6-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of June 2024

 

Commission File Number: 001-41693

 

 

Zapp Electric Vehicles Group Limited

 

 

87/1 Wireless Road

26/F Capital Tower

All Seasons Place

Lumpini, Patumwan

Bangkok 10330 Thailand

(Address of principal executive office)

 

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F

 

Form 40-F

 

 

 


 

EXPLANATORY NOTE

On June 20, 2024, Zapp Electric Vehicles Group Limited issued a press release announcing certain financial and other results for the six months ended March 31, 2024. A copy of the press release is furnished herewith as Exhibit 99.2 to this Report on Form 6-K and is incorporated by reference herein.

 


 

EXHIBIT INDEX

Exhibit

 

Description of Exhibit

99.1

 

Unaudited Condensed Consolidated Interim Financial Statements for the six months ended March 31, 2024.

99.2

 

Press release issued by Zapp Electric Vehicles Group Limited, dated June 20, 2024.

 

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

ZAPP ELECTRIC VEHICLES GROUP LIMITED

 

 

 

 

Date: June 20, 2024

 

By:

/s/ Swin Chatsuwan

 

 

Name:

Swin Chatsuwan

 

 

Title:

Chief Executive Officer

 

 


EX-99.1

Exhibit 99.1

ZAPP ELECTRIC VEHICLES GROUP LIMITED

UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED MARCH 31, 2024

 

1


 

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the six months ended March 31, 2024

 

 

 

For the Six Months Ended March 31,

 

(in USD)

 

Notes

 

2024

 

 

2023

 

Revenue

 

 

 

 

 

 

 

 

Cost of sales

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

 

Selling and distribution expenses

 

 

 

 

(220,351

)

 

 

(1,075,655

)

General and administrative expenses

 

 

 

 

(2,913,759

)

 

 

(2,787,850

)

Operating loss

 

 

 

 

(3,134,110

)

 

 

(3,863,505

)

Finance income

 

4

 

 

574

 

 

 

4,811

 

Finance expense

 

4

 

 

(193,503

)

 

 

(344,509

)

Other expense

 

5

 

 

(1,706,090

)

 

 

(4,427,021

)

Loss before tax

 

 

 

 

(5,033,129

)

 

 

(8,630,224

)

Income tax

 

 

 

 

 

 

 

 

Loss for the period

 

 

 

 

(5,033,129

)

 

 

(8,630,224

)

Earnings per share

 

 

 

 

 

 

 

 

Basic and diluted earnings per share

 

6

 

 

(1.61

)

 

 

(3.61

)

 

 

 

 

 

For the Six Months Ended March 31,

 

(in USD)

 

Notes

 

2024

 

 

2023

 

Loss for the period

 

 

 

 

(5,033,129

)

 

 

(8,630,224

)

Other comprehensive loss

 

 

 

 

 

 

 

 

Items that are or may be reclassified subsequently to profit or loss:

 

 

 

 

 

 

 

 

Foreign currency translation differences

 

 

 

 

(258,848

)

 

 

(15,935

)

Other comprehensive loss for the period, net of tax

 

 

 

 

(258,848

)

 

 

(15,935

)

Total comprehensive loss for the period

 

 

 

 

(5,291,977

)

 

 

(8,646,159

)

The notes on pages 7 to 17 form part of these financial statements.

 

2


 

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As of March 31, 2024

(in USD)

 

Notes

 

March 31,
2024

 

 

September 30,
2023

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

484,972

 

 

 

823,223

 

Inventory

 

9

 

 

588,981

 

 

 

566,226

 

Trade and other receivables

 

10

 

 

880,860

 

 

 

1,261,700

 

Total current assets

 

 

 

 

1,954,813

 

 

 

2,651,149

 

Non-current assets

 

 

 

 

 

 

 

 

Property, plant and equipment

 

7

 

 

510,877

 

 

 

590,795

 

Right-of-use assets

 

13

 

 

328,983

 

 

 

359,057

 

Intangible assets

 

8

 

 

980,394

 

 

 

1,042,880

 

Derivative assets - non-current

 

16

 

 

 

 

 

2,660,568

 

Other non-current assets

 

 

 

 

53,428

 

 

 

37,374

 

Total non-current assets

 

 

 

 

1,873,682

 

 

 

4,690,674

 

Total assets

 

 

 

 

3,828,495

 

 

 

7,341,823

 

Liabilities and Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Trade and other payables

 

11

 

 

20,744,737

 

 

 

19,884,517

 

Loans and borrowings - current

 

12

 

 

3,889,845

 

 

 

3,713,717

 

Lease liabilities - current

 

13

 

 

68,107

 

 

 

99,961

 

Derivative liabilities - current

 

16

 

 

181,000

 

 

 

 

Total current liabilities

 

 

 

 

24,883,689

 

 

 

23,698,195

 

Non-current liabilities

 

 

 

 

 

 

 

 

Loans and borrowings - non-current

 

12

 

 

1,291,569

 

 

 

1,022,866

 

Lease liabilities - non-current

 

13

 

 

277,724

 

 

 

296,773

 

Derivative liabilities - non-current

 

16

 

 

249,860

 

 

 

603,028

 

Other non-current liabilities

 

 

 

 

135,957

 

 

 

158,578

 

Total non-current liabilities

 

 

 

 

1,955,110

 

 

 

2,081,245

 

Total liabilities

 

 

 

 

26,838,799

 

 

 

25,779,440

 

Equity

 

 

 

 

 

 

 

 

Share capital

 

14

 

 

6,260

 

 

 

5,790

 

Share premium

 

14

 

 

122,679,578

 

 

 

120,966,057

 

Merger reserve

 

 

 

 

12,838,970

 

 

 

12,838,970

 

Share option reserve

 

 

 

 

76,321,146

 

 

 

77,315,847

 

Foreign currency translation reserve

 

 

 

 

(522,075

)

 

 

(263,227

)

Equity accounted warrants

 

 

 

 

345,218

 

 

 

345,218

 

Accumulated deficit

 

 

 

 

(234,679,401

)

 

 

(229,646,272

)

Total equity

 

 

 

 

(23,010,304

)

 

 

(18,437,617

)

Total liabilities and equity

 

 

 

 

3,828,495

 

 

 

7,341,823

 

The notes on pages 7 to 17 form part of these financial statements.

