REG - EQTEC PLC - Interim results
29/09/2022 07:00
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RNS Number : 0762B EQTEC PLC 29 September 2022
29 September 2022
EQTEC plc
("EQTEC", the "Company" or the "Group")
Interim results for the six months ended 30 June 2022
EQTEC plc (AIM: EQT), a global technology innovator powering distributed,
decarbonised, new energy infrastructure through its waste-to-value solutions
for hydrogen, biofuels, and energy generation, announces its unaudited interim
results for the six months ended 30 June 2022 ("H1 2022"), with post-period
progress and financial outlook.
Financial highlights
· Revenue and other operating income €2.98 million (H1 2021: €0.48
million)
· Gross profit €0.24 million (H1 2021 €0.07 million)
· EBITDA loss €1.97 million (H1 2021 €3.49 million)
· Capital raise of £3.75 million through the placing of shares
· Loan facility for up to £10 million with initial drawdown of £5
million
Commercial and operational highlights
· Two of three Market Development Centres progress toward key
milestones
· UK RDF projects move ahead with top-tier partners
· Contaminated plastics and liquid fuels added to solution portfolio
· Project finance accelerates project development in Greece, UK and USA
Current trading and outlook
Advanced technology innovation and integration significantly, with:
· Acquisition of a failed gasification plant in France, for upgrade to
EQTEC technology, recommissioning and operation for three, different waste
feedstocks;
· Launch into the contaminated plastic waste treatment business in
France, with a French partner following completion of successful contaminated
plastic waste trials;
· Progress with project development for two UK, multi-technology plants
to transform MSW into biogas, power and/or hydrogen; and
· New or strengthened partnerships with Anaergia for anaerobic
digestion solutions, Wood for integrated Waste-to-hydrogen and Waste-to-SNG
solutions and CompactGTL for Waste-to-biofuels solutions.
Project execution through EQTEC go-to-markets and development partners,
including:
· Upgrade, restoration and cold commissioning of Italia Market
Development Centre ("MDC") toward full commercial operation by year's end;
· Successful acquisition of a MDC for France, with numerous contracts
already in place and with feedstock and offtake arranged;
· Transition of approach to project funding, with corporate centre team
actively engaging infrastructure investors through top-tier advisors;
· Heads of terms for sale of the Deeside, UK project to a corporate
investor, with funds to develop the project to financial close, acquire
EQTEC's equity, and pay all EQTEC development services fees due, with
financial impact expected before the year end;
· Successful renegotiation of agreement at the Southport, UK project,
releasing the Company from liabilities for acquisition of project scope
deploying non-EQTEC technology whilst preserving its right to develop project
scope and deploy integrated syngas-to-hydrogen technology, with the combined
capabilities of EQTEC and Wood;
· Improved financial modelling and development strategy for the
Billingham project, for a multi-technology, multi-use facility built around
the existing, consented syngas-to-power facility, with Petrofac appointed as
the FEED partner;
· Successful arrangement of a debt facility with Greek lenders, backed
by the European RRF, amounting to 80 per cent of the funding required for the
Livadia project in Boeotia, Greece; and
· Accelerated progress with funding and planning for the BMEC project
in California, USA.
David Palumbo, CEO of EQTEC, commented:
"As we witness the cost-of-living crisis alongside the worsening situation
with Russia, attention inevitably leads back to our energy needs, their costs
and their consequences. It is now clearer than ever that new responses to
these are needed. EQTEC has some of those responses, and as the world's needs
become more urgent, not only does our resolve strengthen, but our capability
to respond increases.
"Our MDCs will demonstrate those responses for the world to see, in live,
commercial environments. The first will be operational this year, in one of
the greenest, most beautiful parts of Italy. We are commissioning Italia MDC
now and will shortly thereafter move on to MDCs in Croatia and France. Not
only will these showcase numerous feedstocks for a range of offtake solutions,
but they will demonstrate new business models to power a decarbonised world.
"Our RDF projects in the UK are gaining momentum, benefitting from innovative,
multi-technology solutions, sharper financial models and world-class
partnerships. We are excited about these integrated solutions we will
introduce to the UK, right in line with its move away from traditional
solutions and its need for energy independence and security. We now have
Deeside on a path to be fully funded through to financial close and Southport
re-focused for accelerated development.
"Our 2022 will be less backloaded than last year, but we still have an
ambitious Q4 ahead of us. Behind our progress is an increasingly focused,
collaborative and professional team that will drive the Company forward
through Q4 and into 2023 with increasing success and global impact."
Chief Executive's statement and outlook
EQTEC's purpose is to decarbonise local communities and transform waste into
value, deploying our innovative, carbon engineering capabilities to baseload
energy and biofuel solutions across a wide range of decentralised business
models. This purpose is enabled by our world-leading proficiency with
synthesis gas ("syngas").
EQTEC's syngas technology is proprietary, patented and proven. It accommodates
the widest range of feedstocks including forestry and agricultural wastes,
municipal wastes and industrial wastes. EQTEC's growing library of nearly 60
waste feedstocks, together with its highly accurate, proprietary computational
modelling capability enable EQTEC to design tailored and highly efficient
syngas production facilities to support the widest range of applications
including thermal energy, electrical power, hydrogen, SNG, chemicals and
liquid fuels. Because EQTEC designs all aspects of the syngas production
process and programs its proprietary control systems in-house, it is able to
achieve the highest levels of efficiency and operational availability.
The Company's target business model positions EQTEC as a leading technology
innovator for production of clean, renewable, baseload energy and biofuels.
The Company envisions three, priority customer types for its solutions:
· Industrial: manufacturing companies with captive waste, hazardous or
not, with the business case to safely and cleanly transform that waste into
electrical power, thermal energy, hydrogen, synthetic natural gas ("SNG")
and/or liquid fuels. The Company's longest-standing deployment of EQTEC
technology is in a large-scale, agro-industrial facility in southern Spain and
has delivered strong performance there for over a decade. The Company is
engaged with several, multi-national companies in the consumer products,
industrial products and agro-industrial sectors who are considering EQTEC
solutions.
· Utility: generators and distributors of heat, power and/or fuel for
sale to consumers or industrial customers. These owners and commercial
operators of generation facilities, many of whom are looking to transition
away from traditional, fossil fuel-led and/or incineration technologies, are
looking at EQTEC technologies as a sustainable alternative for future
business.
· Municipalities: local or super-local (e.g., state, regional)
authorities with waste management requirements who want to dispose of waste
cleanly and efficiently and also generate value from it for the local
community. Nearly every project in EQTEC's portfolio focuses on value creation
for local communities but public sector entities are becoming increasingly
active in driving energy transition toward technologies such as EQTEC's.
The three pillars of the Company's business strategy aim to position EQTEC as
a renewable technology leader, able to scale globally:
· Global leadership with syngas technology innovation and integration
· Project execution through a Group operating model and partner
ecosystem
· Global scale through licensing, modular deployment and digital
tooling
As the Company deploys its technology into an increasing number of fully
operational, high-performance plants, its revenues will shift from one-off
project revenues to recurring revenues, derived from annual licensing and
value-added services. Its near-term focus is establishing a critical mass of
operational plants and well-funded projects with the world's leading finance,
development, delivery and technology partners.
