TIDMRMS
RNS Number : 2358B
Remote Monitored Systems PLC
09 June 2021
9 June 2021
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ('MAR') which has
been incorporated into UK law by the European Union (Withdrawal)
Act 2018. Upon the publication of this announcement via Regulatory
Information Service ('RIS'), this inside is now considered to be in
the public domain.
Remote Monitored Systems plc
("Remote Monitored Systems", the "Company" or the "Group")
Final Results for the Year to 31 December 2020
The Company is pleased to announce its final results for the
year end 31 December 2020.
Company Highlights
Financials
-- Growing revenues of GBP104k (2019: GBP52k)
-- Losses increased to GBP1.53m (2019: GBP0.59m) including
share option cost (GBP434k) and impairment of GyroMetric
(GBP363k)
-- Net cash used in continuing operations GBP990k (2019:
GBP583k)
-- Over GBP6m of new capital raised net of costs
Operations
-- Acquisition of Pharm 2 Farm
-- Proposed disposal of GyroMetric
-- Proposed change of name to "nanosynth group plc"
-- Three subsidiaries: Pharm 2 Farm Ltd (development
of nanoparticles for agricultural products and human
nutrients); nanosynth Ltd (development of nanoparticles
for advanced materials and their application in healthcare
and other sectors): and Cloudveil (intelligence services
and Security Risk Management).
Board
-- Reconfiguring and strengthening the Company's board
in progress in order to facilitate the Company's new
focus and direction.
Antony Legge, Executive Chairman commented:
"Significant progress has been made in transforming the Group
and refocusing on businesses which provide good opportunities where
we are able to apply the Company's reserves to best exploit those
areas. To this end, the board has been largely reshaped as we
continue our search for a new CEO and look to invest in our
marketing capability . Building on the excellent work done to date,
I am confident that we will be able to progress several positive
developments in the coming months."
ENQUIRIES :
Remote Monitored Systems plc via IFC Advisory
Antony Legge (Executive Chairman)
SP Angel Corporate Finance LLP +44 20 3470 0470
Nominated Adviser and Joint Broker
Stuart Gledhill
Caroline Rowe
Peterhouse Capital Limited +44 20 7469 0930
Joint Broker
Lucy Williams
IFC Advisory Ltd +44 20 3934 6630
Graham Herring
Zach Cohen
CHAIRMAN'S STATEMENT
The last twelve months has been a period of major change at RMS;
the Company has acquired a new subsidiary in Pharm 2 Farm Ltd
("P2F"), new shareholders, a new board, a new direction and is now
proposing the disposal of its 58 per cent. subsidiary, GyroMetric
Systems Ltd ("GyroMetric"), and a change of name to nanosynth group
plc. Such pace of change in an organisation is immensely
challenging, however, the Company has emerged stronger than this
time last year with a healthy balance sheet and many more growth
opportunities ahead of it.
2020 started positively, with the Company reporting in April
that unprecedented interest in Cloudveil and customer orders for
GyroMetric meant that the future was brightening. By the end of
June, the potential remained strong, but the lockdown was delaying
any meaningful progress. Two months later, on 21 August, the
Company announced it was in discussions to acquire P2F, a spin-out
from Nottingham Trent University ("NTU"), which had responded to
the COVID-19 pandemic by diverting from its original strategy of
creating novel agricultural supplements using nano particles to
developing enhanced personal protective equipment ("PPE") through
producing an antiviral face mask. The acquisition was approved by
shareholders on 4 November 2020.
With the acquisition of P2F completing just 8 weeks before the
end of RMS's financial year and now the proposed disposal of
GyroMetric, the results for 2020 provide few meaningful indications
for the future.
Revenue increased to GBP104k in 2020 from GBP52k in 2019, driven
mainly by sales at GyroMetric (up to GBP83k from GBP51k in 2019).
Operating costs increased to GBP1.26m from GBP0.61m in 2019, due
mainly to the expense of the share options granted to directors in
November 2020 and a number of one-off costs, including costs
related to the P2F acquisition. With the carrying value of
GyroMetric being written off at the end year reflecting the
proposed terms of its disposal, total losses before tax on
continuing operations more than doubled to GBP1.53m from GBP0.59m
in 2019; giving a loss per share on continuing operations of 0.18p.
However, nearly half this loss was due to the share option expenses
(GBP434k) and the impairment on the value of GyroMetric (GBP363k).
As these are both non-cash items, the net cash used by continuing
operations was GBP990k, compared to GBP583k in 2019, driven mainly
by an increase of GBP358k in working capital (mainly due to advance
payments on the mask machine and raw materials to make the
anti-viral masks at P2F) compared to a decrease of GBP123k in 2019.
Through placings in April, July and December, coupled with the
exercise of warrants, the Company raised over GBP6.0m net of costs
of GBP0.4m. GBP1.5m of the placing monies from December were not
received until after the year end and hence are not included in the
year-end cash balance of GBP3.6m. The exercise to date in 2021 of
further warrants and options have raised an additional GBP0.9m for
the Group and, as at 7 June 2021, its consolidated bank balance
stood at approximately GBP5.0m .
Moving into 2021, the Company responded to shareholder concerns
with several board changes, including myself replacing Paul Ryan as
Chairman and Richard Clarke joining as an independent non-executive
director. The challenge for the new board was severalfold; the mask
machine arrived at P2F in early January and needed commissioning
ahead of a formal launch of P2F's anti-viral mask under its band
name "ProLarva"; initial interest in the mask needed to be
converted into sales and decisions needed taking on how to best
utilise the funds raised in December 2020. To this last point, the
Board commenced a strategic review, which has recently completed.
The Board was also keen to build on the innovations behind the
anti-viral face mask and develop further products using the same
technology, alongside the development of products for the
agricultural sector, which had been the founding principle behind
P2F.
The first step was to solve the production issue and avoid
disappointing customers by being unable to deliver any masks.
Commissioning of the mask machine has been delayed by several
months as a number of problems were identified and dealt with and
the Board is confident that the machine should be fully operational
by early July. With the machine at BioCity unable to meet the
anticipated demand, the Board outsourced the manufacturing of the
mask to Volz Filters UK.
The price of masks has decreased significantly since the start
of the COVID-19 pandemic and the differential between the Pro-Larva
mask and other, non anti-pathogenic masks is now significantly
greater than 12 months ago. This combined with the impact of
existing stockpiles of masks, the success of the vaccination
campaign and the uncertainty over the lifting or otherwise of
current lockdown restrictions has made sales challenging in the UK.
The Group has adopted a two-pronged approach to marketing the
Pro-Larva mask. The first, for areas suffering from a rise in COVID
infection rates, such as India, is to position the mask as a key
step in breaking the infection cycle. However, this is only a
short-term opportunity that will fade as the pandemic recedes. The
second approach is to position the mask as part of an array of
enhanced personal protection equipment, providing a broad
anti-pathogenic protection and so reducing the impact of infection
amongst workers in in key sectors, such as healthcare. The
short-term focus will be on the dental and GP sectors, with a
longer-term campaign to encourage the NHS to adopt the protection
offered by the unique anti-viral layer, currently contained in the
Pro-Larva mask.
However, the Pro-Larva mask is but a small element of the
Group's potential. The purpose of the strategic review undertaken
by the Board was to identify other areas of opportunity and to
apply the Company's cash reserves to best exploit those areas.
GyroMetric had shown potential in the discussions with offshore
wind turbine manufacturers. However, significant investment would
have been required to take advantage of this and other
opportunities for GyroMetric's technology and so the Board will be
seeking shareholder approval at the forthcoming Annual General
Meeting ("AGM") to return control of GyroMetric to its founders and
reduce ongoing costs to the Group. Cloudveil continues to show
promise, although sales this year have been slowed by the merger of
two of its major potential customers. Cloudveil does not currently
require any investment, although this could change if it secures
some of the current contracts under discussion. The opportunities
arising from the intellectual property inside P2F are substantial.
The use of copper as a biocide in the anti-viral layer (the
'<ALPHA>-virion'(TM) layer) has led to the development of two
spin-off applications. Initial tests on the anti-viral
characteristics of these new applications have been successful and
the Group is now seeking partners to further develop these ideas
into commercial products. P2F is also in advanced discussions with
a major global agricultural supplier for a new range of animal
nutrients.
With the recognition of the importance of nano-technology to the
future of the Group, the Board believes that it is now the right
time to change the Group's name. The Board proposes that the
Company is renamed nanosynth group plc; and that following the
disposal of GyroMetric, there will be three subsidiaries; Pharm 2
Farm Ltd (to focus on agricultural applications and the human
nutrient market), nanosynth Ltd (to focus on advance materials such
as the '<ALPHA>-virion'(TM) layer and their applications in
healthcare and other sectors), and Cloudveil Ltd (to focus on
Intelligence Services and Security Risk Management) .
As has been previously reported, the Group has begun its search
for a new Chief Executive Officer. It is expected that this search
could take several months as we want to be certain of finding the
right calibre of individual who will help the team best exploit the
myriad of opportunities arising from its nanotechnology, but we
hope that it will be complete by the time that we announce our
interim results. We are also looking to boost our marketing
capabilities. In the meantime, we are privileged to have very
capable executives across the Group, who are receiving good
guidance and support from the Board. The appointment of Dr Gareth
Cave and Dr Felicity Sartain as non-executive directors ensures
that science remains at the heart of all Board conversations.
Lastly, I would like to thank all the Company's shareholders for
their support over the last few months. I know that many
shareholders feel communication can be improved and we continue to
work in that direction. However, we also need to ensure that we are
only announcing concrete news. After the groundwork that has been
carried out during the year to date, I am confident that the second
half of the year will see the announcement of several positive
developments at nanosynth group plc.