 

3


 

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended March 31, 2024

(in USD)

 

 

Share capital

 

 

Share premium

 

 

Accumulated deficit

 

 

Share option reserve

 

 

Equity accounted warrants

 

 

Merger reserve

 

 

Foreign currency translation reserve

 

 

Total

 

At October 1, 2023

 

 

 

5,790

 

 

 

120,966,057

 

 

 

(229,646,272

)

 

 

77,315,847

 

 

 

345,218

 

 

 

12,838,970

 

 

 

(263,227

)

 

 

(18,437,617

)

Comprehensive loss for the period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

 

 

 

 

 

 

 

 

 

(5,033,129

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,033,129

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(258,848

)

 

 

(258,848

)

Contributions by and distributions to owners

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued on exercise of employee share options

 

 

 

200

 

 

 

887,791

 

 

 

 

 

 

(887,947

)

 

 

 

 

 

 

 

 

 

 

 

44

 

Shares issued for cash, net of issuance costs

 

 

 

245

 

 

 

625,755

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

626,000

 

Shares issued in relation to the SEPA commitment fee

 

 

 

18

 

 

 

49,982

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

50,000

 

Shares issued to settle MSA compensation

 

 

 

7

 

 

 

149,993

 

 

 

 

 

 

(150,000

)

 

 

 

 

 

 

 

 

 

 

 

 

Share-based payments

 

 

 

 

 

 

 

 

 

 

 

 

43,246

 

 

 

 

 

 

 

 

 

 

 

 

43,246

 

At March 31, 2024

 

 

 

6,260

 

 

 

122,679,578

 

 

 

(234,679,401

)

 

 

76,321,146

 

 

 

345,218

 

 

 

12,838,970

 

 

 

(522,075

)

 

 

(23,010,304

)

The notes on pages 7 to 17 form part of these financial statements.

4


 

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended March 31, 2023

(in USD)

 

 

Share capital

 

 

Share premium

 

 

Accumulated deficit

 

 

Share option reserve

 

 

Foreign currency translation reserve

 

 

Total

 

At October 1, 2022

 

 

 

940

 

 

 

8,994,292

 

 

 

(7,544,340

)

 

 

1,300,373

 

 

 

(238,825

)

 

 

2,512,440

 

Comprehensive loss for the period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

 

 

 

 

 

 

 

 

 

(8,630,224

)

 

 

 

 

 

 

 

 

(8,630,224

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15,935

)

 

 

(15,935

)

Contributions by and distributions to owners

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on disposal of affiliate

 

 

 

 

 

 

 

 

 

(4,411

)

 

 

 

 

 

 

 

 

(4,411

)

Share-based payments

 

 

 

 

 

 

 

 

 

 

 

 

842,406

 

 

 

 

 

 

842,406

 

At March 31, 2023

 

 

 

940

 

 

 

8,994,292

 

 

 

(16,178,975

)

 

 

2,142,779

 

 

 

(254,760

)

 

 

(5,295,724

)

The notes on pages 7 to 17 form part of these financial statements.

 

5


 

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended March 31, 2024

 

Notes

 

For the Six Months Ended March 31,

 

(in USD)

 

 

 

2024

 

 

2023

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Loss for the period

 

 

 

 

(5,033,129

)

 

 

(8,630,224

)

Adjustment for:

 

 

 

 

 

 

 

 

Depreciation of property, plant and equipment and right-of-use assets

 

 

 

 

133,512

 

 

 

114,618

 

Amortization of intangible assets

 

 

 

 

68,977

 

 

 

66,774

 

Equity-settled share-based payment charge

 

 

 

 

43,247

 

 

 

842,406

 

Fair value movements

 

 

 

 

1,974,401

 

 

 

(27,138

)

Foreign exchange movements

 

 

 

 

(268,273

)

 

 

(9,839

)

Professional fees relating to the Business Combination

 

 

 

 

 

 

 

4,576,853

 

Loss on disposal of shares in affiliates

 

 

 

 

 

 

 

(1,423

)

Finance income

 

 

 

 

(574

)

 

 

(4,811

)

Finance expense

 

 

 

 

193,503

 

 

 

343,513

 

 

 

 

 

 

(2,888,336

)

 

 

(2,729,271

)

Changes in:

 

 

 

 

 

 

 

 

- Inventories

 

 

 

 

(21,785

)

 

 

(121,556

)

- Trade and other receivables

 

 

 

 

380,576

 

 

 

(410,064

)

- Other non-current assets

 

 

 

 

(15,785

)

 

 

73,901

 

- Derivative assets

 

 

 

 

300,000

 

 

 

 

- Trade and other payables

 

 

 

 

720,586

 

 

 

(366,396

)

- Other non-current liabilities

 

 

