TIDMAIQ
RNS Number : 1670U
AIQ Limited
29 July 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF EU REGULATION 596/2014, WHICH IS PART OF UK LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018.
29 July 2022
For Immediate Release
AIQ Limited
("AIQ" or the "Company" or, together with Alchemist Codes and
Alcodes International, the "Group")
Interim Results
The Board of AIQ (LSE: AIQ) announces the Company's unaudited
consolidated interim results for the six months ended 30 April
2022.
Summary
-- Progressed delivery of a contract to supply a decentralised
finance ("DeFi") exchange ("DEX") to a customer based in Australia,
which was completed post period
-- Awarded a contract to supply a non-fungible token ("NFT")
marketplace for education applications in Hong Kong
-- Revenue for the six months ended 30 April 2022 increased to GBP361k (H1 2021: GBP12k)
-- Net loss for the period was reduced to GBP202k (H1 2021: GBP915k loss)
-- Cash and cash equivalents of GBP852k at 30 April 2022 (31
October 2021: GBP581k), having r aised GBP500k through the issue of
unsecured convertible loan notes
Graham Duncan, Chairman of AIQ, said: " We delivered a strong
increase in revenue for the first half of our 2022 financial year,
albeit from a very low base and still a relatively small amount,
and, thanks to the action we took last year to substantially cut
costs, we reduced our losses significantly. During the period, we
focused on delivering the DeFi DEX project and seeking to win new
business, which resulted in us securing a contract to supply an NFT
platform for educational applications. However, it is still early
days for the new strategy. The Board continues to closely monitor
the progress of the Group and evaluate opportunities for generating
value for shareholders."
Enquiries
AIQ Limited c/o +44 (0)20 7618 9100
Graham Duncan, Chairman
Luther Pendragon (Media Relations)
Claire Norbury +44 (0)20 7618 9100
Operational Review
During the first half of the 2022 financial year, the Group
focused on the delivery of a contract, secured at the end of the
previous year, to supply a DeFi DEX to a customer based in
Australia. For the project, the Group performs the role of project
manager and subcontracts the technical delivery (such that the net
benefit to the Group is the margin earned on the contract). The
majority of the project was delivered during the first half, with
completion occurring since period end.
Also during the period the Group was awarded a contract to
supply an NFT platform designed to enable art schools and education
centres in Hong Kong to assist their students in publishing NFTs
and developing their creative talent under Web3 technology. The
Group will oversee and manage the project, with the development of
the marketplace being provided by Accubits Technologies Inc., a
full-service software provider, and digiXnode Technology Ltd.,
which specialises in blockchain development. Work on the platform
is underway and the beta version is expected to be ready for
testing in the coming months.
Financial Review
Revenue for the six months to 30 April 2022 was GBP361k compared
with GBP12k for the first half of the previous year. The revenue
was predominantly based on the delivery of the DeFi DEX contract
(GBP331k), with GBP10k from the NFT contract and a GBP19k
contribution from IT projects in Hong Kong.
The Group recognised a gross profit of GBP115k compared with a
gross loss of GBP197k for the first six months of the previous
year. This was as a result of the higher revenue.
Administrative expenses were reduced to GBP392k (H1 2021:
GBP573k) reflecting a reduction in personnel costs of GBP43k,
Directors' fees of GBP28k, and consultancy and other overhead
savings of GBP110k.
In Malaysia, the Group was able to sublet around half of its
office space during the period, which has been substantially
increased post period, thereby serving to further reduce the
Group's outgoings.
The Group recognised a net gain on foreign exchange of GBP70k
compared with a net loss of GBP138k for the same period of the
prior year.
The lower expenses combined with the higher revenue enabled a
significant reduction in operating loss for the period to GBP207k
(H1 2021: GBP908k loss).
Net finance costs were GBP5k compared with GBP7k for the first
half of the previous year.
As a result, loss before tax for the period was reduced to
GBP202k (H1 2021: GBP915k loss) and the loss per share to 0.3 pence
(H1 2021: 1.4 pence loss per share).