In H1 2022, our strategy sharpened amidst challenging market conditions. We
responded with speed and resilience, focusing execution on our
highest-priority projects. We redoubled our efforts driving Italia MDC and
Croatia MDC toward live operations, and France MDC toward full funding and
financial close. We significantly improved the viability of our large, UK RDF
projects at Deeside, Southport and Billingham through collaboration with
top-tier partners including Anaergia, Black & Veatch, Wood and Petrofac.
With our development partners, we accelerated funding at Livadia in Greece and
Blue Mountain Electric Company ("BMEC") in USA.
Concurrently, we de-risked EQTEC's financial position on projects by
offloading development liabilities, reaffirming our role as technology
provider and core engineering partner. Despite supply-side challenges, demand
for EQTEC syngas technology continues to grow. In response, we formalised our
France entry, affirmed our capabilities with contaminated plastics and
partnered with CompactGTL for liquid fuel production.
Even as demand grows, project developers face challenging financing conditions
and this has slowed our pace, so that some projects will achieve revenues
later than previously anticipated, resulting in an adjustment to our 2022
revenue forecast.
Alongside completion of a modest capital raise, we grew our innovation and
engineering team, rationalised our corporate centre and focused it on
targeting and securing project funding. Our outlook remains conservative,
given difficult financial markets, but our business strategy and project
execution focus remain firm.
In Q4 2022, we will launch the Italia MDC into full operation and complete
establishment of a steam-oxygen gasification capability to produce syngas for
hydrogen and SNG applications, at our R&D centre at the Université de
Lorraine in France.
Through the end of 2022 and on into 2023, we will continue our pursuit of
growth and strategic development in the face of difficult trading conditions
and in a market that is likely to become more volatile. We will continue
monitoring and supporting project development efforts and drive strong
engagement with global infrastructure investors and top-tier partners.
Investor presentation
In line with EQTEC's commitment to ensuring appropriate communication
structures are in place for all shareholders, management will deliver an
online presentation on the interim results for the six months ended 30 June
2022. The presentation is available to all existing and potential
shareholders, via the Investor Meet Company platform, today at 10:30am UK
time.
Questions may be submitted prior to the event through the platform, or at any
time during the live presentation. Management may not be in a position to
answer every question it receives but will address those it can while
remaining within the confines of information already disclosed to the market.
Q&A responses will be published at the earliest opportunity on the
Investor Meet Company platform.
Investors can sign up for free
via: https://www.investormeetcompany.com/eqtec-plc/register-investor
(https://www.investormeetcompany.com/eqtec-plc/register-investor) . Those who
have already registered and requested to meet the Company will be invited
automatically.
This announcement contains inside information as defined in Article 7 of the
EU Market Abuse Regulation No 596/2014, as it forms part of United Kingdom
domestic law by virtue of the European Union (Withdrawal) Act 2018, as
amended, and has been announced in accordance with the Company's obligations
under Article 17 of that Regulation.
ENQUIRIES
EQTEC plc +44 20 3883 7009
David Palumbo / Nauman Babar
Strand Hanson - Nomad & Financial Adviser +44 20 7409 3494
James Harris / Richard Johnson
Panmure Gordon - Joint Broker +44 20 7886 2500
John Prior / Harriette Johnson
Canaccord Genuity - Joint Broker +44 20 7523 8000
Henry Fitzgerald-O'Connor / James Asensio / Patrick Dolaghan
Alma PR - Financial Media & Investor Relations +44 20 3405 0205
Josh Royston / Sam Modlin EQTEC@almapr.co.uk (mailto:EQTEC@almapr.co.uk)
Instinctif - General Media Enquiries +44 20 7457 2381
+44 788 788 4794
Chris Speight / Tim Field EQTEC@instinctif.com (mailto:EQTEC@instinctif.com)
Technology innovation and integration
The versatility of EQTEC technology makes it suitable for a wide range of
emerging business models for distributed, decarbonised new energy
infrastructure. At present, the Company is focused on specific projects best
able to showcase its capabilities here and now, building partnerships and
driving R&D efforts to make it able to rapidly pursue innovation
opportunities in future, as the market evolves.
· On 14 March 2022, the Company announced its intention to acquire a
failed gasification plant and recommission it with EQTEC technology, to
process a mixture of diverse feedstocks, including wood, contaminated wood and
RDF ("France MDC").
· On 14 March 2022, the Company also announced a partnership with SEPS
SAS ("SEPS"), a French company specialising in waste management and recycling
of industrial waste, indicating the partners' joint intent to develop
contaminated waste treatment plants that apply their combined capabilities.
The Company also announced the partners' first project opportunity at an
on-premise, industrial facility in Haute-Garonne, France.
· On 30 May 2022, the Company acknowledged a report published by the
Université de Lorraine ("UdL") in France verifying that EQTEC's Advanced
Gasification Technology successfully converts contaminated plastic waste into
syngas cleanly, stably and efficiently. The report followed a series of tests
on contaminated plastics carried out in December 2021 at EQTEC's technology
innovation facility in France and opened the market for this difficult
feedstock to the Company and its partners.
· On 30 June 2022, in line with its strategic collaboration agreement
with global engineering leader Wood, the Company announced its selection of
Wood and its VESTA technology as its partner for co-development of an
integrated RDF-to-syngas-to-hydrogen solution for its Southport project.
· On 07 July 2022, the Company announced it had entered into a
collaboration agreement with CompactGTL Limited ("CompactGTL"), a
gas-to-liquids company specialising in the production and use of synthetic
fuels from gases, including syngas. The partners committed to collaborate on
waste-to-fuel projects and other synthetic fuel and energy infrastructure
projects, starting with a pilot demonstration project at a location already
identified.
· Throughout H1 2022, the Company announced progress with its three
waste-to-value projects in the UK, including a multi-technology plant for
MSW-to-biogas and power at Deeside, Flintshire, a multi-technology plant for
MSW-to-biogas and hydrogen at Southport, Merseyside and RDF-to-combined heat
and power and hydrogen at Billingham, Teesside.
· Throughout H1 2022, the Company strengthened its partnership with
Anaergia, Inc. ("Anaergia"), a technology provider with capabilities focused
on materials recovery facilities ("MRF") and anaerobic digestion ("AD"),
announcing further collaboration at its Deeside and Southport projects.
In addition to working on concept designs and detailed designs across a range
of projects, with construction advisory, commissioning leadership and
Operations and Maintenance ("O&M") preparations at others, EQTEC's
technical team has also been hard at work with Research and Development
("R&D"): testing new feedstocks for prospective projects and preparing the
full-scope, end-to-end R&D facility at UdL for trials of new solutions
including for hydrogen, SNG and advanced biofuels. The Company intends to
install steam-oxygen capabilities at the UdL site this autumn, which is
critical for syngas production that supports these offtakes.