 

 

 

 

 

(1,218

)

Cash generation from operating activities

 

 

 

 

(1,524,744

)

 

 

(3,554,604

)

Income tax paid

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

 

 

 

(1,524,744

)

 

 

(3,554,604

)

Cash flows from investing activities

 

 

 

 

 

 

 

 

Acquisition of property, plant and equipment

 

 

 

 

(10,198

)

 

 

(91,809

)

Acquisition of intangible assets

 

 

 

 

 

 

 

(6,627

)

Repayment of loans to related parties

 

 

 

 

 

 

 

1,834

 

Interest received

 

 

 

 

574

 

 

 

4,811

 

Net cash used in investing activities

 

 

 

 

(9,624

)

 

 

(91,791

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

Drawdown of loans, net of issuance costs

 

 

 

 

284,151

 

 

 

6,008,981

 

Proceeds from the issuance of convertible loan notes, net of issuance costs

 

 

 

 

421,500

 

 

 

 

Repayment of loans

 

 

 

 

(7,472

)

 

 

(7,111

)

Payment of lease liabilities

 

 

 

 

(43,765

)

 

 

(64,686

)

Proceeds from the issuance of shares

 

 

 

 

626,000

 

 

 

 

Professional fees relating to the Business Combination

 

 

 

 

 

 

 

(1,000,000

)

Interest paid

 

 

 

 

(81,114

)

 

 

(7,441

)

Net cash from financing activities

 

 

 

 

1,199,300

 

 

 

4,929,743

 

Net (decrease) / increase in cash and cash equivalents

 

 

 

 

(335,068

)

 

 

1,283,348

 

Cash and cash equivalents at October 1, 2023 and 2022

 

 

 

 

823,223

 

 

 

1,963,087

 

Effect of exchange rate fluctuations on cash held

 

 

 

 

(3,183

)

 

 

143,839

 

Cash and cash equivalents at March 31, 2024 and 2023

 

 

 

 

484,972

 

 

 

3,390,274

 

The notes on pages 7 to 17 form part of these financial statements.

 

6


 

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended March 31, 2024

1.
Reporting entity

Zapp Electric Vehicles Group Ltd. (the “Company” or "Zapp EV") is an exempted limited company incorporated under the laws of the Cayman Islands on November 15, 2022. The Company’s registered office is at 190 Elgin Avenue, George Town, Grand Cayman KY1-9008, Cayman Islands. The Company’s principal executive office is at 87/1 Wireless Road, 26/F Capital Tower, All Seasons Place, Lumpini, Patumwan, Bangkok 10330, Thailand. The Group’s principal activity is the design, development and delivery of electric vehicles.

The financial statements incorporate the accounts of the Company and entities controlled by the Company (“its subsidiaries”). The term “Group” means, subsequent to closing of the Business Combination, Zapp Electric Vehicles Group Ltd. and its subsidiaries.

The Business Combination

On April 28, 2023, Zapp Electric Vehicles Group Ltd, an exempted company incorporated with limited liability under the laws of the Cayman Islands, consummated the business combination pursuant to the Agreement and Plan of Merger, dated as of November 22, 2022 (the “Merger Agreement”), by and among Zapp EV, CIIG Capital Partners II, Inc. (“CIIG II”), Zapp Electric Vehicles Limited, a private company limited by shares registered in England and Wales (“Zapp UK”) and Zapp Electric Vehicles, Inc., a Delaware corporation and direct wholly owned subsidiary of Zapp EV (“Merger Sub”).

The Merger Agreement provided that the parties thereto would enter into a business combination transaction (the “Business Combination”) pursuant to which, among other things, (i) the shareholders of Zapp UK transferred their respective ordinary shares of Zapp UK to Zapp EV in exchange for ordinary shares of Zapp EV (“Zapp EV Ordinary Shares”, and such exchange, the “Company Exchange”); and (ii) immediately following the Company Exchange, Merger Sub merged with and into CIIG II, with CIIG II being the surviving corporation in the merger (the “Merger”), and each outstanding share of common stock of CIIG II (other than certain excluded shares) would convert into the right to receive one Zapp EV Ordinary Share.

Upon the consummation of the Business Combination: (i) the shareholders of Zapp UK transferred their respective ordinary shares of Zapp UK to Zapp EV in exchange for Zapp EV Ordinary Shares pursuant to the Company Exchange, (ii) Zapp UK’s senior unsecured convertible loan notes due 2025 (the “Zapp UK Convertible Loan Notes”) were automatically redeemed at the principal amount by conversion into ordinary shares of Zapp UK, which were then transferred to Zapp EV in exchange for Zapp EV Ordinary Shares; (iii) all Zapp UK options, whether vested or unvested, were released and cancelled by holders of Zapp UK options in exchange for options to purchase Zapp EV Ordinary Shares (“Zapp EV Exchange Options”); (iv) the Zapp UK warrants issued to Michael Joseph to purchase ordinary shares of Zapp UK ceased to be warrants with respect to ordinary shares of Zapp UK and were assumed by Zapp EV and converted into fully vested warrants to purchase Zapp EV Ordinary Shares (“Zapp EV Exchange Warrants”); (v) all shares of CIIG II Class A common stock, par value $0.0001 per share, and CIIG II Class B common stock, par value $0.0001 per share, were cancelled and automatically deemed to represent the right to receive Zapp EV Ordinary Shares; and (vi) each CIIG II warrant was modified to provide that such warrant no longer entitles the holder thereof to purchase the number of shares of CIIG II’s common stock set forth therein and in substitution thereof such warrant would entitle the holder to acquire the same number of Zapp EV Ordinary Shares per warrant on the same terms (“Zapp EV Public Warrants”).