Antony Legge
Executive Chairman
8 June 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2020
2020 2019
Note GBP GBP
------------------------------------------------- ---- ----------- -----------
Revenue from contracts with customers 5 104,309 52,648
Cost of sales (62,064) (26,582)
------------------------------------------------- ---- ----------- -----------
Gross profit 42,245 26,066
Administrative expenses 6 (1,256,234) (608,802)
Other operating income 19,841 -
Impairments (363,745) (125,983)
------------------------------------------------- ---- ----------- -----------
Operating loss (1,557,893) (708,719)
Finance costs 10 (4,085) (3,295)
Finance income 39 72
Loss before income tax (1,561,939) (711,942)
Income tax 11 27,976 119,652
------------------------------------------------- ---- ----------- -----------
Loss for the year from continuing operations (1,533,963) (592,290)
------------------------------------------------- ---- ----------- -----------
Profit/(loss) for the year from discontinued
operations 12 85,241 (1,029,239)
------------------------------------------------- ---- ----------- -----------
Total comprehensive income for the year (1,448,722) (1,621,529)
------------------------------------------------- ---- ----------- -----------
Loss and total comprehensive income attributable
to:
Equity holders of the parent (1,416,088) (1,551,256)
Non-controlling interests (32,634) (70,273)
Earnings per ordinary share attributable to
owners of the parent during the year (expressed
in pence per share) 13
Basic and diluted - continuing operations (0.18) (0.13)
Basic and diluted - discontinued operations 0.01 (0.25)
Basic and diluted - total (0.17) (0.38)
------------------------------------------------- ---- ----------- -----------
The loss for the financial year dealt with in the financial
statements of the Parent Company, Remote Monitored Systems plc, was
GBP1,543,714 (2019 GBP2,348,306). As permitted by Section 408 of
the Companies Act 2006, no separate statement of comprehensive
income is presented in respect of the Parent Company.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2020
2020 2019
Note GBP GBP
---------------------------------------------- ---- ------------ ------------
Non-current assets
Intangible assets 14 1,764,419 378,345
Property, plant and equipment 15 25,661 10,978
---------------------------------------------- ---- ------------ ------------
Total non-current assets 1,790,080 389,323
---------------------------------------------- ---- ------------ ------------
Current Assets
Trade and other receivables 18 1,925,987 66,090
Corporation tax 1,396 -
Inventories 63,491 14,589
Assets classified as held for
sale 12 - 160,275
Cash and cash equivalents 19 3,741,135 74,770
---------------------------------------------- ---- ------------ ------------
Total current assets 5,732,009 315,724
---------------------------------------------- ---- ------------ ------------
Total assets 7,522,089 705,047
---------------------------------------------- ---- ------------ ------------
Equity attributable to owners
of the parent
Share capital 20 5,795,751 5,128,124
Share premium 20 12,445,569 6,822,694
Convertible loan stock 22 2,000 103,000
Other reserves 23 1,675,276 (475,153)
Translation reserve 92,181 92,181
Retained earnings (13,033,293) (11,642,051)
---------------------------------------------- ---- ------------ ------------
equity ATTRIBUTABLE TO OWNERS
OF THE PARENT 6,977,484 28,795
Non-controlling interests 24 (80,679) (48,045)
---------------------------------------------- ---- ------------ ------------
TOTAL EQUITY 6,896,805 (19,250)
---------------------------------------------- ---- ------------ ------------
Current liabilities
Trade and other payables 25 333,087 375,822
Social security and other taxes 242,322 200,775
Lease liabilities 26 29,500 29,500
Obligations under finance leases 26 - 60,825
---------------------------------------------- ---- ------------ ------------
Total current liabilities 604,909 666,922
---------------------------------------------- ---- ------------ ------------
Non-current liabilities
Lease liabilities 26 7,375 36,875
Provisions 27 13,000 20,500
Deferred tax liabilities 28 - -
---------------------------------------------- ---- ------------ ------------
Total non-current liabilities 20,375 57,375
---------------------------------------------- ---- ------------ ------------
TOTAL LIABILITIES 625,284 724,297
---------------------------------------------- ---- ------------ ------------
TOTAL EQUITY AND LIABILTIES 7,522,089 705,047
---------------------------------------------- ---- ------------ ------------
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 December 2020
Company number: 09109008
2020 2019
Note GBP GBP
------------------------------------------------ ---- ------------ ------------
Non-current assets
Property, plant and equipment 15 3,625 7,975
Investment in subsidiary undertakings 16 60,000 384,601
Trade and other receivables 18 428,974 118,040
------------------------------------------------ ---- ------------ ------------
Total non-current assets 492,599 510,616
------------------------------------------------ ---- ------------ ------------
Current Assets
Trade and other receivables 18 1,558,026 16,427
Cash and cash equivalents 19 3,590,521 4,784
------------------------------------------------ ---- ------------ ------------
Total current assets 5,148,547 21,211
------------------------------------------------ ---- ------------ ------------
TOTAL ASSETS 5,641,146 531,827
------------------------------------------------ ---- ------------ ------------
Equity attributable to shareholders
Share capital 20 5,795,751 5,128,124
Share premium 20 12,445,569 6,822,694
Convertible loan stock 22 2,000 103,000
Other reserves 23 435,275 24,846
Retained loss (13,234,612) (11,715,744)
------------------------------------------------ ---- ------------ ------------
Total equity 5,443,983 362,920
------------------------------------------------ ---- ------------ ------------
Current liabilities
Trade and other payables 25 197,163 168,907
------------------------------------------------ ---- ------------ ------------
Total current liabilities 197,163 168,907
------------------------------------------------ ---- ------------ ------------
TOTAL LIABILITIES 197,163 168,907
------------------------------------------------ ---- ------------ ------------
TOTAL EQUITY AND LIABILITIES 5,641,146 531,827
------------------------------------------------ ---- ------------ ------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at 31 December 2020
Share Convertible Non-
Share Premium loan Other Translation Retained controlling Total
Capital stock reserves reserve loss Total Interests equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
-------------- --------- --------------------- --------- ----------- ------------ ----------- ------------ ------------
As at 1
January
2019 4,791,747 6,330,629 - (298,454) 92,181 (10,247,994) 668,109 22,228 690,337
Loss and total
comprehensive
income
for the year - - - - - (1,551,256) (1,551,256) (70,273) (1,621,529)
Shares
issued(1) 336,377 492,065 - - - - 828,442 - 828,442
Convertible
loan
stock
issued(2) - - 103,000 - - - 103,000 - 103,000
Share based
payments
lapsed - - - (19,500) - - (19,500) - (19,500)
Share based
payments
expired - - - (157,199) - 157,199 - - -
-------------- --------- ---------- --------- --------- ----------- ------------ ----------- ------------ ------------
As at 31
December
2019 5,128,124 6,822,694 103,000 (475,153) 92,181 (11,642,051) 28,795 (48,045) (19,250)
-------------- --------- ---------- --------- --------- ----------- ------------ ----------- ------------ ------------
As at 1
January
2020 5,128,124 6,822,694 103,000 (475,153) 92,181 (11,642,051) 28,795 (48,045) (19,250)
Loss and total
comprehensive
income
for the year - - - - - (1,416,088) (1,416,088) (32,634) (1,448,722)
Shares issued 667,627 5,612,964 (71,752) - - - 6,208,839 - 6,208,839
Warrants
issued - - - 10,712 - - 10,712 - 10,712
Warrants
exercised - 9,911 - (9,911) - - - - -
Convertible
loan
stock issued - - 4,085 - - - 4,085 - 4,085
Convertible
loan
stock
redeemed - - (33,333) - - - (33,333) - (33,333)
Share based
payments
arising - - - 434,474 - - 434,474 - 434,474
Share based
payments
expired - - - (24,846) - 24,846 - - -
Merger relief
on
acquisition - - - 1,740,000 - - 1,740,000 - 1,740,000
-------------- --------- ---------- --------- --------- ----------- ------------ ----------- ------------ ------------
As at 31
December
2020 5,795,751 12,445,569 2,000 1,675,276 92,181 (13,033,293) 6,977,484 (80,679) 6,896,805
-------------- --------- ---------- --------- --------- ----------- ------------ ----------- ------------ ------------
(1) Shares issued are net of costs
(2) Convertible loan stock includes cumulative interest payable
by the issue of shares
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
As at 31 December 2020
Share Share Convertible Other Retained Total
capital premium loan stock reserves loss GBP
GBP GBP GBP GBP GBP
----------------------------- --------- --------- ------------ ----------- ------------ -----------
As at 1 January 2019 4,791,747 6,330,629 - 201,545 (9,524,637) 1,799,284
Loss and total comprehensive
income for the year - - - - (2,348,306) (2,348,306)
Shares issued(1) 336,377 492,065 - - - 828,442
Convertible loan
stock issued(2) - - 103,000 - - 103,000
Share based payments
lapsed - - - (19,500) - (19,500)
Share based payments
expired - - - (157,199) 157,199 -
----------------------------- --------- --------- ------------ ----------- ------------ -----------
As at 31 December
2019 5,128,124 6,822,694 103,000 24,846 (11,715,744) 362,920
----------------------------- --------- --------- ------------ ----------- ------------ -----------
As at 1 January 2020 5,128,124 6,822,694 103,000 24,846 (11,715,744) 362,920
Loss and total comprehensive
income for the year - - - - (1,543,714) (1,543,714)
Shares issued(1) 667,627 5,612,964 (71,752) - - 6,208,839
Convertible loan
stock issued(2) - - 4,085 - - 4,085
Warrants issued - - - 10,712 - 10,712
Warrants exercised - 9,911 - (9,911) - -
Convertible loan
stock redeemed - - (33,333) - - (33,333)
Share based payments
arising - - - 434,474 - 434,474
Share based payments
expired - - - (24,846) 24,846 -
----------------------------- --------- ---------- --------- --------- ------------ -----------
As at 31 December
2020 5,795,751 12,445,569 2,000 435,275 (13,234,612) 5,443,983
----------------------------- --------- ---------- --------- --------- ------------ -----------
(1) Shares issued are net of costs
(2) Convertible loan stock includes cumulative interest payable
by the issue of shares.
