Catenae Innovation - Final Results
30/09/2022 07:00
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RNS Number : 2246B Catenae Innovation PLC 30 September 2022
30 September 2022
Catenae Innovation PLC
("Catenae", the "Company" or the "Group")
Final Results
Catenae Innovation PLC (AIM: CTEA), the AIM quoted provider of digital media
and technology, announces its full year audited results for the year ended 30
September 2021.
Financial overview
· The Group made a net loss for the year of £1,246,948 (2020:
£769,186). Revenues for the year were £30,210 (2020: £14,948).
· The Group has a statement of financial position at the year-end
showing net assets of £381,926 (2020: £502,427).
Operational overview
· Secured an initial contract with the Saxavord Space Port.
· Awarded ISO 27001 after an audit on behalf of the International
Standards Organisation (ISO).
· Awarded a Cyber Essentials accreditation.
Posting of Accounts
The Reports and Accounts of Catenae Innovation Plc have been posted to
shareholders.
This announcement contains inside information for the purposes of the UK
Market Abuse Regulation. The person who arranged for release of this
announcement on behalf of the Company was Guy Meyer, Chief Executive Officer
of the Company and the Directors of the Company are responsible for the
release of this announcement.
For further information please contact:
Catenae Innovation PLC +44 (0)191 580 8545
Guy Meyer, Chief Executive Officer
Cairn Financial Advisers LLP (Nominated Adviser) +44 (0)20 7213 0880
Liam Murray / Jo Turner
Shard Capital Partners LLP (Broker) +44 (0)20 7186 9952
Damon Heath
Yellow Jersey PR (PR & IR) +44 (0)20 3004 9512
Sarah Hollins / James Lingfield
Notes to Editors:
About Catenae Innovation PLC
Catenae Innovation is an AIM quoted provider of digital media and technology
services. Catenae use the power of blockchain to deliver solutions where its
people-centric technology enables trust and certainty allowing organisations
to gain better control over their operations, manage staff and safely welcome
customers.
www.catenaeinnovation.com (http://www.catenaeinnovation.com)
Chairman's Statement
Business and performance review
Catenae has had a trading year of mixed fortunes. The business, in the face of
the continued pandemic, innovated its technologies and participated in various
commercial projects across multiple sectors. We also engaged with the UK
government in a consultation process about the proposed Digital Identity
Policy which is ongoing.
In January, following an extensive review of the Company's organisational and
security processes, the Company was awarded ISO 27001 after an audit on behalf
of the International Standards Organisation (ISO). The Company was also
awarded a Cyber Essentials accreditation. The Cyber Essentials scheme is
operated on behalf of the National Cyber Security Centre (NCSC). In our
sector, customers expect software providers to provide data management
reassurance which these accreditations do.
During the year, the Company secured an initial contract with the Saxavord
Space Port. This has developed into a more substantive and continuing
engagement which the Directors anticipate will lead to further business
results.
While we acknowledge that the commercial benefits from the acquisition of
Hyperneph Software Ltd. have not materialised as promised, the board have
taken a robust approach to remedying this.
The Company continued to manage its finances prudently to ensure business
continuity, with a subscription in January 2021 that raised £1 million and
over the year there were conversions of existing liabilities, issues of
warrants and warrant exercises that resulted in a much improved balance sheet.
Finally, I would like to acknowledge our whole team for their commitment and
tenacity in pursuing every opportunity to bring new business into the Company.
Board changes
There were no board changes over the year.
Financial Overview
The Company made a net loss for the year of £1,246,948 (2020: £769,186).
Revenues for the year were £30,210 (2020: £14,948).
The Company has a statement of financial position at the year-end showing net
assets of £381,926 (2020: £502,427).
Working capital and fund raisings
During the year, the Company issued 60,129,236 new ordinary shares for a total
gross consideration of £1,192,386 of which £1,119,683 was received in cash
and £72,704 to settle liabilities.
Brian Thompson
Chairman
Consolidated statement of comprehensive income for the year ended 30 September 2021
Note 2021 2020
£ £
Revenue 3 30,210 14,948
Cost of sales (14,400)
Gross profit 15,810 14,948
Administrative expenses 5 (939,027) (759,108)
Impairment losses (318,629) -
Loss from operations (1,241,846) (744,160)
Net finance expense 7 10 (25,026)
Loss before taxation (1,241,836) (769,186)
Taxation 9 (5,112) -
Loss from continuing operations (1,246,948) (769,186)
Total comprehensive loss for the year (1,246,948) (769,186)
Owners of the parent (1,257,149) (769,186)
Non-controlling interest 10,201 -
(1,246,948) (769,186)
11 (0.49) (0.65)
Basic and diluted loss per share (pence)
Consolidated Statement of financial position at 30 September 2021
Note 2021 2020
£ £
Non-current assets
Property, plant and equipment 12 6,828 -
Intangible assets 13 1 1
6,829 1
Current assets
Trade and other receivables 15 45,236 20,604
Cash and other equivalents 605,082 714,043
650,318 734,647
Current liabilities
Trade and other payables 16 (275,221) (214,221)
Interest bearing loans 17 -
(275,221) (214,221)
Non current liabilities
Interest bearing loans 17 - (18,000)
Total liabilities (275,221) (232,221)
Net assets / (liabilities) 381,926 502,427
Capital and reserves
Ordinary share capital 19 562,441 442,183
Deferred share capital 19 3,159,130 3,159,130
Share premium account 19,657,821 18,652,949
Share reserve -83,333 -83,333
Merger reserve 11,119,585 11,119,585
Capital redemption reserve 2,732,904 2,732,904
Retained Losses -36,778,140 -35,520,991
Capital and reserves attributable to the owners of Catenae Innovation Plc 370,408 502,427
Non-controlling interest 11,518 -
Total equity 381,926 502,427
The financial statements were approved by the Board and authorised for issue
on 28 September 2022
Brian Thompson
Chairman
Consolidated statement of cash flows for the year ended 30 September 2021
Cash flow from operating activities Note 2021 2020
£ £
Loss for the year (1,246,948) (769,186)
Adjustments for:
Impairment of investment 318,629 -
Net bank and other interest charges (10) 25,026
Services settled by the issue of shares 72,704 -
Issue of share options and warrants charge -
Net cash outflow before changes in working (855,625) (744,160)
capital
(Increase)/Decrease in trade and other receivables (24,633) (2,344)
(Decrease) / Increase in trade and other payables (112,896) (62,210)
Cash outflow from operations (993,154) (807,714)
Interest received 10 28
Interest paid (25,054)
Net cash flows from operating activities (993,144) (833,740)
Investing activities
Investment in subsidiary (217,500) -
Net cash flows from investing activities (217,500) -
Financing activities
Issue of ordinary share capital 1,119,683 1,481,855
Repayment of loan (18,000) (96,580)
New loans raised 133,000
Net cash flows from financing activities 1,101,683 1,518,275
Net (decrease) / increase in cash (108,961) 684,535
Cash and cash equivalents at beginning of year 714,043 29,508
Cash and cash equivalents at end of year 605,082 714,043
During the year £72,704 of trade and other payables and loans were converted
into equity in non-cash transactions.