Upon consummation of the Business Combination, Zapp EV Ordinary Shares and Zapp EV Public Warrants commenced trading on The Nasdaq Stock Market LLC, or “Nasdaq”, under the symbols “ZAPP” and “ZAPPW,” respectively.

As the Company Exchange constituted a common control transaction, the consolidated financial statements are prepared as a continuation of the financial statements of Zapp UK, the accounting acquirer, with a recapitalization to reflect the capital structure of Zapp EV. The comparatives are based on the operations of Zapp UK prior to the Transaction.

As CIIG II did not constitute a business under the definitions of IFRS 3 Business Combinations, the Merger was classified as a reverse acquisition and fell within the scope of IFRS 2 Share-based payment, with the issuance of shares to legacy CIIG II shareholders being treated as a share-based payment in exchange for the acquisition of the net assets of CIIG II by Zapp EV.

 


NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)

For the six months ended March 31, 2024

2.
Basis of preparation

The unaudited condensed consolidated interim financial statements for the six months ended March 31, 2024 have been prepared in accordance with Accounting Standard IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board (IASB). The unaudited condensed consolidated interim financial statements do not include all the information and disclosures required in the annual consolidated financial statements. Accordingly, this report should be read in conjunction with the Group’s annual report on Form 20-F for the year ended September 30, 2023 filed with the Securities and Exchange Commission on February 26, 2024. Our significant accounting policies have not changed since September 30, 2023.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring items and changes in International Financial Reporting Standards, necessary for their fair presentation in conformity with IFRS for complete financial statements. The results of operations for interim periods are not necessarily indicative of the results to be expected for a full year.

2.1.
Going concern

The unaudited condensed consolidated financial statements for the six months ended March 31, 2024 have been prepared on a going concern basis.

The Company had an accumulated deficit at March 31, 2024, a net loss and net cash used in operating activities for the reporting period then ended. As of that date, we had cash and cash equivalents of $0.5 million while our trade and other payables amounted to $20.7 million as we had agreed with certain key suppliers, most notably a number of professional services firms which had provided services related to the Business Combination, to delay the settlement of payment obligations.

The Company is attempting to commence operations and generate revenue; however, the Company’s cash position may not be sufficient to support the Company’s daily operations until that point. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

As at March 31, 2024, the Company had access to up to $9.5 million of liquidity through the Standby Equity Purchase Agreement with an affiliate of Yorkville Advisors Global, LP dated February 10, 2024 (the “SEPA”); $1.2 million of this liquidity was utilized between March 31, 2024 and the date of release of these unaudited condensed consolidated interim financial statements, leaving a balance of $8.3 million available to the Company at the date of release of these unaudited condensed consolidated interim financial statements.

The Company has raised $2.7 million since October 1, 2023 through the issuance of additional shares (including pursuant to the SEPA) and debt and expects to raise further funds through at the market offerings in the coming months. We also intend to seek further extensions to our obligations to suppliers and to raise additional funds by way of a private or public offering of debt or equity securities.

We believe that these funds, taken together, are sufficient to provide the Company with the liquidity required to commence production and launch commercially in summer 2024.

Management’s plans to alleviate the conditions that raise substantial doubt regarding the Company’s ability to continue as a going concern cannot be guaranteed or are not entirely within the Company’s control and therefore cannot be considered probable. While we believe in the viability of our strategy to commence operations and raise additional funds, if these actions are not successful we will not have sufficient liquidity to continue to fund our operations beyond summer 2024.

The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

8


NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)

For the six months ended March 31, 2024

2.2.
New standards, interpretations and amendments adopted by the Group

The accounting policies adopted in the preparation of the unaudited condensed consolidated interim financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended September 30, 2023, except for the adoption of new standards effective for accounting periods starting after October 1, 2022. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

Several amendments apply for the first time in the period, however none of these amendments has an impact on the unaudited condensed consolidated financial statements of the Group.

3.
Reverse Stock Split

On April 11, 2024 the Company’s shareholders approved a consolidation of the Company’s share capital into 25,000,000 ordinary shares, par value $0.002 each (the “Reverse Stock Split” or “RSS”).

As a result of the Reverse Stock Split, every 20 Zapp EV Ordinary Shares issued and outstanding were automatically combined into one post-RSS ordinary share. No fractional shares were issued as a result of the Reverse Stock Split. Where shareholders were otherwise entitled to fractional shares as a result of the Reverse Stock Split because they held a number of shares not evenly divisible by 20, such shareholders were automatically be entitled to an additional fraction of a share to round up to the next whole post-RSS ordinary share.

The Company also proportionately adjusted the terms of outstanding warrants, equity-based awards and other outstanding equity rights.

