense items (including comparative) are translated at the average exchange rates for the period.

Exchange differences arising, if any, are recognised in equity. Cumulative translation differences are recognised

in profit or loss in the period in which the foreign operation is disposed of.

2.7

Defined Contribution Pension Funds

The Group pays contributions related to salary to certain UK employees’ individual pension schemes. The pension

cost charged against profits represents the amount of the contributions payable to the schemes in respect of the

accounting period. No separate provision is made in respect of non-UK employees.

2.8 Investment In Subsidiaries

Investment in subsidiaries comprises shares in the subsidiaries stated at cost less provisions for impairment.

2.9

Property, Plant, and Equipment

All plant and machinery is stated in the financial statements at cost of acquisition less a provision for depreciation

and impairment.

Depreciation is charged to write off the cost less estimated residual values of plant and equipment on a straight line basis

over their estimated useful lives and included in administrative expenses in the statement of comprehensive income.

Estimated useful lives and residual values are reviewed each year and amended if necessary.

Fixed Assets	Useful lives
Office and field equipment and furniture	3-7 years

Right of Use Lease Assets

The Group determines if an arrangement is a lease at inception if the contact conveys the right to control the use

and obtain substantially all the economic benefits from the use of an identified asset for a period of time in

exchange for consideration.

The Group identifies a lease as a finance lease if the agreement includes any of the following criteria: transfer of

ownership by the end of the lease term; an option to purchase the underlying asset that the lessee is reasonably

certain to exercise; a lease term that represents 75 percent or more of the remaining economic life of the underlying

asset; a present value of lease payments and any residual value guaranteed by the lessee that equals or exceeds 90

percent of the fair value of the underlying asset; or an underlying asset that is so specialised in nature that there is

no expected alternative use to the lessor at the end of the lease term. A lease that does not meet any of these criteria

is considered an operating lease.

Lease right-of-use assets represent the Group’s right to use an underlying asset for the lease term and lease

liabilities represent the Group’s obligation to make lease payments arising from the lease. Right-of-use assets and

liabilities are recognised at the commencement date of a lease based on the present value of lease payments over

the lease term. The Group’s lease terms may include options to extend or terminate the lease. The Group includes

these extension or termination options in the determination of the lease term when it is reasonably certain that the

Group will exercise that option. The Group does not recognise leases having a term of less than one year in our

consolidated statement of financial position.

Lease modifications are accounted for as a separate lease if the modification increases the scope of the lease by

adding the right to use one or more underlying assets, and the consideration for the lease increases by an amount

commensurate with the stand-alone price for the increase in scope. Other modifications are remeasured by

adjusting the lease liability and the right-of-use asset using a revised discount rate at the effective date of the

modification.

2.10

Intangible Fixed Assets

The Group purchased the domain name Chill.com on 22 June 2021. This domain name is the only intangible asset

held by the Group.

This domain name is stated in the financial statements at its cost of acquisition less accumulated amortisation. The

domain name is amortised over 25 years using the straight line method. The amortisation expense is included in

administrative expenses in the statement of comprehensive income. The balance as at 31 March 2024 is £1,135,497

(2023: £1,209,424). The amortisation expense for the year ended 31 March 2024 is £51,521 (2023: £50,470). The

net impact of translation adjustments on the intangible asset in the year ended 31 March 2024 was £22,406 (2023:

£69,669) .

In accordance with IAS 36 Impairment of Assets, the Group assesses impairment of the intangible asset if internal

or external factors or events cause the discounted fair value to be below the carrying value of the intangible asset.

Assessment is performed as to whether indicators are met; at which point if they are an impairment assessment is

performed whereby the Company assesses the carrying value versus the recoverable amount. Any impairment is

recognised within administrative expenses in the statement of comprehensive income. Management has deemed

the recoverable amount to be the value in use, which is determined via discounting future cash flows using an

appropriate discount rate.

2.11

Impairment Testing of Property, Plant and Equipment

At each balance sheet date, the Group assesses whether there is any indication that the carrying value of any asset may be

impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the

extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset,

the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately

identifiable cash flows (cash-generating units).

Individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances

indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount

exceeds its recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions

less costs to sell, and value in use, based on in internal discounted cash flow evaluation. Any remaining impairment

loss is charged pro rate to the other assets in the cash generating unit.

2.12 Inventories

Inventories are stated at lower of cost and net realisable value. Costs of inventories are determined on a first-in-

first-out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of

competition and costs necessary to make the sale.

Given the shelf‐life of the Company’s products, along with their relative saleability depending on remaining

useful life, the following inventory provisioning policies shall apply. Exceptions may be applied at the discretion

of the Board.

Label Life Remaining	Recognised Value (%)
Receipt of Product
	100%
Six
Months
	75%
Four Months
	50%
Two Months
	25%
One Month
	10%
Post
-
Expiry Date
	0%

2.13

Long-Term Debt

Government Loans

The Group received a Paycheck Protection Program (PPP) loan during the year ended 31 March 2021 from the

Small Business administration (SBA) as part of the Coronavirus Aid, Relief and Economic Security Act (CARES

Act). The loan is designed for qualifying businesses for amounts up to 2.5 times of the average monthly payroll

expense of the qualifying business. The SBA will forgive PPP loans if all employee retention criteria are met and

the funds are used for eligible expenses. The PPP loan initially is recorded as debt on the financials and 100%

unsecured. If the loan is not forgiven, the Group must pay monthly principal and interest payments loan at a stated

interest rate per year. The Group recognises grant income equal to PPP proceeds received upon forgiveness of the

loan.

The Group received a Bounce Back Loan Scheme (BBLS) loan during the year ended 31 March 2021 managed

by the British Business Bank on benefit of and with the financial backing of the Secretary of State for Business,

Energy and Industrial Strategy. The BBLS loan initially is recorded as debt on the financials and the Group pay

monthly principal and interest payments at a stated interest rate.

See Note 24 for additional information regarding these loans.

Convertible Loan Notes

The convertible loan note agreements, entered into by the Company in the prior financial year ended 31 March

2023, have been classified as compound financial instruments under IAS 32 Financial Instruments: Presentation.

The fair value of the liability component is valued at the net present value of the contracted future cash flows,

discounted at the Group’s estimated cost of borrowing and is reported within loans and current maturity of loans.

Interest imputed on the liability component is amortised to the statement of comprehensive income on a straight-

line basis over the life of the instrument. The equity component represents the residual amount after deducting

the amount for the liability from the value of the loan note principal. Further details of the loan note can be found

in Note 24.

2.14 Equity

Share capital is determined using the nominal value of shares that have been issued.

The Share premium account includes any premiums received on the initial issuing of the share capital. Any transaction

costs associated with the issuing of shares are deducted from the Share premium account, net of any related income tax

benefits. Equity-settled share-based payments are credited to a Share-based payment reserve as a component of equity

until related options or warrants are exercised.

Shares to be issued are credited to the shares to be issued reserve as a component of equity until related shares are

issued.

Retained loss includes all current and prior period results as disclosed in the income statement.

2.15

Share-based Payments

The Group has issued warrants to investors and certain counterparties and advisors as well as share options to its

Directors and US based staff.