During the period, as announced on 25 January 2022, the Group
raised GBP500k from the issue of convertible loan notes.
At 30 April 2022, the Group had cash and cash equivalents of
GBP852k (31 October 2021: GBP582k).
Outlook
In the second half of the year, the Group has continued to
deliver its IT consultancy projects and maintain tight control over
costs. The Group expects revenue for the full year to be
significantly higher than for the year to 31 October 2021 and
anticipates a substantial reduction in net loss. However, the Group
expects revenue for the second half of the year to be lower than
that generated in the first half as the majority of the DeFi DEX
contract was delivered during the first six-month period. The Board
continues to closely monitor the progress of the Group and evaluate
opportunities for generating value for shareholders.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 April 2022
Six months Six months
Note ended ended Year ended
30 Apr 2022 30 Apr 2021 31 Oct 2021
Unaudited Unaudited Audited
GBP GBP GBP
Revenue 7 361,061 12,079 61,863
Cost of sales (246,097) (208,880) (250,670)
-------------- -------------- --------------
Gross profit/(loss) 114,964 (196,801) (188,807)
Administrative expenses (391,791) (573,030) (864,601)
Gain/(loss) on foreign
exchange 69,985 (138,498) (126,708)
Operating loss (206,842) (908,329) (1,180,116)
Finance income 9,184 263 447
Finance costs (4,563) (7,359) (13,151)
Loss before taxation (202,221) (915,425) (1,192,820)
Taxation - - (2,109)
-------------- -------------- --------------
Loss attributable
to equity holders
of the Company for
the period (202,221) (915,425) (1,194,929)
============== ============== ==============
Other comprehensive
income ( as may
be reclassified
to profit
and loss in subsequent
periods, net of
taxes):
Exchange difference
on translating foreign
operations (21,110) 30,223 (16,949)
-------------- -------------- --------------
Comprehensive income
attributable to
equity holders of
the Company for
the period (223,331) (885,202) (1,177,980)
============== ============== ==============
Loss per share -
basic (GBP per share) 8 (0.003) (0.014) (0.018)
Loss per share -
fully diluted (GBP
per share) 8 (0.003) (0.014) (0.018)
The accompanying notes form an integral part of these
consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 April 2022
Note 30 Apr 31 Oct
2022 2021
Unaudited Audited
GBP GBP
Assets
Non-current assets
Property, plant and equipment 111,272 175,207
Right-of-use assets 60,417 163,410
Intangible assets 6 - -
Rental deposits 30,886 29,834
------------ ------------
Total non-current assets 202,575 368,451
------------ ------------
Current assets
Investment in leases 60,417 -
Trade and other receivables 162,300 127,414
Tax receivable 24,317 23,489
Cash and cash equivalents 851,639 581,618
------------ ------------
Total current assets 1,098,673 732,521
------------ ------------
Total assets 1,301,248 1,100,972
------------ ------------
Equity and liabilities
Capital and reserves
Ordinary shares 9 647,607 647,607
Share premium 6,019,207 6,019,207
Foreign currency translation
reserve (11,780) 9,330
Accumulated losses (6,192,621) (5,990,400)
------------ ------------
Total equity 462,413 685,744
------------ ------------
Liabilities
Current liabilities
Trade payables 8,210 1,075
Accruals and other payables 203,436 244,664
Lease liabilities 100,985 94,672
Total current liabilities 312,631 340,411
------------ ------------
Non-current liabilities
Lease liabilities 26,204 74,817
Convertible loan notes 10 500,000 -
Total non-current liabilities 526,204 74,817
------------ ------------
Total equity and liabilities 1,301,248 1,100,972
------------ ------------
The accompanying notes form an integral part of these
consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 April 2022
Foreign
currency
Share Share translation Accumulated Total
capital premium reserve losses equity
GBP GBP GBP GBP GBP
Balance as at 31
October 2020 (Audited) 647,607 6,019,207 (7,619) (4,795,471) 1,863,724
Total comprehensive
loss for the
period - - 30,223 (915,425) (885,202)
Balance at 30 April
2021 (Unaudited ) 647,607 6,019,207 (6,682) (1,770,877) 4,889,255