The impact of the Reverse Stock Split is presented below:

(in USD)

 

Number Prior to RSS

 

 

Number Post RSS

 

 

Exercise Price Prior to RSS

 

 

Exercise Price Post RSS

 

Ordinary shares

 

 

62,601,280

 

 

 

3,130,164

 

 

 

 

 

 

 

Warrants

 

 

26,437,500

 

 

 

1,321,882

 

$

 

11.50

 

$

 

230.00

 

Warrants

 

 

2,280,979

 

 

 

114,049

 

$

 

0.79

 

$

 

15.80

 

Warrants

 

 

1,140,490

 

 

 

57,025

 

$

 

4.49

 

$

 

89.80

 

Share options

 

 

1,026,441

 

 

 

51,323

 

$

 

0.000022

 

$

 

0.00045

 

Share options

 

 

1,123,382

 

 

 

56,179

 

$

 

0.78

 

$

 

15.69

 

Share options

 

 

127,164

 

 

 

6,366

 

$

 

2.13

 

$

 

42.60

 

Management earnout shares

 

 

8,518,290

 

 

 

425,915

 

 

 

 

 

 

 

Sponsor earnout shares

 

 

754,687

 

 

 

37,735

 

 

 

 

 

 

 

SAP compensation

 

 

856,720

 

 

 

34,186

 

 

 

 

 

 

 

As the change to the capital structure occurred after the date of the reported balance sheet but before the release of these condensed consolidated interim financial statements, the change in capital structure has been given retroactive effect in the balance sheet. As a result the number of ordinary shares and other instruments presented throughout these condensed consolidated interim financial statements has been adjusted to reflect the capital structure as if the Reverse Stock Split had occurred prior to the start of the first period presented.

4.
Finance income and expenses

Finance income and expenses comprised the following for the six months ended March 31, 2024 and March 31, 2023:

 

For the Six Months Ended March 31,

 

(in USD)

 

2024

 

 

2023

 

Finance income

 

 

 

 

 

 

Interest on bank deposits

 

 

574

 

 

 

4,811

 

Total finance income

 

 

574

 

 

 

4,811

 

Finance expense

 

 

 

 

 

 

Interest on convertible notes

 

 

(28,121

)

 

 

(317,866

)

Interest on loans and borrowings

 

 

(147,489

)

 

 

(630

)

Interest on lease liabilities

 

 

(11,811

)

 

 

(17,577

)

Other interest payable

 

 

(6,082

)

 

 

(8,436

)

Total finance expense

 

 

(193,503

)

 

 

(344,509

)

Finance income represents interest income. Finance expense consists primarily of interest on convertible loans and other borrowings (see Note 12) and the unwinding of discounting on leases and other financial liabilities (see Note 13).

9


NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)

For the six months ended March 31, 2024

5.
Other (expense)/income

Other (expense)/income comprised the following for the six months ended March 31, 2024 and March 31, 2023:

 

For the Six Months Ended March 31,

 

(in USD)

 

2024

 

 

2023

 

Fair value movements

 

 

(1,974,401

)

 

 

27,138

 

Foreign exchange movements

 

 

268,273

 

 

 

121,255

 

Expenses relating to the Business Combination

 

 

 

 

 

(4,576,853

)

Profit on disposal of shares in associates

 

 

 

 

 

1,423

 

Sundry income

 

 

38

 

 

 

16

 

 

 

 

(1,706,090

)

 

 

(4,427,021

)

For the six months ended March 31, 2024, the fair value movements included $2,360,568 of losses on the revaluation and termination of the Forward Purchase Agreements, gains of $353,168 on the revaluation of warrants accounted for as a financial liability (see Note 16) and gains of $33,000 on the revaluation of embedded derivative liabilities within the convertible loan notes (see Note 12).

All expenses relating to the Business Combination for the six months ended March 31, 2023 relate to items to be settled in cash.

6.
Earnings per share

The share numbers presented below have been adjusted to reflect the Reverse Stock Split. See Note 3 for further details.

The following table sets forth the computation of basic and diluted loss per share for the six months ended March 31, 2024 and March 31, 2023:

 

For the Six Months Ended March 31,

 

(in USD)

 

2024

 

 

2023

 

Loss for the period

 

 

(5,033,129

)

 

 

(8,630,224

)

Basic weighted average number of ordinary shares

 

 

3,130,164

 

 

 

2,388,355

 

Basic and diluted loss per ordinary share

 

 

(1.61

)

 

 

(3.61

)

The weighted average number of shares outstanding for the six months ended March 31, 2023 has been calculated by applying the exchange ratio set out in the Company Exchange to the weighted average number of Zapp UK shares outstanding during the period.

As the Group incurred net losses for the six months ended March 31, 2024 and March 31, 2023, basic loss per share was the same as diluted loss per share in each period.

The following weighted-average effects of potentially dilutive outstanding ordinary share awards, including share options, warrants, management earnout shares and sponsor earnout shares, were excluded from the computation of diluted loss per share because their effects would have been anti-dilutive for the six months ended March 31, 2024 and March 31, 2023:

 

For the Six Months Ended March 31,

 

 

2024

 

 

2023

 

Share options

 

 

113,868

 

 

 

214,852

 

Warrants

 

 

1,492,956

 

 

 

171,074

 

Management earnout shares

 

 

425,915

 

 

 

 

SAP earnout shares

 

 

34,186

 

 

 

 

Sponsor earnout shares

 

 

37,735

 

 

 

 

Shares issuable upon conversion of loan notes

 

 

116,718

 

 

 

 

Total

 

 

2,221,378

 

 

 

385,926

 

 

10


NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)

For the six months ended March 31, 2024

7.
Property, plant and equipment

(in USD)

 

 

Leasehold and leasehold improvements

 

 

Furniture, fixtures and office equipment

 

 

Plant equipment

 

 

Vehicles

 

 

Total

 

Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At October 1, 2023

 

 

 

104,479

 

 

 

141,648

 

 

 

416,726

 

 

 

188,913

 

 

 

851,766

 

Additions

 

 

 

 

 

 

5,918

 

 

 

4,280

 

 

 

 

 

 

10,198

 

Effect of movements in exchange rates

 

 

 

2,324

 

 