Equity-settled share-based payments are measured at fair value (excluding the effect of non-market based vesting

conditions) at the date of grant. The fair value so determined is expensed on a straight-line basis over the vesting period,

based on the Group’s estimate of the number of shares that will eventually vest and adjusted for the effect of non-market

based vesting conditions.

Fair value is measured using either a Black Scholes or Monte Carlo pricing model, depending upon which

methodology is most appropriate in relation to the terms and conditions of the options or warrants granted. The

key assumptions used in the models have been adjusted, based on management’s best estimate, for the effects of

non-transferability, exercise restrictions and behavioral considerations.

The Group issues shares allocated as compensation to its US based staff and Directors. Upon vesting date, the

shares are valued at the stated par value and share premium and recorded as compensation expense and share

premium in the financial statements.

2.16 Taxation

Tax currently payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the

income statement because it excludes items of income or expense that are taxable or deductible in other years and

it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated

using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial

statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using

the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary

differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be

available against which deductible temporary differences can be utilized. Such assets and liabilities are not

recognised if the temporary difference arises from initial recognition of goodwill or from the initial recognition

(other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable

profit not the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and

associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary

difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no

longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset

realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly

to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against

current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends

to settle its current tax assets and liabilities on a net basis.

2.17

Financial Assets and Liabilities Financial Assets

(a)

Classification

The Group classifies its financial assets at amortised cost. The classification depends on the purpose for which the

financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

(b)

Recognition and measurement

Amortised cost

Regular purchases and sales of financial assets are recognised at cost on the trade date, the date on which the

Group commits to purchasing or selling the asset. Financial assets are derecognised when the rights to receive cash

flows from the assets have expired or have been transferred, and the Group has transferred substantially all of the

risks and rewards of ownership.

(c)

Impairment of Financial Assets

The Group recognises an allowance for expected credit losses (“ECLs”) for all debt instruments not held at fair

value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance

with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the

original expected interest rate (“EIR”). The expected cash flows will include cash flows from the sale of collateral

held or other credit enhancements that are integral to the contractual terms.

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in

credit risk since initial recognition. ECLs are provided for credit losses that result from default events that are

possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a

significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected

over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

For trade receivables (not subject to provisional pricing) and other receivables due in less than 12 months, the

Group applied the simplified approach in calculation ECLs, as permitted by IFRS 9. Therefore, the Group does

not track changes in credit risk, but instead, recognised a loss allowance based on the financial asset’s lifetime

ECL at each reporting date.

The Group considers a financial asset to be in default when internal or external information indicates that the

Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit

enhancements held by the Group. A financial assets is written off when there is no reasonable expectation of

recovering the contractual cash flows and usually occurs when past due for more than one year and not subject to

ongoing negotiations or enforcement activity.

Additionally, the Group will also take into account any circumstances relating to trade debtors when determining

whether an asset is in default or not. Where the Group considers there to be a reasonable prospect of recovery,

especially where there is an ongoing trading relationship with the debtor, the Group may consider it appropriate

not to deem an asset in default.

(d)

Derecognition

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or

when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount

and the sum of the consideration received and receivable is recognised in profit or loss.

Financial liabilities

(a)

Classification

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,

loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as

appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings

and payables, net of directly attributable transaction costs. The Group’s financial liabilities include trade and other

payables and loans.

(b)

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities designated upon initial

recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are

incurred for the purpose of repurchasing in the near term. This category also includes derivative financial

instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as

defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are

designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the

statement of profit or loss and other comprehensive income.

Trade and other payables

After initial recognition, trade and other payables are subsequently measured at amortised cost using the EIR method.

Gains and losses are recognised in the statement of profit or loss and other comprehensive income when the liabilities

are derecognised, as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an

integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss and other

comprehensive income.

(c)

Derecognition

A financial liability is derecognised when the associated obligation 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. The difference in the respective carrying amounts is

recognised in profit or loss and other comprehensive income.

Liabilities within the scope of IFRS 9 are classified as financial liabilities at fair value through profit and loss or

other liabilities, as appropriate. A financial liability is derecognised when the obligation under the liability is

discharged or cancelled or expires. Financial liabilities included in trade and other payables are recognized initially

at fair value and subsequently at amortised cost.

2.18 Significant estimates and judgements

In the process of applying the entity’s accounting policies, management makes estimates and assumptions that

have an effect on the amounts recognised in the financial information. Although these estimates are based on

management’s best knowledge of current events and actions, actual results may ultimately differ from those

estimates. The key assumptions concerning the future, and other key sources of estimation uncertainty at the

balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets

and liabilities within the next financial period, are those relating to:

●

the carrying value and recoverability of investments in, and loan to, subsidiary companies (Note 14)

●

Fair value of options and warrants granted (Note 20)

●

Useful life, lifespan and carrying value of the domain name Chill.com (Note 13)

●

the provisions for inventory assets (Note 15)

●

the calculation of the debt and equity component of the convertible loan notes (Note 22)

Carrying Value and recoverability of Investment in, and Loan to, Subsidiary Companies

The Company has invested in the subsidiary companies which, whilst generating revenues, are not yet

profitable or providing cash flows. The estimates used in forecasting the potential future cash generation by

the own-branded product operations focus on business sensitive factors such as distribution agreements, sales

volume, pricing and cost of sales. The Directors considered the recoverability of the loans to subsidiaries and

do not expect to recover the loans in the near future. Due to this the Group has considered it necessary to

impair the entirety of the loans to subsidiary companies.

Fair Value of Options and Warrants Granted

Fair value is measured using either a Black Scholes or Monte Carlo pricing model, depending upon which

methodology is most appropriate in relation to the terms and conditions of the options or warrants granted. The

key assumptions used in the models have been adjusted, based on management’s best estimate, for the effects of

non-transferability, exercise restrictions and behavioral considerations, see Note 20.

Useful life and Recoverability of the Carrying Value of the Domain Name

The domain name is amortised over 25 years using the straight line method, which was determined to be the

estimated useful life of the domain name asset by the Group based on industry analysis. The Group analyses

impairment of the domain name if internal or external factors or events cause the recoverable amount to be below

the carrying value of the intangible asset. An impairment loss is recognised within administrative costs within the

statement of comprehensive income for the amount by which the asset’s carrying amount exceeds its estimated

recoverable amount less costs to sell. The discounted cash flow approach was undertaken in assessing the domain

name impairment.

We have prepared a discounted cash flow model projecting cash flows from 2025 to 2045, incorporating annual

sales growth, gross margins, a present value discount at the rate of 14.44% based on the Capital Asset Pricing

Model (CAPM), and a terminal value as at 2045.

Provisions for Inventory Assets

Given the shelf‐life of the Company’s products, along with their relative salability depending on remaining useful

life, the Group provides inventory provisions based on estimated shelf live, discussed above in note 2.12.

Provisions for inventory are recorded when events or changes in circumstances indicate the carrying cost of

inventories will not be fully realised.

Convertible Loan Note Classification

The convertible loan note agreements, entered into by the Company in prior financial period have been classified

as compound financial instruments under IAS 32. The fair value of the liability component is valued at the net

present value of the contracted future cash flows, discounted at the Group’s estimated cost of borrowing of 12.5%.

The equity component represents the residual amount after deducting the amount for the liability from the value

of the funds received.