---------- ---------- ------------- -------------- --------------
Total comprehensive
loss for the
period - - (937) (3,024,594) (3,025,531)
Balance at 31 October
2021 (Audited ) 647,607 6,019,207 9,330 (5,990,400) 685,744
---------- ---------- ------------- -------------- --------------
Total comprehensive
(loss) for the
financial period (21,110) (202,221) (223,331)
Balance at 30 April
2022 (Unaudited ) 647,607 6,019,207 (11,780) (6,192,621) 462,413
---------- ---------- ------------- -------------- --------------
The accompanying notes form an integral part of these
consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 April 2022
Six months Six months
ended ended Year ended
30 Apr 30 Apr 31 Oct
2022 2021 2021
Unaudited Unaudited Audited
GBP GBP GBP
Cash flows from operating activities
Loss before taxation (202,221) (915,425) (1,192,820)
Adjustment for:-
Depreciation charges 117,383 60,137 119,328
Interest income (9,184) (263) (447)
Loss/(gain) on foreign exchange (57,595) (61,843) 116,106
------------ ------------ -------------
Operating loss before working
capital changes (151,617) (709,451) (957,833)
(Increase)/ decrease in receivables (34,886) 13,916 (56,318)
(Decrease)/ increase in payables (15,840) 47,602 (48,854)
(Decrease)/ increase in amount
owing to directors (9,116) - 2,533
Tax paid - - (2,109)
------------ ------------ -------------
Cash used in operations (211,459) (647,933) (1,062,581)
Interest received 9,184 263 447
------------ ------------ -------------
Net cash used in operating activities (202,275) (646,670) (1,062,134)
------------ ------------ -------------
Cash flows from investing activities
Acquisition of plant and equipment - (4,975) (6,540)
Net cash used in investing activities - (4,975) (6,540)
------------ ------------ -------------
Cash flows from financing activities
Repayment of lease liabilities (55,862) (44,803) (82,512)
Issue of convertible loan notes 500,000 - -
Net cash from / (used in) financing
activities 444,138 (44,803) (82,512)
------------ ------------ -------------
Net increase / (decrease) in
cash and cash equivalents 241,863 (697,448) (1,151,186)
Cash and cash equivalents at
beginning of the period 581,618 1,827,379 1,827,379
Effect of exchange rates on cash
and cash equivalents 28,158 (107,346) (94,575)
Cash and cash equivalents at
end of the period 851,639 1,022,585 581,618
------------ ------------ -------------
The accompanying notes form an integral part of these
consolidated financial statements.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
1. GENERAL INFORMATION
AIQ Limited ("the Company") was incorporated and registered in
The Cayman Islands as a private company limited by shares on 11
October 2017 under the Companies Law (as revised) of The Cayman
Islands, with the name AIQ Limited, and registered number
327983.
The Company's registered office is located at 5th Floor Genesis
Building, Genesis Close, PO Box 446, Cayman Islands, KY1-1106.
The Company has a standard listing on the London Stock
Exchange.
The consolidated financial statements include the financial
statements of the Company and its controlled subsidiaries (the
"Group").
2. PRINCIPAL ACTIVITIES
The principal activity of the Company is to seek acquisition
opportunities and to act as a holding company for a group of
subsidiaries that are involved in the technology sector.
The Group is an information technology (IT) solutions provider,
currently focused on the delivery of blockchain platforms in Asia
through the provision of IT consultancy.
3. ACCOUNTING POLICIES
a) Basis of preparation
The condensed consolidated interim financial statements have
been prepared in accordance with the Disclosure and Transparency
Rules of the Financial Conduct Authority and International
Accounting Standard 34 "Interim Financial Reporting" (IAS 34).
Other than as noted below, the accounting policies applied by the
Group in these condensed interim financial statements are the same
as those set out in the Group's audited financial statements for
the year ended 31 October 2021. These financial statements have
been prepared under the historical cost convention and cover the
six-month period to 30 April 2022.