 

1,154

 

 

 

347

 

 

 

(664

)

 

 

3,161

 

At March 31, 2024

 

 

 

106,803

 

 

 

148,720

 

 

 

421,353

 

 

 

188,249

 

 

 

865,125

 

Accumulated depreciation and impairment losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At October 1, 2023

 

 

 

40,493

 

 

 

31,740

 

 

 

152,051

 

 

 

36,687

 

 

 

260,971

 

Depreciation for the period

 

 

 

10,857

 

 

 

13,465

 

 

 

42,716

 

 

 

28,139

 

 

 

95,177

 

Effect of movements in exchange rates

 

 

 

769

 

 

 

139

 

 

 

(2,225

)

 

 

(583

)

 

 

(1,900

)

At March 31, 2024

 

 

 

52,119

 

 

 

45,344

 

 

 

192,542

 

 

 

64,243

 

 

 

354,248

 

Carrying amounts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At October 1, 2023

 

 

 

63,986

 

 

 

109,908

 

 

 

264,675

 

 

 

152,226

 

 

 

590,795

 

At March 31, 2024

 

 

 

54,684

 

 

 

103,376

 

 

 

228,811

 

 

 

124,006

 

 

 

510,877

 

 

8.
Intangible assets

(in USD)

 

 

Development costs

 

 

Patents and trademarks

 

 

Software

 

 

Total

 

Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

At October 1, 2023

 

 

 

1,249,856

 

 

 

62,051

 

 

 

114,376

 

 

 

1,426,283

 

Effect of movements in exchange rates

 

 

 

1,252

 

 

 

356

 

 

 

3,994

 

 

 

5,602

 

At March 31, 2024

 

 

 

1,251,108

 

 

 

62,407

 

 

 

118,370

 

 

 

1,431,885

 

Accumulated amortization and impairment losses

 

 

 

 

 

 

 

 

 

 

 

 

 

At October 1, 2023

 

 

 

367,830

 

 

 

14,907

 

 

 

666

 

 

 

383,403

 

Amortization for the period

 

 

 

64,068

 

 

 

3,205

 

 

 

1,704

 

 

 

68,977

 

Effect of movements in exchange rates

 

 

 

(903

)

 

 

(13

)

 

 

27

 

 

 

(889

)

At March 31, 2024

 

 

 

430,995

 

 

 

18,099

 

 

 

2,397

 

 

 

451,491

 

Carrying amounts

 

 

 

 

 

 

 

 

 

 

 

 

 

At October 1, 2023

 

 

 

882,026

 

 

 

47,144

 

 

 

113,710

 

 

 

1,042,880

 

At March 31, 2024

 

 

 

820,113

 

 

 

44,308

 

 

 

115,973

 

 

 

980,394

 

Capitalized development costs represents the cost of prototype vehicles and other components based on contractual terms. The development costs are being amortized over a useful life of 10 years; as at March 31, 2024 the remaining useful life was 6.5 years.

11


NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)

For the six months ended March 31, 2024

9.
Inventories

Inventories comprised the following at March 31, 2024 and September 30, 2023:

(in USD)

 

March 31,
2024

 

 

September 30,
2023

 

Raw materials

 

 

450,878

 

 

 

432,744

 

Work in progress

 

 

61,876

 

 

 

58,633

 

Finished goods

 

 

76,227

 

 

 

74,849

 

 

 

 

588,981

 

 

 

566,226

 

Raw materials is stated net of a provision for obsolete inventory of $83,328. The gross carrying value of inventory is $672,309.

10.
Trade and other receivables

Trade and other receivables comprised the following at March 31, 2024 and September 30, 2023:

(in USD)

 

March 31,
2024

 

 

September 30,
2023

 

Income tax receivable

 

 

460,738

 

 

 

460,738

 

Other taxation and social security receivable

 

 

139,120

 

 

 

123,214

 

Prepayments

 

 

120,697

 

 

 

396,190

 

Other receivables

 

 

160,305

 

 

 

281,558

 

 

 

 

880,860

 

 

 

1,261,700

 

The income tax receivable represents payments on account of US tax liabilities.

11.
Trade and other payables

Trade and other payables comprised the following at March 31, 2024 and September 30, 2023:

(in USD)

 

March 31,
2024

 

 

September 30,
2023

 

Accounts payable and accrued liabilities

 

 

20,522,910

 

 

 

19,754,628

 

Other taxation and social security payable

 

 

207,121

 

 

 

114,590

 

Deferred income

 

 

14,706

 

 

 

15,299

 

 

 

 

20,744,737

 

 

 

19,884,517

 

At March 31, 2024, accounts payable and accrued liabilities include $18,045,105 (September 30, 2023 - $18,042,911) that remains payable in respect of professional fees and excise taxes in connection with the Business Combination.

12.
Loans and borrowings

Details of loans and borrowings outstanding as of September 30, 2023 are set out in Note 17 to the financial statements included in the Group's annual report on Form 20-F for the year ended September 30, 2023. Movements since October 1, 2023 are summarized below:

(in USD)

 

March 31,
2024

 

 

September 30,
2023

 

Current

 

 

 

 

 

 

Bank loans

 

 

15,041

 

 

 

14,527

 

Convertible notes

 

 

135,697

 

 

 

 

Promissory notes

 

 

3,739,107

 

 

 

3,699,190

 

 

 

 

3,889,845

 

 

 

3,713,717

 

Non-current

 

 

 

 

 

 

Bank loans

 

 

16,607

 

 

 

22,866

 

Promissory notes

 

 

1,000,000

 

 

 

1,000,000

 

Promissory notes issued to related parties

 

 

274,962

 

 

 

 

 

 

 

1,291,569

 

 

 

1,022,866

 

 

 

 

5,181,414

 

 

 

4,736,583

 

Promissory notes

On January 12, 2024, Zapp Scooters (Thailand) Company Limited issued a promissory note to Patchara Rattakul, a director of the Company, with a value of THB 10.0 million (approximately $287,000 at that date) which bears interest at a rate of 15.0% per annum and is repayable in January 2026. At March 31, 2024 the amount outstanding on this note was $274,962.