Measurement of expected credit losses

The measurement of both the initial and ongoing ECL allowance for trade receivables measured at amortised cost

is an area that requires the use of significant assumptions about credit behaviour such as likelihood of customers

defaulting and the resulting losses. In assessing the probability of default, the Board has taken note of the

experience and loss history of its customers which may not be indicative of future losses. The default probabilities

are based on a number of factors including customer and sectoral trends which the Board believes to be a good

predictor of the probability of default. The Group has applied the simplified approach to recognise lifetime

expected credit losses for its trade receivables as required or permitted by IFRS 9.

Management has performed a calculation to ascertain the expected credit loss provision, which for the year ended

31 March 2024 amounted to £180,000 (2023: £nil). The movement has been recognised in the statement of

comprehensive income.

2.18

Standards, Amendments and Interpretations to Existing Standards that are not yet Effective and

Have not been Early Adopted by the Group

(a)

New and amended Standards and Interpretations adopted by the Group and Company

No standards or Interpretations that came into effect for the first time for the financial year beginning 1 April 2023

have had an impact on the Group.

(b)

New and amended Standards and Interpretations issued but not effective for the financial year beginning 1

April 2024

At the date of approval of these financial statements, the following standards and interpretations which have not

been applied in these financial statements were in issue but not yet effective (and in some cases had not been

adopted by the UK):

- Amendments to IAS 21: Lack of exchangeability – effective 1 January 2025*

- Amendments to IFRS 18: Presentation and Disclosures in Financial Statements – effective 1 January 2027*

- Amendments to IFRS 19: Subsidiaries without Public Accountability: Disclosures – effective 1 January

2027*

*subject to UK endorsement

The new and amended Standards and Interpretations which are in issue but not yet mandatorily effective are not

expected to be material.

Revenue

	2024	2023
	£	£
Sales of consumer packaged goods products	1,908,020	82,840

The geographical split of revenues which all related to nicotine-free vapes or sales of third party branded products

can be seen in note 4 below.

Approximately 85% of the Company’s sales during the year ended 31 March 2024 were derived from one UK

customer.

Segment Reporting

Under IFRS 8, there is a requirement to show profit or loss for each reportable segment and total assets

and total liabilities for each reportable segment if such amounts are regularly provided to the CODM,

being the Chief Executive Officer.

The Company considers there is only one business segment and

the Group has analysed the Group’s activity based on geographical location.

Results by geographical location:

	US Operations
		UK
		Operations
			Intra-Group
			Eliminations	Total
Year ended 31 March 2024	£	c	£	£
Revenue
	68,719	1,839,301	-	1,908,020
Cost of revenue
	(83,541)	(956,512)	-	(1,040,053)
Obsolete inventory expense
	(367,507)	(27,650)	-	(395,157)
Gross profit (loss)
	(382,329)	855,139	-	472,810
Other
operating costs
	(1,461,021)	(2,072,934)	10,448	(3,523,507)
Finance costs
	(5,149)	(371,933)	-	(377,082)
Finance
income
	12	87,021	-	87,033
Other income
	25	245	-	270
Recovery (impairment) of
intercompany loan
	1,104,240	(1,093,792)	(10,448)	-
Net loss from continuing
activities
	(744,222)	(2,596,254)	-	(3,340,476)
Total assets
	1,618,577	3,646,648	-	5,265,225
Net
assets
	1,065,635	1,505,241	-	2,570,876

	US Operations	UK Operations	Intra-Group
			Eliminations
				Total
Year ended 31 March 2023	£	c	£	£
Revenue
	64,167	18,673	-	82,840
Cost of revenue
	(33,964)	(27,834)	-	(61,798)
Obsolete inventory expense
	(139,337)	(88,564)	-	(227,901)
Gross profit (loss)
	(109,134)	(97,725)	-	(206,859)
Share-based payments
charge
	-	(1,126,846)
			-	(1,126,846)
Other operating costs
	(1,822,625)	(813,490)	-	(2,636,115)
Finance costs
		(323,556)		(323,556)
Other income
	6,053	24,309	-	30,362
Recovery (impairment) of
intercompany loan
	2,184,257	(2,251,265)	67,008	-
Net income (loss) from
continuing activities
	258,551	(4,588,573)	67,008	(4,263,014)
Total
assets
	2,453,101	3,687,972	-	6,141,073
Net assets
/ (liabilities)
	1,839,721	(961,049)	-	878,672

All of the Group’s activities related to its business in the United States and UK. Information relating to the

CBD activities are shown in the primary statements, therefore all IFRS disclosures are incorporated

within other notes to the financial statements.

Nature of Expenses

	2024	2023
	£	£
Within administrative expenses and share expenses for options
granted, the following non-cash expenses are included:
Depreciation of property, plant and equipment	13,150	14,405
Depreciation of right of use asset	150,200	67,904
Amortisation of the domain name “Chill.com”	51,521	50,470
Provision for expected credit losses	180,000	-
Finance costs	377,082	323,556
Share-based payments charge	-	1,126,846
Lease operating expenses	-	48,669
Auditor’s remuneration
- Audit of Group (note 7)	122,000	122,000
- Non-audit services	45,000	-
Director’s remuneration (including share-based payment charge)	427,347	434,277
Staff costs (including Directors)	550,558	609,386

Directors and Staff Costs

The average number of staff during the year, including Directors, was 7 (2023: 5). As shown staff costs

for the Group, for the year, including Directors, were:

	2024	2023
	£	£
Salaries	469,359	536,049
Pension contributions	2,642	2,311
Healthcare Costs	57,281	46,287
	529,282	584,647
Social Security and other payroll tax costs	21,277	24,739
	550,559	609,386

The Directors have determined that there are no key management personnel other than the Directors

during the year. Management remuneration paid and other benefits supplied to the Directors during the

period plus the associated social security costs were as follows:

	2024	2023
	£	£
Salaries	348,081	367,247
Pension contributions	2,642	2,311
Healthcare Costs	49,221	46,287
	399,944	415,846
Social Security and other payroll tax costs	27,403	18,431
	427,347	434,277

Auditor’s Remuneration

	2024
		2023
Chill Brand Group PLC
	£
		£
Fees payable to the company’s auditor for the audit of the individual
and group accounts
	67,200
		67,200
Non
-
audit services
	45,000
		-
Chill Corporation
Fees payable to the company’s auditor for the audit of the individual
accounts
	54,800
		54,800

Taxation

	2024	2023
	£	£
Current tax	-	-
Deferred tax	-	-
Total	-	-
The charge/credit for the period is made up as follows:
Corporate taxation on the results for the period	-	-
UK	-	-
Non-UK	-	-
Taxation charge/credit for the period	-	-
A reconciliation of the tax charge/credit appearing in the income statement to the tax credit that would result
from applying the standard rate of tax to the results for the period is:
Loss per accounts	(3,370,293)	(4,287,891)
Tax credit at the standard rate of corporation tax at a combined rate of
24% (2023:20%)	(808,870)	(857,578)
Impact of unrelieved tax losses carried forward	808,870	(857,578)
Taxation credit for the period	-	-

The Directors consider that there are no material disallowable costs or timing differences in respect of the current year.

