Final Results
30/06/2021 07:00
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RNS Number : 5550D Catenae Innovation PLC 30 June 2021
30 June 2021
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 results for the twelve months ended 30
September 2020.
Financial overview
* Net loss of £769,186 (2019: £825,230), with revenues of £14,948(1) (2019:
£102,549).
* Statement of financial position at the year-end shows net assets of £502,427
(2019 net liabilities: £727,077).
* On 26 March 2020, the Company announced it had agreed a loan facility of
£150,000 from Brian Thompson, which was fully repaid on 6 July 2020.
Operational overview
* Developed the Cov-ID app within a consortium of companies led by Z/Yen Group
Limited to offer a COVID-19 status verification passport.
* Entered into a partnership agreement with Newcastle Premier Health Limited
("NPH"), an occupational health and wellness business based in the North East
of England, to pilot the Cov-ID app.
* Enhanced the Cov-ID app by developing Onsite ID, an advanced GDPR-compliant
multi-document digital wallet for the validation of identity, qualifications
and access across a range of sectors.
* Signed Afrik-ID strategic market analysis agreement for Onsite ID in SADC
(South Africa Development Community) region.
* Resignation of Kevin Everett as Interim Non-Executive Chairman.
* Appointment of Brian Thompson and John Farthing to the Board as Non-Executive
Chairman and Chief Financial Officer respectively and appointment of Guy Meyer
as Chief Executive Officer on a permanent basis.
* Appointment of Brandon Hill Capital Limited as sole corporate broker.
Guy Meyer, Chief Executive Officer of Catenae, said:
"COVID-19 presented the Group with a number of challenges given that Catenae's
principal trading activity prior to the pandemic involved providing services
to clients in the facilities management and local government sectors.
"That being said, the Company responded quickly and efficiently to the
situation, acknowledging that its distributed ledger technology lent itself to
helping organisations securely record employees' COVID-19 test results. Our
proactive involvement in the consortium led by Z/Yen Group and our partnership
with NPH were testament to our commitment to stay at the forefront of our
industry and expand our network.
"Despite a number of leads and paid-for trials during the period under review,
unfortunately the uptake of our product did not meet the Board's anticipations
as the marketplace was largely defined by government lockdown restrictions.
However, all our product development was designed with multi-purpose
applications in mind so the know-how and intellectual property that was gained
is retained in the business."
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
Brandon Hill Capital Limited, Broker +44 (0)20 3463 5000
Andy Gutmann
Yellow Jersey PR (PR & IR) +44 (0)20 3004 9512
Sarah Hollins / Annabel Atkins / Matthew McHale
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 showed considerable resilience in what was a difficult trading year,
and I would like to thank our team for their unwavering dedication and support
to the business and in adapting to this 'new normal'.
Following the successful corporate restructuring and business stabilisation
process carried out by the Board in 2019, the year started positively as the
Company focused on innovating its products and exploring new opportunities for
growth. Catenae made a number of inroads into new sectors and markets during
its development of the Cov-ID app as well as Onsite ID.
While we acknowledge the commercial uptake of our product set was
disappointing, the Company managed its finances prudently to ensure business
continuity, with a subscription, conversion of existing liabilities and issue
of warrants in January 2020 and a further fundraise in April 2020 resulting in
an improved balance sheet.
Board changes
On 24 April 2020, Kevin Everett stepped down from the Board as Interim
Non-Executive Chairman and was replaced by Brian Thompson as Non-Executive
Chairman. John Farthing, the Company's Chief Financial Officer, also joined
the Board on 24 April 2020. Guy Meyer was appointed Chief Executive Officer on
a permanent basis on 20 July 2020.
Financial overview
The Company made a net loss for the year of £769,186 (2019: £825,230).
Revenues for the year were £14,948(1) (2019: £102,549).
The Company has a statement of financial position at the year-end showing net
assets of £502,427 (2019 net liabilities: £727,077).
On 26 March 2020, the Company announced it had agreed a loan facility of
£150,000 from Brian Thompson, which was fully repaid on 6 July 2020.
Working capital and fund raisings
During the year, the Company issued 188,855,491 new ordinary shares for a
total gross consideration of £2,061,690 of which £1,497,455 was received in
cash and £564,235 to settle liabilities.
COVID-19
At the end of January 2020, the Company ceased to rent offices, with all
employees working remotely. Business meetings were successfully held using
video conferencing platforms and Catenae's technical solutions were used
effectively with customers and partners.
Brian Thompson
Chairman
(1) Following the audit the Board became aware of an error in the unaudited
half year report for the 6 month period to 31 March 2020, notified on 30 June
2020, turnover was misstated as £19,892, the correct figure was £4,521.