CONSOLIDATED CASH FLOW STATEMENT
As at 31 December 2020
2020 2019
Note GBP GBP
--------------------------------------------------------------------- ---- ----------- -----------
Cash Flows from Operating Activities
Loss for the year on continuing
activities (1,533,963) (592,290)
Profit/(loss) for the year from
discontinued operations 85,241 (1,029,239)
Depreciation of property, plant
and equipment 15 6,900 161,862
Amortisation of intangible assets 14 14,600 255,182
Share based payments 434,474 (7,500)
Impairments 363,745 602,108
Non-cash directors' fees - 94,958
Interest income (39) (80)
Finance costs 4,085 27,081
Profit on disposal - (7,608)
Taxation (120,471) (334,969)
(Increase)/decrease in inventories (4,879) 3,501
(Increase)/decrease in trade
and other receivables (229,024) 206,821
(Decrease)/increase in provisions (7,500) 20,500
Decrease in trade and other payables (123,806) (87,828)
--------------------------------------------------------------------- ---- ----------- -----------
Cash used in operations (1,110,637) (687,501)
Income taxes received 120,471 128,641
Interest paid - (24,081)
--------------------------------------------------------------------- ---- ----------- -----------
Net cash used in operating activities (990,166) (582,941)
--------------------------------------------------------------------- ---- ----------- -----------
Cash Flows from Investing Activities
Purchases of property, plant
and equipment 15 (518) (37,884)
Proceeds from sale of property,
plant and equipment - 28,374
Interest income 39 80
Proceeds from sale of business 160,275
Investment in subsidiaries (net
of cash acquired) 15,592 1,617
Net cash used in investing activities 175,388 (7,813)
--------------------------------------------------------------------- ---- ----------- -----------
Cash Flows from Financing Activities
Repayment of lease liabilities (29,500) (29,500)
Repayment of borrowings (60,825) (105,841)
Issue of loan notes - 100,000
Repayment of loan notes (33,333) -
Issue of shares, net of issue
costs 4,604,801 591,484
--------------------------------------------------------------------- ---- ----------- -----------
Net cash generated from financing
activities 4,481,143 556,143
--------------------------------------------------------------------- ---- ----------- -----------
Net increase/(decrease) in cash
and cash equivalents 3,666,365 (34,611)
Cash and cash equivalents at
beginning of year 74,770 109,381
--------------------------------------------------------------------- ---- ----------- -----------
Cash and cash equivalents at
31 December 19 3,741,135 74,770
--------------------------------------------------------------------- ---- ----------- -----------
Non-cash transactions
The principal non-cash transactions
relate to:
* Acquisition of subsidiary 16 1,800,000 130,000
* Loan note conversion (including interest) 71,752 -
--------------------------------------------------------------------- ---- ----------- -----------
1,871,752 130,000
------------------------------------------------------------------- ---- ----------- -----------
PARENT COMPANY CASH FLOW STATEMENT
As at 31 December 2020
2020 2019
Note GBP GBP
--------------------------------------------------------------------- ---- ----------- -----------
Cash Flows from Operating Activities
Loss for the year on continuing
activities (1,543,714) (2,348,306)
Depreciation of property, plant
and equipment 15 4,350 4,350
Share based payments 434,474 (7,500)
Impairments 640,201 2,020,810
Non-cash directors' fees - 94,958
Interest income - (7)
Finance costs 4,085 3,295
(Increase)/decrease in trade
and other receivables (35,449) 16,232
Increase in trade and other payables 53,006 11,070
--------------------------------------------------------------------- ---- ----------- -----------
Cash used in operations (443,047) (205,098)
Interest paid - (295)
--------------------------------------------------------------------- ---- ----------- -----------
Net cash used in operating activities (443,047) (205,393)
--------------------------------------------------------------------- ---- ----------- -----------
Cash Flows from Investing Activities
Interest income - 7
Loans to subsidiary undertakings (542,684) (492,692)
--------------------------------------------------------------------- ---- ----------- -----------
Net cash used in investing activities (542,684) (492,685)
--------------------------------------------------------------------- ---- ----------- -----------
Cash Flows from Financing Activities
Issue of loan notes - 100,000
Repayment of loan notes (33,333) -
Issue of shares, net of issue
costs 4,604,801 591,484
--------------------------------------------------------------------- ---- ----------- -----------
Net cash generated from financing
activities 4,571,468 691,484
--------------------------------------------------------------------- ---- ----------- -----------
Net increase/(decrease) in cash
and cash equivalents 3,585,737 (6,594)
Cash and cash equivalents at
beginning of year 4,784 11,378
--------------------------------------------------------------------- ---- ----------- -----------
Cash and cash equivalents at
31 December 19 3,590,521 4,784
--------------------------------------------------------------------- ---- ----------- -----------
Non-cash transactions
The principal non-cash transactions
relate to:
* Acquisition of subsidiary 16 60,000 130,000
* Loan note conversion (including interest) 71,752 -
--------------------------------------------------------------------- ---- ----------- -----------
131,752 130,000
------------------------------------------------------------------- ---- ----------- -----------
These Financial Statements were approved by the Board of
Directors and authorised for issue on 8 June 2021 and were signed
on its behalf by:
Antony Legge
Executive Chairman
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2020
1 Ge neral information
Remote Monitored Systems plc (the "Company") and its
subsidiaries (together the "Group") conducted three main continuing
activities during the year as detailed in note 5. The Company is
incorporated and domiciled in the UK and its registered office is
27-28 Eastcastle Street, London W1W 8DH.
The Company's shares are quoted on the Alternative Investment
Market ("AIM") of the London Stock Exchange plc.
2 Summary of accounting policies
The principal accounting policies applied in the preparation of
these Consolidated Financial Statements are set out below. These
policies have been consistently applied in the year presented,
unless otherwise stated.
(a) Basis of preparation
The Consolidated Financial Statements of Remote Monitored
Systems plc (the "Group") have been prepared in accordance with
International Accounting Standards ("IAS") in conformity with the
requirements of the Companies Act 2006. These accounting policies
comply with each IAS that is mandatory for accounting periods
ending on 31 December 2020 except for, in order to present fairly
the acquisition of Pharm 2 Farm Limited, the Group has departed
from the requirements within IFRS 3 relating to the value of the
consideration as detailed in note 17.
The Financial Statements are presented in GBP (GBP) rounded to
the nearest pound.
The preparation of financial statements in conformity with IAS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Group's Accounting Policies. The areas involving a
higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the Financial
Statements are disclosed in Note 4.
(b) Going concern basis
At the date of this report the Group had net cash of
approximately GBP5.0m. The Directors have reviewed the Group's
strategy with regard to future investment in its business.
The Directors have considered the impact of Covid-19 and are
closely monitoring the situation.
The Group's business activities together with the factors likely
to affect its future development performance and position are set
out in the Strategic Report.
For the year ended 31 December 2020, the Group's objectives,
policies and processes for managing its capital, its financial risk
management objectives, details of its financial instruments and its
exposure to credit and liquidity risk can be found in the Strategic
Report and in Notes 3 and 29.
Based on these assumptions, the Directors have a reasonable
expectation that the Group and Company have adequate resources to
continue in operational existence for the foreseeable future and
therefore have adopted the going concern basis of preparation in
these Financial Statements.
(c) New and amended standards
Changes in accounting policy
For the purpose of the preparation of these consolidated
financial statements, apart from that detailed in 2(a) above the
Group has applied all standards and interpretations that are
effective for accounting periods beginning on or after 1 January
2020.
There were no new standards, amendments and interpretations
effective for the first time on or after 1 January 2020 that had a
material impact on the Group or parent company.
New standards, interpretations and amendments not yet
effective
Standards, amendments and interpretations that have been
published and will be mandatory for accounting periods beginning on
or after 1 January 2021 are not expected to have a material impact
on the Group's or parent company's results or shareholders'
funds.
(d) Basis of consolidation
Subsidiaries are entities controlled by the Group. Control is
achieved when the Group is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability
to affect those returns through its power over the investee.
Specifically, the Group controls an investee if, and only if, the
Group has:
-- Power over the investee (i.e. existing rights that give it
the current ability to direct the relevant activities of the
investee).
-- Exposure, or rights, to variable returns from its involvement with the investee
-- The ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting
rights result in control. To support this presumption and when the
Group has less than a majority of the voting or similar rights of
an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee,
including:
-- The contractual arrangement with the other vote holders of the investee.
-- Rights arising from other contractual arrangements.
-- The Group's voting rights and potential voting rights.
Consolidation of a subsidiary begins when the Group obtains
control over the subsidiary and ceases when the Group loses control
of the subsidiary. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the year are included in
the consolidated financial statements from the date the Group gains
control until the date the Group ceases to control the subsidiary.
The acquisition method is used to account for the acquisition of
subsidiaries.
Acquisition related costs are expensed as incurred.
The Group measures goodwill at the acquisition date as the
excess of the fair value of the consideration transferred, plus the
recognised amount of any non-controlling interests, less the
recognised amount of the identifiable assets acquired and
liabilities assumed. If this consideration is lower than the fair
value of the net assets of the subsidiary acquired, the difference
is recognised in profit or loss.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by other members of the Group. All
intercompany transactions and balances between group entities are
eliminated on consolidation.
Transactions with non-controlling interests that do not result
in loss of control are accounted for as equity transactions. Gains
or losses on disposals to non-controlling interests are recorded in
equity.
Where considered appropriate, adjustments are made to the
financial information of subsidiaries to bring the accounting
policies used into line with those used by other members of the
Group. All intercompany transactions and balances between Group
enterprises are eliminated on consolidation.
The Company's UK subsidiaries Limited use UK GAAP rules to
prepare and report their financial statements. The Group reports
using IFRS standards and in order to comply with the Group's
reporting standards, management of these subsidiaries processed
several adjustments to ensure the financial information included at
a Group level complies with IFRS. These subsidiaries will continue
to prepare their company financial statements in line with UK GAAP
rules.
(e) Segmental reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker
("CODM"). The CODM is deemed to be the Chief Executive Officer and
the Chief Financial Officer.
Operating segments are identified on the basis of internal
reports that are regularly reviewed by the CODM to allocate
resources and to assess performance. Using the Group's internal
management reporting as a starting point, three continuing
reporting segments set out in note 5 have been identified.
The individual financial statements of each Group company are
measured in the currency of the primary economic environment in
which it operates (its functional currency) being US dollar or
pounds sterling. For the purpose of the Group Financial Statements,
the results and financial position are expressed in pounds sterling
GBP, which is the presentation currency for the Group and
Company.
(f) Discontinued operations
A discontinued operation is a component of the Group's business,
the operations and cash flows of which can be clearly distinguished
from the rest of the Group and which:
-- represents a separate major line of business or geographic area of operations;
-- is part of a single co-ordinated plan to dispose of a
separate major line of business or geographic area of operations;
or
-- is a subsidiary acquired exclusively with a view to re-sale.
Discontinued operations are presented in the income statement as
a separate line and are shown net of tax. Comparative information
in relation to the Consolidated Statement of Comprehensive Income
has been restated to reflect this presentation.
Foreign currencies
Functional and presentation currency
Pounds sterling GBP is the Group's presentation currency and the
parent company's functional currency.
Transactions and balances
In preparing the financial statements of the individual
companies, 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 the
Statement of Financial Position date, monetary assets and
liabilities that are denominated in foreign currencies are
translated at the rates prevailing on the Statement of Financial
Position date. Exchange differences arising on the settlement of
monetary items, and on the translation of monetary items at the
Statement of Financial Position date, are included in the Statement
of Comprehensive Income for the year.
Group companies
The results and financial position of all the Group entities
(none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation
currency are translated into the presentation currency as
follows:
-- assets and liabilities for each period end date presented are
translated at the period-end closing rate;
-- income and expenses for each Income Statement are translated
at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are
translated at the dates of the transactions); and
-- all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the
translation of the net investment in foreign entities, and of
monetary items receivable from foreign subsidiaries for which
settlement is neither planned nor likely to occur in the
foreseeable future, are taken to other comprehensive income. When a
foreign operation is sold, such exchange differences are recognised
in the Income Statement as part of the gain or loss on sale
(g) Intangible assets
Goodwill arises on the acquisition of subsidiaries and
represents the excess of the consideration transferred, the amount
of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previous equity interest in the
acquiree over the fair value of the identifiable net assets
acquired. If the total of consideration transferred,
non-controlling interest recognised and previously held interest
measured at fair value is less than the fair value of the net
assets of the subsidiary acquired, in the case of a bargain
purchase, the difference is recognised directly in the Statement of
Comprehensive Income.