Estimated tax losses of £14.9 million (2023: £11.9 million) may be available for relief against future profits,

however, the estimated tax losses are dependent on eradication of losses on the change from a natural resources

business to a consumer packaged-goods business. The deferred tax asset not provided for in the accounts based on

the estimated tax losses and the treatment of temporary timing differences, is approximately £3.2 million (2023:

£2.4 million). Utilisation of these losses in future may or may not be possible depending upon future profitability

within the Group and the continued availability of the losses due to the change in the Group’s core activities. The

losses from the previous oil and gas activities have been excluded from the above due to the uncertainty of the

value of the losses due to the change in activities.

No deferred tax asset has been recognised by the Group due to the uncertainty of generating sufficient future

profits and tax liability against which to offset the tax losses. Although current tax rates in the U.S. differ to those

in the UK, due to the uncertainty of timing of any available relief and the Corporation tax rates that would be

applicable at that time in either the UK or the U.S., where the Group’s operations principally occur, the Directors

have assumed that the applicable tax rate will be 24%, which is a blended rate given that the tax rate in the USA

is 21 percent and the main profits rate in the UK is 25 percent.

Loss for the Period from Discontinued Activities

During the year ended 31 March 2020, the Board decided that the Group should withdraw from all oil and gas

activities due to the continued volatility in the sector and the lack of progress in establishing profitable niche

positions for the Group. The Group disposed of its interest in its East Denver producing wells, its Kansas

operations and its patent portfolio along with its premises leases during the current year. The Group continues to

incur costs on this sector in relation to the growing of the vegetation of the land in order to retrieve the bond

deposit with the state.

The results of the discontinued operations which have been included in the consolidated income statement were

as follows:

	Year ended 31
	March 2024
		Year ended 31
		March 2023
	£	£
Revenue and other income	-	-
Administrative expenses	(29,817)	(24,877)
Operating loss	(29,817)	(24,877)
Loss on ordinary activities before taxation	(29,817)	(24,877)
Taxation on loss on ordinary activities	-	-
Loss for the period from discontinued activities	(29,817)	(24,877)
Cash flows from discontinued activities
Operating activities	(29,817)	(24,877)
Investing activities	-	-
Financing activities	-	-
	(29,817)	(24,877)

10.

Loss Per Share

	Loss (£)
		Weighted average number
		of shares
			Per share amount
			(£)
For the year ended 31 March 2024
Basic loss per share:
Continuing activities	(3,340,476)	345,693,745	(0.96)p
Discontinued activities	(29,817)	345,693,745	(0.01)p
Totals	(3,370,293)	345,693,745	(0.97)p
For the year ended 31 March 2023
Basic loss per share
Continuing activities	(4,263,014)	242,977,694	(1.75)p
Discontinued activities	(24,877)	242,977,694	(0.01)p
Totals	(4,287,891)	242,977,694	(1.76)p

The calculation of the loss per share is based on the weighted average of 345,693,745 shares (2023: 242,977,694

shares). The calculation includes ordinary shares in issue during the period and on the loss for the financial period

after taxation of £3,370,294 (2023: £4,287,891) split between the loss on continuing activities of £3,340,476 (2023:

£4,263,014) and the loss on discontinued activities of £29,817 (2023: £24,877).

Basic earnings per share is based on net income and is calculated based upon the daily weighted-average number

of common shares outstanding during the periods presented, Also, this calculation includes fully vested stock

awards that have not been issued as common stock.

Diluted loss per share is calculated by dividing the results after tax attributable to members by the weighted average

number of shares in issue, adjusted for potentially dilutive share options. Given that the Group is in a loss position,

diluted loss per share has not been presented and the basic measure has been used.

11.

Property, Plant and Equipment

Group Cost	Plant and Equipment	Total
	£	£
At 31 March 2022	90,048	90,048
Translation adjustment	5,462	5,462
At 31 March 2023	95,510	95,510
Depreciation
At 31 March 2022	35,875	35,875
Charge for the year	14,405	14,405
Translation adjustment	2,618	2,618
At March 31 2023	52,898	52,898
Cost
At 31 March 2023	95,510	95,510
Translation adjustment	(1,808)	(1,808)
At 31 March 2024	93,702	93,702
Depreciation
At 31 March 2023	52,898	52,898
Charge for the year	13,150	13,150
Translation adjustment	(1,126)	(1,126)
At 31 March 2024	64,922	64,922
Net book Value
At 31 March 2022	54,173	54,173
At 31 March 2023	42,612	42,612
At 31 March 2024	28,780	28,780

12.

Right-of-Use Asset

	Asset	Liability
	£	£
As of 31 March 2023	210,216	(218,141)
Lease additions	94,703	(94,703)
Lease modifications	27,826	(27,826)
Depreciation of right of use assets	(152,089)	-
Lease liability principal repayments	-	151,873
Foreign currency differences	(2,538)	4,161
As of 31 March 2024	178,118	(184,636)

Future minimum lease payments under non-cancellable
operating leases	31 March 2024
	£
Within one year	92,393
Within two to five years	92,243
Total	184,636

The Group leases an office and warehouse space under non-cancelable operating leases with remaining lease

terms expiring on 30 April 2026 ( with an option to extend for another 5 years) and 31 May 2024, respectively.

The right of use assets are carried at £178,118 and is reported within non-current assets in the Consolidated

Statement of Financial Position. Operating liabilities are reported within the non-current liabilities in the

Consolidated Statement of Financial Position. The Group has not entered into any finance leases. Operating lease

costs under this lease for the year ended 31 March 2024 totalled £nil (2023: £68,124).

For leases with a term of 12 months or less (short-term leases) with no purchase option, IFRS 16 permits a lessee

to make an accounting policy election by class of underlying asset not to recognise lease assets and lease liabilities.

If a lessee makes this election, it should recognise the lease expense for such leases generally on a straight line

basis over the lease term. In the year ended 31 March 2023, the Group made this accounting policy election related

to short-term leases for all classes of underlying assets and therefore the Group did not recognise lease assets and

lease liabilities related to the lease with Racquette Hanger, LLC as discussed in note 26. In the year ended 31

March 2024, the Group agreed to lengthen the agreed lease terms with Racquette Hanger, LLC by 12 months.

These modifications have resulted in an increase in the total amounts payable under the existing lease and a

corresponding recognition to both of the right-of-use asset and lease liabilities with effect from the date of

modification (9 June 2023). Accordingly, the Group recognised a right-of-use asset and lease liability of £94,733

based on the modified lease payments using the discount rate on the modification date.

13.

Intangible Assets

	Domain Name
	“Chill.com”
	£
Cost
Balance at 31 March 202
3
	1
	,
	300,456
Translation
a
djustment
s
	(24
	,616
	)
	_
Balance at 31 March 202
4
	1,275,
	8
	4
	0
Accumulated amortisation
Balance at 31 March 202
3
	(
	91,032
	)
Charge for the year
	(51,
	521)
Translation
a
djustment
s
	2,21
	0
Balance at 31 March 202
4
	(
	14
	0,34
	3
	)
Intangible Asset, net at 31 March 2023	1,209,424
Intangible Asset, net at 31 March 2024	1,135,497

The Group entered into an agreement to purchase the domain name “Chill.com” and all intellectual property rights

that it has accrued in connection with the domain name and its use. The Group values the intangible assets at cost

in accordance with IAS 38 Intangible Assets.