Market Development Centres
MDCs are live, profitable plants operated by the Company and employed as
showcases of EQTEC technology in full-scale, commercial environments.
Strategically, MDCs are catalysts for accelerated engagement of project
finance, owner-operators and other key stakeholders.
In 2022, the Company has progressed work on two MDCs, with a focus on funding
the third:
· At the Italia MDC in Gallina, Tuscany, Italy, the Company in H1
delivered new equipment and completed critical upgrades. It also arranged for
additional funding from existing investors, to cover price increases for
remaining equipment and unforeseen work. In Q3, the Company recruited the
plant operations team and commenced commissioning.
At the France MDC in Villers-sous-Montrond, Doubs, France, the Company on 14
March announced its intention to acquire, upgrade and recommission the 6.5 MWe
plant, replacing the failed gasification technology with EQTEC technology. On
07 September, the acquisition was approved and finalised by France's
Ministère de l'Économie, des Finances et de l'Industrie (MINEFI). The France
MDC would process diverse feedstock, with a combination of wood, contaminated
wood and RDF and is expected to be France's largest ever gasification project
for combined heat and power.
To support the French market and projects, the Company in March announced the
launch of EQTEC France SAS and appointment of David Le Saint as market lead.
For the Croatia MDC in Belišće, Croatia, key components were manufactured in
H1 to support the plant's capacity upgrade to 1.5MWe from the original 1.2MWe.
Discussions with investors and operators for the sale of the project started
in July and continue. Once the final business model and ownership of the
project have been formalised with the ultimate buyer/s, construction and
commissioning will be completed with a view toward full commercial operations
as early as Q1 2023.
The Italia MDC is expected to complete commissioning and become fully
operational before the end of 2022, with the Croatia MDC requiring final
funding to complete its commissioning and the France MDC finalising funding
arrangements toward construction work in 2023.
UK RDF projects
The Company's UK projects are expected to produce some of the first,
commercially viable gasification plants for RDF in the world, qualifying EQTEC
and its partners as leaders in the high-growth sector for municipal
waste-to-value. The UK plants will also demonstrate business solutions for
industrial customers and municipalities.
In 2022, the Company progressed development of three UK projects and
collaborated with top-tier ecosystem partners to bring quality execution and
risk mitigation to them:
· At Deeside Industrial Estate, at Deeside, Flintshire, the Company on
01 April announced its appointment of global engineering, procurement,
consulting and construction company Black & Veatch ("B&V") to review
the project, with a particular focus on integration risks in light of the
multiple technologies for the plant, provided by EQTEC and technology partner
Anaergia. On 11 July, the Company announced its appointment of B&V as
Front-end Engineering and Design ("FEED") partner with the added remit of
preparing an Engineering, Procurement and Construction ("EPC") cost estimate
for power generation equipment and systems. The Company confirmed on 01 April
that based on successful completion of feasibility work for hydrogen
production from syngas in future phases of work, EQTEC had received proposals
from prospective partners for provision of syngas-to-hydrogen technology. On
26 September, the Company confirmed that it and development partner Logik
Developments Limited had signed non-binding heads of terms for full
acquisition of the project by a corporate investor. A completed contract with
the party would allow the project to proceed to financial close and compensate
the Company for development services fees.
· At Southport Hybrid Energy Park, Southport, Merseyside, the Company
on 24 June announced that technology partner Anaergia had reached agreement
with the project for construction and operation of its Phase 1 scope of work.
On 30 June, the Company announced its selection of Wood as its technology
partner for co-development of an integrated RDF-to-syngas-to-hydrogen solution
for its Phase 2 scope of work. The Company then announced on 21 September that
it had agreed with development partner Rotunda Group Limited ("Rotunda") a new
agreement under which Rotunda would retain Phase 1 of the project and deploy
Anaergia technology, allowing the Company to focus on development of Phase 2,
deploying EQTEC technology for the UK's first waste-to-hydrogen plant, whilst
still recovering all development services fees due to the Company for Phase 1.
· At the Haverton Hill project in Billingham, Teesside, the Company on
15 February confirmed that it had a fully consented scheme for advanced
thermal conversion and that it was exploring a range of additional solutions
for syngas-to-power, syngas-to-heat and syngas-to-chemical applications on the
17-acre site. At its AGM in May, the Company went on to confirm that it was
developing financial models for a variety of scenarios, including
syngas-to-hydrogen production on the site, indicating that there were other
technologies also seeking to use the land on the site. On 18 July, the Company
announced its selection of Petrofac Limited ("Petrofac") as FEED contractor
and potential EPC partner. Out of period, the Company has secured heads of
terms for over 250 per cent of its feedstock requirement at attractive gate
fees, with a grid connection and highly favourable power purchase agreement
("PPA"). The Company is further discussing private wire opportunities with
local companies. Once funded, the project is expected to move quickly into
FEED work with Petrofac. Petrofac has confirmed it will support the Company's
efforts with engagement of funding candidates toward that end.
The UK RDF projects remain some of the most complex in the Company's
portfolio, but with the quality of partners now in place and with strong
progress on commercial, engineering and planning work, funding remains the key
that will unlock further progress to financial close and construction. The
Company is prioritising funding at project level therefore as its key focus in
H2 2022.
Other projects
Funding has proven to be the critical key to progressing projects at pace.
Beyond the projects outlined above, the Company and its partners have put
other projects in good positions to move forward at pace once full funding is
secured.
· For the Livadia project in Boeotia, Greece, the Company announced on
21 June 2022 that its partners ewerGy GmbH and ECO Hellas M IKE had confirmed
a new debt facility with Optima Bank S.A ("Optima") to support construction of
the plant, making it 80 per cent funded. The Optima facility is backed in part
by the Recovery and Resilience Facility for Greece.
Additionally, the Company and its partners have been pursuing equity funding
with institutional funds for the remaining requirement and intend to secure
heads of terms as soon as possible.
The project has already secured all licenses, building permits and a grid
connection and PPA.
· For the Blue Mountain Electric Company ("BMEC") project in
Wilseyville, California, USA, development funding has been secured to support
concept design work toward application for a large, federal loan to support
construction of the plant. Additional term sheets have been received from both
equity investors and lenders. A strong project manager appointed to BMEC with
funding from the Company has engaged a range of top-tier EPCs to bid for work
on the project and the Company anticipates applying for the loan in Q4 with
confirmation of funding expected in early 2023.
· At the North Fork Community Power ("NFCP") project in North Fork,
California, USA, the power purchase agreement ("PPA") for the project has been
extended to Q3 2023 to provide additional time for project commissioning and
EPC works are progressing under an updated construction schedule. The project
has been impacted by several local fires, causing delays that exacerbated the
effect of cost inflation due to global supply issues. The drawdown on the
convertible loan facility committed by the Company in 2021 has therefore been
suspended until the additional gap funding has been secured by NFCP. In the
meantime, NFCP Managing Members, including the Company, are engaged in
advanced discussions with the project lender and the State of California,
toward a solution to the funding challenge.