For the purpose of impairment testing, goodwill acquired in a
business combination is allocated to each of the CGUs, or groups of
CGUs, that is expected to benefit from the synergies of the
combination. Each unit or group of units to which the goodwill is
allocated represents the lowest level within the entity at which
the goodwill is monitored for internal management purposes.
Goodwill is monitored at the operating segment level.
Goodwill impairment reviews are undertaken annually or more
frequently if events or changes in circumstances indicate a
potential impairment. The carrying value of the CGU containing the
goodwill is compared to the recoverable amount, which is the higher
of value in use and the fair value less costs of disposal. Any
impairment is recognised immediately as an expense and is not
subsequently reversed.
Customer lists and intellectual property rights are shown at
fair value at date of acquisition, less amortisation and
impairments. Costs associated with these are recognised as an
expense as incurred.
Development costs that are directly attributable to the design
and testing of identifiable and unique products controlled by the
Company are recognised as intangible assets when the following
criteria are met:
-- it is technically feasible to complete the product so that it will be available for use;
-- management intends to complete the product and use or sell it;
-- there is an ability to use or sell the product;
-- it can be demonstrated how the product will generate probable future economic benefits;
-- adequate technical, financial and other resources to complete
the development and use or sell the product are available; and
-- the expenditure attributable to the product during its
development can be reliably measured.
The Group's Intangible assets, other than goodwill acquired on
acquisition, are amortised at 20% per annum on a straight line
basis.
At each year end date, the Group reviews the carrying amounts of
its intangible assets other than goodwill if there is an indication
of impairment to determine if those assets have suffered an
impairment loss. 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 the asset does not generate
cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
In assessing value in use, the estimated future cash flows are
discounted to their present value, using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset for which the estimates of
future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised as an expense
immediately.
(h) Property, plant and equipment
All property, plant and equipment are shown at cost less
subsequent depreciation and impairment. Cost includes expenditure
that is directly attributable to the acquisition of items.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of the replaced part is derecognised.
All other repairs and maintenance are charged to the Statement of
Comprehensive Income during the financial year in which they are
incurred.
Depreciation is charged so as to write off the cost of assets
over their useful economic lives, using the straight-line method,
which is considered to be as follows:
-- Plant and equipment - 5 years
-- Motor Vehicles - 3 to 5 years
-- Software - 3 years
The assets' residual values and useful lives are reviewed, and,
if appropriate, asset values are written down to their estimated
recoverable amounts, at each Statement of Financial Position
date.
Gains and losses on disposals are determined by comparing
proceeds with the carrying amounts and are included in the
Statement of Comprehensive Income.
(i) Financial assets
The Group and Company has classified all of its financial assets
as loans and receivables. The classification depends on the purpose
for which the financial assets were acquired. Management determines
the classification of its financial assets at initial
recognition.
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are included in current assets. The Group's loans and
receivables comprise trade and other receivables and cash and cash
equivalents in the Statement of Financial Position.
Loans and receivables are initially recognised at fair value
plus transaction costs and are subsequently carried at amortised
cost using the effective interest method, less provision for
impairment.
(j) Impairment of financial assets
The Group assesses, on a forward-looking basis, the expected
credit losses associated with its debt instruments carried at
amortised cost. The impairment methodology applied depends on
whether there has been a significant increase in credit risk. A
financial asset, or a group of financial assets, is impaired, and
impairment losses are incurred, only if there is objective evidence
of impairment as a result of one or more events that occurred after
the initial recognition of the asset (a "loss event"), and that
loss event (or events) has an impact on the estimated future cash
flows of the financial asset, or group of financial assets, that
can be reliably estimated.
The criteria that the Group and Company uses to determine that
there is objective evidence of an impairment loss include:
-- significant financial difficulty of the issuer or obligor;
-- a breach of contract, such as a default or delinquency in interest or principal repayments.
The amount of the loss is measured as the difference between the
asset's carrying amount and the present value of estimated future
cash flows (excluding future credit losses that have not been
incurred), discounted at the financial asset's original effective
interest rate. The asset's carrying amount is reduced, and the loss
is recognised in the profit or loss.
For trade receivables, the Group applies the simplified approach
permitted by IFRS 9, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
If, in a subsequent year, the amount of the impairment loss
decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised (such as an
improvement in the trade and other receivables credit rating), the
reversal of the previously recognised impairment loss is recognised
in the Statement of Comprehensive Income.
(k) Trade and other receivables
Trade receivables are amounts due from customers for services
performed in the ordinary course of business. If collection is
expected in one year or less (or in the normal operating cycle of
the business if longer), they are classified as current assets. If
not, they are presented as non-current assets.
(l) Cash and cash equivalents
In the Cash Flow Statements, cash and cash equivalents comprise
cash in hand and deposits held at call with banks.
(m) Share capital and reserves
Equity comprises the following:
-- Share Capital represents ordinary shares issued at par value
and includes "Deferred Shares" below
-- Deferred Shares represents notional shares arising on the
redenomination of the nominal share capital at various times. The
Deferred Shares form part of the Share Capital balance shown in the
Statement of Financial Position.
-- Share Premium represents the premium paid on shares issued
above par value net of issue costs.
-- Retained earnings represents retained profits and losses.
-- Merger reserve represents the difference between the carrying
value of the investment and the nominal value of the shares of
subsidiaries upon consolidation under merger accounting. The merger
reserve is presented in "other reserves".
-- Merger relief reserve represents the difference between the
nominal value of shares issued accounted under merger relief and
the consideration attributed to the shares issued.
-- Share option and warrants reserve represents the fair value of unexpired warrants.
-- Convertible loan stock represents fair value of consideration
received together with interest thereon.
Foreign Currency Translation Reserve - represents the
translation differences arising from translating the financial
statement items from functional currency to presentational
currency
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
(n) Share-based payments
The Group operates a number of equity-settled, share-based
compensation plans, under which the entity receives goods or
services from employees or third party suppliers as consideration
for equity instruments of the Company. The fair value of the
equity-settled share based payments are recognised as an expense in
the Statement of Comprehensive Income or charged to equity
depending on the nature of the services provided or instruments
issued.
(o) Trade and other payables
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities
if payment is due within one year or less. If not, they are
presented as non-current liabilities. Trade payables are recognised
initially at fair value, and subsequently measured at amortised
cost using the effective interest method.
(p) Borrowings
Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are subsequently carried at
amortised cost; any difference between the proceeds (net of
transaction costs) and the redemption value is recognised in the
Statement of Comprehensive Income over the year of the borrowings
using the effective interest method.
(q) Revenue recognition
The Group recognises revenue in accordance with IFRS 15 which
includes five key steps:
Step 1: Identify the contracts with a customer; Step 2: Identify
the performance obligations in the contract; Step 3: Determine the
transaction price; Step 4: Allocate the transaction price to the
performance obligations in the contract; and Step 5: Recognise
revenue when (or as) the entity satisfies a performance
obligation.
The Group recognises revenue when the amount of revenue can be
reliably measured, it is probable that future economic benefits
will flow to the entity, and specific criteria have been met for
each of the Group's activities, as described below: if revenue has
been billed but the specific performance obligations are not met
then this is recognised as deferred revenue.
Primarily revenues were recognised on the provision of survey
services when the services were rendered to clients as per the
terms of specific contracts. In the case of fixed price contracts,
revenues are recognised on a percentage of completion basis.
Turnover is stated net of value added tax in respect of continuing
activities.
The Group bases its estimates on historical results, taking into
consideration the type of customer, the type of transaction and the
specifics of each arrangement. Where the Group makes sales relating
to a future financial period, these are deferred and recognised
under 'deferred revenue' on the Statement of Financial
Position.
(r) Current and deferred income tax
Income tax represents tax currently payable or receivable and
deferred tax. The tax currently payable is based on taxable profit
or loss for the year. Taxable profit or loss differs from the
profit or loss for the year as reported in the Consolidated
Statement of Comprehensive Income 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 or asset for current tax is calculated using tax
rates that have been enacted or substantively enacted by the
Statement of Financial Position date.
Deferred tax is the tax expected to be payable or recoverable 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
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 utilised. Such assets and liabilities are not recognised if
the temporary difference arises from the 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 nor the accounting loss.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries, 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.
Deferred tax is calculated at the tax rates that are expected to
apply in the relevant jurisdiction in the year when the liability
is settled or the asset is realised. Deferred tax is charged or
credited to the Consolidated Statement of Comprehensive Income,
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 is not discounted.
Deferred tax assets and liabilities are offset where there is a
legally enforceable right to set off 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.
(s) Leases
Prior to 1 January 2019: Leases in which a significant portion
of the risks and rewards were retained by the lessor were
classified as operating leases. Payments made under operating
leases were charged to the Statement of Comprehensive Income on a
straight line basis over the period of the lease.
Assets held under finance leases were recognised as assets of
the Group at the fair value at the inception of the lease or if
lower, at the present value of the minimum lease payments. The
related liability to the lessor was included in the Statement of
Financial Position as a finance lease obligation. Lease payments
were apportioned between interest expenses and capital redemption
of the liability. Interest was recognised immediately in the
Statement of Comprehensive Income, unless attributable to
qualifying assets, in which case they were capitalised to the cost
of those assets.
Post 1 January 2019: Assets held under leases are recognised as
assets of the Group at the fair value at the inception of the lease
or if lower, at the present value of the minimum lease payments.
The related liability to the lessor is included in the Statement of
Financial Position as a finance lease obligation. Lease payments
are apportioned between interest expenses and capital redemption of
the liability. Interest is recognised immediately in the Statement
of Comprehensive Income, unless attributable to qualifying assets,
in which case they are capitalised to the cost of those assets.
Exemptions are applied for short life leases and low value
assets, with payments made under operating leases charged to the
Statement of Comprehensive Income on a straight line basis over the
period of the lease.
3 Financial risk management
Group financial risk factors
The Group's activities expose it to a variety of financial
risks. The Group's finance function monitors and manages the
financial risks relating to the operations of the Group. The Group
is exposed to market risks (including foreign exchange risk and
price risk) and credit risk and to a very limited amount interest
rate risk and liquidity risk.
Risk management is carried out by the Board of Directors. The
Board provides written principles for overall risk management, as
well as written policies covering specific areas, such as foreign
exchange risk, interest rate risk and credit risk, to mitigate
financial risk exposures.