12


NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)

For the six months ended March 31, 2024

SEPA

On February 10, 2024, the Company entered into the SEPA with YA II PN, LTD (the “Investor”), a Cayman Islands exempt limited partnership that is an affiliate of Yorkville Advisors Global, LP, pursuant to which the Company has the right to sell to the Investor up to $10.0 million (“the Commitment Amount”) of its ordinary shares, subject to certain limitations and conditions set forth in the SEPA, from time to time during the term thereof.

Under the agreement, the Investor agreed to advance to the Company $1.5 million in two tranches (the “Pre-Paid Advance”) in exchange for convertible promissory notes (the “Convertible Notes”). The first advance of $500,000 was disbursed on March 20, 2024 and the balance of $1.0 million was disbursed on April 23, 2024. The purchase price for the Pre-Paid Advance was 95% of the principal amount thereof. The notes are not interest bearing and are repayable in March 2025. The promissory note relating to the first advance of $500,000 has been recognized as a financial liability with embedded derivatives which at March 31, 2024 was $135,697, net of capitalized issuance costs. See Note 16 for further details.

Between April 23, 2024 and June 13, 2024, Investor exercised its right to require the issuance and sale of a total of 906,219 ordinary shares in the Company. There were no Pre-Paid Advance amounts outstanding as of the date of release of these unaudited condensed consolidated interim financial statements. See Note 18 for further details.

Following repayment of the Convertible Notes, subject to certain conditions and limitations, the Company has the right, but not the obligation, from time to time during the term of the SEPA, to direct Investor to purchase specified numbers of Company shares, priced according to the SEPA by delivering written notice to Investor.

13.
Leases

The Group has entered into lease contracts for its offices, delivery vans and staff motor vehicles. The Group's obligations under its leases are secured either by the lessor's title to the leased assets or by a collateral pledge over the lease assets.

The carrying amounts and movement in the right-of-use assets are set out below:

(in USD)

 

 

Leasehold property

 

 

Furniture, fixtures and office equipment

 

 

Vehicles

 

 

Total

 

Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

At October 1, 2023

 

 

 

419,990

 

 

 

9,682

 

 

 

111,403

 

 

 

541,075

 

Effect of movements in exchange rates

 

 

 

9,660

 

 

 

10

 

 

 

1,925

 

 

 

11,595

 

At March 31, 2024

 

 

 

429,650

 

 

 

9,692

 

 

 

113,328

 

 

 

552,670

 

Accumulated depreciation and impairment losses

 

 

 

 

 

 

 

 

 

 

 

 

 

At October 1, 2023

 

 

 

148,695

 

 

 

1,882

 

 

 

31,441

 

 

 

182,018

 

Depreciation for the period

 

 

 

24,539

 

 

 

824

 

 

 

12,971

 

 

 

38,334

 

Effect of movements in exchange rates

 

 

 

2,768

 

 

 

(14

)

 

 

581

 

 

 

3,335

 

At March 31, 2024

 

 

 

176,002

 

 

 

2,692

 

 

 

44,993

 

 

 

223,687

 

Carrying amounts

 

 

 

 

 

 

 

 

 

 

 

 

 

At October 1, 2023

 

 

 

271,295

 

 

 

7,800

 

 

 

79,962

 

 

 

359,057

 

At March 31, 2024

 

 

 

253,648

 

 

 

7,000

 

 

 

68,335

 

 

 

328,983

 

The carrying amounts and movement in the lease liabilities are set out below:

(in USD)

 

March 31,
2024

 

At October 1, 2023

 

 

396,734

 

Interest

 

 

12,249

 

Payments

 

 

(43,765

)

Effect of movements in exchange rates

 

 

(19,387

)

At March 31, 2024

 

 

345,831

 

The following are the amounts recognized in profit or loss in respect of the lease agreements:

 

For the Six Months Ended March 31,

 

(in USD)

 

2024

 

 

2023

 

Depreciation expense on right-of-use assets

 

 

38,334

 

 

 

34,065

 

Interest on lease liabilities

 

 

11,811

 

 

 

9,719

 

 

 

 

50,145

 

 

 

43,784

 

 

13


NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)

For the six months ended March 31, 2024

14.
Share capital

The share numbers presented below have been adjusted to reflect the Reverse Stock Split. See Note 3 for further details.

At March 31, 2024 the authorized share capital of the Company was US$50,000 divided into 500,000,000 ordinary shares of $0.0001 each. On April 11, 2024 the Company’s shareholders approved, and the Company effected, a 20:1 consolidation of the Company’s share capital into 25,000,000 ordinary shares of $0.002 each.

Holders of Ordinary Shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at general meetings of the Company.