The Company's pipeline of interest and demand expands weekly, and the team is
closely managing and prioritising new opportunities, communicating with
high-priority prospects. However, the near-term priorities are focused less on
generation or pursuit of new demand and more on execution of existing projects
and commissioning of plants.
Group operations and financial management
In H1 2022, the Company grew its technical and engineering team and
rationalised its corporate centre team to fit its near-term objectives of
project funding, at the project level, executing projects and commissioning
plants. Especially given tighter capital availability, the Company reviewed
and reduced its working capital requirements and cut non-essential expenditure
for focus on strategic execution.
Financial performance
For H1 2022, the Company recorded a five-fold increase in revenues over the
same period last year, with €2.98 million in revenues (H1 2021: €0.48
million). Gross profit increased to €0.24 million (H1 2021: €0.07 million)
and EBITDA loss decreased by 44% over the same period last year, to €1.97
million (H1 2021: €3.49 million).
The net assets were recorded at €40.9 million at the end of H1 2022 compared
to €43.4 million as at 31 December 2021.
On 29 March 2022, the Company announced a new loan facility for up to £10
million with an initial disbursement of £5 million received by the Company
the same day.
On 14 July, the Company announced completion of a fundraising that raised
£3.75 million (before expenses) through the placing of 233,385,650 placing
shares, subscription for 73,614,350 Primary Bid shares and subscription for
443,000,000 subscription shares, in each case at an issue price of 0.5 pence
per share.
Financial outlook
With revenue dependent on funding sufficient to meet project milestones, based
on a re-focused portfolio, the Company anticipates its total revenues for 2022
to be in the range of €10 - 12 million. In line with the project re-focus,
the Company currently forecasts an EBITDA loss in the range of €2 - 3
million (2021: (€3.8) million). The revenue and EBITDA guidance is
predicated on the progression of projects' meeting anticipated timelines, in
particular Deeside.
EQTEC plc
Unaudited condensed consolidated statement of profit or loss
for the six months ended 30 June 2022
Notes 6 months ended 6 months ended
30 June 2022 30 June 2021
€ €
Revenue 6 2,981,006 481,720
Cost of sales (2,742,168) (414,549)
Gross profit 238,838 67,171
Operating income/(expenses)
Administrative expenses (2,464,310) (2,277,559)
Impairment of project costs (1,872) -
Other gains/(losses) 7 - (1,404,755)
Foreign currency gains/(losses) 253,214 123,044
Operating loss (1,974,130) (3,492,099)
Share of loss from equity accounted investments (7,322) (2,914)
Gains from sales to equity accounted investments deferred (83,504) -
Loss on revaluation of equity accounted investment (488) -
Change in fair value of investments (249,120) (52,846)
Finance income 233,953 21,711
Finance costs (199,751) (512,414)
Loss before taxation 6 (2,280,362) (4,038,562)
Income tax 8 - -
LOSS FOR THE FINANCIAL PERIOD (2,280,362) (4,038,562)
Loss/(Profit) attributable to:
Owners of the company (2,280,379) (4,037,800)
Non-controlling interest 17 (762)
(2,280,362) (4,038,562)
6 months ended 6 months ended
30 June 2022 30 June 2021
€ per share € per share
Basic loss per share:
From continuing operations 9 (0.0003) (0.0005)
From continuing and discontinued operations 9 (0.0003) (0.0005)
Diluted loss per share:
From continuing operations 9 (0.0003) (0.0005)
From continuing and discontinued operations 9 (0.0003) (0.0005)
EQTEC plc
Unaudited condensed consolidated statement of other comprehensive income
for the six months ended 30 June 2022
6 months ended 6 months ended
30 June 2022 30 June 2021
€ €
Loss for the financial period (2,280,362) (4,038,562)
Other comprehensive income/(loss)
Items that may be reclassified
subsequently to profit or loss
Exchange differences arising on retranslation
of foreign operations (235,360) 88,473
(235,360) 88,473
Total comprehensive loss for the financial period (2,515,722) (3,950,089)
Attributable to:
Owners of the company (2,574,813) (3,843,401)
Non-controlling interests 59,091 (106,688)
(2,515,722) (3,950,089)
EQTEC plc
Unaudited condensed consolidated statement of financial position
At 30 June 2022
Notes 30 June 2022 31 December 2021
ASSETS € €
Non-current assets
Property, plant and equipment 10 353,868 446,861
Intangible assets 11 17,640,532 17,702,833
Investments accounted for using the equity method 12 11,087,383 8,074,184
Financial assets 3,835,738 4,050,030
Other financial investments 252,018 506,976
Total non-current assets 33,169,539 30,780,884
Current assets
Development costs 13 5,015,864 3,455,496
Loans receivable from project development 13 3,748,458 3,000,469
Trade and other receivables 14 8,754,929 6,876,747
Cash and cash equivalents 2,221,662 6,446,217
Total current assets 19,740,913 19,778,929
Total assets 52,910,452 50,559,813
EQUITY AND LIABILITIES € €
Equity
Share capital 15 25,977,130 25,977,130
Share premium 83,610,562 83,610,562
Other reserves 2,353,868 2,353,868
Accumulated deficit (68,751,885) (66,177,072)
Equity attributable to the owners of the company 43,189,675 45,764,488
Non-controlling interests (2,325,098) (2,384,189)
Total equity 40,864,577 43,380,299
Non-current liabilities
Lease liabilities 17 - 56,855
Total non-current liabilities - 56,855
Current liabilities
Trade and other payables 18 6,314,360 6,921,806
Borrowings 16 5,575,757 -
Lease liabilities 17 155,758 200,853
Total current liabilities 12,045,875 7,122,659
Total equity and liabilities 52,910,452 50,559,813
EQTEC plc
Unaudited condensed consolidated statement of changes in equity
for the six months ended 30 June 2022 and the six months ended 30 June 2021
Share Other reserves Accumulated deficit Equity attributable to owners of the company Non-controlling interests Total
Capital Share premium
€ € € € € € €
Balance at 01 January 2021 24,355,545 62,896,521 2,148,220 (61,875,561) 27,524,725 (2,223,986) 25,300,739
Issue of ordinary shares 1,403,448 21,344,046 - 22,747,494 - 22,747,494
-
Issue of share capital on exercise of employee share warrants 46,884 89,351 - 136,235 - 136,235
-
Share issue costs - (1,470,869) - (1,470,869) - (1,470,869)
-
Transactions with owners 1,450,332 19,962,528 - 21,412,860 - 21,412,860
-
Loss for the financial period - - (4,037,800) (4,037,800) (762) (4,038,562)
-
Unrealised foreign exchange gains/(losses) - - 194,399 194,399 (105,926) 88,473
-
Total comprehensive loss for the financial period - - (3,843,401) (3,843,401) (3,950,089)
- (106,688)
Balance at 30 June 2021 25,805,877 82,859,049 (65,718,962) 45,094,184 (2,330,674) 42,763,510
2,148,220
Balance at 01 January 2022 25,977,130 83,610,562 (66,177,072) 45,764,488 (2,384,189) 43,380,299
2,353,868
Transactions with owners -
- - - - - -
Loss/(profit) for the financial period - - (2,280,379) (2,280,379) 17 (2,280,362)
-
Unrealised foreign exchange losses - - - (294,434) (294,434) 59,074 (235,360)
Total comprehensive loss for the financial period - - - (2,574,813) (2,574,813) 59,091 (2,515,722)
Balance at 30 June 2022 25,977,130 83,610,562 (68,751,885) 43,189,675 (2,325,098) 40,864,577
2,353,868
EQTEC plc
Unaudited condensed consolidated statement of cash flows