Market risk
(a) Foreign exchange risk
The Group has closed its operations located in parts of the
world whose functional currency is not the same as the Group's
functional currency (GBP Sterling), therefore the foreign exchange
risk is low. The Group's net assets arising from closed US
operations are exposed to currency risk resulting in gains and
losses on retranslation from US Dollar. Due to the minimal amount
of transactions in US dollars, the Group does not consider hedging
its net investments beneficial because the cash flow risk created
from such hedging techniques would outweigh the risk of foreign
currency exposure. It is the Group's policy to hold surplus funds
over and above working capital requirements in the Parent Company.
The Group considers this policy minimises any unnecessary foreign
exchange exposure.
In order to monitor the continuing effectiveness of this policy
the Board through their approval of both corporate and capital
expenditure budgets, and review of the currency profile of cash
balances and management accounts, considers the effectiveness of
the policy on an ongoing basis.
(b) Price risk
The Group is not exposed to commodity price risk as a result of
its operations. The Directors will revisit the appropriateness of
this policy should the Group's operations change in size or
nature.
Credit risk
Credit risk arises from the Group's trade receivables. Where no
independent rating of customers is available, credit control
assesses the quality of customers by reference to their financial
position, past experience and any other relevant factors.
Interest rate risk management
The Group is not exposed to interest rate risk on financial
liabilities.
Liquidity risk management
The Group manages liquidity risk by maintaining adequate
reserves and by continuously monitoring forecast and actual cash
flows and matching the maturity profiles of financial assets and
liabilities. The Group seeks to manage financial risk, to ensure
sufficient liquidity is available to meet foreseeable needs and to
invest cash assets safely and profitably.
Capital risk management
The Group manages its capital to ensure that it will be able to
continue as a going concern while maximising the return to
stakeholders. The Group's capital structure primarily consists of
equity attributable to equity holders of the parent, comprising
issued capital, reserves and retained losses.
4 Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
The Group makes estimates and judgements concerning the future.
The resulting accounting estimates and judgements will, by
definition, seldom equal the related actual results. The estimates
and judgements that have a significant risk of causing a material
adjustment to the carrying amount of assets and liabilities within
the next financial year are addressed below:
Intangible assets
Intangible assets comprise of goodwill, development costs,
customer lists and Intellectual Property acquired on acquisitions
and apart from goodwill are amortised as follows:
Development costs 20% per annum on a straight-line basis
Customer lists 20% per annum on a straight-line basis
Intellectual Property 20% per annum on a straight-line basis
Useful lives are based on management's estimates of the period
that the assets will generate revenues with such records being
periodically reviewed for continual appropriation.
On acquisitions the group values intangible assets excluding
goodwill.
The Group test annually whether goodwill has suffered any
impairment, and of other intangible assets where there is an
indication of impairment, in accordance with the accounting policy.
Where applicable, the recoverable amounts of cash generating units
have been determined based on value in use calculations. The value
in use calculations require the entity to estimate future cash
flows expected to arise from the cash generating unit and apply a
suitable discount rate in order to calculate present value. These
calculations require the use of estimates (note 14).
Share Options
The group issued 77,603,512 employee share options on the 9
November 2020 at a price of 1.4p per option, exercisable at any
time within 5 years from issue.
The valuation of options used is the Black Scholes model and is
detailed in Note 21. Changes to inputs and assumptions, in
particular concerning the volatility of the Company's share price
and the time to exercise can have a significant effect on the
valuation.
Share options in GyroMetric Systems Limited were issued during
2019. The fair value of the options was considered to be negligible
and therefore no expense reflected in the financial statements.
5 Segmental analysis
Management considers that during 2020 there were three
continuing activities as set out below. The 'utilisation of
functional nanoparticles' segment commenced during the year on the
acquisition of Pharm 2 Farm Limited. This segmental analysis is
reflected in the Consolidated Group Statements set out herein. The
revenue below excludes the discontinued operations of the Geocurve
business (note 12).
Total revenue comprises:
Revenue from external customers:
2020 2019
GBP GBP
------------------------------------------------ ------- ------
Developing and manufacturing digital monitoring
and safeguarding systems for rotating shafts 83,591 51,012
Security and risk management consultancy 20,118 1,636
Utilisation of functional nanoparticles 600 -
------------------------------------------------ ------- ------
104,309 52,648
------------------------------------------------ ------- ------
Revenues are generated by geographical areas as follows:
2020 2019
GBP GBP
--------------- ------- ------
United Kingdom 10,050 11,265
Europe 94,259 41,383
--------------- ------- ------
104,309 52,648
--------------- ------- ------
The following customers generated more than 10% of the Group's
revenue:
2020 2019
GBP GBP
----------- ------ ------
Customer 1 69,154 41,383
Customer 2 16,418 9,629
----------- ------ ------
85,572 51,012
----------- ------ ------
Carrying amount of assets:
2020 2019
GBP GBP
------------------------- --------- -------
United Kingdom 7,552,089 544,332
United States of America - 440
------------------------- --------- -------
7,552,089 544,772
------------------------- --------- -------
Carrying amount of liabilities:
2020 2019
GBP GBP
------------------------- ------- -------
United Kingdom 423,337 536,439
United States of America 201,947 187,858
------------------------- ------- -------
625,284 724,297
------------------------- ------- -------
The segmental analysis of the balance sheet is not part of
routine management reporting and consequently no activity segmental
analysis of assets is shown.
6 Administrative expenses
The following have been charged in arriving at operating loss
from continuing operations:
2020 2019
GBP GBP
---------------------------------- --------- -------
Staff costs 341,890 320,587
Foreign exchange gains and losses 15,342 (6,738)
Depreciation 6,900 4,523
Amortisation of intangibles 14,600 14,600
Audit fees (note 9) 22,500 22,500
Share based payments expense 434,474 12,000
Other expenses 420,528 241,330
---------------------------------- --------- -------
1,256,234 608,802
---------------------------------- --------- -------
7 Staff costs
The average number of employees, including Directors, was:
2020 2020 2019 2019
Total Continuing Total Continuing
operations operations
No. No. No. No.
----------------------------------- ------ ----------- ------ -----------
Directors (including subsidiaries) 12 12 12 11
Development 2 2 9 1
Administration - - 3 1
----------------------------------- ------ ----------- ------ -----------
14 14 24 13
----------------------------------- ------ ----------- ------ -----------
Employees', including Directors' costs comprise:
2020 2020 2019 2019
Total Continuing Total Continuing
GBP operations GBP operations
GBP GBP
-------------------------- ------- ----------- ------- -----------
Wages, salaries and other
staff costs 319,697 314,697 758,394 303,362
Share option expense 434,474 434,474
Social security costs 23,876 23,876 62,128 13,646
Pension costs 3,358 3,317 4,304 3,579
-------------------------- ------- ----------- ------- -----------
781,405 776,364 824,826 320,587
-------------------------- ------- ----------- ------- -----------
The directors were the only employees of the Company and the
costs incurred by the Company are detailed in note 8. Included in
the figures below were GBP51,500 (2019 GBP55,000) paid through
subsidiary companies.
8 Directors
The Directors during the year were considered to be the Key
Management of the Group.
2020 2019
Short Share Short
term employee option term employee
benefits Pension expense Total benefits Pension Total
Group GBP GBP GBP GBP GBP GBP GBP
Paul Ryan 48,000 - 217,237 265,237 48,000 - 48,000
Trevor Brown 54,167 - 217,237 271,404 48,000 - 48,000
Nigel Burton (9,182) - - (9,182) 48,000 - 48,000
John Richardson 85,000 1,500 - 86,500 55,000 - 55,000
---------------- -------------- ------- -------- ------- -------------- ------- -------
177,985 1,500 434,474 613,959 199,000 - 199,000
---------------- -------------- ------- -------- ------- -------------- ------- -------
Paul Ryan was paid his short-term employee benefits through a
service company, Warande1970 BVBA. Nigel Burton agreed to waive
some of his accrued benefits on his resignation.
Gary Nel, former director of Geocurve Limited, was considered to
be Key Management until his departure during the previous year and
was paid short term employee benefits during that year of
GBP34,808.
During 2019 John Richardson also received 5,000 share options in
GyroMetric Systems Limited the fair value of which were considered
to be negligible.
The share option expense is detailed further in note 21.
9 Auditors remuneration
2020 2019
GBP GBP
---------------------------------------------------- ------ --------
Fees payable to the Company's auditor for the
audit of the Group and Parent Company's Financial
Statements 22,500 22,500
Fees payable to the Company's auditor for other - -
services
---------------------------------------------------- ------ --------
22,500 22,500
--------------------------------------------------- ------ --------
10 Finance costs
2020 2019
GBP GBP
----------------------------------------- ----- -----
Interest payable and other finance costs 4,085 3,295
----------------------------------------- ----- -----
11 Tax
2020 2019
GBP GBP
Group
Income tax
-------------------------- -------- ---------
Current tax
UK Corporation tax credit (27,976) (49,107)
-------------------------- -------- ---------
Deferred tax
Current year - (70,545)
-------------------------- -------- ---------
Tax credit (27,976) (119,652)
-------------------------- -------- ---------
The tax on the Group's loss before tax differs from the
theoretical amount that would arise using the weighted average tax
rate applicable to the profits/(losses) of the consolidated
entities as follows:
2020 2019
GBP GBP
Group
---------------------------------------------------- ----------- ---------
Loss before tax (1,561,939) (711,942)
---------------------------------------------------- ----------- ---------
Tax at the applicable rate of 19.00% (2019 19.00%): (296,768) (135,269)
Effect of:
Expenses/income not deductible for tax purposes 78,432 26,016
Depreciation in excess of capital allowances 1,311 855
R&D tax credit (27,976) (49,107)
Fixed asset timing differences 2,774 (70,545)
Net tax effect of losses carried forward 214,251 108,398
---------------------------------------------------- ----------- ---------
Tax credit for the year (27,976) (119,652)
---------------------------------------------------- ----------- ---------
The tax rate used for 2019 is the standard rate of corporation
tax in the UK.
The Group has tax losses of approximately GBP5,200,000 (2019
GBP4,800,000) available to carry forward against future taxable
profits. No deferred tax asset has been recognised in view of the
uncertainty over the timing of future taxable profits against which
the losses may be offset.
12 Discontinued operations
During December 2019 the group reached agreement to sell the
fixed assets and goodwill within Geocurve Limited. At the same
time, a formal plan was made to discontinue the Geocurve business.
The disposal was completed in January 2020. The fixed assets
included in the sale were sold for GBP160,275 and were included
within 'Assets classified as held for sale' within the 2019
Consolidated Statement of Financial Position at the lower of
carrying value and net realisable value. Impairments relating to
the disposal were intangible assets of GBP189,238 and fixed assets
of GBP286,887 which were shown within the 2019 discontinued
operations.
In addition, the purchaser has agreed to pay a finder's fee as a
percentage of sales arising from existing customers of the Geocurve
business. These amounts will be credited to income when the
respective sales are settled.