For the purposes of recognition of the asset’s value, the Group has determined that the Chill.com domain has an

estimated useful life of 25 years, and its value should therefore be amortised over that same period. As at 31 March

2024, the remaining useful life was approximately 22 years.

In determining the appropriate estimated useful life of the Asset, the Group’s management has given consideration

to the following factors:

● the treatment of domain assets by international regulatory bodies;

● the impact of the Asset on revenues generated by the Group;

● the continued development of an e-commerce platform under the Asset;

● the commercial opportunities attracted by ownership of the Asset; and

● the likelihood of realising the assets full purchase value on any future disposal.

In accordance with IAS 36 Impairment of Assets, the Group assesses impairment of the intangible asset if internal

or external factors or events cause the recoverable amount to be below the carrying value of the intangible asset.

Assessment is performed as to whether indicators are met; at which point if they are an impairment assessment is

performed whereby the Company assesses the carrying value versus the recoverable amount. Impairment charges

are recognised within administrative expenses in the statement of comprehensive income.

The following potential indicators of impairment were highlighted by this review:

- Sales through the website in the year ended 31 March 2024 were below forecasts produced in the prior

year.

- Legislation enacted by the UK government prohibited the sale of disposable vape products from 1 June

2025, impacting on the Company’s prior intentions to continue sales of such products.

Whilst sales of third-party brands made through the domain during the financial year were lower than previously

forecasted, the bearing of this performance on future growth is, in the opinion of the Company’s management,

limited. This is because while the domain was acquired with ambitious growth aspirations, little was done in practice

to realise these goals or to deliver growth. In particular, the Company did not:

● Consistently execute a search engine optimisation strategy to enhance the organic visibility of the site on

search engines;

● Execute any paid advertising program to drive targeted traffic to the site from Google or Meta platforms,

including Instagram and Facebook;

● Operate an effective affiliate or influencer marketing campaign;

● Allocate any meaningful budget to attract user traffic to the site or build an extended email marketing list.

Consequently, we do not consider that the past performance of the domain reflects its potential under a properly

resourced and executed strategy.

With regard to the recent legislative changes, the Company recognises that previously provided projections were in

part predicated on the expectation of continued sales of the Company’s first generation of Chill ZERO branded

vape products. However, as a result of legislation brought forward by the UK government, disposable vape products

became prohibited in the UK from 1 June 2025.

While this means that sales of the existing product will cease, it does not change the Company’s mid to long-term

view of the vaping industry or the potential of the Company’s brand and products within it. The Company has

developed and procured its own range of e-liquids for use in refillable vapes and is progressing towards the launch

of rechargeable, reusable pod-based vaping products that will be a direct replacement for the company’s existing

disposable products.

Although this legislative change has introduced short-term turbulence to the market for vape products, the Company

actually considers that the prohibition on disposable vapes and the introduction of various regulations concerning

vaping products will bring more stability and predictability to the market. This regulatory environment will enable

retail buyers to confidently engage with brands, given that the market will be settled and more predictable.

Management have deemed the recoverable amount to be the value in use, which is determined via discounting future

cash flows. The discounted cash flow model prepared by the Company has projected cash flows from 2025 to 2045,

incorporating annual sales growth, gross margins and a present value discount at the rate of 14.44% based on the

Capital Asset Pricing Model (CAPM), and a terminal value as at 2045. On the basis of this assessment, no

impairment was deemed necessary.

14.

Investment in Subsidiary and Loan to Group Companies

Company	2024	2023
	£	£
Investment in subsidiaries at cost	15,746,468	15,746,468
Less: impairment provision	(15,746,468)	(15,746,468)
Investment in subsidiaries	-	-

The Company has three subsidiaries for the years end 31 March 2024 and 2023.

All subsidiary companies are consolidated in the Group’s financial statements.

Name
	Place of
	Incorporation
	and Operation
		Proportion of
		Ownership
		Interest
			Profit (Loss)
			for the Year
				Aggregate
				Capital and
				Reserves at 31
				March 2024
Highlands Natural Resources Corporation	USA	100%	(29,817)	(832,214)
Highlands Montana Corporation*	USA	100%	-	(£3,685,668)
Chill Corporation*	USA	100%	(744,272)	(1,358,647)

*Owned by Highlands Natural Resources Corporation

The principal activity of Chill Corporation is as a developer and producer of nicotine-free vape products and other

consumer packaged-goods products.

Highlands Natural Resources Corporation and Highlands Montana Corporation were dormant throughout the year

ended 31 March 2024. The registered office of the USA based subsidiaries is 1601 Riverfront Drive Suite 201,

Grand Junction, Colorado 81501. The ownership in all cases is 100% of the issued ordinary shares of each

company and in all cases represents 100% of the voting rights.

The investments in the shares of the subsidiaries are long term holdings and were initially made for the long term

financing of the Group’s oil and gas activities. Given the withdrawal of the Group from the oil and gas sector, and

the associated losses generated from those discontinued activities, the Board has taken the view that there is no

certainty of any significant sums being generated in the future from those activities to support the initial investment

values. Consequently, the Company has made full provision against the investment in the shares of its US based

subsidiaries.

During the year, the Company made further loans to Chill Corporation and Highlands Natural Resource

Corporation to fund the US operations. The Board does not consider that in due course such loans will be

recoverable in full. In particular, management has assessed the non-performative elements of the business and the

Company now intends to shutter its US operations while it focuses on developing its core business. Due to this, it

was considered reasonable to impair the loans as of 31 March 2024. See Critical accounting judgements and key

sources of estimation uncertainty at note 2.18.

Loan to Group Undertaking	Loan at Cost
		Impairment
		Provision	Net Total
	£	£	£
At 31 March 2023	11,580,990	(11,580,990)	-
Additions	1,093,789	-	1,093,789
Impairment	-	(1,093,789)	(1,093,789)
At 31 March 2024
	12,674,779	(12,674,779)
			-

15.

Inventories

	Group 2024
		Company
		2024	Group 2023
				Company
				2023
	£	£	£	£
Finished goods	667,807	222,949	650,921	109,646
Raw materials	351,129	-	357,903	-
Impairment charges	(879,098)	(116,214)	(544,796)	(88,564)
Totals	139,838	106,735	464,028	21,082

Obsolete inventory expense (Group)	2024	2023
Impairment of hemp inventory	351,129	-
Inventory provisions based on “best by” date	29,835	170,905
Provision of inventory due to slow movement	14,193	56,996
Total charge for the year	395,157	227,901

The Group’s inventory of hemp seeds was fully impaired in the year ended 31 March 2024. Despite the seeds'

strong genetic profile, proven cultivation viability, and potential for alternative applications, the Company

acknowledged the uncertainty surrounding their commercialisation. The failure to meet EU uniformity standards

limits their immediate marketability in Europe, while regulatory and market dynamics in other regions, such as

the United States, remain subject to external factors. Given the uncertainty introduced by these factors, the

Directors have elected to fully impair the value of the feminised hemp seed inventory in the current financial year.

This decision does not diminish the seeds’ inherent potential but reflects a cautious approach given the challenges

associated with their immediate monetisation.

Below is a reconciliation of the movement of the accumulated provision for obsolete inventory for the Group for

the year ended 31 March 2024.