for the six months ended 30 June 2022
Notes 6 months ended 6 months ended
30 June 2022 30 June 2021
€ €
Cash flows from operating activities
Loss for the financial period (2,280.362) (4,038,562)
Adjustments for:
Depreciation of property, plant and equipment 117,055 59,596
Amortisation of intangible assets 62,301 -
Share of loss from equity accounted investments 7,322 2,914
Gains from sales to equity accounted investments deferred 83,504 -
Loss on revaluation of equity accounted investment 488 -
Change in fair value of investments 249,120 52,846
Loss/(gain) on debt for equity swap - 1,404,755
Unrealised foreign exchange movements (468,471) 328,535
Operating cash flows before working capital changes (2,229,043) (2,189,916)
Increase in:
Development costs (1,444,134) (1,929,353)
Trade and other receivables (1,296,294) (840,758)
(Decrease)/(increase) in Trade and other payables (186,641) 87,226
Cash used in operating activities - continuing operations (5,156,112) (4,872,801)
Finance income (233,953) (21,711)
Finance costs 199,751 512,414
Cash used in operating activities (5,190,314) (4,382,098)
Cash flows from investing activities
Additions to property, plant and equipment (26,465) -
Additions to intangible assets (1,000,000)
Deposit paid on land purchase (593,799) -
Investment in related undertakings (356,279) -
Loans advanced to equity accounted investments (2,715,253) (492,000)
Loans advanced to project development undertakings (781,483) (1,283,801)
Cash used in investing activities (4,473,279) (2,775,801)
Cash flows from financing activities
Proceeds from borrowings and lease liabilities 5,981,262 1,391,174
Repayment of borrowings and lease liabilities (212,847) (2,929,858)
Proceeds from issue of ordinary shares - 19,034,484
Share issue costs - (1,266,913)
Loan issue costs (328,769) -
Interest paid (608) -
Net cash generated from financing activities 5,439,038 16,228,887
Net (decrease)/ increase in cash and cash equivalents (4,224,555) 9,070,988
Cash and cash equivalents at the beginning of the financial period 6,446,217 6,270,581
Cash and cash equivalents at the end of the financial period 2,221,662 15,341,569
EQTEC plc
Notes to the unaudited condensed consolidated financial statements
1. GENERAL INFORMATION
The unaudited interim condensed consolidated financial statements of EQTEC plc
("the Company") and its subsidiaries ("the Group") for the six months ended 30
June 2022 were authorised for issue in accordance with a resolution of the
directors on 28 September 2022.
EQTEC plc ("the Company") is a company domiciled in Ireland. The Company's
registered office is at Building 1000, City Gate, Mahon, Cork T12 W7CV,
Ireland. The Company's shares are quoted on the AIM market of the London Stock
Exchange plc.
The Group is a waste-to-value group, which uses its proven proprietary
Advanced Gasification Technology to generate safe, green energy from nearly 60
different kinds of feedstock such as municipal, agricultural and industrial
waste, biomass, and plastics. The Group collaborates with waste operators,
developers, technologists, EPC contractors and capital providers to build
sustainable waste elimination and green energy infrastructure.
Our income currently comes from the following streams: gasification technology
sales including software, engineering & design and other related services;
maintenance income from operating plants; and we receive development fees from
projects where we invest development capital. In the future we expect to
receive potential revenue from licensing opportunities and revenue from live
operations where EQTEC has an equity stake in a plant.
2. BASIS OF PREPERATION
The unaudited interim condensed consolidated financial statements
are for the six months ended 30 June 2022 and are presented in Euro, which is
the functional currency of the parent company. They have been prepared on a
going concern basis in accordance with International Accounting Standard (IAS)
34 Interim Financial Reporting.
The annual financial statements of the group are prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the EU. The
condensed set of financial statements has been prepared applying the
accounting policies and presentation that were applied in the preparation of
the Company's published consolidated financial statements for the financial
year ended 31 December 2021, except for the adoption of new standards
effective as of 01 January 2022. The Group has not early adopted any other
standard, interpretation or amendment that has been issued but is not yet
effective.
The financial information contained in this interim statement, which is
unaudited, does not constitute statutory accounts as defined by the Companies
Act, 2014. The interim condensed consolidated financial statements do not
include all the information and disclosures required in the annual financial
statements and should be read in conjunction with the Group's financial
statements for the financial year ended 31 December 2021. The financial
statements of the Group were prepared in accordance with IFRSs as adopted by
the European Union and can be found on the Group's website at www.eqtec.com
(http://www.eqtec.com) .
The financial information for the six months ended 30 June 2022 and the
comparative financial information for the six months ended 30 June 2021 have
not been audited or reviewed by the Company's auditors pursuant to guidance
issued by the Auditing Practices Board. The comparative figures for the
financial year ended 31 December 2021 are not the Group's statutory accounts
for that financial year. Those accounts have been reported on by the Company's
auditor and will be delivered to the Company's Registration Office in due
course. The audit report on those statutory accounts
was unqualified.
The Group incurred a loss on continuing operations of €2,280,362 (1H 2021:
€4,038,562) during the six-month period ended 30 June 2022 and had net
current assets of €7,578,894 (31 December 2021: €12,656,270) and net
assets of €40,864,577 (31 December 2021: €43,380,299) at 30 June 2022.
Going concern
The unaudited interim financial statements have been prepared on the going
concern basis, which assumes that the Company will have sufficient funds
available to enable them to continue to trade for the foreseeable future.
During July 2022 the Company raised £3.75 million (before expenses) by way of
a Placing and Retail Offer. The directors consider that this is sufficient
funding for the Company to continue as a going concern beyond the twelve
months of the date of this report.
The directors are confident that the funding received by the Company in June
2022 will ensure that it will continue as a going concern and that there will
be sufficient funding in the Company to continue to support its activities for
the foreseeable future being not less than twelve months from the date of
approval of these financial statements. The directors have therefore prepared
the financial statements on a going concern basis.
The financial statements do not include any adjustments that would arise if
the Company were unable to continue as a going concern.
3. BASIS OF CONSOLIDATION
The unaudited interim condensed consolidated financial statements include the
financial statements of the Group and all subsidiaries. The financial period
ends of all entities in the Group are coterminous.