Results of discontinued operations were as follows:
2020 2019
GBP GBP
------------------------------ -------- -----------
Revenue 6,132 427,616
Cost of sales (1,243) (459,227)
Depreciation - (157,339)
Intangible amortisation - (240,582)
Share option credit/(expense) - 19,500
Impairments - (476,125)
Other costs (12,143) (334,621)
Finance income - 8
Finance costs - (23,786)
Income tax 92,495 215,317
------------------------------ -------- -----------
85,241 (1,029,239)
------------------------------ -------- -----------
Included in the Group Cash Flow Statement are the following
amounts relating to discontinued operations;
2020 2019
GBP GBP
------------------------------------ -------- ---------
Cash flow from operating activities 77,757 (240,117)
Cash flow from investing activities (90,325) 366,953
Cash flow from financing activities 160,675 (135,341)
------------------------------------ -------- ---------
13 Earnings per share
Basic earnings per share has been calculated by dividing the
loss attributable to equity holders of the Company after taxation
by the weighted average number of shares in issue during the year.
There is no difference between the basic and diluted loss per share
on loss making operations. The difference between the basic and
diluted profit per share on discontinued operations for 2020 is
insignificant.
2020 2019
GBP GBP
Basic and Diluted
-------------------------------------------------------- ------------ ------------
Loss after taxation - continuing operations (1,501,329) (522,017)
Profit/(loss) after taxation - discontinued operations 85,241 (1,029,239)
-------------------------------------------------------- ------------ ------------
Loss after taxation - total (1,416,088) (1,551,256)
-------------------------------------------------------- ------------ ------------
Weighted average number of shares 813,456,106 412,161,620
-------------------------------------------------------- ------------ ------------
Earnings per share (pence) - continuing operations (0.18) (0.13)
Earnings per share (pence) - discontinued operations 0.01 (0.25)
-------------------------------------------------------- ------------ ------------
Earnings per share (pence) - total (0.17) (0.38)
-------------------------------------------------------- ------------ ------------
14 Intangible assets
2020 2019
GBP GBP
Goodwill - Group
------------------------------------------ ---------- ----------
Cost
At 1 January 450,795 334,646
Additions (note 17) 1,764,419 125,983
Reclassification to held for sale assets
(note 12) - (9,834)
------------------------------------------- ---------- ----------
At 31 December 2,215,214 450,795
------------------------------------------- ---------- ----------
Impairment
At 1 January 125,983 -
Arising during the year 324,812 135,817
Reclassification to held for sale assets
(note 12) - (9,834)
------------------------------------------- ---------- ----------
At 31 December 450,795 125,983
------------------------------------------- ---------- ----------
Net book value at 31 December 1,764,419 324,812
------------------------------------------- ---------- ----------
As at the year end, management has reassessed the recoverable
amount of the Goodwill relating to Pharm 2 Farm Limited based on
forecast NPV calculations. Management budgeted operating margin
based upon current estimated costing and its expectations of market
development. The discount rates reflect specific risks relating to
the relevant operating segment. The value in use calculations and
headroom is sensitive to any change in the key assumptions.
Management concluded that the goodwill is not impaired.
The key assumptions used for the Pharm 2 Farm value-in-use
calculations were as follows:
Operating margin 12%
Growth rate Specific annual estimates
Discount rate 20%
The goodwill of GBP324,812 relating to the GyroMetric Business
has been fully impaired due to the current proposal by the
directors for the disposal of the division as detailed in the
Chairman's Statement.
Given the inherent uncertainty partially relating to the
Covid-19 virus, management have considered that the reliability of
value in use calculations for the Cloudveil business would still
not be sufficiently robust. The goodwill of GBP125,983 was fully
impaired in 2019.
Customer Intellectual Development
Lists Property Costs Total
GBP GBP GBP GBP
Other intangibles - Group
---------------------------- ---------- ------------- ------------ ------------
Cost
At 1 January 2019 370,227 532,867 372,818 1,275,912
Reclassification to held
for sale assets (note 12) (370,227) (459,867) (372,818) (1,202,912)
----------------------------- ---------- ------------- ------------ ------------
At 31 December 2019 - 73,000 - 73,000
----------------------------- ---------- ------------- ------------ ------------
At 31 December 2020 - 73,000 - 73,000
----------------------------- ---------- ------------- ------------ ------------
Amortisation
At 1 January 2019 265,919 272,133 249,741 787,793
Amortisation 74,045 106,573 74,564 255,182
Impairment 30,263 100,628 48,513 179,404
Reclassification to held
for sale assets (note 12) (370,227) (459,867) (372,818) (1,202,912)
----------------------------- ---------- ------------- ------------ ------------
At 31 December 2019 - 19,467 - 19,467
----------------------------- ---------- ------------- ------------ ------------
Amortisation - 14,600 - 14,600
Impairment - 38,933 - 38,933
----------------------------- ---------- ------------- ------------ ------------
At 31 December 2020 - 73,000 - 73,000
----------------------------- ---------- ------------- ------------ ------------
Net book value
At 31 December 2018 104,308 260,734 123,077 488,119
----------------------------- ---------- ------------- ------------ ------------
At 31 December 2019 - 53,533 - 53,533
----------------------------- ---------- ------------- ------------ ------------
At 31 December 2020 - - - -
----------------------------- ---------- ------------- ------------ ------------
15 Property, Plant and Equipment
Right Plant Motor
of use & equipment Software Vehicles Total
leasehold GBP GBP GBP GBP
GBP
Group
---------------------------- ----------- ------------- ----------- ---------- ----------
Cost
At 1 January 2019 - 685,570 17,900 15,031 718,501
Reclassification of leases 95,875 - - - 95,875
Acquisition of subsidiary - 4,299 - - 4,299
Additions - 37,884 - - 37,884
Disposals - (49,984) - (8,000) (57,984)
Reclassification to held
for sale assets (note 12) - (639,632) (4,850) (7,031) (651,513)
---------------------------- ----------- ------------- ----------- ---------- ----------
At 31 December 2019 95,875 38,137 13,050 - 147,062
---------------------------- ----------- ------------- ----------- ---------- ----------
Acquisition of subsidiary - 24,377 - - 24,377
Additions - 518 - - 518
Disposals - (28,956) - - (28,956)
---------------------------- ----------- ------------- ----------- ---------- ----------
At 31 December 2020 95,875 34,076 13,050 - 143,001
---------------------------- ----------- ------------- ----------- ---------- ----------
Accumulated depreciation
At 1 January 2019 - 204,472 1,533 8,008 214,013
Acquisition of subsidiary - 1,778 - - 1,778
Charge for the year 29,500 123,608 5,563 3,191 161,862
Disposals - (33,050) - (4,168) (37,218)
Impairments 66,375 217,683 2,829 286,887
Reclassification to held
for sale assets (note 12) - (479,357) (4,850) (7,031) (491,238)
---------------------------- ----------- ------------- ----------- ---------- ----------
At 31 December 2019 95,875 35,134 5,075 - 136,084
---------------------------- ----------- ------------- ----------- ---------- ----------
Acquisition of subsidiary - 3,312 - - 3,312
Charge for the year - 2,550 4,350 - 6,900
Disposals - (28,956) - - (28,956)
---------------------------- ----------- ------------- ----------- ---------- ----------
At 31 December 2020 95,875 12,040 9,425 - 117,340
Net book value
At 31 December 2018 - 481,098 16,367 7,023 504,488
---------------------------- ----------- ------------- ----------- ---------- ----------
At 31 December 2019 - 3,003 7,975 - 10,978
---------------------------- ----------- ------------- ----------- ---------- ----------
At 31 December 2020 - 22,036 3,625 - 25,661
---------------------------- ----------- ------------- ----------- ---------- ----------
15 Property, Plant and Equipment (continued)
Plant
&
equipment Software Total
GBP GBP GBP
Company
-------------------------- ----------- --------- --------
Cost
At 1 January 2019 4,226 13,050 17,276
Additions - - -
-------------------------- ----------- --------- --------
At 31 December 2019 4,226 13,050 17,276
-------------------------- ----------- --------- --------
Additions - - -
-------------------------- ----------- --------- --------
At 31 December 2020 4,226 13,050 17,276
-------------------------- ----------- --------- --------
Accumulated depreciation
At 1 January 2019 4,226 725 4,951
Charge for the year - 4,350 4,350
-------------------------- ----------- --------- --------
At 31 December 2019 4,226 5,075 9,301
-------------------------- ----------- --------- --------
Charge for the year - 4,350 4,250
-------------------------- ----------- --------- --------
At 31 December 2020 4,226 9,425 13,651
-------------------------- ----------- --------- --------
Net book value
At 31 December 2018 - 12,325 12,325
-------------------------- ----------- --------- --------
At 31 December 2019 - 7,975 7,975
-------------------------- ----------- --------- --------
At 31 December 2020 - 3,625 3,625
-------------------------- ----------- --------- --------
16 Investment in subsidiary undertakings
2020 2019
GBP GBP
Company
-------------------- --------- -----------
As at 1 January 384,601 1,289,509
Additions (note 17) 60,000 130,000
Impairment (384,601) (1,034,908)
---------------------- --------- -----------
Cost at 31 December 60,000 384,601
---------------------- --------- -----------
The addition in 2020 relates to the company's acquisition of
Pharm 2 Farm Ltd. Under s615 of the Companies Act 2006, the company
has elected to show the investment at the nominal cost of the
shares issued. The Fair Value of the shares issued is set out in
Note 17.
The impairment in 2020 relates to the company's investment in
GyroMetric Limited and in its US subsidiary Strat Aero
International, Inc.
The impairment in 2019 relates to the company's investments in
Geocurve Limited which held the Geocurve business that was disposed
after the year end (note 12), its investment in Cloudveil Limited
and a partial impairment against its investment in GyroMetric
Systems Limited.
The following are the principal subsidiaries of the Company at
31 December 2020 and at the date of these Financial Statements. All
these were incorporated in the UK. These subsidiaries are taking
advantage in their individual financial statements of audit
exemption.
Share
Class capital Nature of
Name of company Registered Address Parent company of shares held business
----------------- -------------------------- ---------------- ------------ -------- -----------------
GyroMetric Dockholme Lock Cottage, Remote Monitored Ordinary 57.8% Shaft Monitoring
Systems Limited 380 Bennett Street Systems plc
, Long Eaton , Nottingham
NG10 4JF, UK
Cloudveil Limited 52 West Street, Farnham Remote Monitored Ordinary 100% Security
GU9 7DX, UK Systems plc
Geocurve Limited 27-28 Eastcastle Street, Remote Monitored Ordinary 100% Receipt
London Systems plc of commission
W1W 8DH, UK from former
business
Pharm 2 Farm 27-28 Eastcastle Street, Remote Monitored Ordinary 100% Nanoparticle
Limited London Systems plc applications
W1W 8DH, UK
In addition to the above the company has non trading fully owned
subsidiaries at 31 December 2020 as follows:
Incorporated and Registered in United States of America
Strat Aero International, Inc.