Accumulated provision for obsolete inventory at 1 April 2023
	(544,796)
Provisions during the period
	(395,157)
Inventory allowance released in the year
	53,068
Translation adjustment
	7,787
Accumulated provision at 31 March 2024	(879,098)

Management reviews inventory best by dates and creates a provision for inventory based on the inventory

provisioning policy discussed in Note 2.12.

16.

Trade & Other Receivables

	Group 2024
		Company
		2024	Group 2023
				Company
				2023
	£	£	£	£
Trade receivables (gross)	1,546,308	1,501,808	16,331	842
ECL provision	(180,000)	(180,000)	-	-
Trade receivables (net of ECL provision)	1,366,308	1,321,808	16,331	842
Prepayments & other debtors	1,101,396	992,193	431,036	121,805
	2,467,704	2,314,001	447,367	122,647

All amounts in trade receivables are due within 3 months and are stated at amortised cost.

The Group applies the IFRS9 simplified approach to measuring expected credit losses using a lifetime expected

credit loss provision for trade receivables. To measure expected credit losses on a collective basis, trade receivables

are grouped based on similar credit risk and ageing. The Group’s customer base is of a similar bracket and share

the same characteristics, as such these have been treated as one population. The expected lifetime losses in respect

of trade receivables are considered to be £180,000 (2023: £nil).

The expected credit losses have been based on historical, current and forward-looking information. The Group

does not change the classification of a trade receivable if payment is delayed where the value is considered to be

recoverable. The Group assesses trade receivables and the associated debtors to determine the appropriateness of

this treatment and the likelihood of recovery.

Provision for expected credit losses (Group)	2024	2023
As at 1 January	-	-
Movement in expected credit loss provision	180,000	-
As at 31 December	180,000	-

17.

Cash & Cash Equivalents

	Group 2024
		Company
		2024	Group 2023
				Company
				2023
	£	£	£	£
Cash at bank	1,315,289	1,225,912	3,767,426	3,544,243

Cash at bank comprises of balanced held by the Group in current bank accounts. The carrying amount of these

assets approximated to their fair value.

The credit ratings for Virgin Money UK Plc were:

Rating Agency	Rating
Fitch	A-
Moody’s	Baa2

Credit ratings were not available for Timberline Bank.

18.

Trade & Other Payables

	Group 2024
		Company
		2024	Group 2023
				Company
				2023
	£	£	£	£
Trade and other payables	658,143	439,131	418,641	97,264
Accruals	228,798	89,272	122,000	67,200
	886,941	528,403	540,641	164,464

Trade payables, accruals and other payables principally comprise amounts outstanding for trade purchases and

continuing costs and are stated at amortised cost. The Directors consider that the carrying amount of trade and

other payables approximates to their fair value.

19.

Share Capital

	2024	2023
	£	£
Allotted called up and fully paid:
506,291,025 ordinary 1p shares (2023: 261,115,305 ordinary 1p shares)	4,953,169	2,611,153

The Company has only one class of share. All ordinary shares have equal voting rights and rank pari passu for the

distribution dividends and repayment of capital.

		Par Value of
		Shares Issued
	Number	£
At 31 March 2023	261,115,305	2,611,153
15 May 2023 issue of shares at 4.0p per share	26,500,000	265,000
5 December 2023 issue of shares at 2.0p per share	154,675,220	1,546,752
Adjustment on convertible loan note conversion	-	(109,741)
26 January 2024 issue of shares at 3.75p per share	64,000,500	640,005
Total number of shares in issue at 31 March 2024	506,291,025	4,953,169

Share Premium Account

	Shares	£
At 31 March 2023	261,115,305	10,923,000
15 May 2023 issue of shares at 4p per share
	26,500,000	795,000
5 December 2023 issue of shares at 2.0p per share
	154,675,220	1,546,752
Adjustment on convertible loan note conversion
	-	(109,741)
26 January 2024 issue of shares at 3.75p per share
	64,000,500	1,760,014
Less: costs relating to share issue	-	(159,455)
At 31 March 2024	506,291,025	14,755,570

On 15 May 2023, the Group announced that it had issued 1,500,000 new ordinary shares of 1 pence each to a

service provider at a price of 4 pence per share. The shares were issued in settlement of an invoice for investor

relations and connected services, following the aforementioned fundraise and ongoing work to assist the Group in

communicating with investors.

On 15 May 2023, the Group issued 25,000,000 of new ordinary shares at 1 pence each to an investor from the

March 2023 fundraise at a price of 4 pence per share.

On 5 December 2023, the Company issued 154,675,220 ordinary shares of 1 pence each on the conversion of the

Company’s Convertible Loan Notes at an effective price of 2 pence per share. On the same date, the Company

sought admission to trading of up to a further 19,750,574 ordinary shares pursuant to Warrant previously issued,

as follows:

Description	Number of warrants	Date of grant	Exercise period	Exercise price per
				Ordinary Share
Series 1
	10,000,000
		13 May 2022
			13 May 2025
				10.0 pence
Series 2
	400,000
		13 May 2022
			13 May 2025
				5.0 pence
Series 3
	9,350,574
		13 May 2022
			30 May 2025
				2.0 pence
Total
	19,750,574

On 26 January 2024, the Company undertook a conditional placing of 28,533,800 new ordinary shares of 1p each

in the Company (the "Placing Shares") at a price of 3.75 pence per share (the "Issue Price") (the "Placing"), and

conditional subscription of 3,466,700 new Ordinary Shares (the "Subscription") at the Issue Price, together raising

£1,200,019 before expenses for the Company.

The Company also announced the conversion of the coupon amount to be repaid on the convertible loan notes in

the sum of £192,000 (together with accrued interest of £8,000) and the capitalisation of £1,000,000 of liabilities

predominantly comprised of inventory debt financing by existing significant shareholder, Mr Jonathan Swann for

32,000,000 new Ordinary Shares (the "Capitalisation", together with the Placing and Subscription, the "Fundraise"),

in aggregate 64,000,500 new Ordinary Shares (the "Fundraise Shares"), at the Issue Price.

20.

Share Options and Warrants

At 31 March 2024 there were options and warrants outstanding over 39,146,205 unissued ordinary shares

(2023: 48,496,779). Details of the options and warrants outstanding are as follows:

Issued	Exercisable From	Exercisable Until
			Number
			Outstanding
				Exercise
				Price (p)
12 October 2016	Any time until	11 October 2026	250,000	27.75
8 October 2019	8 October 2021	8 October 2029	5,839,773	10.00
8 October 2019	8 October 2022	8 October 2029	65,000	10.00
8 October 2019	Any time until	8 October 2029	1,000,000	10.00
28 May 2021	Any time until	28 May 2026	10,000,000	60.00
1 June 2021	1 June 2022	1 May 2026	1,200,000	10.00
27 September 2021	23 September 2022	23 September 2026	10,391,432	10.00
26 April 2022	26 April 2022	26 April 2025	400,000	5.00
26 April 2022	26 April 2022	26 April 2025	10,000,000	10.00
Total			39,146,205

The Directors held the following options and warrants at the beginning and end of the period:

Director
	At 31
	March 2023
		Granted in
		the Period
			Exercised in
			the Period
				Lapsed in
				the Period
					At 31
					March 2024
						Exercise
						price (p)
T Taylor	2,887,273	-	-	-	2,887,273	4-10p
A Russo	2,887,500	-	-	-	2,887,500	4-10p
C Sommerton	-	-	-	-	-	-
Total	5,774,773	-	-	-	5,774,773

The options held by T. Taylor and A. Russo issued in October 2019 are exercisable until 8 October 2029. All other

options are exercisable between 8 September 2024 and 8 September 2029.