EQTEC plc
Notes to the unaudited condensed consolidated financial statements
4. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies used in preparing the unaudited interim
condensed consolidated financial information are consistent with those
disclosed in the Annual Report and Accounts of EQTEC plc for the financial
year ended 31 December 2021, except for the amendment to the development
assets policy and the adoption of new standards and interpretations and
revisions of existing standards as of 1 January 2022 noted below:
New/revised standards and interpretations adopted in 2022
The following amendments to existing standards and interpretations were
effective in the period to 30 June 2022, but were either not applicable or did
not have any material effect on the Group:
· Amendments to IFRS 3 Reference to the Conceptual Framework;
· Amendments to IFRS 16: COVID-19 Rent Related Concessions beyond 30
June 2021;
· Amendments to IAS 16 Property, Plant and Equipment: Proceeds before
Intended Use;
· Amendments to IAS 37 Onerous Contracts - Costs of fulfilling a
contract;
· Annual improvements to IFRS Standards 2018-2020 cycle Amendments to
IFRS 1 First time adoption of International Financial Reporting Standards,
IFRS 9 Financial Instruments, IFRS 16 Leases and IAS 41 Agriculture;
The directors do not expect the adoption of the above amendments and
interpretations to have a material effect on the interim condensed financial
statements in the period of initial application.
5. ESTIMATES
The preparation of the interim condensed consolidated financial statements
requires management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of certain assets,
liabilities, revenues and expenses together with disclosure of contingent
assets and liabilities. Estimates and underlying assumptions are reviewed on
an on-going basis. Revisions of accounting estimates are recognised in the
period in which the estimate is revised.
The judgements, estimations and assumptions applied in the interim financial
statements, including the key sources of estimation uncertainty, were the same
as those applied in the Group's last annual financial statements for the
financial year ended 31 December 2021.
6. SEGMENT INFORMATION
Information reported to the chief operating decision maker for the purposes of
resource allocation and assessment of segment performance focuses on the
products and services sold to customers. The Group's reportable segments under
IFRS 8 Operating Segments are as follows:
Technology Sales: Being the sale of Gasification Technology and associated
Engineering and Design Services;
Power Generation: Being the development and operation of renewable energy
electricity and heat generating plants.
The chief operating decision maker is the Chief Executive Officer. Information
regarding the Group's current reportable segment is presented below. The
following is an analysis of the Group's revenue and results from continuing
operations by reportable segment:
Segment Revenue Segment Profit/(Loss)
6 months ended 6 months ended
30 June 2022 30 June 2021 30 June 2022 30 June 2021
€ € € €
Technology Sales 2,981,006 481,720 (536,346) (427,114)
Power Generation - - (63) (185)
Total from continuing operations
2,981,006 481,720 (536,409) (427,299)
Central administration costs and directors' salaries (1,689,063) (1,783,089)
Impairment of project costs (1,872) -
Other gains and losses - (1,404,755)
Foreign currency gains/(losses) 253,214 123,044
Share of loss of equity accounted investments (7,322) (2,914)
Gains from sales to equity accounted investments deferred (83,504) -
Loss on revaluation of equity accounted investment (488) -
Change in fair value of investments (249,120) (52,846)
Finance income 233,953 21,711
Finance costs (199,751) (512,414)
Loss before taxation (continuing operations) (2,280,362) (4,038,562)
EQTEC plc
Notes to the unaudited condensed consolidated financial statements
6. SEGMENT INFORMATION - continued
Revenue reported above represents revenue generated from associated
undertakings and external customers. Inter-segment sales for the financial
period amounted to €Nil (2021: €Nil). Included in revenues in the
Technology Sales Segment are revenues of €2,550,000 (2021: €Nil) which
arose from sales to associate undertakings and joint ventures of EQTEC plc.
Segment profit or loss represents the profit or loss earned by each segment
without allocation of central administration costs and directors' salaries,
other operating income, share of losses of jointly controlled entities,
investment revenue and finance costs. This is the measure reported to the
chief operating decision maker for the purposes of resource allocation and
assessment of segment performance.
Other segment information: Depreciation and amortisation Additions to non-current assets
6 months ended 6 months ended
30 June 2022 30 June 2021 30 June 2022 30 June 2021
€ € € €
Technology sales 61,794 41,732 26,465 -
Power Generation - - - -
Head Office 117,563 17,864 - 2,658,570
179,357 59,596 26,465 2,658,570
The Group operates in four principal geographical areas: Republic of Ireland
(country of domicile), the European Union, United States and the United
Kingdom. The Group's revenue from continuing operations from external
customers and information about its non-current assets* by geographical
location are detailed below:
Revenue from Associates and External Customers Non-current assets*
6 months ended 6 months
ended As at As at
30 June 2022 30 June 2021 30 June 2022 31 December 2021
€ € € €
Republic of Ireland - - - -
European Union 2,981,006 481,720 2,620,797 2,720,427
United States - - - -
United Kingdom - - 90,144 147,808
2,981,006 481,720 2,710,941 2,868,235
*Non-current assets excluding goodwill, financial instruments, deferred tax
and investment in jointly controlled entities and associates.
The management information provided to the chief operating decision maker does
not include an analysis by reportable segment of assets and liabilities and
accordingly no analysis by reportable segment of total assets or total
liabilities is disclosed.
7. OTHER GAINS AND LOSSES 6 months ended 6 months ended
30 June 2022 30 June 2021
€ €
Gain/(Loss) on debt for equity swap - (1,404,755)
During the financial period the Group extinguished some of its borrowings by
issuing equity instruments. In accordance with IFRIC 19 Extinguishing
Financial Liabilities with Equity Instruments, the gain recognised on these
transactions was €Nil (H1 2021: loss of €1,404,755).
8. INCOME TAX 6 months ended 6 months ended
30 June 2022 30 June 2021
€ €
Income tax expense comprises:
Current tax expense - -
Deferred tax credit - -
Adjustment for prior financial periods - -
Tax expense - -
An income tax charge does not arise for the six months ended 30 June 2022 or
30 June 2021 as the effective tax rate applicable to expected total annual
earnings is Nil as the Group has sufficient tax losses carried forward to
offset against any taxable profits. A deferred tax asset as not been
recognised for the losses coming forward.
EQTEC plc
Notes to the unaudited condensed consolidated financial statements
9. LOSS PER SHARE 6 months ended 6 months ended
30 June 2022 30 June 2021
€ per share € per share
Basic loss per share
From continuing operations (0.0003) (0.0005)
From discontinued operations - -
Total basic loss per share (0.0003) (0.0005)
Diluted loss per share
From continuing operations (0.0003) (0.0005)
From discontinued operations - -
Total diluted loss per share (0.0003) (0.0005)
The loss and weighted average number of ordinary shares used in the
calculation of the basic and diluted loss per share are as follows:
6 months ended 6 months ended
30 June 2022 30 June 2021
€ €
Loss for period attributable to equity holders of the parent (2,280,379) (4,037,800)
Profit for the period from discontinued operations used in the calculation of
basic earnings per share from discontinued operations
- -
Losses used in the calculation of basic loss per share from continuing
operations
(2,280,379) (4,037,800)
No. No.