17 Acquisition of subsidiary undertakings
In November 2020 the entire issued share capital of Pharm 2 Farm
Limited was acquired.
As detailed in the share purchase agreement dated 21 August 2020
the purchase consideration was stated as GBP1,800,000 to be settled
through the issue of 600,000,000 ordinary shares. Due to the need
for regulatory and shareholder approval the consideration shares
were not issued until 5 November 2020 when control of Pharm 2 Farm
Limited was obtained. Under IFRS 3 the consideration would be based
on the market value of those shares at the point of issue which
would equate to GBP17,700,000. Management does not believe this
fairly reflects the acquisition given the volatility of the share
price leading up to 5 November 2020 and have used the consideration
within the agreement of GBP1,800,000 as a fairer reflection of the
agreement. In accordance with IFRS 3, the Company will perform a
purchase price allocation within the 12 months of fully acquiring
Pharm 2 Farm Limited. Pharm 2 Farm is based in the UK and its
principal activity is that of utilisation of functional nano
particles.
GBP
----------------------------------- ----------
Purchase consideration 1,800,000
Fair value of net assets acquired 35,581
------------------------------------ ----------
Goodwill 1,764,419
------------------------------------ ----------
At acquisition Pharm 2 Farm Limited had rights over intellectual
property under 15 year licences signed in 2019. Whilst management
believe there is now significant intrinsic value of these licences,
at the time of acquisition the estimate of timing and value of
income generation was insufficiently robust for a reasonable
estimate of the valuation of these rights at acquisition to be
made.
The goodwill acquired also includes employee knowledge and
expertise with regard to nano particle technology applications.
The fair value of net assets and liabilities arising from the
acquisition were as follows:
GBP
------------------------------- ----------
Cash and cash equivalents 15,592
Property, plant and equipment 21,065
Inventories 44,023
Trade and other receivables 127,269
Trade and other payables (172,368)
-------------------------------- ----------
35,581
------------------------------- ----------
Included in the Consolidated Statement of Comprehensive Income
is revenue of GBP600 and operating losses of GBP51,780 attributable
to Pharm 2 Farm Limited in the post acquisition period.
Revenue of GBP52,493 and operating losses of GBP210,132 would
have been included in the Consolidated Statement of Comprehensive
Income had the acquisition been made on 1 January 2020.
There were no adjustments processed during the year to the fair
value of the business combinations completed during the year ended
31 December 2019.
18 Trade and other receivables
2020 2019
Group Company Group Company
GBP GBP GBP GBP
------------------------------------- ---------- ---------- ------- ----------
Amounts due from group undertakings - 430,124 - 118,040
Trade receivables 11,535 - 23,312 -
VAT receivable 68,424 23,035 8,085 5,984
Other receivables 1,813,877 1,505,000 19,889 -
Prepayments 32,151 28,841 14,804 10,443
------------------------------------- ---------- ---------- ------- ----------
At 31 December 1,925,987 1,987,000 66,090 134,467
------------------------------------- ---------- ---------- ------- ----------
Less: non-current portion - (428,974) - (118,040)
------------------------------------- ---------- ---------- ------- ----------
Current portion 1,925,987 1,558,026 66,090 16,427
------------------------------------- ---------- ---------- ------- ----------
Amounts due from group undertakings were impaired by GBP255,600
(2019 GBP985,514) during the year within the Company.
The fair value of all receivables is the same as their carrying
values stated above.
2020 2019
GBP GBP
------------------------------------------------ ------ ------
Ageing of trade receivables net of provisions -
Group:
Not due 630 2,160
0 - 30 days - 16,992
Over 30 days 10,905 4,160
------------------------------------------------ ------ ------
11,535 23,312
------------------------------------------------ ------ ------
The carrying amount of the Group's trade receivables are all
denominated in GB pounds.
The maximum exposure to credit risk at the reporting date is the
carrying value reported above. The Group does not hold collateral
as security. Provisions totalling GBP20,345 (2019: GBP335) have
been made at the year end in respect of trade receivables.
19 Cash and cash equivalents
Cash at bank is held with credit institutions with an A credit
rating. The carrying amount of the Group's cash and cash
equivalents are denominated in the following currencies:
2020 2019
Group Company Group Company
GBP GBP GBP GBP
----------- --------- --------- ------ --------
US dollars - - 446 -
GB pounds 3,741,135 3,590,521 74,324 4,784
----------- --------- --------- ------ --------
3,741,135 3,590,521 74,770 4,784
----------- --------- --------- ------ --------
20 Share capital
Group and Company 2020 2019
Issued equity share capital Number GBP Number GBP
---------------------------- -------------- --------- -------------- ---------
Is sued and fu l ly pa
id
Ordinary shares of 0.2p
each - - 500,656,790 1,001,313
Ordinary shares of 0.01p
each 1,983,270,231 198,327 - -
Deferred shares of 0.1p
each 2,358,954,414 2,358,954 2,358,954,414 2,358,954
Deferred shares of 0.19p
each 774,006,790 1,470,613 - -
A Deferred shares of 0.001p
each 17,678,567,358 1,767,857 17,678,567,358 1,767,857
---------------------------- -------------- --------- -------------- ---------
5,795,751 5,128,124
---------------------------- -------------- --------- -------------- ---------
Number of Number of Share
deferred ordinary capital Share premium Total
Group and Company shares shares GBP GBP GBP
------------------------ --------------- ------------ ---------- -------------- -----------
As at 1 January 2019 20,037,521,772 332,467,690 4,791,747 6,330,629 11,122,376
------------------------ --------------- ------------ ---------- -------------- -----------
Issue of new shares
17 January 2019 - 53,846,154 107,692 232,308 340,000
Issue of new shares
30 July 2019 - 21,101,715 42,203 52,754 94,957
Issue of new shares
3 October 2019 - 22,241,231 44,482 85,518 130,000
Issue of new shares
18 October 2019 - 62,500,000 125,000 116,485 241,485
Issue of new shares
21 October 2019 - 2,500,000 5,000 5,000 10,000
Issue of new shares
6 December 2019 - 6,000,000 12,000 - 12,000
------------------------ --------------- ------------ ---------- -------------- -----------
As at 31 December 2019 20,037,521,772 500,656,790 5,128,124 6,822,694 11,950,818
------------------------ --------------- ------------ ---------- -------------- -----------
20 Share capital (continued)
Number of Number of Share
deferred ordinary capital Share premium Total
Group and Company shares shares GBP GBP GBP
------------------------- --------------- -------------- ---------- -------------- -----------
As at 1 January 2020 20,037,521,772 500,656,790 5,128,124 6,822,694 11,950,818
Issue of new shares
17 and 20 April 2020 - 160,400,000 320,800 53,488 374,288
Issue of new shares
10 July 2020 - 112,950,000 225,900 46,086 271,986
Share subdivision 774,006,790 - - - -
Loan note conversion
27 October 2020 - 12,801,543 1,280 34,564 35,844
Exercise of warrants
27 October 2020 - 12,618,928 1,262 34,071 35,333
Exercise of warrants
26 October 2020 to 2
November 2020 - 97,200,000 9,720 476,280 486,000
Issue of new shares
5 November 2020 - 600,000,000 60,000 (12,200) 47,800
Exercise of warrants
11 to 13 November 2020 - 51,200,000 5,120 250,880 256,000
Exercise of warrants
12 November 2020 - 12,618,928 1,262 34,071 35,333
Loan note conversion
12 November 2020 - 12,824,042 1,283 34,624 35,907
Issue of new shares
16 November 2020 - 10,000,000 1,000 24,000 25,000
Issue of new shares
18 December 2020 - 400,000,000 40,000 4,637,100 4,677,100
Release of warrants
reserve - - - 9,911 9,911
------------------------- --------------- -------------- ---------- -------------- -----------
As at 31 December 2020 20,811,528,562 1,983,270,231 5,795,751 12,445,569 18,241,320
------------------------- --------------- -------------- ---------- -------------- -----------
On 17 April 2020 the Company issued 140,000,000 new ordinary
shares of 0.2p each at a price of 0.25p per share raising gross
proceeds of GBP350,000. Two directors took part in the open offer
with each subscribing to 10,000,000 new ordinary shares. Each share
was issued with 1 warrant to subscribe for 1 ordinary share
exercisable at 0.5p.
On 20 April 2020 the Company issued 20,400,000 new ordinary
shares of 0.2p each at a price of 0.25p per share in consideration
for outstanding fees payable by the Company, to an advisor. Each
share was issued with 1 warrant to subscribe for 1 ordinary share
exercisable at 0.5p.
On 10 July 2020 the Company issued 112,950,000 new ordinary
shares of 0.2p each at a price of 0.25p per share raising gross
proceeds of GBP265,000 and settling advisors fees of GBP17,375.
During 26 October to 13 November 2020 148,400,000 warrants for
shares were exercised at a price of 0.5p each.
On 27 October 2020 the Company issued 12,801,543 new ordinary
shares of 0.01p each in settlement of the convertible loan notes
including interest held by a director.
On 27 October 2020 12,618,928 warrants for shares were exercised
at a price of 0.28p each by a director.
On 5 November 2020 the Company issued 600,000,000 new ordinary
shares in consideration of the entire issued share capital of Pharm
2 Farm Limited. The shares have been recorded at their nominal
value.
On 12 November 2020 the Company issued 12,824,042 new ordinary
shares of 0.1p each in settlement of the convertible loan notes
including interest held by a director.
On 12 November 2020 12,618,928 warrants for shares were
exercised at a price of 0.28p each by a director.
On 16 November 2020 the Company issued 10,000,000 new ordinary
shares of 0.1p each at a price of 0.25p per share in settlement of
outstanding consultancy fees.
On 18 December 2020 the Company issued 400,000,000 new ordinary
shares of 0.01p each at a price of 1.25 per share raising gross
proceeds of GBP5,000,000.
Share options in the Company
There were no share options outstanding 31 December 2019.
At 31 December 2020 there were 77,603,512 outstanding share
options which had been issued on 9 November 2020. The options
vested on issue, had a term of 5 years and an option price of 1.4
pence per share.