The market price of the shares at the year-end was 2.40 p per share.

21.

Equity-settled Share-based Payments Reserve

	2024	2023
	£	£
Brought forward	4,516,608	3,389,762
Share based payment charge on options and warrants in the year	-	1,126,846
Carried forward	4,516,608	4,516,608

The details of the exercise price and exercise period of options outstanding at the year-end are given in Note

20 above.

Details of the options and warrants outstanding at the period end are as follows:

Options and Warrants	2024 Number
		2024 Weighted
		average
		exercise price –
		pence
			2023
			Number
				2023
				Weighted
				average
				exercise
				price-pence
Outstanding at the beginning of the
period	48,496,779	24.23p	28,746,432	36.68p
Granted	-	-	19,750,574	6.11 p
Lapsed during the period	(9,350,574)	2.0p	-	-
Exercised during the period	-	-	(227)	10p
Outstanding at the period end	39,146,205	29.54p	48,496,779	24.23p
Exercised at the period end	250,227	27.75p	250,227	27.75p

The options and warrants outstanding at the period end have a weighted average remaining contractual life of

2.55 years.

Full details of the exercise price and potential exercise dates are given in Note 20 above.

22.

Compound Loan Note Equity Component Reserve

The Company issued convertible loan notes in the year ended 31 March 2023 which constituted a compound

financial instrument under IAS 32.

A further breakdown of the equity component of the loan notes that have been recorded in the Compound Loan

Note Equity Component Reserve is shown in Note 24.

23.

Capital Commitments

There were no capital commitments at 31 March 2024 or 31 March 2023.

24.

Long Term Debt

	Group 2024
		Company
		2024	Group 2023
				Company
				2023
	£	£	£	£
Government loans	22,500	22,500	32,500	32,479
Other	9,771	-	19,040	-
Convertible loan notes	1,590,501	1,590,501	4,452,079	4,452,079
1,622	,772	1,613,001	4,503,619	4,484,558
Current	211,017	202,000	468,893	459,792
Non-current	1,411,755	1,411,001	4,034,726	4,024,766
1,622	,772	1,613,001	4,503,619	4,484,558

Government Loans

		Balance as of
		March 31,
		2024
			Balance as of
			March 31,
			2023
Description
	Maturity
	Date
		£	£
Bounce Back Loan Scheme (BBLS) managed by the British
Business Bank on benefit of and with the financial backing
of the Secretary of State for Business, Energy and Industrial
Strategy. The BBLS loan of £50,000 carries an interest of
2.50% rate per annum with repayment over 60 months	July 2026	22,500	32,500
Highlands Natural Resources Corporation entered into a
Small Business Administration (SBA) loan of £154,078 with
an interest of 1.00% rate per annum.	April 2025	9,771	19,040

Maturity Schedule
of Government Loans
	£
Current Portion
	19,071
2025
	10
	,
	000
2026
	3,200
Total
	32,271

Both of these loans have been repaid subsequent to the year-end.

Convertible Loan Notes

On 13 May 2022, the Company issued convertible loan notes with an aggregate value of £2,916,670 with an

interest rate of nil through 31 May 2023 and 10% for the period after 31 May 2023. Conversion of 145,833,495

shares at a conversion price of 2 pence per share was compulsory upon approval of a prospectus or a change in

legislation where a prospectus is not needed between the date of issuance and through 31 May 2024. All of these

loan notes were converted into ordinary shares as described in Note 19 above, pursuant to a prospectus dated 30

November 2023.

On 21 June 2022, the Company issued convertible loan notes with an aggregate value of £176,835 with an interest

rate of nil through 31 May 2023 and 10% for the period after 31 May 2023. Conversion of 8,841,725 shares at a

conversion price of 2 pence per share was compulsory upon approval of a prospectus or a change in legislation

where a prospectus is not needed between the date of issuance through 31 May 2024. All of these loan notes were

converted into ordinary shares as described in Note 19 above, pursuant to a prospectus dated 30 November 2023.

On 31 March 2023, the Company issued convertible loan notes with an aggregate value of £1,600,000 with an

interest rate of 12%. Originally, the lender had the right between the date of issuance and 1 April 2026 to serve a

conversion notice on the Group to convert all or some of the notes outstanding into the applicable number of

conversion shares up to 20,000,000 at the conversion price of 8 pence per share. To the extent not already redeemed

or converted, the notes in issue were to be paid to the lender on 1 April 2026.

As announced on 23 May 2025, the Company has agreed to vary the terms of these convertible loan notes such

that their maturity date is extended to 15 May 2028, and their conversion price is amended to 2.15 pence per

ordinary share, resulting in a potential issuance of up to 74,418,605 conversion shares.

The loan notes each constitute a compound financial instrument under IAS 32. The liability component represents

the net present value of future contractual cash flows. See below for a breakdown of the classification of the loan

notes.

	Equity
	component
	£
		Current
		liability
		component
		£
			Long-term
			liability
			component
			£
				Totals
				£	Notes
13 May 2022 issuance	377,268	243,056	2,464,727	3,085,051	Converted
21 June 2022 issuance	22,849	14,736	148,611	186,196	Converted
31 March 2023 issuance	19,051	192,000	1,388,949	1,600,000	Outstanding
Totals	419,168	449,792	4,002,287	4,871,247

Reconciliation of
movements for the year
ended 31 March 2024
	Equity
	component
	£
		Liability
		component
		£
			Totals
			£	Notes
Amounts outstanding at
31 March 2023:
13 May 2022 issuance	377,268	2,707,783	3,085,051	Converted
21 June 2022 issuance	22,849	163,347	186,196	Converted
31 March 2023 issuance	19,051	1,580,949	1,600,000	Outstanding
Totals at 31 March 2023	419,168	4,452,079	4,871,247
Conversion in the year	(400,116)	(2,885,388)	(3,285,504)
Interest charged	-	343,300	343,300
Interest capitalised as
share capital		(192,000)	(192,000)
Interest paid	-	(127,490)	(127,490)
Amounts outstanding at
31 March 2024	19,052	1,590,501	1,609,553
Liability due within one
year		192,000
Liability due after more
than one year		1,398,501
Total		1,590,501

Net Debt

The table below outlines the changes in net debt for the Group during the year end 31 March 2024.

	At 31
	March 2023	Cash Flows
			Foreign
			currency
			adjustments
				Other
				adjustments
				and
				reclassifications
					At 31
					March 2024
Cash and cash equivalents	3,767,426	(2,447,912)	(4,225)	-	1,315,289
Borrowings
Debt due within one year	468,893	(19,289)	-	(238,587)	211,017
Debt due after one year	4,034,726	-	-	(2,622,971)	1,411,755
	4,503,619	(19,289)	-	(2,861,558)	1,622,772
Total net debt	(736,193)	(2,428,623)	(4,225)	2,861,558	(307,483)

25.