Weighted average number of ordinary shares for
the purposes of basic loss per share 8,599,024,945 7,358,418,295
Weighted average number of ordinary shares for
the purposes of diluted loss per share 8,599,024,945 7,358,418,295
Dilutive and anti-dilutive potential ordinary shares
The following potential ordinary shares were excluded in the diluted earnings
per share calculation as they were anti-dilutive.
30 June 2022 30 June 2021
Share warrants in issue 462,472,488 596,005,793
Share options in issue 67,304,542 67,304,542
Convertible loans 93,457,944 -
LTIP Shares in issue 23,045,003 -
Total anti-dilutive shares 646,279,977 663,310,355
Events after the balance sheet date
802,757,286 ordinary shares were issued after the period end. If these shares
were in issue prior to 30 June 2022, they would have affected the calculation
of the weighted average number of shares in issue for the purposes of
calculating both the basic loss per share and diluted loss per share by
133,792,881.
10. PROPERTY, PLANT AND EQUIPMENT
During the six-month period ended 30 June 2022, the Group acquired property,
plant and equipment to the value of €26,465.
11. GOODWILL
Included are the following amounts relating to goodwill:
30 June 2022 31 December 2021
Cost € €
At start and at end of the financial period 16,710,497 1
6
,
7
1
0
,
4
9
7
Accumulated impairment losses
At start of the financial period 1,427,038 1
,
4
2
7
,
0
3
8
Impairment losses -
-
At end of the financial period 1,427,038 1,427,038
Carrying value
At start and at end of the financial period 15,283,459 1
5
,
2
8
3
,
4
5
9
EQTEC plc
Notes to the unaudited condensed consolidated financial statements
12. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Investments accounted for using the equity method are made up as follows:
30 June 2022 31 December 2021
€ €
Investment in associate undertakings 7,714,902 6,951,064
Investment in joint ventures 3,372,481 1,123,120
11,087,383 8,074,184
The carrying amount of equity-accounted investments has changed as follows in
the six months to June 2022:
Associate Joint
Undertakings Ventures
6 months ended 6 months ended
30 June 2022 30 June 2022
€ €
Beginning of the period 6,951,064 1,123,120
Loans advanced in period 444,478 2,270,775
Interest accrued on loans in period 122,728 63,522
Share of profit/loss on equity-accounted investments in period 4,080 (11,402)
Adjustment in respect of unrealised gains on sales from the Group (8,709) (74,795)
Loss on revaluation of equity accounted investment - (488)
Exchange differences 201,261 1,749
7,714,902 3,372,481
13. DEVELOPMENT ASSETS
30 June 2022 31 December 2021
€ €
Costs associated with project development 5,015,864 3,455,496
Loan receivable from project development undertakings 3,748,458 3,000,469
The Group uses its expertise in engineering, project management, permitting,
planning and financing to develop waste to value projects. Once the projects
reach a certain level of maturity, third party investors are allowed invest in
the project SPV. The Group charges a premium to the project SPV for the
development services over and above the costs incurred in developing the
project.
Costs associated with project development, including loans advanced to project
undertakings (together "Total Project Costs") comprise expenses associated
with engineering, project management, permitting, planning, financing and
other services, incurred in furthering the development of a project towards
financial close. Total Project Costs set out above represent the cost of
delivery of project development services and are transferred to cost of sales
when the project SPV is invoiced by the Group for project development work.
As described in Note 20, the Company has cancelled its share purchase
agreement to purchase shares in Shankley Biogas Limited. The exclusivity
payment paid of £100,000 with respect to this (classified as financial assets
on 31 December 2021 (€119,119)) has been reclassified to project development
assets at 30 June 2022 (€116,234).
Included in loans receivable from project development undertakings is an
amount of €550,000 which is receivable, along with accrued interest, 18
months from the date of drawdown. Interest is charged at 15% per annum. At 30
June 2022, the loan is valued at €654,589 (31 December 2021: €613,678).
The remaining loans receivables were issued with no interest and no fixed
repayment date.
EQTEC plc
Notes to the unaudited condensed consolidated financial statements
14. TRADE AND OTHER RECEIVABLES
Included in trade and other receivables is an amount of €883,382 (31
December 2021: €309,708) being a deposit towards the purchase of land on
which the proposed up to 25 MWe Billingham waste gasification and power plant
at Haverton Hill, Billingham, UK, will be constructed. On 15 February 2022, a
further payment of £250,000, along with a further fee towards the Variation
was made with respect to an agreement ("the Variation") to extend the
existing, conditional Land Purchase Agreement.
15. EQUITY
During the 6-month period ended 30 June 2022, Nil shares (6 months ended 30
June 2021:1,450,322,620 shares) were issued as follows:
Amounts of shares 6 months ended 6 months ended
30 June 2022 30 June 2021
Ordinary Shares of €0.001 each issued and fully paid
- Beginning of the period 8,599,024,945 6,977,439,598
- Issued on exercise of warrants for cash - 156,773,543
- Issued on exercise of employee share warrants for cash - 46,884,149
- Issued in settlement of suppliers and other creditors - 152,075,311
- Issued in exchange for shares in other entity - 27,932,961
- Share issue for cash - public and private placement - 1,066,666,656
Total Ordinary shares of €0.001 each authorised, issued and fully paid at
the end of the period
8,599,024,945 8,427,772,218
16. BORROWINGS
During the six months ended 30 June 2022, the following occurred in relation
to debt securities:
On 29 March 2022, the Company announced that it had agreed an unsecured loan
facility ("Loan Facility") of up to £10 million with Riverfort Global
Opportunities PCC Limited and YA II PN, Ltd (together, the "Lenders"). The
Loan Facility may be drawn down in multiple instalments with the Initial
Advance of £5million (net of a commitment fee of 2.5% of the aggregate amount
of the Loan Facility) that was received on 29 March 2022. Each instalment of
the Loan Facility will have a maturity date of 12 months from the date of
advance with repayments of principal made on a monthly basis, as set out in a
closing statement to be agreed at the time of each advance. The Loan Facility
will accrue a fixed interest coupon equivalent to 7.5% of the Initial Advance
and of any further advance, payable on a quarterly basis.
The Company and the Lenders may mutually agree that the Company satisfies any
payment of the amounts due under the Loan Agreement by the issue of ordinary
shares of €0.001 each in the capital of the Company ("Ordinary Shares") at a
reference price as set out in the Loan Facility documents.
The Company and the Lenders have also entered into a performance agreement
pursuant to which the Company may pay a performance fee to the Lenders if the
share price of the Company significantly increases whilst the facility is in
place. The requirement to make any payments under the performance agreement
will only come into effect 90 days following the entering into of the Loan
Facility, should the loan not be repaid within 90 days.
The Company will use the proceeds of the Loan Facility to fund further growth
and development activities in its key markets, and for general working capital
purposes.