Warrants
Warrants to subscribe for new Ordinary Shares in the Company
were in issue as follows:
2020 2019
Weighted Weighted
No. of warrants average No. of average
price warrants price
GBP GBP
---------------------------- ------------------ --------- ------------- ---------
At 1 January 49,451 0.0500 80,454,531 0.05
Issued during the year 185,637,856 0.0047 - -
Lapsed during the year (49,451) 0.0500 (80,405,080) 0.05
Exercised during the year 173,637,856 0.0047 - -
---------------------------- ------------------ --------- ------------- ---------
Outstanding at 31 December 12,000,000 0.0047 49,451 0.05
---------------------------- ------------------ --------- ------------- ---------
The warrants outstanding at 31 December 2020 had a weighted
average remaining contractual life of 4 months (31 December 2019: 9
months).
The fair value of the warrants granted in the year were
calculated using the Black Scholes model.
Share options in GyroMetric Systems Limited
At 31 December 2019 share options were in issue relating to
shares in GyroMetric Systems Limited. The number of share options,
which are only exercisable on a trade sale or IPO, vary dependent
upon the exit valuation. The maximum number of options outstanding
at 31 December 2020 were as follows:
Number of shares Exercise price
65,300 GBP0.62
544,366 GBP1.05
The number of shares in issue in GyroMetric Systems Limited is
1,091,302.
Included in the above were 5,000 options issued during 2019 at
an exercise price of GBP0.62. The value of these options was
considered to be negligible.
21 Share-based payments
Share option plan
During the year 38,801,756 share options were granted to each of
Trevor Brown and Paul Ryan, directors of the company, under the
existing incentive plan. The options had an exercise price of 1.4p
per share being the closing mid market place on the issue date. The
options vested immediately and were exercisable within 5 years.
Fair value of share options
The fair value of the share options granted in the year have
been calculated using the Black Scholes model assuming the inputs
shown below:
Grant date 9 November 2020
No of options granted 77,603,512
Share price on date of grant 1.4p
Exercise price 1.4p
Continuous growth rate 0.00%
Dividend yield 0.00%
Volatility 46.89%
Time to maturity 5 years
Value of option in accounts 0.1448p
Volatility was measured over a 3 year period and excluded the
period of exceptional share price movement in the days leading up
to the granting of the options.
22 Convertible loan stock
2020 2019
GBP GBP
Group and Company
--------------------------------------- --------- -------
As at 1 January 103,000 -
Convertible loan stock
issued - 100,000
Repayment/conversion of loan stock and
interest (105,085) -
Accrued interest 4,085 3,000
----------------------------------------- --------- -------
At 31 December 2,000 103,000
----------------------------------------- --------- -------
The convertible loan stock was unsecured and had an annual
coupon of 6%. The coupon was payable in shares. The convertible
loan stock was fully repaid/converted during 2020, with the balance
representing shares to be issued in relation to interest.
23 Other reserves
The measurement requirements of IFRS 2 have been implemented in
respect of share options and warrants granted.
Group Company
Share option Merger Merger Share option
and warrants relief reserve and warrants
reserve reserve Total reserve Total
GBP GBP GBP GBP GBP GBP
-------------------------- -------------- ---------- ---------- ---------- -------------- ----------
At 1 January
2019 201,545 - (499,999) (298,454) 201,545 201,545
Share options
charge (19,500) - - (19,500) (19,500) (19,500)
Share warrants
lapsed (157,199) - - (157,199) (157,199) (157,199)
-------------------------- -------------- ---------- ---------- ---------- -------------- ----------
At 31 December
2019 24,846 - (499,999) (475,153) 24,846 24,846
-------------------------- -------------- ---------- ---------- ---------- -------------- ----------
At 1 January
2020 24,846 - (499,999) (475,153) 24,846 24,846
Share options
charge 434,474 - - 434,474 434,474 434,474
Share warrants
issued 10,712 - - 10,712 10,712 10,712
Share warrants
exercised (9,911) - - (9,911) (9,911) (9,911)
Share warrants
lapsed (24,846) - - (24,846) (24,846) (24,846)
Arising on consolidation - 1,740,000 - 1,740,000 - -
-------------------------- -------------- ---------- ---------- ---------- -------------- ----------
At 31 December
2020 435,275 1,740,000 (499,999) 1,675,276 435,275 435,275
-------------------------- -------------- ---------- ---------- ---------- -------------- ----------
24 Non controlling interests
Total
Group GBP
-------------------------------------------- --- --------
As at 1 January 2019 22,228
Non controlling interests in share of
losses for the year 70,372
------------------------------------------------- --------
At 31 December 2019 (48,045)
Non controlling interest in share of losses
for the year (32,634)
------------------------------------------------- --------
At 31 December 2020 (80,679)
--------------------------------------------------- --------
25 Trade and other payables
2020 2019
Group Company Group Company
GBP GBP GBP GBP
----------------------------------- -------- -------- -------- --------
Amounts due to group undertakings - 2,669
Trade payables 115,648 69,673 105,732 43,269
VAT payable 1,755 - 8,018 -
Corporation tax - - 2,531 -
Accruals 94,265 84,376 135,034 112,969
Other creditors 121,419 43,114 124,507 10,000
----------------------------------- -------- -------- -------- --------
333,087 197,163 375,822 168,907
----------------------------------- -------- -------- -------- --------
26 Lease and finance lease obligations
2020 2019
Lease Finance Lease Finance
liabilities lease liabilities lease
Group GBP GBP GBP GBP
--------------------------- ------------- -------- ------------- --------
Total at 31 December 36,875 - 66,375 60,825
--------------------------- ------------- -------- ------------- --------
Less: non-current portion (7,375) - (36,875) -
--------------------------- ------------- -------- ------------- --------
Current portion 29,500 - 29,500 60,825
--------------------------- ------------- -------- ------------- --------
The non current portion of the lease liabilities are payable as
to GBP7,375 within 2022.
27 Provisions
2020 2019
Group GBP GBP
----------------------------------------- ------ ------
Closure costs in respect of the Geocurve
business 13,000 20,500
------------------------------------------- ------ ------
It is expected provision for closure costs will be settled
within 2021.
28 Deferred tax
2020 2019
Group Company Group Company
GBP GBP GBP GBP
------------------------- ------ -------- ------ --------
Deferred tax liabilities
Deferred tax liability - - - -
------------------------- ------ -------- ------ --------
The movement in the deferred tax account is as follows:
2020 2019
Group Company Group Company
GBP GBP GBP GBP
------------------------------- ------ -------- ---------- --------
At 1 January - - 206,328 -
Investment in subsidiaries - - (150,941) -
Fixed asset timing differences - - (55,387) -
------------------------------- ------ -------- ---------- --------
At 31 December - - - -
------------------------------- ------ -------- ---------- --------
29 Financial instruments
Categories of financial instruments
2020 2020
Group Company
GBP GBP
--------------------------------------------------- ---------- ----------
Assets - Loans and receivables
Trade and other receivables (excluding
prepayments) 1,825,412 1,935,124
Cash and cash equivalents 3,741,135 3,590,521
---------------------------------------------------- ---------- ----------
5,566,547 5,525,645
--------------------------------------------------- ---------- ----------
Liabilities - At amortised cost
Trade and other payables (excluding non-financial
liabilities) 237,067 113,237
Lease liabilities 36,875 -
--------------------------------------------------- ---------- ----------
273,942 113,237
--------------------------------------------------- ---------- ----------
2019 2019
Group Company
GBP GBP
--------------------------------------------------- -------- --------
Assets - Loans and receivables
Trade and other receivables (excluding
prepayments) 43,201 118,040
Cash and cash equivalents 74,770 4,784
---------------------------------------------------- -------- --------
117,971 122,824
--------------------------------------------------- -------- --------
Liabilities - At amortised cost
Trade and other payables (excluding non-financial
liabilities) 433,047 55,938
Lease liabilities & Finance lease obligations 127,200 -
-
--------------------------------------------------- -------- --------
560,247 55,938
--------------------------------------------------- -------- --------
30 Financial commitments
Operating leases
The Group had no significant operating lease obligations at 31
December 2020 or 31 December 2019.
Other commitments
At 31 December 2020 the Group had capital commitments of
GBP250,381 (2019 - GBPnil) of which GBP227,904 had been paid and is
included within other receivables. The Company had no capital
commitments at 31 December 2020 or 31 December 2019.
31 Contingent liabilities
The Group has received a claim made against its subsidiary in
the US following the dismissal of an employee. The claim is in the
hands of the Group's lawyers and the outcome has not yet been
reached, however the Directors believe that the claim is without
merit. In the event of a settlement, the exact level of
compensation is unknown at this stage. On this basis, the
contingent liability cannot be quantified.
32 Related party transactions
Directors' transactions
Directors remuneration is disclosed in note 8.
The amount owing to Nigel Burton in respect of unpaid salary at
31 December 2020 was GBPnil (2019 - GBP11,182).
The amount owing to Trevor Brown in respect of unpaid salary at
31 December 2020 was GBPnil (2019 - GBP750).
Paul Ryan is the owner of Warande1970 BVBA which the Group pays
in relation to Paul's director fee. GBP8,000 was outstanding at 31
December 2020 (2019 - GBP4,750).
Trevor Brown is a director and significant shareholder of
Braveheart Investment Group plc. During the year the Company
purchased a 51.73% interest in Pharm 2 Farm Limited from Braveheart
Investment Group plc settled through the issue of 310,354,815
ordinary shares.
During the year Braveheart Investment Group plc provided
additional funds to GyroMetric Systems Limited totalling GBP5,000
(2019 - GBP34,200 in the form of a convertible loan note). These
amounts were both still outstanding at 31 December 2020.
During the previous year Cloudveil Limited advanced amounts to
Hugo Gillum-Webb, a Director of that Company which were repaid in
full during the year. GBP11,038 was due to that Company at 31
December 2019.
Various amounts have been advanced by the Directors of the
Parent Company and Subsidiaries. The following amounts were
outstanding at the year end:
2020 2019
N Burton - 29,000
P & R Orton 6,312 6,312
A Ferguson 19,200 4,200
Parent Company transactions with subsidiary companies
At the year end GBP1,451,632 (2019: GBP1,034,568) was due from
the subsidiary companies.
The above balance included amounts owing from GyroMetric Systems
Ltd and Cloudveil Ltd which were impaired by GBP141,600 and
GBP114,000 respectively during the current year and from Geocurve
Ltd which was impaired by GBP765,908 during the previous year.
33 Ultimate controlling party
There is not considered to be a controlling party. For details
of major shareholdings please refer to the Director's Report.
34 Events after the reporting year
Following the year end there have been additional exercises of
warrants and options raising in excess of GBP0.9m.
After a strategic review of the Group's operations by the
directors, as detailed in the Chairman's statement, they are
recommending the proposal for the disposal of the Group's interest
of its GyroMetric division. In addition, the directors are
recommending a proposal for a change of name of the Company to
nanosynth group plc to bring it in line with the future direction
of the company.
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END
FR SSSFAAEFSELM
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June 09, 2021 02:00 ET (06:00 GMT)
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