These condensed financial statements do not include all of the
information required for a complete set of IFRS financial
statements. However, selected explanatory notes are included to
explain events and transactions that are significant to an
understanding of the changes in the Group's financial position and
performance since the audited financial statements for the year
ended 31 October 2021.
The condensed interim financial statements are unaudited and
have not been reviewed by the auditors and were approved by the
Board of Directors on 28 July 2022.
The financial information is presented in Pounds Sterling (GBP),
which is the presentational currency of the Company.
A summary of the principal accounting policies of the Group are
set out below.
b) Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and its subsidiaries made up to the end
of the reporting period. Subsidiaries are entities over which the
Group has control. The Group controls an investee if the Group has
power over the investee, exposure to variable returns from the
investee, and the ability to use its power to affect those variable
returns.
The consolidated financial statements present the results of the
Company and its subsidiaries as if they formed a single entity.
Inter-company balances and transactions between Group companies are
therefore eliminated in full. The financial information of
subsidiaries is included in the Group's financial statements from
the date that control commences until the date that control
ceases.
c) Going concern
The financial statements are required to be prepared on the
going concern basis unless it is inappropriate to do so.
The Group incurred losses of GBP0.2 million during the period
and cash outflows from operating activities of GBP0.2 million. As
at 30 April 2022, the Group had net current liabilities of GBP0.1
million and cash of GBP0.9 million. The Group's cash position was
approximately GBP800,000 at the date of this report.
The Group meets its day-to-day working capital requirements
through cash generated from the capital it raised on admission to
the London Stock Exchange, the issue of the convertible loan notes
in the period (see note 10) and from the operations of its
subsidiaries.
Notwithstanding these actions, a material uncertainty exists
that may cast significant doubt on the Group's ability to continue
as a going concern with the uncertainty of future trading
performance giving rise to a material uncertainty over the going
concern status of the Group. The Directors consider the Group to be
a going concern but have identified a material uncertainty in this
regard.
4. SUBSIDIARIES
Name Place Registered Principal Effective interest
of incorporation address activity
30.04.2022 31.10.2021
------------------- ------------------ ---------------------- ----------- -----------
2-9, Jalan
Puteri 4/8,
Bandar Puteri,
47100 Puchong,
Alchemist Selangor Darul Design and
Codes Sdn Ehsan development
Bhd Malaysia Malaysia of software 100% 100%
------------------- ------------------ ---------------------- ----------- -----------
Cyberport 3,
3 Cyberport
Alcodes International Road, Telegraph Software
Limited* Hong Kong Bay, Hong Kong and app development 100% 100%
------------------- ------------------ ---------------------- ----------- -----------
* Held by Alchemist Codes Sdn Bhd
5. INTANGIBLE ASSETS
Goodwill and acquisition related intangible assets arising from
the acquisition of Alchemist Codes were fully impaired in the year
ended 31 October 2020. The OctaPLUS Platform and Messenger App were
also fully impaired in the year ended 31 October 2021.
No research and development costs were capitalised in the period
ended 30 April 2022.
6. REVENUE
Six months Six months
ended ended Year ended
30 Apr 2022 30 Apr 2021 31 Oct 2021
Unaudited Unaudited Audited
GBP GBP GBP
Sale of software products 19,052 10,635 37,639
Project management and coordination
income 341,263 - 19,415
Cashback income 746 1,332 4,628
Other - 112 181
Total 361,061 12,079 61,863
-------------- -------------- --------------
All revenues were generated in Asia.
During the period ended 30 April 2022, one customer accounted
for GBP331,619 (92%) of revenues. No other customers accounted for
more than 10%.