EQTEC plc
Notes to the unaudited condensed consolidated financial statements
17. LEASES
Lease liabilities are presented in the statement of financial position as
follows:
30 June 2022 31 December 2021
€ €
Current 155,758 200,853
Non-current - 56,855
155,758 257,708
The Group has a lease for its offices in Iberia, Spain and London, United
Kingdom. The lease liabilities are secured by the related underlying asset.
Further minimum lease payments at 30 June 2022 were as follows:
Minimum lease payments due
Within 1 year 1-2 years 2-3 years 3-4 years 4-5 years After 5 years Total
€ € € € € € €
30 June 2022
Lease payments 157,789 - - - - - 157,789
Finance charges (2,031) - - - - - (2,031)
Net Present Values 155,758 - - - - - 155,758
31 December 2021
Lease payments 205,838 57,177 - - - - 263,015
Finance charges (4,985) (322) - - - - (5,307)
Net Present Values 200,853 56,855 - - - - 257,708
18. TRADE AND OTHER PAYABLES
Included in trade and other payables at 30 June 2022 is an amount of
€2,557,158 (£2,200,000) (31 December 2021: €2,977,963 (£2,500,000))
relating to consideration payable under the share purchase contract to acquire
Logik WTE Limited. On 01 April 2022 £300,000 was paid with respect to this
share purchase contract.
19. RELATED PARTY TRANSACTIONS
Transactions with associate undertakings and joint ventures
The following aggregated transactions were made with associate undertakings
and joint ventures in the six months ended 30 June 2022:
6 months ended 6 months ended
30 June 2022 30 June 2021
Loans to associated undertakings and joint ventures € €
Beginning of the financial period 3,621,307 -
Loans advanced in period 2,715,253 482,000
Interest accrued on loans in period 186,251 687
Exchange differences 203,103 -
At end of the financial period 6,725,914 482,687
6 months ended 6 months ended
30 June 2022 30 June 2021
Sales of goods and services € €
Technology sales 2,550,000 -
Re-charge of costs - 93,148
EQTEC plc
Notes to the unaudited condensed consolidated financial statements
19. RELATED PARTY TRANSACTIONS - Continued
Transactions with associate undertakings and joint ventures - continued
30 June 2022 31 December 2021
Period-end balances € €
Included in trade receivables 4,951,310 4,243,628
Re-charge of costs 27,488 27,508
Transactions with key management
Key management of the Group are the members of EQTEC plc's board of directors.
There have been no non-remuneration transactions with key management in the
six months ended 30 June 2022.
Transactions with other parties
The Group is in the process of acquiring a 32% stake in Logik WTE Limited.
During the six-month period ended 30 June 2022, the Group advanced €593,897
(or £500,083) (H1 2021: €741,702 (or £643,962)) to Logik WTE Limited to
advance the development of the Deeside project. Included in the loans
receivable from project development undertakings is €2,082,441 (31 December
2021: €1,538,420) of receivable from Logik WTE Limited. This loan was issued
with no interest and no fixed repayment date; however, the Group can elect to
use this investment raised directly at the Project SPV level as consideration
towards the acquisition of Logik WTE Limited.
During the six-month period ended 30 June 2022, the Group advanced €187,586
(or £157,954) (H1 2021: €339,930 (or £295,135)) to Shankley Biogas Limited
to advance the development of the Southport project. Included in the loans
receivable from project development undertakings is €1,011,428 (31 December
2021: €848,371) of receivable from Shankley Biogas Limited. This loan was
issued with no interest and no fixed repayment date.
20. EVENTS AFTER THE BALANCE SHEET DATE
Share placements
On 13 July 2022, the Company announced its intention to raise a minimum of £3
million before expenses, by way of (i) a placing of new Ordinary Shares
("Placing Shares") at a fixed price of 0.5 pence per share (the "Issue Price")
to institutional and other investors (the "Placing"), (ii) an offer for
subscription of new Ordinary Shares by PrimaryBid ("PrimaryBid Shares") at the
Issue Price to retail investors (the "PrimaryBid Offer"), and (iii) direct
subscriptions with the Company of new Ordinary Shares (the "Subscription" and,
together with the Placing and the PrimaryBid Offer, the "Fundraising").
On 14 July 2022, the Company announced that the Fundraising raised £3.75
million (before expenses) through the placing of 233,385,650 Placing Shares,
subscription for 73,614,350 PrimaryBid Shares and subscription for 443,000,000
Subscription Shares, in each case at an Issue Price of 0.5 pence per share. In
addition, a further 32,657,286 shares were issued to suppliers at the Issue
Price to settle debts totalling £163,286.
On 01 September 2022, the Company announced that it is issuing, in aggregate,
20,100,000 new Ordinary Shares (the "Supplier Shares") to certain strategic
service providers providing business development and advisory services to the
Group in satisfaction of fees due to them. The issue of the Supplier Shares
will further align the interests of strategic advisers and service providers
with those of the Company and its shareholders.
Deeside Project Share Purchase Agreement and Sale of Project:
On 01 September 2022, the Company announced that, further to its announcement
on 30 June 2022, Deeside WTV Limited ("Deeside WTV"), a wholly owned
subsidiary of EQTEC, and Logik Developments Limited ("Logik") were in advanced
discussions with a third party for the sale of Deeside Project.
On 26 September 2022, the Company announced that the Company, Deeside WTV and
Logik have signed non-binding Heads of Terms ("HoTs") for the acquisition by a
publicly quoted corporate investor ("Investor") of the project at Deeside,
Flintshire, UK that comprises a waste reception plant, anaerobic digestion
facility and EQTEC Advanced Gasification Technology facility (the "Project").
To facilitate this transaction, Deeside WTV and Logik have agreed to extend
the longstop date specified in the Share Purchase Agreement they signed on 07
December 2020 (the "SPA"), to 28 February 2023 (the "Long Stop Date").
Rationalisation and focus of Southport Project Ownership:
On 21 September 2022, the Company announced that it has executed with Rotunda
Group Limited ("Rotunda") and certain of its subsidiaries a series of legal
agreements to accelerate development of the Southport Hybrid Energy Park (the
"Project"), absolve the Company of the requirement to purchase Shankley Biogas
Limited ("Shankley") for Phase 1 of the Project and secure the Company's right
to develop Phase 2 of the Project through an Option to Lease, valid through
August 2025, signed between a newly-created and wholly-owned subsidiary, EQTEC
Southport H2 MDC Limited ("Southport H2") and Rotunda. Following the
cancellation of the Share Purchase Agreement with Rotunda, the Company will
secure the outstanding £2,500,000 of development services fees in the form of
a secured convertible loan note ("CLN") with Shankley. The CLN, which bears
no interest, is due to be paid to the Company, following sale of or investment
into Shankley by any third party.
No other adjusting or significant non-adjusting events have occurred until the
date of authorisation of these financial statements.
EQTEC plc
Notes to the unaudited condensed consolidated financial statements
21. APPROVAL OF FINANCIAL STATEMENTS
The condensed consolidated financial statements for the six months ended 30
June 2022, which comply with IAS 34, were approved by the Board of Directors
on 28 September 2022.
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