Statement of comprehensive income for the year ended 30 September 2020
2020 2019
£ £
Revenue 14,948 102,549
Cost of sales - -
Gross profit 14,948 102,549
Administrative expenses (759,108) (1,072,233)
Loss from operations (744,160) (969,684)
Net finance expense (25,026) (1,412)
Loss before taxation (769,186) (971,096)
Taxation credit - 145,866
Loss from continuing operations (769,186) (825,230)
Total comprehensive loss for the year (769,186) (825,230)
Basic and diluted loss per share (pence) (0.65) (2.86)
Statement of financial position at 30 September 2020
2020 2019
£ £
Non-current assets
Intangible assets 1 1
Investments - -
1 1
Current assets
Trade and other receivables 20,604 22,948
Cash and other equivalents 714,043 29,508
734,647 52,456
Current liabilities
Trade and other payables (214,221) (555,629)
Interest bearing loans - (223,905)
(214,221) (779,534)
Non current liabilities
Interest bearing loans (18,000) -
Total liabilities (232,221) (779,534)
Net assets / (liabilities) 502,427 (727,077)
Capital and reserves
Ordinary share capital 442,183 3,223,601
Deferred share capital 3,159,130 -
Share premium account 18,652,949 17,031,971
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 (35,520,991) (34,751,805)
Shareholders' funds 502,427 (727,077)
Statement of cash flows for the year ended 30 September 2020
Cash flow from operating activities 2020 2019
£ £
Loss for the year (769,186) (825,230)
Adjustments for:
Amortisation of intangible assets - -
Net bank and other interest charges 25,026 1,412
Services settled by the issue of shares - 120,055
Issue of share options and warrants charge - -
Net cash outflow before changes in working capital (744,160) (703,763)
(Increase)/Decrease in trade and other receivables (2,344) (6,000)
(Decrease) / Increase in trade and other payables (62,210) (182,976)
Cash outflow from operations (808,714) (892,739)
Interest received 28 88
Interest paid (25,054) (1,500)
Net cash flows from operating activities (833,740) (894,151)
Investing activities
Investment in joint venture - -
Net cash flows from investing activities - -
Financing activities
Issue of ordinary share capital 1,481,855 967,810
Repayment of loan (96,580) (245,937)
New loans raised 133,000 152,681
Net cash flows from financing activities 1,518,275 874,554
Net (decrease) / increase in cash 684,535 (19,597)
Cash and cash equivalents at beginning of year 29,508 49,105
Cash and cash equivalents at end of year 714,043 29,508
During the year £564,235 of trade and other payables and loans were converted
into equity in non-cash transactions.
Statement of changes in equity for the year ended 30 September 2020
Deferred Shares / Shares to be issued
Share Capital Share Premium Other Reserves Retained Earnings Total Equity
£ £ £ £ £ £
Balance at 30 Sept 2018
2,078,601 16,999,644 187,245 13,769,156 (33,926,575) (891,929)
Loss for the year
- - - - (825,230) (825,230)
Share capital issued
1,145,000 100,000 (187,245) - - 1,057,755
Share issue cost - (67,673) - - - (67,673)
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
The other reserves relate to the merger reserve, share reserve and the capital
redemption reserve.
The principal activity of Catenae Innovation Plc 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
financial statements are set out below. These policies have been consistently
applied to all the period presented unless otherwise
stated.
Statement of compliance
These 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.
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 Company, its cash flows,
liquidity position and borrowing facilities are described in the financial
statements. In addition, note 16 to the financial statements includes the
Company'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 2020, being the Company's financial
year-end, was £502,427. Subsequent to the reporting date, the Board has been
able to agree additional funding in the form of further share issues raising
£1.0m in cash.
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 Company's revenues, fixed and variable
cost and resultant expected cash flow requirements.
The Company'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 Company has sufficient financial resources
for the going concern period. The Company 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 Company 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 Company's performance, as the Company performs. The Company 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 Company'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.
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
Company 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.
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.
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.
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 Company 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
Company applies the simplified approach in calculating Expected Credit Losses
("ECL's"), as permitted by IFRS 9. Therefore, the Company 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 Company 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 Company's historical experience and informed credit
assessment including forward-looking information.
Financial liabilities
Financial liabilities are recognised when, and only when, the Company 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 Company'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 Company 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.
Equity instruments
Equity instruments issued by the Company are recorded as the proceeds
received, net of direct costs.
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 Company
There were no new standards and interpretations to published standards adopted
during the year which have had a significant impact on the company's
accounting policies.
New and amended Standards and Interpretations issued but not effective for the financial year beginning 1 October 2019
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.
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) 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 1,621,911 share options and 46,154,769 share warrants outstanding
at the year-end (2019: 1,621,911 and 10,277,647). However, the figures for
2020 and 2019 have not been adjusted to reflect conversion of these share
options, as the effects would be anti- dilutive. The 2019 comparatives have
been adjusted for the subdivision of shares in the current period, as
disclosed in Note 17.
2020 2019
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 (0.65) (2.86)
(769,186) 118,441,725 (825,230) 28,875,058
3) 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.
Forward-Looking Statements
Certain statements made in this announcement are forward-looking statements.
These forward-looking statements are not historical facts but rather are based
on the Company's current expectations, estimates, and projections about its
industry; its beliefs; and assumptions. Words such as 'anticipates,'
'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar
expressions are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject to known
and unknown risks, uncertainties, and other factors, some of which are beyond
the Company's control, are difficult to predict, and could cause actual
results to differ materially from those expressed or forecasted in the
forward-looking statements.
The Company cautions security holders and prospective security holders not to
place undue reliance on these forward-looking statements, which reflect the
view of the Company only as of the date of this announcement. The
forward-looking statements made in this announcement relate only to events as
of the date on which the statements are made. The Company will not undertake
any obligation to release publicly any revisions or updates to these
forward-looking statements to reflect events, circumstances, or unanticipated
events occurring after the date of this announcement except as required by law
or by any appropriate regulatory authority.
-Ends-
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