An analysis of revenue by the timing of the delivery of goods
and services to customers for the period ended 30 April 2022 and
the year ended 31 October 2021 is as follows:
Services
Goods transferred at a point transferred
in time over time
Six months Six months
ended ended
30 Apr 2022 30 Apr 2022
Unaudited Unaudited
GBP GBP
Sale of software products - -
Project management - 360,315
Cashback income 746 -
Other - -
Total 746 360,315
-------------- --------------------
Services
Goods transferred at a point transferred
in time over time
Six months Six months
ended ended
30 Apr 2021 30 Apr 2021
Unaudited Unaudited
GBP GBP
Sale of software products - 10,635
Project management - -
Cashback income 1,332 -
Other 112 -
Total 1,444 10,635
-------------- --------------------
Services
Goods transferred at a point transferred
in time over time
Year ended Year ended
31 Oct 2021 31 Oct 2021
Audited Audited
GBP GBP
Sale of software products 35,424 2,215
Project management 12,822 6,593
Cashback income - 4,628
Other - 181
Total 48,246 13,617
---------------- -------------
7. SEGMENT REPORTING
IFRS 8 defines operating segments as those activities of an
entity about which separate financial information is available and
which are evaluated by the Board of Directors to assess performance
and determine the allocation of resources. The Board of Directors
is of the opinion that under IFRS 8 the Group has only one
operating segment, the sale of software and ancillary services. The
Board of Directors assesses the performance of the operating
segment using financial information that is measured and presented
in a manner consistent with that in the Financial Statements.
All revenues were derived from Asia.
8. LOSS PER SHARE
The Company presents basic and diluted earnings per share
information for its ordinary shares. Basic loss per share is
calculated by dividing the loss attributable to ordinary
shareholders of the Company by the weighted average number of
ordinary shares in issue during the reporting period. Diluted
earnings per share are determined by adjusting the loss
attributable to ordinary shareholders and the weighted average
number of ordinary shares outstanding for the effects of all
dilutive potential ordinary shares.
Six months Six months
ended 30 ended 30 Year ended
Apr 2022 Apr 2021 31 Oct 2021
Unaudited Unaudited Audited
GBP GBP GBP
Loss after tax attributable to
owners of the Company (202,221) (885,202) (1,177,980)
Weighted average number of shares:
* Basic 64,760,721 64,760,721 64,760,721
Conversion of loan note at period
end share price 5,555,556 - -
Fully diluted 70,316,277 64,760,721 64,760,721
Loss per share (expressed as GBP
per share)
* Basic (0.003) (0.014) (0.018)
* Fully diluted (0.003) (0.014) (0.018)
9. SHARE CAPITAL
Six months Six months Year
ended ended ended
30 Apr 2022 30 Apr 2021 31 Oct
2021
Unaudited Unaudited Audited
GBP GBP GBP
As at beginning of period 647,607 647,607 647,607
As at end of period 647,607 647,607 647,607
--------- ------------ ------------------
Nominal
value
Number GBP
Authorised
Ordinary shares of GBP0.01 each 800,000,000 8,000,000
Issued and fully paid:
As at 1 November 2021 64,760,721 647,607
Issue of shares in the period - -
At 30 April 2022 64,760,721 647,607
------------- ----------
10. CONVERTIBLE LOAN NOTES
On 24 January 2022, the Company entered into an unsecured
convertible loan note agreement for a total subscription of
GBP500,000 (the "Loan Notes").
The Loan Notes have an expiration date of 24 January 2024
("Expiration Date") and can be repaid, in part or in full, by the
Company on 31 December in any year prior to the Expiration Date by
giving not less than 14 days' written notice to the noteholders.
All outstanding Loan Notes attract interest at a rate of 5% per
annum from the date of issue (24 January 2022) to the date of
repayment or conversion.
The Loan Notes shall be convertible into new Ordinary Shares of
the Company at the lesser of 11 pence per Ordinary Share or the
Volume Weighted Average Price of the Company's Ordinary Shares on
the London Stock Exchange in the seven-day period prior to the date
on which the Loan Note is converted into Ordinary Shares. The Loan
Notes shall be convertible, in part or in full, at any time from
the date of issue until the Expiration Date by the noteholder
giving to the Company at least one week's written notice.
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END
IR BRGDRRUDDGDI
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