Consolidated statement of changes in equity for the year ended 30 September 2021
Deferred Shares / Shares to be issued
Share Capital Share Premium Other Reserves Retained Earnings Non-controlling interest Total Equity
£ £ £ £ £ £ £
Balance at 30 Sept 2019
3,223,601 17,031,971 - 13,769,156 (34,751,805) - (727,077)
Loss for the year
- - - - (769,186) - (769,186)
Capital Reduction (3,159,130) - - - - -
3,159,130
Share capital issued
377,712 1,683,978 - - - - 2,061,690
Share issue costs - (63,000) - - - - (63,000)
Balance at 30 Sept 2020
442,183 18,652,949 3,159,130 13,769,156 (35,520,991) - 502,427
Loss for the year - - - (1,257,149) 10,201 (1,246,948)
Non-controlling share of net assets on acquisition - - - - - 1,317 1,317
Share capital issued
120,258 1,073,452 - - - - 1,193,710
Share issue costs
- (68,580) - - - (68,580)
Balance at 30 Sept 2021
562,441 19,657,821 3,159,130 13,769,156 (36,778,140) 11,518 381,926
The other reserves relate to the merger reserve, share reserve and the capital
redemption reserve.
Company statement of financial position at 30 September 2021
Note 2021 2020
£ £
Non-current assets
Intangible assets 1 1
Investments 14 - -
1 1
Current assets
Trade and other receivables 15 45,236 20,604
Cash and other equivalents 539,842 714,043
585,078 734,647
Current liabilities
Trade and other payables 16 (226,659) (214,221)
Interest bearing loans 17 -
(226,659) (214,221)
Non current liabilities
Interest bearing loans 17 - (18,000)
Total liabilities (226,659) (232,221)
Net assets / (liabilities) 358,420 502,427
Capital and reserves
Ordinary share capital 19 562,441 442,183
Deferred share capital 19 3,159,130 3,159,130
Share premium account 19,657,821 18,652,949
Share reserve (83,333) (83,333)
Merger reserve 11,119,585 11,119,585
Capital redemption reserve 2,732,904 2,732,904
Retained Losses (36,790,128) (35,520,991)
Shareholders' funds 358,420 502,427
Catenae Innovation Plc has taken advantage of s408 of Companies Act 2006 and
has not included its own profit and loss account in the financial statements.
The Company's loss for the year after tax was £1,269,137 (2020: £769,186).
The financial statements were approved by the Board and authorised for issue
on 28 September 2022
Brian Thompson
Chairman
Company statement of cash flows for the year ended 30 September 2021
Cash flow from operating activities Note 2021 2020
£ £
Loss for the year (1,269,137) (769,186)
Adjustments for:
Impairment of investment 320,000 -
Net bank and other interest charges (10) 25,026
Services settled by the issue of shares 72,704 -
Issue of share options and warrants charge - -
Net cash outflow before changes in working (876,443) (744,160)
capital
(Increase)/Decrease in trade and other receivables (24,633) (2,344)
(Decrease) / Increase in trade and other (157,318) (62,210)
payables
Cash outflow from operations (1,058,394) (808,714)
Interest received 10 28
Interest paid - (25,054)
Net cash flows from operating activities (1,058,384) (833,740)
Investing activities
Investment in subsidiary (217,500) -
Net cash flows from investing activities (217,500) -
Financing activities
Issue of ordinary share capital 1,119,683 1,481,855
Repayment of loan (18,000) (96,580)
New loans raised - 133,000
Net cash flows from financing activities 1,101,683 1,518,275
(174,201) 684,535
Net (decrease) / increase in cash
Cash and cash equivalents at beginning of year 714,043 29,508
Cash and cash equivalents at end of year 539,842 714,043
During the year £72,704 of trade and other payables and loans were converted
into equity in non-cash transactions.
Company statement of changes in equity for the year ended 30 September 2021
Deferred Shares / Shares to be issued
Share Capital Share Premium Other Reserves Retained Earnings Total Equity
£ £ £ £ £ £
Balance at 30 Sept 2019
3,223,601 17,031,971 - 13,769,156 (34,751,805) (727,077)
Loss for the year
- - - - (769,186) (769,186)
Capital (3,159,130) - 3,159,130 - - -
Reduction
Share capital issued
377,712 1,683,978 - - - 2,061,690
Share issue costs - (63,000) - - - (63,000)
Balance at 30 Sept 2020 442,183 18,652,949 3,159,130 13,769,156 (35,520,991) 502,427
Loss for the year - - - (1,269,137) (1,269,137)
Capital Reduction - - - - - -
Share capital issued
120,258 1,073,452 - - - 1,193,710
Share issue costs
- (68,580) - - - (68,580)
Balance at 30 Sept 2021 562,441 19,657,821 3,159,130 13,769,156 (36,790,128) 358,420
The other reserves relate to the merger reserve, share reserve and the capital
redemption reserve.
Notes to the consolidated financial statements for the year ended 30 September 2021
The principal activity of the Group is the provision of multimedia and
technology solutions.
Catenae Innovation Plc is incorporated in the United Kingdom with registration
number 04689130. Catenae Innovation Plc is domiciled in the United Kingdom and
has its registered office at 27 Old Gloucester Street, London WC1N 2AX. The
principal place of business for the Company is 26-27 Lansdowne Terrace,
Gosforth, Newcastle Upon Tyne, NE3 1HP.
Catenae Innovation Plc is a public limited company, limited by shares and its
shares are quoted on the AIM market of the London Stock Exchange.
Catenae Innovation Plc's financial statements are presented in Pounds
Sterling.
1. Principal 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 to all the period presented unless otherwise
stated.
Statement of compliance
These consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs), International Accounting
Standards (IASs) and International Financial Reporting Interpretations
Committee (IFRIC) interpretations (collectively 'IFRSs') as adopted for use in
the European Union and as issued by the International Accounting Standards
Board and with those parts of the Companies Act 2006 applicable to companies
reporting under IFRS.
Basis of preparation and consolidation
The group financial statements consolidate those of the Company and its
subsidiaries (together referred to as the "Group"). The Group and separate
parent company financial statements have been prepared under the historic cost
convention, except for, where applicable, the revaluation of financial assets
and liabilities at fair value through profit or loss.
The Group financial statements consolidate those of the Company and of its
subsidiary undertakings drawn up to 30 September 2021. Subsidiaries are
entities over which the Group has the power to control the financial and
operating policies so as to obtain benefits from its activities. The Group
obtains and exercises control through voting rights.
Amounts reported in the financial statements of subsidiaries have been
adjusted where necessary to ensure consistency with the accounting policies
adopted by the Group. The trading results of subsidiaries acquired or disposed
of during the year are included in the consolidated statement of comprehensive
income from the effective date of acquisition or up to the effective date of
disposal, as appropriate.
All intra-Group transactions, balances, income and expenditure are eliminated
on consolidation.
Going concern
The Company's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Chairman's
statement and below. The financial position of the Group, its cash flows,
liquidity position and borrowing facilities are described in the financial
statements. In addition, note 18 to the financial statements includes the
Group's objectives, policies and processes for managing its capital; its
financial risk management objectives; details of its financial instruments;
and exposures to credit risk and liquidity risk.
The net asset position as at 30 September 2021, being the Group's financial
year-end, was £381,926. Subsequent to the reporting date, the Board has been
able to agree additional funding in the form of a convertible loan for
£250,000 from Sanderson Capital Partners Ltd.
The Directors note that the World Health Organisation declared a pandemic
relating to COVID-19 on 11 March 2020, and social distancing measures were
introduced in the UK during March 2020. The Directors have assessed the impact
of incorporating additional COVID-19 risk factors in the Going Concern
assessment over a period of 18 months after the signing of these financial
statements.
Key assumptions considered by management when assessing going concern include
adjusting management best estimate of forecasted performance for factors
including the length and extent of current lockdown restrictions ease and
utilisation of relevant government support schemes. These have been estimated
for their respective impacts on the Group's revenues, fixed and variable cost
and resultant expected cash flow requirements.
The Group's forecasts and projections, taking into account reasonable estimate
of a possible downturn in trading performance arising from the COVID-19
outbreak, show that the Group has sufficient financial resources for the going
concern period. The Group does not believe that the COVID-19 outbreak
represents a material uncertainty about the entity's ability to continue as a
going concern. Accordingly, the Directors have adopted the going concern basis
in preparing these consolidated financial statements.
Revenue recognition
The Group provides software licencing and support services.
The weighting of these and pricing of these services (which drives the revenue recognition) depends on the service level required by the client, and on the commercial imperatives and pricing sensitivities of the client.
The contractual performance obligations will typically be embedded in an agreement with the client.
Where that agreement is detailed, the revenue recognition will follow the allocation of fees and revenues against the completion of the agreed performance milestones in the accounting period.
Where the agreement is not specific, the revenue recognition will be in proportion to the completion of performance milestones in the relevant accounting period against the internal costings prepared in advance for each project.
(i) Software licencing contracts
Revenue from software licencing contracts is recognised when the customer takes possession of and accepts the software licence products which is the point in time when the customer has the ability to direct the use of the product and obtain substantially all of the benefits of the products.
(ii) Ongoing support and maintenance contracts
Revenue from ongoing support and maintenance contracts is recognised over the contractual term when the customer simultaneously receives and consumes the benefits provided by the Group's performance, as the Group performs. The Group recognises contract liabilities for any revenue not yet provided to the customer as of the year end.
Research and development
Expenditure on research activities is recognised as an expense in the period
in which it is incurred. An internally generated intangible asset arising from
the Group's development activity is recognised only if all the following
conditions are met:
• an asset is created that can be identified (such as a website);
• it is probable that the asset created will generate future
economic benefits: and,
• the development cost of the asset can be measured reliably.
Internally-generated intangible assets are amortised on a straight-line basis
over their useful lives. Where no internally-generated intangible asset can be
recognised, development expenditure is recognised as an expense in the period
in which it is incurred.
Intangible assets
Externally acquired intangible assets
Externally acquired intangible assets are initially recognised at cost and
subsequently amortised on a straight-line basis over their estimated useful
economic lives. The amortisation expense is included within the other
administrative expenses line of the statement of comprehensive income.
Intangible assets are recognised on business combinations if they are
separable from the acquired entity or give rise to other contractual/legal
rights.
Business combinations and goodwill
The Group accounts for business combinations using the acquisition method when control is transferred to the Group.. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in the consolidated statement of profit or loss as incurred. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in consolidated statement of profit or loss immediately.
Property, plant and equipment
Plant, machinery, fixtures and fittings are stated at historical cost less
accumulated depreciation and accumulated impairment loss. Depreciation is
recognised so as to write off the cost or valuation of assets less their
residual values over their useful lives, using the reducing balance method, on
the following bases:
Plant and machinery - 20 per cent per annum
The estimated useful lives, residual values and depreciation method are
reviewed at the end of each reporting period, with the effect of any changes
in estimate accounted for on a prospective basis.
Impairment of non-current assets
For the purposes of assessing impairment, assets are grouped into separately
identifiable cash-generating units. At the end of each reporting period, the
Group reviews the carrying amounts of its non-current assets, to determine
whether there is any indication that 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).
An impairment loss is recognised for the amount by which the assets or
cash-generating unit's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of fair value less costs to sell and
value in use based on an internal discounted cash flow evaluation.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and on demand deposits.
Deferred taxation
Recognition of deferred tax assets is restricted to those instances where it
is probable that taxable profit will be available against which the difference
can be utilised.
Investments
Investments in subsidiaries, associates and joint ventures are stated cost and
reviewed for impairment if there are indicators that the carrying value may
not be recoverable. An impairment loss is recognised to the extent that the
carrying amount cannot be recovered either by selling the asset or by
continuing to hold the asset and benefitting from the net present value of the
future cash flows of the investment. The Group has not elected to apply equity
method of accounting to investments in associates.
Equity
Equity comprises the following:
• Share capital represents the nominal value of issued ordinary shares
and deferred shares.
• Share premium represents the excess over nominal value of the fair
value of consideration received for equity shares, net of expenses of the
share issue.
• Shares to be issued reserve represents cash received for the purchase
of shares yet to be issued at the period end and for creditors who have agreed
to convert their debt to shares yet to be issued at the period end.
• Merger reserve represents the excess over nominal value of the fair
value of consideration received for equity shares issued on acquisition of
subsidiaries, net of expenses of the share issue.
• Share reserve represents shares held in treasury at nominal value
following the conclusion of the defaulting shares from October 2016.
• Capital redemption reserve represents the nominal value of shares
repurchased by the Company.
• Retained earnings represent retained profits and losses.
• Non-controlling interest relates to the ownership interest and
accumulated comprehensive income of the minority shareholders in the Group's
subsidiaries.
Equity instruments
Equity instruments issued by the Company are recorded as the proceeds
received, net of direct costs.
Financial assets
On initial recognition, financial assets are classified as either financial assets at fair value through the statement of profit or loss, held-to-maturity investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate.
Loans and receivables
The Group classifies all its financial assets as trade and other receivables. The classification depends on the purpose for which the financial assets were acquired.
Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables financial assets are measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
For trade receivables and other receivables due in less than 12 months, the
Group applies the simplified approach in calculating Expected Credit Losses
("ECL's"), as permitted by IFRS 9. Therefore, the Group does not track changes
in credit risk, but instead, recognises a loss allowance based on the
financial asset's lifetime ECL at each reporting date. For any other financial
assets carried at amortised cost (which are due in more than 12 months), the
ECL is based on the 12-month ECL. The 12-month ECL is the proportion of
lifetime ECLs that results from default events on a financial instrument that
are possible within 12 months after the reporting date. However, when there
has been a significant increase in credit risk since origination, the
allowance will be based on the lifetime ECL. When determining whether the
credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECLs, the Group considers reasonable and
supportable information that is relevant and available without undue cost or
effort. This includes both quantitative and qualitative information and
analysis, based on the Group's historical experience and informed credit
assessment including forward-looking information.
Financial liabilities
Financial liabilities are recognised when, and only when, the Group becomes a
party to the contracts which give rise to them and are classified as financial
liabilities at fair value through the profit and loss or loans and payables as
appropriate. The Group's loans and payable comprise trade and other payables.
When financial liabilities are recognised initially, they are measured at fair
value plus directly attributable transaction costs and subsequently measured
at amortised cost using the effective interest method other than those
categorised as fair value through income statement.
Fair value through the income statement category comprises financial
liabilities that are either held for trading or are designated to eliminate or
significantly reduce a measurement or recognition inconsistency that would
otherwise arise. Derivatives are also classified as held for trading unless
they are designated as hedges. There were no financial liabilities classified
under this category.
The Group determines the classification of its financial liabilities at
initial recognition and re-evaluate the designation at each financial year
end.
A financial liability is de-recognised when the obligation under the liability
is discharged, cancelled or expires.
When an existing financial liability is replaced by another from the same
party on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as a
de-recognition of the original liability and the recognition of a new
liability, and the difference in the respective carrying amounts is recognised
in the income statement.
Share-based payments
When share options and warrants are awarded, the fair value of the options and
warrants at the date of grant is charged to the statement of comprehensive
income over the vesting period. Non-market conditions are taken into account
by adjusting the number of equity instruments expected to vest at each end of
reporting period, so that, ultimately, the cumulative amount recognised over
the vesting period is based on the number of options and warrants that
eventually vest.
Market conditions are factored into the fair value of the options and warrants
granted. As long as all other vesting conditions are satisfied, a charge is
made irrespective of whether the market vesting conditions are satisfied. The
cumulative expense is not adjusted for failure to achieve a market vesting
condition.
Where the terms and conditions of options and warrants are modified before
they vest, the increase in fair value of the options and warrants, measured
immediately before and after the modification, is also charged to the
statement of comprehensive income over the remaining vesting period.
Where equity instruments are granted to persons other than employees, the full
cost of services provided is recognised as a current liability and as a
charge in the statement of comprehensive income. When shares are issued to
settle the obligation, the liability is extinguished and the share issue is
reflected in equity as an issue of share capital.
Upon exercise of share options and warrants, the proceeds received net of
attributable transaction costs are credited to share capital, and where
appropriate share premium.
New and amended Standards and Interpretations adopted by the Group
There were no new standards and interpretations to published standards adopted
during the year which have had a significant impact on the Group's accounting
policies.
New and amended Standards and Interpretations issued but not effective for the financial year beginning 1 October 2020
At the date of authorisation of these financial statements, the following
standards and interpretations which have not been applied in these financial
statements were in issue but not yet effective:
IFRS 17 "Insurance Contracts", effective date 1 January 2023 applies a model
that combines a current balance sheet measurement of insurance contracts with
recognition of profit over the period that services are provided.
IAS 37 "Onerous contracts", effective 1 January 2022 relates to costs of
fulfilling a contract.
The impact of the above standards on the financial statements is expected to
be insignificant. The effect of all other new and amended Standards and
Interpretations which are in issue but not yet mandatorily effective is not
expected to be material. The Directors will continue to monitor the effect of
this and should the effect become material, more detailed notes will be
provided.
2. Critical accounting judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make
estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the disclosure of contingent liabilities
at the date of the financial statements. If in the future such estimates and
assumptions, which are based on management's best judgement at the date of the
financial statements, deviate from the actual circumstances, the original
estimates and assumptions will be modified as appropriate in the year in which
the circumstances change.
Where necessary, the comparatives have been reclassified or extended from the
previously reported results to take into account presentational changes.
Critical judgements and estimates in applying the Group's accounting policies
In the process of applying the Group's accounting policies, which are
described in note 1, management has made the following judgements and
estimates that have the most significant effect on the amounts recognised in
the financial statements (apart from those involving estimations, which are
dealt with below).
Judgements
Going concern
Management have considered that the Group remains a going concern. The going
concern assumption is discussed further in note 1.
Estimates
There are not deemed to be any key sources of estimation of uncertainty that
have a significant risk of resulting in a material adjustment to the carrying
amounts of assets and liabilities within the next financial year.
3. Segment and revenue analysis
The accounting policy for identifying segments is based on the internal
management reporting information that is regularly reviewed by the senior
management team.
The Group has one reportable segment:
Catenae and Hyperneph Software Ltd -generates revenue from the exploitation of
intellectual property and licenses held.
The financials for this segment can be seen in the financial statements in
this document.
The Group derives revenue from the transfer of services over time and at a
point in time to customers all located in the UK.
2021 2020
£ £
Timing of revenue recognition:
At a point in time 30,210 14,948
Over time - -
Total revenue 30,210 14,948
4. Joint venture - Trust in Media
In March 2018, the Group formed a joint venture to create Trust in Media.
Catenae held 50.5% of the shares in Trust in Media.
The company entered compulsory liquidation on 29 July 2020 when the official
receiver was appointed.
The official receiver completed the winding-up on 13 September 2021 without
any claim on the Group and Trust in Media Ltd was dissolved on 20 December
2021.
5. Administrative expenses
The following amounts are included within administrative expenses:
2021 2020
£ £
Auditors' remuneration:
Fees payable to the Company's auditor:
For the audit of the Company's annual accounts 14,000 14,000
For the audit of the Company's subsidiaries 6,000 -
Fees for taxation compliance services - 1,000
Staff costs (note 6) 311,380 248,575
Depreciation 621 -
6. Directors and staff
Staff costs during the year, including Directors, were as follows:
2021 2020
£ £
Wages and salaries 283,789 235,916
Social security costs 25,279 10,764
Pension costs 2,312 1,895
311,380 248,575
The average number of staff of the Group during the year was as follows:
2021 2020
no. no.
Sales, distribution and technology 2 1
Directors and administration 5 3
7 4
The amounts paid and accrued as a liability by the Company in respect of the
Directors, who are the key management personnel of the Company was as follows:
2021 2020
£ £
Edward Guy Meyer 139,000 97,500
Kevin Everett - 13,025
Anthony Flynn - 4,125
Brian Thompson 16,000 10,000
John Farthing 52,000 23,420
Total Directors emoluments 207,000 148,070
Employers national insurance, employers pension and share option / warrant
charges for key management
personnel (including
directors) 26,560 16,172
233,560 164,242
Details of the total amounts outstanding to the Directors at the period end
are detailed in note 16.
7. Net finance expenses
2021 2020
£ £
Bank interest receivable 10 28
Other interest payable - (586)
Loan Interest payable (24,468)
10 (25,026)
8. Discontinued operations
There were no discontinued operations during the year.
9. Tax on loss
2021 2020
£ £
Corporation tax charge on profits for the period 5,112 -
Total current tax charge 5,112 -
The reasons for the difference between the actual tax charge for the year and
the standard rate of corporation tax in the UK applied to profits for the year
are as follows:
2021 2020
£ £
Loss before tax (1,241,836) (769,186)
Loss at the standard rate of corporation tax in the UK of 19% (2020: 19%) (235,949) (146,145)
Effects of:
Expenses not deductible for tax purposes 186 8,193
Other adjustments 67,194 -
Unutilised tax losses and other deductions 173,681 137,952
Total tax charge in the year 5,112 -
Deferred tax assets of approximately £2.8m (2020: £2.7m) have not been
recognised in the financial statements as there is currently insufficient
evidence to suggest that any deferred tax asset would be recoverable. The
Group has unutilised tax losses of approximately £14.8m (2020: £13.9m) that
would be available to carry forward against future profits from the same
activity, subject to agreement by HM Revenue & Customs.
10. Dividend
No dividends have been paid or proposed in the year (2020: £nil).
11. Loss per share
The calculation of the basic loss per share is based on the loss attributable
to ordinary shareholders divided by the weighted average number of shares in
issue during the year. The calculation of diluted loss per share is based on
the basic loss per share, adjusted to allow for the issue of shares and the
post tax effect of dividends and interest, on the assumed conversion of all
other dilutive options and other potential ordinary shares.
There were 164,444 share options and 70,022,695 share warrants outstanding at
the year-end (2020: 1,621,911 and 46,154,769 ). However, the figures for 2021
and 2020 have not been adjusted to reflect conversion of these share options,
as the effects would be anti- dilutive.
2021 2020
Weighted average number of Weighted average number of
shares Per share amount Pence shares Per share amount Pence
Loss Loss
£ £
Basic and diluted loss per share attributable to shareholders
(0.49) (0.65)
(1,257,149) 258,490,041 (769,186) 118,441,725
12. Property, plant and equipment
Group Plant and machinery Total
£ £
Cost
At 1 October 2019 and 2020 - -
On acquisition of subsidiary 6,522 6,522
Additions 2,111 2,111
At 30 September 2021 8,633 8,633
Accumulated depreciation
At 1 October 2019 and 2020 - -
On acquisition of subsidiary 1,184 1,184
Charge for the year 621 621
At 30 September 2021 1,805 1,805
Carrying amount
As at 30 September 2021 6,828 6,828
As at 30 September 2020 - -
13. Intangible assets
Group Goodwill Total
£ £
Cost
At 1 October 2019 and 2020 1 1
Additions in year 318,629 318,629
Impairment (318,629) (318,629)
At 30 September 2020 and 2021 1 1
Carrying amount
As at 30 September 2020 and 2021 1 1
The Group assesses at each reporting date whether there is an indication that
an asset may be impaired. The assets have been allocated for impairment
testing purposes to the individual businesses acquired which are also the
cash‐generating units ("CGU") identified. The recoverable amount of a CGU is
determined based on value in use calculations using cash flow projections
based on financial budgets approved by the Directors. The projections are
based on the assumption that the Company can realise projected sales. A
prudent approach has been applied with no residual value being factored into
these calculations. If the projected sales do not materialise there is a risk
that the total value of the intangible assets shown above would be impaired.
Goodwill is assessed annually for impairment. At the period end based on these
assumptions there is an indication of impairment of the full value of
goodwill.
On 4 May 2021 the Group entered into an agreement to purchase 51% of the
equity interests of Hyperneph Software Ltd. Refer to Note 27 for further
details of the acquisition.
There is no consideration allocated to the fair value of the net identifiable
assets and liabilities acquired resulting in goodwill of £318,629 for
intangible assets that do not qualify for separate recognition. The goodwill
includes customer loyalty, staff know how, reputation and relationships with
contractors and suppliers. The goodwill has not currently been treated as
being expected to be tax deductible.
Details of the fair value of identifiable assets and liabilities acquired and
goodwill as at 4 May 2021 are as follows, measuring non controlling interests
under the "proportionate interest method":
Book Value Adjustment Fair value
£ £ £
Intangible fixed assets - - -
Tangible fixed assets 5,338 - 5,338
Financial assets - - -
Trade and other receivables 15,000 - 15,000
Cash 24,155 - 24,155
Trade and other payables (41,805) - (41,805)
Borrowings - - -
───── ───── ─────
Total net assets 2,688 - 2,688
Non controlling interests (1,317)
Goodwill 318,629
─────
Fair value of consideration 320,000
─────
Acquisition-related costs were £35,025 and were recognised as expenses in the
period within administrative expenses.
The amount of the non-controlling interest in the acquiree recognised at the
acquisition date was £1,317 and was measured using the 'proportionate
interest method'.
£5,208 of revenue and £35,778 losses of the acquiree (net of intercompany
eliminations) since the acquisition date have been included in the
consolidated statement of income for the period.
It is not possible to calculate the combined entity's revenue and loss if the
acquisition had occurred at the start of the period due to the acquiree's long
period of accounts which straddled the Group's prior year end.
14. Investments in subsidiaries
Company
Investments Total
£ £
Cost
At 1 October 2019 and 2020 - -
Additions in year 320,000 320,000
Impairment (320,000) (320,000)
At 30 September 2020 and 2021 - -
- 10
Carrying amount
As at 30 September 2020 and 2021 - -
The value of shares in investments are tested annually for impairment.
Subsidiaries as at 30 Sept 2021 Registered Address Class of Shares Total Number of Shares in issue at 30 Sept 2021 Percentage held by Catenae
Synovate Global Ltd 35 New Broad Street, London, EC2M 1NH Ordinary Shares of 0.1p 1 100%
Hyperneph Software Ltd 1007 London Road, Leigh-On-Sea Ordinary Shares of 0.1p 2000 51%
SS9 3JY
Synovate Global Ltd was dissolved on 7 June 2022.
15. Trade and other receivables
Group and Company
2021 2020
£ £
Trade receivables 11,010 4,284
Other receivables 16,320
34,226
20,604
45,236
Trade receivable days at the year-end were 133 days (2020: 105 days). No
interest is charged on receivables within the agreed credit terms. Thereafter,
interest may be charged.
An allowance for impairment is made where there is an identified event which,
based on previous experience, is evidence of a reduction in the recoverability
of the outstanding amount. The Group provides, in full, for any debts it
believes have become non- recoverable. The figures shown above are after
deducting specific provision for bad and doubtful debts of £nil (2020:
£nil). No amounts included within trade and other receivables are expected to
be recovered in more than one year (2020: £nil).
The maximum exposure to credit risk at the reporting date is the carrying
value of each class of receivable set out above. The carrying value at the
year-end for each class of assets is deemed by the Directors to be the same as
the fair value.
The ageing of trade receivables that have not been impaired are:
2021 2020
£ £
More than 29 days 11,010 4,284
11,010
4,284
16. Trade and other payables
Group
2021 2020
£ £
Trade payables 86,193 137,813
Other payables 122,482 4,284
Taxation and social security 23,701 455
Accruals and contract liabilities 42,845 71,669
275,221 214,221
Included in accruals and deferred income are amounts of £6,500 (2020:
£34,250) relating to unpaid contingent remuneration to the Directors in
office at the year-end. This has been accrued in accordance with the payments
agreed between the Group and Directors.
Included in contract liabilities there is £12,000 (2020: £6,250), which
relates to the residual proportion of annual fees remaining at the year-end.
Company
2021 2020
£ £
Trade payables 83,492 137,813
Other payables 105,102 4,284
Taxation and social security 1,470 455
Accruals and contract liabilities 36,595 71,669
226,659 214,221
Included in accruals and deferred income are amounts of £6,500 (2020:
£34,250) relating to unpaid contingent remuneration to the Directors in
office at the year-end. This has been accrued in accordance with the payments
agreed between the Company and Directors.
Included in contract liabilities there is £6,250 (2020: £6,250), which
relates to the residual proportion of annual fees remaining at the year-end.
17. Interest bearing loans and borrowings
Group and Company
2021 2020
£ £
Loans due within one year -
-
Loans due after one year - 18,000
18,000
-
The loan £18,000 was a Bounce Back Loan and was due to be repaid over 6 years
with interest at 2.5% per year, with the repayments and interest commencing 1
year after draw down. However, the loan was repaid in full in May 2021 without
any interest accruing.
18. Financial instruments and risk management
Financial risk factors
The Group's financial instruments comprise cash, including short-term
deposits, trade and other receivables, short-term loan financing and trade and
other payables that arise directly from its operations. The main risks arising
from the Group's financial instruments are liquidity risk, credit risk and
interest rate risk. The Board has reviewed and agreed policies for managing
each of these risks and they are summarised below. The Group has no financial
assets other than trade receivables and cash at bank. The statement of
financial position values for the financial assets and liabilities are not
materially different from their fair values.
Liquidity risk
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. The Group policy is to ensure there are sufficient cash reserves
to meet liabilities during such periods. These are incorporated into rolling
twelve-month Group cash flow forecasts, which are reviewed by the Board
monthly.
Short-term flexibility is provided through the availability of cash
facilities. Long-term funding is secured through issues of share capital and
loans.
Credit risk
The Group's principal financial assets are bank balances, cash and trade and
other receivables. The Group's credit risk is primarily attributable to its
trade receivables. As far as possible, the Group operates to ensure that the
payment terms of customers are matched to the Group's own contractual
obligations on development.
Currency risk
The Group does not operate in overseas markets and is not subject to exposures
on transactions undertaken during the year. The Group's exposure to exchange
rate fluctuations is therefore not significant.
Capital risk management
The capital structure of the Group consists of a loan and the shareholders'
equity, comprising issued share capital and reserves. The capital structure of
the Group is reviewed on an on-going basis with reference to the costs
applicable to each element of capital, future requirements of the Group,
flexibility of capital to be drawn down and availability of further capital
should it be required.
The Group had no loan liabilities at the year-end (2020: £18,000).
Liability maturity analysis
Group
Repayable on demand or within 1 month Between 1 Between 6
month and 6 months months and 1 year
2021
£ £ £
Trade creditors 86,193 - -
Other creditors - - 146,183
Interest bearing loans - - -
Between 1 Between 6
Repayable on demand or within 1 month month and 6 months months and 1 year
2020
£ £ £
Trade creditors 137,813 - -
Other creditors 4,284 - -
Interest bearing loans (£18,000 due within 6 years but repaid early 8 months - - -
after year end)
Company
Repayable on demand or within 1 month Between 1 Between 6
month and 6 months months and 1 year
2021
£ £ £
Trade creditors 83,492 - -
Other creditors - - 106,572
Interest bearing loans - - -
Between 1 Between 6
Repayable on demand or within 1 month month and 6 months months and 1 year
2020
£ £ £
Trade creditors 137,813 - -
Other creditors 4,284 - -
Interest bearing loans (£18,000 due within 6 years but repaid early 8 months - - -
after year end)
Interest rate and liquidity risk
The Group's financial liabilities represented trade and other payables at the
year-end. No interest was payable on the balances outstanding as at the year
end. The Group's working capital commitments are reviewed on an on-going basis
with reference to the dates when liabilities are to be repaid.
19. Share capital
2021 2020
£ £
Allotted, called up and fully paid
281,220,744 (2020: 221,091,508) ordinary shares of 0.2p 562,441 442,183
(2020: 0.2p) each
562,441 442,183
On 23 December 2019 the 3,223,601,700 ordinary shares of 0.1p each were
subdivided into 32,236,017 ordinary shares of 0.2p each and 32,236,017
deferred shares of 9.8p each.
The aggregate nominal value of the deferred shares is £3,159,130.
20. Share warrants
At 30 September 2021, the Company had the following equity settled warrants in
issue (the number of warrants and exercise prices have been adjusted for the
reorganisation of the Company's shares into ordinary and deferred shares
during the year):
Shares forfeited / expired / waived / exercised during the year
Number of warrants outstanding as at Warrants granted Warrants outstanding as at 30
Date warrant granted 1 Oct 2020 during Sept 2021
the year Exercise
price
Edward Guy Meyer 31/01/2020 2,000,000 - (2,000,000) - 0.4p
Brian Thompson 31/01/2020 26,931,818 - - 26,931,818 0.4p
Anthony Daltrey 31/01/2020 5,000,000 - - 5,000,000 0.4p
Misc. Warrants 03/08/2016 267,075 - (267,075) - 125p
03/08/2016 267,075 - (267,075) - 175p
23/08/2016 287,582 - (287,582) - 125p
23/08/2016 287,582 - (287,582) - 175p
05/03/2019 5,750,000 - - 5,750,000 12.5p
31/01/2020 4,363,637 - - 4,363,637 0.4p
20/04/2020 1,000,000 - - 1,000,000 1.25p
27/01/2021 - 26,200,000 (3,722,760) 22,477,240 3p
27/01/2021 - 2,500,000 - 2,500,000 2p
08/04/2021 - 2,000,000 - 2,000,000 2.5p
46,154,769 30,700,000 (6,832,074) 70,022,695
On 27 January 2021, the Company issued warrants to placing investors and
conversion over a total of 26,200,000 ordinary shares at an exercise price of
3p which may be exercised up to two years from the date of issue. In addition,
warrants over 2,500,000 shares were issued at 2p which may be exercised up to
3 years. On 8 April 2021, 2,000,000 warrants were issued at 2.5p which may be
exercised up to 2 years.
The fair value of the share warrants issued as share based payments was
estimated at the date of grant using the Monte-Carlo model for those with the
performance conditions and the Black Scholes model for those without
performance conditions, taking into account the terms and conditions upon
which they were granted. The following tables list the inputs to the model
used for the valuations of share warrants.
The warrants granted in year ended 30 September 2021 related to subscription
and conversion warrants issued alongside certain shares issued during the
year.
Grant Date 5/4/2019
Final Date 5/4/2022
Exercise Price 0.125p
Share Price 0.1p
Expected Volatility 98%
Expected Dividend Yield n/a
Risk Free Rate 1.49%
Average Time to Vest 1 years
Grant Date 3/2/2021
Final Date 3/2/2024
Exercise Price 2p
Share Price 2p
Expected Volatility 25%
Expected Dividend Yield n/a
Risk Free Rate 0.6%
Average Time to Vest immediate
The total fair value of the warrants granted in the period was approximately
£2,000 (2020: £nil) but has not been deemed to be material and so has not
been recognised . The net charge recognised in the statement of comprehensive
income for share warrants was £nil (2020: £nil).
21. Capital commitments
There were no capital commitments as of 30 September 2021 or 30 September
2020.
22. Share-based payment
On 15 August 2011, the Company granted to the Directors and other individuals
options over a total of 19,500,000 ordinary shares of 0.1p each, at a price of
1 penny per share as disclosed in the announcement dated 16 August 2011. Half
of the options vest once the closing mid-market share price of the Company has
been more than or equal to 2 pence for a period of 15 consecutive business
days. The remainder vest once the closing mid- market share price of the
Company has been more than or equal to 3 pence for a period of 15 consecutive
days. The options are exercisable on or following the first anniversary of the
date of issue and will lapse on the tenth anniversary of the date of issue.
Options issued to non-Director employees under the EMI scheme lapse on
cessation of employment. Since the issue date 7,500,000 options have lapsed.
On 13 December 2012, the Company granted to various individuals options over a
total of 7,695,000 ordinary shares of 0.1p each at a price of 1.5 pence per
share as disclosed in the announcement dated 14 December 2012. Half of the
options vest once the closing mid- market share price of the Company has been
more than or equal to 2 pence for a period of 15 consecutive business days.
The remainder vest once the closing mid-market share price of the Company has
been more than or equal to 3 pence for a period of 15 consecutive days. The
options are exercisable on or following the first anniversary of the date of
issue and will lapse on the tenth anniversary of the date of issue. Options
issued to employees under the EMI scheme lapse on cessation of employment.
Since the issue date 5,695,000 options have lapsed.
On 27 March 2015, the Company granted to the Directors and other individuals
options over a total of 85,787,000 ordinary shares of 0.1p each at a price of
1 penny per share as disclosed in the announcement dated 22 December 2014.
Half of the options vest once the closing mid-market share price of the
Company has been more than or equal to 2 pence for a period of 15 consecutive
business days. The remainder vest once the closing mid- market share price of
the Company has been more than or equal to 3 pence for a period of 15
consecutive days. The options are exercisable on or following the first
anniversary of the date of issue and will lapse on the tenth anniversary of
the date of issue. Options issued to non-Director employees under the EMI
scheme lapse on cessation of employment. Since the issue date 19,190,000
options have lapsed.
On 23 August 2016, the Company granted to the Directors and other individuals
options over a total of 78,260,782 ordinary shares of 0.1p each at a price of
0.1 pence per share as disclosed in the announcement dated 23 August 2016. The
options will lapse on the tenth anniversary of the date of issue. On 23 August
2016, the Company also granted to a Director options over a total of 3,333,334
ordinary shares of 0.1p each, half of the options at a price of 1.25 pence per
share and the remainder at 1.75 pence per share. The options vest once the
closing mid-market share price of the Company has been more than 2.5 pence for
a period of 5 consecutive business days. The options will lapse on the fifth
anniversary of the date of issue.
Details of the Options are as follows:
Number of new options granted in the year Number of options forfeited in the year Options held at 30 September
Options held at 1 October 2021
2020 Option price
Tony Sanders 153,520 - 153,520 - 100p
66,666 - - 66,666 10p
16,666 - 16,666 - 125p
16,666 - 16,666 - 175p
Kevin Everett 35,820 - 35,820 - 100p
77,778 - - 77,778 10p
Others 596,630 - 596,630 - 100p
20,000 - - 20,000 150p
638,165 - 638,165 - 100p
Total 1,621,911 - 1,457,467 164,444
At 30 September 2021, no options were exercisable due to the mid-market share
price of the Company in the period (30 September 2020: nil). At this date, the
weighted average contractual life of the outstanding options was 0.1 years (30
September 2020: 1.1 years).
There were no share options exercised during the year (2020: nil).
The fair value of the share options was estimated at the date of the grant
using either the Monte-Carlo model (where market conditions existed) or the
Black-Scholes model, taking into account the terms and conditions upon which
they were granted.
The following table lists the inputs to the model used for the valuations of
share options:
Options granted on 15 August 2011 lapsed 15 August 2021
Weighted average share price (pence) 0.95p
Weighted average exercise price (pence) 1p
Option life (years) 1
Risk free interest rate (%) 2
Dividend yield 0
Volatility (%) 60
Options granted on 13 December 2012 expire 13 December 2022
Weighted average share price (pence) 0.7p
Weighted average exercise price (pence) 1.5p
Option life (years) 1
Risk free interest rate (%) 2
Dividend yield 0
Volatility (%) 60
Options granted on 27 March 2015 expire 27 March 2025
Exercise price (pence) 1p 1p
Share price (pence) 0.65p 0.65p
Expected volatility (%) 85% 85%
Expected dividend yield n/a n/a
Risk free rate 0.41% 0.49%
Average time to vest (years) 2 years 2.3 years
Options granted on 23 August 2016 expire 23 August 2026
Exercise price (pence) 0.1p
Share price (pence) 0.625p
Expected volatility (%) 91%
Expected dividend yield n/a
Risk free rate 1.33%
Average time to vest (years) 10 years
Options granted on 23 August 2016 lapsed 23 August 2021
Exercise price (pence) 1.25p 1.75p
Share price (pence) 0.625p 0.625p
Expected volatility (%) 91% 91%
Expected dividend yield n/a n/a
Risk free rate 0.07% 0.07%
Average time to vest (years) 2 years 2 years
The expected volatility was based on historic volatility and reflects the
assumption that the historical volatility is indicative of future trends,
which may not necessarily be the actual outcome. No other features of the
options were incorporated into the measurement of fair value, and non-market
conditions have not been included in calculating the fair value. The total
fair value of the options granted in the period was £nil (2020: £nil). The
amount debited to the statement of comprehensive income for share options was
£nil (2020: £nil). The combined total fair value of the options and warrants
granted in the period was £nil (2020: £nil) and the combined amount debited
to the statement of comprehensive income was £nil (2020: £nil).
23. Transactions with Directors and other related parties
Other transactions with Directors
As stated in note 16 to the accounts a total of £6,500 (2020: £34,250) is
due to certain Directors as unpaid remuneration.
During the prior year, Brian Thompson provided loans to the Group, both before
and after his appointment as a director. These loans were fully repaid by the
end of the year.
Payments (to) / from related
Related Party relationship Transaction parties Balance owing /
amount owed
2021 2020 2021 2020 2021 2020
£ £ £ £ £ £
Sales/(Purchases) from companies in which Directors or their
immediate family have a significant controlling interest
17,800 12,880 17,800 12,880 - -
Amounts lent to the Group by the Directors or companies in which Directors or
their immediate family have a significant controlling interest
- - - (18,426) - 11,222
Amounts lent to joint venture companies
- - - - - -
All amounts owing to related parties are payable on demand with no interest
accruing.
24. Retirement benefit schemes
During the year, £1,207 was paid to a retirement benefit scheme on behalf of
Directors (2020:
£928).
25. Operating lease rental commitments
At 30 September 2021 and 30 September 2020, the Group had no commitments under
operating leases.
26. Notes supporting the cash flow statement
Cash and cash equivalents for the purposes of the cash flow statement
comprises:
2021 2020
£ £
Cash available on demand 714,043
605,082
714,043
605,082
27. Events after the reporting period
On 16 October 2020, the Company agreed to issue warrants over 12,000,000 new
ordinary shares in the Company, including 10,000,000 to a related party of
BHA-Medical (Pty) Limited. The Warrants will be exercisable at a price of 2.5
pence per ordinary share and will vest with immediate effect from the date of
grant and may be exercised for a period of up to 2 years from issue.
On 16 February 2022, the Company ended this joint venture agreement and no
warrants were issued.
On 4 May 2021 the Company acquired a 51% interest in Hyperneph Software
Limited ("Hyperneph" or "Acquisition"). Tony Sanders is a former director of
the Company and a director and shareholder of Hyperneph. The consideration for
the Acquisition amounts to £320,000, of which £270,000 will be satisfied in
cash ("Cash Consideration") and the balance of £50,000 will be satisfied by
way of the issue of new ordinary shares in the Company ("Equity
Consideration"). Hyperneph, incorporated on 24 February 2020, is a software
and application development consultancy, focusing on digital transformation.
The rationale for the acquisition is to secure and enhance the Company's
ability to deliver innovative software-based solutions leveraging Catenae's
existing capabilities including task management, proof of work, digital
wallets, identity and digital certification capabilities, allowing Catenae to
provide a broader portfolio of product and service offerings to support
customers as they pursue new ways of working with people located remotely in
distributed operations. The Cash Consideration will be satisfied from
Catenae's existing cash resources. The Equity Consideration was due to be
satisfied by the issue of new ordinary shares on or around 28 February 2022 at
the volume weighted average price of the Company's shares during the previous
10 trading days.
On 9 May 2022, Mr Alan Simpson and Mr Anthony Sanders issued legal proceedings
against the Company in the High Court. The claimed sum was £49,875.00 (plus
interest) along with specific performance of various clauses of a Share
Purchase Agreement and a Shareholders Agreement both dated 1 May 2022. Those
relate to the issue of the £50,000 shares consideration and the payment of
two amounts of £20,000 relating to working capital. The action is being
defended by the Company which has brought a counterclaim for breach of
restrictive covenants and fiduciary duty. No date is currently set for trial
but the Claimants have issued a Summary Judgment application which is yet to
be listed by the Court.
On 28 September 2022 the Company has agreed additional funding in the form of
a convertible loan
for £250,000 from Sanderson Capital Partners Ltd.
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed to be, forward
looking statements. Forward looking statements are identified by their use of
terms and phrases such as ''believe'', ''could'', "should" ''envisage'',
''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect",
''will'' or the negative of those, variations or comparable expressions,
including references to assumptions. These forward-looking statements are not
based on historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of operations,
performance, future capital and other expenditures (including the amount,
nature and sources of funding thereof), competitive advantages, business
prospects and opportunities. Such forward looking statements reflect the
Directors' current beliefs and assumptions and are based on information
currently available to the Directors.
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