Financial Instruments and Risk Management

The Group’s financial instruments comprise primarily cash and various items such as trade debtors and trade

creditors which arise directly from its operations. The main purpose of these financial instruments is to provide

working capital for the Group’s operations.

The Group does not utilise complex financial instruments or hedging mechanisms in respect of its non-sterling

operations.

Financial Assets by Category

The categories of financial assets included in the balance sheet and the heading in which they are included are as

follows:

	Group 2024
		Company
		2024	Group 2023
				Company
				2023
	£	£	£	£
Non-current assets
Loan to group undertaking	-	-	-	-
Current assets
Trade receivables	1,366,307	1,321,808	16,331	842
Other receivables	5,742	-	-	-
Cash and cash equivalents	1,315,289	1,225,912	3,767,426	3,544,243
Categorised as financial assets
measured at amortised cost	2,687,338	2,547,720	3,783,757	3,545,085

The loan to group undertaking has no fixed repayment date and its future repayment will depend upon the financial

performance of subsidiary. All other amounts are short term and none are past due at the reporting date.

Financial Liabilities by Category

The categories of financial liabilities included in the balance sheet and the heading in which they are included are

as follows:

	Group 2024
		Company
		2024	Group 2023
				Company
				2023
	£	£	£	£
Current liabilities
Trade and other payables	658,142	439,131	418,641	97,263
Loans	1,622,772	1,618,001	4,503,619	4,484,558
Categorised as financial liabilities
measured at amortised cost	2,280,864	2,057,132	4,922,260	4,581,821

All amount, excluding loans, are short term payables.

Credit Risk

The maximum exposure to credit risk at the reporting date by class of financial asset was:

	Group 2024
		Company
		2024	Group 2023
				Company
				2023
	£	£	£	£
Trade and other receivables	1,366,307	1,321,808	16,331	842
Related party note receivables	-	-	155,901	-

Credit and Liquidity Risk

Credit risk is managed on a Group basis. Funds are deposited with financial institutions with a credit rating

equivalent to, or above, the main UK clearing banks. The Group’s liquid resources are invested having regard to

the timing of payments to be made in the ordinary course of the Group’s activities. All financial liabilities are

payable in the short term (normally between 0 and 3 months) and the Group maintains adequate bank balances to

meet those liabilities as they fall due.

Capital Management

The Group considers its capital to be equal to the sum of its total equity. The Group monitors its capital using a

number of metrics including cash flow projections, working capital ratios, the cost to achieve development

milestones and potential revenue from partnerships and ongoing licensing activities. The Group’s objective when

managing its capital is to ensure it obtains sufficient funding for continuing as a growing concern, The Group

funds its capital requirements through the issue of new share to investors.

Interest Rate Risk

The maximum exposure to interest rate risk at the reporting date by class of financial asset was:

	Group 2024
		Company
		2024	Group 2023
				Company
				2023
	£	£	£	£
Bank balances and receivables	1,315,289	1,225,912	3,767,426	3,544,243

The Group uses liquid resources to meet the cost of future development activities. Consequently, it seeks to

minimise risk in the holding of its bank deposits. The Group is not financially dependent on the small rate of

interest income earned on these resources and therefore the risk of interest rate fluctuations is not significant to

the business and the Directors have not performed a detailed sensitivity analysis. Nonetheless, the Directors take

steps when possible and cost effective to secure rates of interest which generate a return for the Group by

depositing sums which are not required to meet the immediate needs of the Group in interest-bearing deposits.

Other balances are held in interest-bearing, instant access accounts. All deposits are placed with main clearing

banks to restrict both credit risk and liquidity risk. The deposits are placed for the short term, between one and

three months, to provide flexibility and access to the funds and to avoid locking into potentially unattractive

interest rates.

Market Risk

Market risk arises from changes in interest rates, foreign exchange rates and equity prices, as well as in their

correlations and volatility levels. Market risk is managed on a Group basis in the ordinary course of the Group’s

activities.

Currency Risk

The Group operates in a global market with income possibly arising in a number of different currencies, principally

in Sterling or US Dollars. The majority of the operating costs are incurred in Sterling with the rest predominantly

in US Dollars. The Group does not hedge potential future income or costs, since the existence, quantum and timing

of such transactions cannot be accurately predicted. The exchange rate in US Dollars to Sterling was 1.263 and

1.239 as of 31 March 2024 and 2023, respectively.

Financial assets and liabilities denominated in US Dollars and translated into Sterling at the closing rate were:

	Group 2024
		Company
		2024	Group 2023
				Company
				2023
	£	£	£	£
Financial assets	50,241	-	758,117	-
Financial liabilities	(228,783)	-	(613,328)	-
Net financial (liabilities)/assets	(178,542)	-	144,789	-

The following table illustrates the sensitivity of the net result for the period and the reported financial assets of the

Group in regard to the exchange rate for Sterling: US Dollar:

	2024 as reported
		If Sterling Rose
		20%
			If Sterling Fell
			20%
	£	£	£
Group result for the period	(3,370,293)	(3,285,701)	(3,454,885)
US Dollar denominated net financial liabilities	(178,542)	(161,515)	(195,569)
Total equity at 31 March 2024	2,570,877	2,834,231	2,287,523

26.

Related Party Transactions

Eric Schrader, a former director of the Company, owns Racquette Hanger, LLC which let property to the Group

during year for the storage and distribution of products. During the year ended 31 March 2024, the Group made

rental payments to Racquette Hanger, LLC of £79,202 (2023: £39,163).

Eric Schrader has an interest in Kuma Creative which provided marketing services to the Group. During the year

ended 31 March 2024, the Group made payments to Kuma Creative of £47,975 (2023: £36,889).

Scott Thompson, a former director of the Company, is a partner at Lippes Mathias which provided legal advice to

the Group. During the year ended 31 March 2024, the Group made payments to Lippes Mathias of £76,983 (2023:

£62,534).

In 2021, the Group entered into a distribution agreement with Ox Distributing LLC, a brokerage firm specialising

in ecommerce shipping in convenience stores, grocery stores and other retail chains in the Unites States. Ox

Distributing, LLC is owned by Eric Schrader, a related party to the Group given that he was a director of the

Company and had significant influence over the entity. During the year ended 31 March 2024, the Group made

sales net of promotional discounts of CBD products to Ox Distributing, LLC, with terms equivalent to those that

prevail in an arm’s length transaction, of £35,086 (2023:£nil) resulting from the sale of CBD products to the

Company. As of 31 March, 2024 the Group has accounts receivable of £nil (2023: £nil) owed by Ox Distributing,

LLC. As of 31 March 2024 the Group has a note receivable from Ox Distributing, LLC of £nil (2023: £155,900).

27.

Events After the Reporting Period

After the Period, a dispute over the removal of certain Directors by shareholder vote arose from a requisition letter

for a General Meeting that occurred on 4 June 2024. Disputes connected to this matter led to almost $400,000 being

withdrawn from the Company’s accounts and increased legal costs in the UK and US. The Company also

temporarily lost control of its domain asset, Chill.com, from June to December 2024, until an out-of-court settlement

was reached. Chill.com is now managed by the Company.

Since then, the UK Government has legislated a ban on disposable vapes effective 1 June 2025. This includes Chill

ZERO nicotine-free disposables, requiring the Company to develop compliant devices to sustain its vape product

revenue in the UK.