Movements in the Company's share capital during the six months ended March 31, 2024 were as follows:

(in USD, except number)

 

 

 

Number

 

 

Share capital

 

 

Share premium

 

At October 1, 2023

 

 

 

 

2,894,970

 

 

 

5,790

 

 

 

120,966,057

 

Shares issued on exercise of employee share options

 

 

 

 

99,793

 

 

 

200

 

 

 

887,791

 

Shares issued for cash, net of issuance costs

 

 

 

 

122,704

 

 

 

245

 

 

 

625,755

 

Shares issued in relation to the SEPA commitment fee

 

 

 

 

9,091

 

 

 

18

 

 

 

49,982

 

Shares issued to settle MSA compensation

 

 

 

 

3,606

 

 

 

7

 

 

 

149,993

 

At March 31, 2024

 

 

 

 

3,130,164

 

 

 

6,260

 

 

 

122,679,578

 

On February 23, 2024 the Company issued 99,793 ordinary shares pursuant to the exercise of an employee share option agreement. See Note 15 for further details.

Between February 28, 2024 and March 26, 2024 the Company issued 122,704 ordinary shares pursuant to private share subscriptions.

On March 26, 2024 the Company issued 9,091 ordinary shares to Investor in relation to the SEPA commitment fee.

On March 29, 2024 the Company issued 3,606 ordinary shares to one of its suppliers following the vesting of restricted stock units granted pursuant to a Marketing Services Agreement entered into in June 2023 (the “MSA”). See Note 15 for further details.

As of March 31, 2024, 1,492,956 warrants to acquire the Company's ordinary shares were outstanding. 171,074 warrants expired on May 28, 2024. The remaining 1,321,882 expire on April 28, 2028 and entitle holders to purchase one ordinary share at an exercise price of $230.00 per share. Until warrant holders acquire the ordinary shares upon exercise of such warrants, they have no rights in respect of such ordinary shares.

15.
Share-based payments

The numbers presented below have been adjusted to reflect the Reverse Stock Split. See Note 3 for further details.

There have been no changes to the Group’s share-based payment arrangements from those described in the Group’s annual report for the year ended September 30, 2023.

The Group recognized a share-based payment charge for the period as follows:

 

Six Months Ended March 31,

 

(in USD)

 

2024

 

 

2023

 

Informal share option arrangements

 

 

13,602

 

 

 

249,087

 

MSA compensation

 

 

29,645

 

 

 

 

 

 

 

43,247

 

 

 

249,087

 

No share options, share awards or RSUs were granted during the six months ended March 31, 2024.

Movements in equity instruments during the period

The following reconciles the outstanding share options, earnout shares, share awards to be issued and restricted stock units at the beginning and end of the period:

 

 

Informal share option arrangements

 

 

Management earnout shares

 

 

Sponsor earnout shares

 

 

SAP compensation

 

 

MSA compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At October 1, 2023

 

 

213,661

 

 

 

425,916

 

 

 

37,735

 

 

 

34,186

 

 

 

3,606

 

Exercised/settled during the period

 

 

(99,793

)

 

 

 

 

 

 

 

 

 

 

 

(3,606

)

At March 31, 2024

 

 

113,868

 

 

 

425,916

 

 

 

37,735

 

 

 

34,186

 

 

 

 

 

14


NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)

For the six months ended March 31, 2024

On February 23, 2024 the Company issued 99,793 ordinary shares pursuant to the exercise of an employee share option agreement. The exercise price of these share options was $0.00045 per share.

As at March 31, 2024, 111,372 of the informal share options were vested. 51,323 of the share options outstanding as at March 31, 2024 were exercisable at a price of $0.00045 per share, 56,179 were exercisable at a price of $15.69 per share, and 3,870 were exercisable at a price of $42.60 per share.

The following table presents key terms in relation to the informal share option arrangements:

 

 

Weighted average exercise price

 

 

Weighted average remaining contractual life (in years)

 

At October 1, 2023

 

$

5.40

 

 

 

 

At March 31, 2024

 

$

10.13

 

 

 

6.54

 

Movements in non-vested shares under informal share option arrangements were as follows:

 

 

Number

 

 

Weighted average fair value at grant date

 

At October 1, 2023

 

 

8,735

 

 

$

21.80

 

Vested during the period

 

 

(6,239

)

 

$

22.08

 

At March 31, 2024

 

 

2,496

 

 

$

19.15

 

 

16.
Financial instruments
16.1.
Financial assets

Financial assets, other than cash and short-term deposits, comprised the following at March 31, 2024 and September 30, 2023:

(in USD)

 

March 31,
2024

 

 

September 30,
2023

 

Financial assets at amortized cost

 

 

 

 

 

 

Lease deposits

 

 

37,513

 

 

 

36,878

 

 

 

 

37,513

 

 

 

36,878

 

Financial assets at fair value through profit or loss

 

 

 

 

 

 

Forward purchase agreement

 

 

 

 

 

2,660,568

 

 

 

 

 

 

 

2,660,568

 

Total financial assets

 

 

37,513

 

 

 

2,697,446

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

17,606

 

Non-current

 

 

37,513

 

 

 

2,679,840

 

For full details in respect of the Forward Purchase Agreement please refer to Note 21.1 to the financial statements included in the Group’s annual report on from 20-F for the year ended September 30, 2023.

On January 23, 2024, Seller ACM ARRT I LLC and the Company terminated their respective Forward Purchase Agreement by mutual agreement. Neither party shall have any further obligation to the other.

15


NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (continued)

For the six months ended March 31, 2024

16.2.
Financial liabilities

Financial liabilities comprised the following at March 31, 2024 and September 30, 2023:

(in USD)

 

 

 

 

 

March 31,
2024

 

 

September 30,
2023

 

Financial liabilities at amortized cost

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities