REG - Nanosynth Group PLC - Results for year ended 31 Dec 2021 & Notice of AGM
30/06/2022 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220630:nRSd7054Qa&default-theme=true
RNS Number : 7054Q Nanosynth Group PLC 30 June 2022
30 June 2022
nanosynth group plc
("nanosynth", the "Company" or the "Group")
Results for the year ended 31 December 2021 and Notice of AGM
nanosynth, the AIM quoted company specialising in the synthesis and
application of nanoparticles to create new and improve existing products, is
pleased to announce its final audited results for the year ended 31 December
2021.
The Company also announces that the Company's Annual General Meeting ('AGM')
will be held at 9am on 22 July 2022 at the London Marriott Hotel Maida Vale,
Plaza Parade, Maida Vale, NW6 5RP.
The Company's annual report and accounts, Notice of AGM and Forms of Proxy
will be dispatched to shareholders later today and will shortly be available
on the website at www.nanosynthgroup.com
CHAIRMAN'S STATEMENT
Overview
The last eighteen months has been a period of major change at nanosynth group
plc (nnn) with a new name, a new board and a new direction. During the year
the Group refocused on the development and commercialisation of its core
nano-particle platform technology and dispensed with non-core activities,
including the return of Cloudveil Limited to its founders and, the disposal of
the majority of Gyrometric Systems Ltd. The Group also announced a strategic
review and has emerged in a stronger position than this time last year with a
healthy balance sheet, a clear and achievable business strategy and a new team
positioned to deliver against the Group's strategic goals.
Board changes
The Company implemented a number of board changes in the period. The major
challenge for the new board was a complete strategic review. The Board was
also keen to build on the innovations behind the anti-viral face mask and
develop further products using the same technology, alongside the development
of products for the agricultural sector, which had been the founding principle
behind Pharm2Farm (P2F).
Financials
With a year of substantial change and complete refocus, the results for the
2021 financial year provide limited meaningful insight into the future of the
business and in fact incorporate costs associated with the required
strategic shift.
Operating expenses related to continuing operations before current asset
impairments increased to £2,538k from £960k in 2020 reflecting the greater
activity within the Group and incorporating a number of one-off costs required
to reposition the business. Revenue from continuing operations increased to
£209k in 2021 from £1k in 2020, which was derived solely from the P2F
division.
During the period the Company raised £939,225 net of costs through the issue
of new shares as a result of the exercise of warrants and options. In
addition, £1,505,000 was received during this financial year in respect of
shares issued in the previous period.
Cash as at 31(st) December 2021 was £3.8m, and at the date of this report,
the Group had net cash of £1.8m which is considered to be more than
sufficient to cover the expected working capital requirements of the Group for
at least the next twelve months.
Strategic review
As a result of the deep strategic review, the decision was made to evolve the
Group's mask strategy to focus on licensing the core anti-viral technology
into the market rather than manufacturing masks directly. As a result of
market changes it was not considered financially viable to continue
manufacturing masks and, as previously notified, the mask machine was disposed
of and the existing stock has been fully provided for in these accounts given
the likely incremental cost of readying that stock for commercial sale. The
remaining masks that have been manufactured will be made available to good
causes including local hospitals and care homes.
The ground-breaking technology that was developed for the anti-viral face
masks is being further refined for use in the HVAC market through a joint
venture company, Virosynth, that has been formed with a leading vertically
integrated media manufacturer, Volz Luftfilter GmbH. Through the JV
arrangement, nanosynth expects to benefit from the heightened awareness of,
and demand for, cleaner air in all public environments.
Beyond HVAC, there are seven additional specific market verticals that have
been identified for the development and application of nanoparticle technology
with strategic partners. These areas include animal health and wellbeing,
cosmetics, medical, plants, food and drink, functional coatings and
electronics. In each of these areas, specific use-cases and development
projects have been defined and strategic partners have been identified. The
Company is currently in discussion with a number of major companies and
trading partners within the seven identified markets and will be progressing
these discussions in order to target the conclusion of successful commercial
agreements within the second half of 2022, galvanising the confidence and
clear value the Board see in nanosynth group and its new commercial
strategy.
At this point, it is noted the future strategy shared on 1 June 2022 is not
impacted by the current situation surrounding Ukraine nor the associated
sanctions imposed on Russia other than the global shift in commodity prices, a
risk we aim to manage with our target trading partners and supply agreements.
Richard Clarke
Non-Executive Chairman
29 June 2022
Mark Duffin, Chief Executive of nanosynth, commented:
"I would like to thank all of the Company's shareholders for their support.
The Board is firmly focused on delivering concrete agreements with commercial
parties and looks forward to updating shareholders as it progresses its
various initiatives. At the beginning of the year, the Board was considering
various M&A opportunities however, in the current economic climate this is
not now a near term focus though the Company will always consider
opportunities where it can deliver value to shareholders and build scale to
its operations. After the groundwork that has been carried out during the
year to date, I am confident that the second half of 2022 will see further
positive developments at nanosynth and we look forward with renewed optimism."
ENQUIRIES:
nanosynth Group plc via IFC Advisory
Mark Duffin (Chief Executive Officer)
SP Angel Corporate Finance LLP (Nominated Adviser & Broker) +44 20 3470 0470
Stuart Gledhill
Caroline Rowe
IFC Advisory Ltd (Financial PR & IR) +44 20 3934 6630
Graham Herring
Zach Cohen
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2021
Note 2021 2020
£ £
Revenue from contracts with customers 5 208,778 600
Cost of sales (164,027) (14,943)
Gross profit/(loss) 44,751 (14,343)
Administrative expenses 6 (2,537,934) (960,357)
Other operating income 2,000 9,841
Impairments 6 (687,656) -
Operating loss (3,178,839) (964,859)
Finance costs 10 (545) (4,085)
Finance income - 39
Loss before income tax (3,179,384) (968,905)
Income tax 11 - -
Loss for the year from continuing operations (3,179,384) (968,905)
Loss for the year from discontinued operations 12 (173,266) (479,817)
Total comprehensive income for the year (3,352,650) (1,448,722)
Loss and total comprehensive income attributable to:
Equity holders of the parent (3,340,894) (1,416,088)
Non-controlling interests (11,756) (32,634)
Earnings per ordinary share attributable to owners of the parent during the 13
year (expressed in pence per share)
Basic and diluted - continuing operations (0.15) (0.12)
Basic and diluted - discontinued operations (0.01) (0.05)
Basic and diluted - total (0.16) (0.17)
The loss for the financial year dealt with in the financial statements of the
Parent Company, nanosynth group plc, was £1,445,525 (2020 £1,543,714). As
permitted by Section 408 of the Companies Act 2006, no separate statement of
comprehensive income is presented in respect of the Parent Company.
The notes form part of these Financial Statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2021
Note 2021 2020
£ £
Non-current assets
Intangible assets 14 1,764,419 1,764,419
Property, plant and equipment 15 42,391 25,661
Total non-current assets 1,806,810 1,790,080
Current Assets
Trade and other receivables 18 80,348 1,925,987
Corporation tax 1,396 1,396
Inventories 16,679 63,491
Cash and cash equivalents 19 3,760,992 3,741,135
Total current assets 3,859,415 5,732,009
Total assets 5,666,225 7,522,089
Equity attributable to owners of the parent
Share capital 20 5,805,331 5,795,751
Share premium 20 13,674,215 12,445,569
Convertible loan stock 22 - 2,000
Other reserves 23 1,405,836 1,675,276
Translation reserve 92,181 92,181
Retained loss (16,017,896) (13,033,293)
equity ATTRIBUTABLE TO OWNERS OF THE PARENT 4,959,667 6,977,484
Non-controlling interests 24 - (80,679)
TOTAL EQUITY 4,959,667 6,896,805
Current liabilities
Trade and other payables 25 462,483 333,087
Social security and other taxes 244,075 242,322
Lease liabilities 26 - 29,500
Total current liabilities 706,558 604,909
Non-current liabilities
Lease liabilities 26 - 7,375
Provisions 27 - 13,000
Deferred tax liabilities 28 - -
Total non-current liabilities - 20,375
TOTAL LIABILITIES 706,558 625,284
TOTAL EQUITY AND LIABILTIES 5,666,225 7,522,089
The notes form part of these Financial Statements.
These Financial Statements were approved by the Board of Directors and
authorised for issue on 29 June 2022 and were signed on its behalf by:
Mark Duffin
Chief Executive Officer
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 December 2021
Company number: 09109008
Note 2021 2020
£ £
Non-current assets
Property, plant and equipment 15 15,706 3,625
Investment in subsidiary undertakings 16 60,051 60,000
Trade and other receivables 18 1,858,024 428,974
Total non-current assets 1,933,781 492,599
Current Assets
Trade and other receivables 18 31,381 1,558,026
Cash and cash equivalents 19 3,719,134 3,590,521
Total current assets 3,750,515 5,148,547
TOTAL ASSETS 5,684,296 5,641,146
Equity attributable to shareholders
Share capital 20 5,805,331 5,795,751
Share premium 20 13,674,215 12,445,569
Convertible loan stock 22 - 2,000
Other reserves 23 165,835 435,275
Retained loss (14,323,846) (13,234,612)
Total equity 5,321,535 5,443,983
Current liabilities
Trade and other payables 25 308,408 192,623
Social security and other taxes 54,353 4,540
Total current liabilities 362,761 197,163
TOTAL LIABILITIES 362,761 197,163
TOTAL EQUITY AND LIABILITIES 5,684,296 5,641,146
The notes form part of these Financial Statements.
These Financial Statements were approved by the Board of Directors and
authorised for issue on 29 June 2022 and were signed on its behalf by:
Mark Duffin
Chief Executive Officer
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at 31 December 2021
Share Other reserves Translation reserve Retained Total Non- controlling Total equity
capital Share Convertible £ £ loss £ interests £
£ premium loan stock £ £
£ £
As at 1 January 2020 5,128,124 6,822,694 103,000 (475,153) 92,181 (11,642,051) 28,795 (48,045) (19,250)
Loss and total comprehensive income for the year - - - - - (1,416,088) (1,416,088) (32,634) (1,448,722)
Shares issued(1) 667,627 5,612,964 (71,752) - - - 6,208,839 - 6,208,839
Warrants issued - - - 10,712 - - 10,712 - 10,712
Warrants exercised - 9,911 - (9,911) - - - - -
Convertible loan stock issued(2) - - 4,085 - - - 4,085 - 4,085
Convertible loan stock redeemed - - (33,333) - - - (33,333) - (33,333)
Share based payments arising - - - 434,474 - - 434,474 - 434,474
Share based payments expired - - - (24,846) - 24,846 - - -
Merger relief on acquisition - - - 1,740,000 - - 1,740,000 - 1,740,000
As at 31 December 2020 5,795,751 12,445,569 2,000 1,675,276 92,181 (13,033,293) 6,977,484 (80,679) 6,896,805
As at 1 January 2021 5,795,751 12,445,569 2,000 1,675,276 92,181 (13,033,293) 6,977,484 (80,679) 6,896,805
Loss and total comprehensive income for the year - - - (3,340,894) (3,340,894) (11,756) (3,352,650)
- -
Shares issued(1) 9,580 1,149,662 - - - - 1,159,242 - 1,159,242
Disposal of subsidiary - - - - - - - 92,435 92,435
Interest waived - - (2,000) - - - (2,000) - (2,000)
Warrants exercised - 801 - (801) - - - - -
Share based payments arising - - - 165,835 - - 165,835 - 165,835
Share based payments exercised - 78,183 - (434,474) - 356,291 - - -
As at 31 December 2021 5,805,331 13,674,215 - 1,405,836 92,181 (16,017,896) 4,959,667 - 4,959,667
(1)Shares issued are net of costs
( )
(2)Convertible loan stock includes cumulative interest payable by the issue of
shares
The notes form part of these Financial Statements.
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
As at 31 December 2021
Share Share Convertible Share option and warrant reserve Retained Total
capital premium loan stock £ loss £
£ £ £ £
As at 1 January 2020 5,128,124 6,822,694 103,000 24,846 (11,715,744) 362,920
Loss and total comprehensive income for the year - - - - (1,543,714) (1,543,714)
Shares issued(1) 667,627 5,612,964 (71,752) - - 6,208,839
Convertible loan stock issued(2) - - 4,085 - - 4,085
Warrants issued - - - 10,712 - 10,712
Warrants exercised - 9,911 - (9,911) - -
Convertible loan stock redeemed - - (33,333) - - (33,333)
Share based payments arising - - - 434,474 - 434,474
Share based payments expired - - - (24,846) 24,846 -
As at 31 December 2020 5,795,751 12,445,569 2,000 435,275 (13,234,612) 5,443,983
As at 1 January 2021 5,795,751 12,445,569 2,000 435,275 (13,234,612) 5,443,983
Loss and total comprehensive income for the year - - - - (1,445,525) (1,445,525)
Shares issued(1) 9,580 1,149,662 - - - 1,159,242
Interested waived - - (2,000) - - (2,000)
Warrants exercised - 801 - (801) - -
Share based payments arising - - - 165,835 - 165,835
Share based payments exercised - 78,183 - (434,474) 356,291 -
As at 31 December 2021 5,805,331 13,674,215 - 165,835 (14,323,846) 5,321,535
(1) Shares issued are net of costs
(2) Convertible loan stock includes cumulative interest payable by the issue
of shares.
The notes form part of these Financial Statements.
CONSOLIDATED CASH FLOW STATEMENT
As at 31 December 2021
Note 2021 2020
£ £
Cash Flows from Operating Activities
Loss for the year on continuing activities (3,179,384) (968,905)
Loss for the year from discontinued operations (173,266) (479,817)
Depreciation of property, plant and equipment 15 13,714 6,900
Amortisation of intangible assets 14 - 14,600
Share based payments 385,852 434,474
Impairments of inventories 586,013 -
Impairments of intangible assets - 363,745
Release from lease liability (16,875) -
Interest income - (39)
Finance costs 10 545 4,085
Interest waived (2,000) -
Loss on disposal of fixed assets 4,629 -
Loss on disposal of discontinued operations 12 68,847 -
Taxation - (120,471)
Increase in inventories (542,120) (4,879)
Decrease/(increase) in trade and other receivables 329,900 (229,024)
Decrease in provisions (13,000) (7,500)
Increase/(decrease) in trade and other payables 214,421 (123,806)
Cash used in operations (2,322,724) (1,110,637)
Income taxes received - 120,471
Interest paid (545) -
Net cash used in operating activities (2,323,269) (990,166)
Cash Flows from Investing Activities
Purchases of property, plant and equipment 15 (37,562) (518)
Interest income - 39
Proceeds from sale of businesses (net of cash held) (43,537) 160,275
Investment in subsidiaries (net of cash acquired) - 15,592
Net cash (used in)/generated from investing activities (81,099) 175,388
Cash Flows from Financing Activities
Repayment of lease liabilities 30 (20,000) (29,500)
Repayment of borrowings 30 - (60,825)
Repayment of loan notes - (33,333)
Issue of shares, net of issue costs 2,444,225 4,604,801
Net cash generated from financing activities 2,424,225 4,481,143
Net increase/(decrease) in cash and cash equivalents 19,857 3,666,365
Cash and cash equivalents at beginning of year 3,741,135 74,770
Cash and cash equivalents at 31 December 19 3,760,992 3,741,135
Non-cash transactions
The principal non-cash transactions relate to:
- Acquisition of subsidiary 17 - 1,800,000
- Loan note conversion (including interest) - 71,752
- 1,871,752
The notes form part of these Financial Statements.
PARENT COMPANY CASH FLOW STATEMENT
As at 31 December 2021
Note 2021 2020
£ £
Cash Flows from Operating Activities
Loss for the year on continuing activities (1,445,525) (1,543,714)
Depreciation of property, plant and equipment 15 4,716 4,350
Share based payments 385,852 434,474
Impairments 18 85,972 640,201
Profit on investment disposal (1) -
Finance costs 10 545 4,085
Interest waived (2,000) -
Decrease)/(increase) in trade and other receivables 20,494 (35,449)
Increase in trade and other payables 165,599 53,006
Cash used in operations (784,348) (443,047)
Interest paid (545) -
Net cash used in operating activities (784,893) (443,047)
Cash Flows from Investing Activities
Purchases of property, plant and equipment 15 (16,797) -
Investment in subsidiaries 16 (51) -
Disposal of subsidiary undertakings proceeds 1 -
Loans to subsidiary undertakings (1,513,872) (542,684)
Net cash used in investing activities (1,530,719) (542,684)
Cash Flows from Financing Activities
Repayment of loan notes - (33,333)
Issue of shares, net of issue costs 2,444,225 4,604,801
Net cash generated from financing activities 2,444,225 4,571,468
Net increase in cash and cash equivalents 128,613 3,585,737
Cash and cash equivalents at beginning of year 3,590,521 4,784
Cash and cash equivalents at 31 December 19 3,719,134 3,590,521
Non-cash transactions
The principal non-cash transactions relate to:
- Acquisition of subsidiary 16 - 60,000
- Loan note conversion (including interest) - 71,752
- 131,752
The notes form part of these Financial Statements.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2021
1. General information
nanosynth group plc (the "Company") and its subsidiaries (together the
"Group") conducted three main activities during the year, as detailed in note
12, two of these were discontinued. The Company is incorporated and domiciled
in the UK and its registered office is 27-28 Eastcastle Street, London W1W
8DH. During the year the company changed its name to reflect the continuing
activity of the Group.
The Company's shares are quoted on the Alternative Investment Market ("AIM")
of the London Stock Exchange plc.
2. Summary of accounting policies
The principal accounting policies applied in the preparation of these
Consolidated Financial Statements are set out below. These policies have been
consistently applied in the year presented, unless otherwise stated.
a) Basis of preparation
These Financial Statements have been prepared with UK-adopted International
Accounting Standards ("UK-adopted IAS") and the Companies Act 2006. These
accounting policies comply with each IAS that is mandatory for accounting
periods ending on 31 December 2021 except for, in order to present fairly the
acquisition of Pharm 2 Farm Limited, the Group has departed from the
requirements within IFRS 3 relating to the value of the consideration as
detailed in note 17.
As a result of the UK leaving the EU, the company has applied UK-adopted
IAS. In the previous year the company applied EU-adopted IFRS. On 1
January 2021 these were identical and no restatements made.
The Financial Statements are presented in GBP (£) rounded to the nearest
pound.
The preparation of financial statements in conformity with IAS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's Accounting
Policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the Financial
Statements are disclosed in Note 4.
b) Going concern basis
At the date of this report the Group had net cash of £1.8m. The Directors
have reviewed the Group's strategy with regard to future investment in its
business.
The Directors have considered the impact of Covid-19 and are closely
monitoring the situation.
The Group's business activities together with the factors likely to affect its
future development performance and position are set out in the Strategic
Report.
For the year ended 31 December 2021, the Group's objectives, policies and
processes for managing its capital, its financial risk management objectives,
details of its financial instruments and its exposure to credit and liquidity
risk can be found in the Strategic Report and in Notes 3 and 29.
Based on these assumptions, the Directors have a reasonable expectation that
the Group and Company have adequate resources to continue in operational
existence for the foreseeable future and therefore have adopted the going
concern basis of preparation in these Financial Statements.
c) New and amended standards
Changes in accounting policy
For the purpose of the preparation of these consolidated financial statements,
apart from that detailed in 2(a) above the Group and Parent Company have
applied all standards and interpretations that are effective for accounting
periods beginning on or after 1 January 2021.
There were no new standards, amendments and interpretations effective for the
first time on or after 1 January 2021 that had a material impact on the Group
or Parent Company.
New standards, interpretations and amendments not yet effective
Standards, amendments and interpretations that have been published and will be
mandatory for accounting periods beginning on or after 1 January 2022 are not
expected to have a material impact on the Group's or Parent Company's results
or shareholders' funds.
d) Basis of consolidation
Subsidiaries are entities controlled by the Group. Control is achieved when
the Group is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its
power over the investee. Specifically, the Group controls an investee if, and
only if, the Group has:
• Power over the investee (i.e. existing rights that give it the current ability
to direct the relevant activities of the investee).
• Exposure, or rights, to variable returns from its involvement with the
investee
• The ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting rights result in
control. To support this presumption and when the Group has less than a
majority of the voting or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing whether it has power over an
investee, including:
• The contractual arrangement with the other vote holders of the investee.
• Rights arising from other contractual arrangements.
• The Group's voting rights and potential voting rights.
Consolidation of a subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the subsidiary. Assets,
liabilities, income and expenses of a subsidiary acquired or disposed of
during the year are included in the consolidated financial statements from the
date the Group gains control until the date the Group ceases to control the
subsidiary. The acquisition method is used to account for the acquisition of
subsidiaries.
Acquisition related costs are expensed as incurred.
The Group measures goodwill at the acquisition date as the excess of the fair
value of the consideration transferred, plus the recognised amount of any
non-controlling interests, less the recognised amount of the identifiable
assets acquired and liabilities assumed. If this consideration is lower than
the fair value of the net assets of the subsidiary acquired, the difference is
recognised in profit or loss.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into line with those used
by other members of the Group. All intercompany transactions and balances
between group entities are eliminated on consolidation.
Transactions with non-controlling interests that do not result in loss of
control are accounted for as equity transactions. Gains or losses on disposals
to non-controlling interests are recorded in equity.
Where considered appropriate, adjustments are made to the financial
information of subsidiaries to bring the accounting policies used into line
with those used by other members of the Group. All intercompany transactions
and balances between Group enterprises are eliminated on consolidation.
The Company's UK subsidiaries use UK GAAP rules to prepare and report their
financial statements. The Group reports using IFRS standards and in order to
comply with the Group's reporting standards, management of these subsidiaries
processed several adjustments to ensure the financial information included at
a Group level complies with IFRS. These subsidiaries will continue to prepare
their company financial statements in line with UK GAAP rules.
e) Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker ("CODM"). The CODM is
deemed to be the Chief Executive Officer and the Chief Financial Officer.
Operating segments are identified on the basis of internal reports that are
regularly reviewed by the CODM to allocate resources and to assess
performance. Using the Group's internal management reporting as a starting
point, only one continuing reporting segment set out in note 5 has been
identified.
The individual financial statements of each Group company are measured in the
currency of the primary economic environment in which it operates (its
functional currency) being US dollar or pounds sterling. For the purpose of
the Group Financial Statements, the results and financial position are
expressed in pounds sterling GBP, which is the presentation currency for the
Group and Company.
f) Discontinued operations
A discontinued operation is a component of the Group's business, the
operations and cash flows of which can be clearly distinguished from the rest
of the Group and which:
• represents a separate major line of business or geographic area of operations;
• is part of a single co-ordinated plan to dispose of a separate major line of
business or geographic area of operations; or
• is a subsidiary acquired exclusively with a view to re-sale.
Discontinued operations are presented in the income statement as a separate
line and are shown net of tax. Comparative information in relation to the
Consolidated Statement of Comprehensive Income and Consolidated Cashflow
Statement has been restated to reflect this presentation.
Foreign currencies
Functional and presentation currency
Pounds sterling GBP is considered to be the functional currency.
Transactions and balances
In preparing the financial statements of the individual companies,
transactions in currencies other than the entity's functional currency
(foreign currencies) are recorded at the rates of exchange prevailing on the
dates of the transactions. At the Statement of Financial Position date,
monetary assets and liabilities that are denominated in foreign currencies are
translated at the rates prevailing on the Statement of Financial Position
date. Exchange differences arising on the settlement of monetary items, and on
the translation of monetary items at the Statement of Financial Position date,
are included in the Statement of Comprehensive Income for the year.
g) Intangible assets
Goodwill arises on the acquisition of subsidiaries and represents the excess
of the consideration transferred, the amount of any non-controlling interest
in the acquiree and the acquisition-date fair value of any previous equity
interest in the acquiree over the fair value of the identifiable net assets
acquired. If the total of consideration transferred, non-controlling interest
recognised and previously held interest measured at fair value is less than
the fair value of the net assets of the subsidiary acquired, in the case of a
bargain purchase, the difference is recognised directly in the Statement of
Comprehensive Income.
For the purpose of impairment testing, goodwill acquired in a business
combination is allocated to each of the CGUs, or groups of CGUs, that is
expected to benefit from the synergies of the combination. Each unit or group
of units to which the goodwill is allocated represents the lowest level within
the entity at which the goodwill is monitored for internal management
purposes. Goodwill is monitored at the operating segment level.
Goodwill impairment reviews are undertaken annually or more frequently if
events or changes in circumstances indicate a potential impairment. The
carrying value of the CGU containing the goodwill is compared to the
recoverable amount, which is the higher of value in use and the fair value
less costs of disposal. Any impairment is recognised immediately as an expense
and is not subsequently reversed.
Customer lists and intellectual property rights are shown at fair value at
date of acquisition, less amortisation and impairments. Costs associated with
these are recognised as an expense as incurred.
Development costs that are directly attributable to the design and testing of
identifiable and unique products controlled by the Company are recognised as
intangible assets when the following criteria are met:
• it is technically feasible to complete the product so that it will be
available for use;
• management intends to complete the product and use or sell it;
• there is an ability to use or sell the product;
• it can be demonstrated how the product will generate probable future economic
benefits;
• adequate technical, financial and other resources to complete the development
and use or sell the product are available; and
• the expenditure attributable to the product during its development can be
reliably measured.
The Group's Intangible assets, other than goodwill acquired on acquisition,
are amortised at 20% per annum on a straight line basis.
At each year end date, the Group reviews the carrying amounts of its
intangible assets other than goodwill if there is an indication of impairment
to determine if those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any). Where the asset does
not generate cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to which the
asset belongs.
In assessing value in use, the estimated future cash flows are discounted to
their present value, using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. An impairment
loss is recognised as an expense immediately.
h) Property, plant and equipment
All property, plant and equipment are shown at cost less subsequent
depreciation and impairment. Cost includes expenditure that is directly
attributable to the acquisition of items.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of any replaced part
is derecognised. All other repairs and maintenance are charged to the
Statement of Comprehensive Income during the financial year in which they are
incurred.
Depreciation is charged so as to write off the cost of assets over their
useful economic lives, using the straight-line method, which is considered to
be as follows:
• Plant and equipment 5 years
• Motor Vehicles 3 to 5 years
• Software 3 years
The assets' residual values and useful lives are reviewed, and, if
appropriate, asset values are written down to their estimated recoverable
amounts, at each Statement of Financial Position date.
Gains and losses on disposals are determined by comparing proceeds with the
carrying amounts and are included in the Statement of Comprehensive Income.
i) Financial assets
The Group and Company has classified all of its financial assets as loans and
receivables. The classification depends on the purpose for which the financial
assets were acquired. Management determines the classification of its
financial assets at initial recognition.
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They are
included in current assets. The Group's loans and receivables comprise trade
and other receivables and cash and cash equivalents in the Statement of
Financial Position.
Loans and receivables are initially recognised at fair value plus transaction
costs and are subsequently carried at amortised cost using the effective
interest method, less provision for impairment.
j) Impairment of financial assets
The Group assesses, on a forward-looking basis, the expected credit losses
associated with its debt instruments carried at amortised cost. The impairment
methodology applied depends on whether there has been a significant increase
in credit risk. A financial asset, or a group of financial assets, is
impaired, and impairment losses are incurred, only if there is objective
evidence of impairment as a result of one or more events that occurred after
the initial recognition of the asset (a "loss event"), and that loss event (or
events) has an impact on the estimated future cash flows of the financial
asset, or group of financial assets, that can be reliably estimated.
The criteria that the Group and Company uses to determine that there is
objective evidence of an impairment loss include:
• significant financial difficulty of the issuer or obligor;
• a breach of contract, such as a default or delinquency in interest or
principal repayments.
The amount of the loss is measured as the difference between the asset's
carrying amount and the present value of estimated future cash flows
(excluding future credit losses that have not been incurred), discounted at
the financial asset's original effective interest rate. The asset's carrying
amount is reduced, and the loss is recognised in the profit or loss.
For trade receivables, the Group applies the simplified approach permitted by
IFRS 9, which requires expected lifetime losses to be recognised from initial
recognition of the receivables.
If, in a subsequent year, the amount of the impairment loss decreases and the
decrease can be related objectively to an event occurring after the impairment
was recognised (such as an improvement in the trade and other receivables
credit rating), the reversal of the previously recognised impairment loss is
recognised in the Statement of Comprehensive Income.
k) Trade and other receivables
Trade receivables are amounts due from customers for services performed in the
ordinary course of business. If collection is expected in one year or less (or
in the normal operating cycle of the business if longer), they are classified
as current assets. If not, they are presented as non-current assets.
l) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and deposits held at call with
banks.
m) Share capital and reserves
Equity comprises the following:
• Share Capital represents ordinary shares issued at par value and includes
"Deferred Shares" below
• Deferred Shares represents notional shares arising on the redenomination of
the nominal share capital at various times and have no voting rights. The
Deferred Shares form part of the Share Capital balance shown in the Statement
of Financial Position.
• Share Premium represents the premium paid on shares issued above par value net
of issue costs.
• Retained earnings represents retained losses.
• Merger reserve represents the difference between the carrying value of the
investment and the nominal value of the shares of subsidiaries upon
consolidation under merger accounting. The merger reserve is presented in
"other reserves".
• Merger relief reserve represents the difference between the nominal value of
shares issued accounted under merger relief and the consideration attributed
to the shares issued.
• Share option and warrants reserve represents the fair value of unexpired
warrants.
• Convertible loan stock represents fair value of consideration received
together with interest thereon.
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
n) Share-based payments
The Group operates a number of equity-settled, share-based compensation plans,
under which the entity receives goods or services from employees or third
party suppliers as consideration for equity instruments of the Company. The
fair value of the equity-settled share based payments are recognised as an
expense in the Statement of Comprehensive Income or charged to equity
depending on the nature of the services provided or instruments issued.
o) Trade and other payables
Trade payables are obligations to pay for goods or services that have been
acquired in the ordinary course of business from suppliers. Accounts payable
are classified as current liabilities if payment is due within one year or
less. If not, they are presented as non-current liabilities. Trade payables
are recognised initially at fair value, and subsequently measured at amortised
cost using the effective interest method.
p) Borrowings
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently carried at amortised cost; any
difference between the proceeds (net of transaction costs) and the redemption
value is recognised in the Statement of Comprehensive Income over the year of
the borrowings using the effective interest method.
q) Revenue recognition
The Group recognises revenue in accordance with IFRS 15 which includes five
key steps:
Step 1: Identify the contracts with a customer; Step 2: Identify the
performance obligations in the contract; Step 3: Determine the transaction
price; Step 4: Allocate the transaction price to the performance obligations
in the contract; and Step 5: Recognise revenue when (or as) the entity
satisfies a performance obligation.
The Group recognises revenue when the amount of revenue can be reliably
measured, it is probable that future economic benefits will flow to the
entity, and specific criteria have been met for each of the Group's
activities, as described below: if revenue has been billed but the specific
performance obligations are not met then this is recognised as deferred
revenue.
From the Group's remaining activity of utilisation of functional
nanoparticles, revenues are recognised on delivery of the goods.
The Group bases its estimates on historical results, taking into consideration
the type of customer, the type of transaction and the specifics of each
arrangement. Where the Group makes sales relating to a future financial
period, these are deferred and recognised under 'deferred revenue' on the
Statement of Financial Position.
r) Current and deferred income tax
Income tax represents tax currently payable and deferred tax. The tax
currently payable is based on taxable profit for the year. Taxable profit
differs from the loss for the year as reported in the Consolidated Statement
of Comprehensive Income because it excludes items of income or expense that
are taxable or deductible in other years and it further excludes items that
are never taxable or deductible. The Group's liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by
the Statement of Financial Position date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the liability method. Deferred tax
liabilities are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if
the temporary difference arises from the initial recognition of goodwill or
from the initial recognition (other than in a business combination) of other
assets and liabilities in a transaction that affects neither the taxable
profit nor the accounting loss.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries, except where the Group is able to
control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply in the
relevant jurisdiction in the year when the liability is settled or the asset
is realised. Deferred tax is charged or credited to the Consolidated Statement
of Comprehensive Income, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt with in
equity. Deferred tax is not discounted.
Deferred tax assets and liabilities are offset where there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax assets and
liabilities on a net basis.
s) Leases
Prior to 1 January 2019: Leases in which a significant portion of the risks
and rewards were retained by the lessor were classified as operating leases.
Payments made under operating leases were charged to the Statement of
Comprehensive Income on a straight line basis over the period of the lease.
Assets held under finance leases were recognised as assets of the Group at the
fair value at the inception of the lease or if lower, at the present value of
the minimum lease payments. The related liability to the lessor was included
in the Statement of Financial Position as a finance lease obligation. Lease
payments were apportioned between interest expenses and capital redemption of
the liability. Interest was recognised immediately in the Statement of
Comprehensive Income, unless attributable to qualifying assets, in which case
they were capitalised to the cost of those assets.
Post 1 January 2019: Assets held under leases are recognised as assets of the
Group at the fair value at the inception of the lease or if lower, at the
present value of the minimum lease payments. The related liability to the
lessor is included in the Statement of Financial Position as a finance lease
obligation. Lease payments are apportioned between interest expenses and
capital redemption of the liability. Interest is recognised immediately in
the Statement of Comprehensive Income, unless attributable to qualifying
assets, in which case they are capitalised to the cost of those assets.
Exemptions are applied for short life leases and low value assets, with
payments made under operating leases charged to the Statement of Comprehensive
Income on a straight line basis over the period of the lease.
3) Financial risk management
Group financial risk factors
The Group's activities expose it to a variety of financial risks. The Group's
finance function monitors and manages the financial risks relating to the
operations of the Group. The Group is exposed to market risks (including
foreign exchange risk and price risk) and credit risk and to a very limited
amount interest rate risk and liquidity risk.
Risk management is carried out by the Board of Directors. The Board provides
written principles for overall risk management, as well as written policies
covering specific areas, such as foreign exchange risk, interest rate risk and
credit risk, to mitigate financial risk exposures.
Market risk
a) Foreign exchange risk
The Group has closed its operations located in parts of the world whose
functional currency is not the same as the Group's functional currency (GBP
Sterling), therefore the foreign exchange risk is low. The Group's net assets
arising from closed US operations are exposed to currency risk resulting in
gains and losses on retranslation from US Dollar. Due to the minimal amount of
transactions in US dollars, the Group does not consider hedging its net
investments beneficial because the cash flow risk created from such hedging
techniques would outweigh the risk of foreign currency exposure. It is the
Group's policy to hold surplus funds over and above working capital
requirements in the Parent Company. The Group considers this policy minimises
any unnecessary foreign exchange exposure.
In order to monitor the continuing effectiveness of this policy the Board
through their approval of both corporate and capital expenditure budgets, and
review of the currency profile of cash balances and management accounts,
considers the effectiveness of the policy on an ongoing basis.
b) Price risk
The Group is not exposed to commodity price risk as a result of its
operations. The Directors will revisit the appropriateness of this policy
should the Group's operations change in size or nature.
Credit risk
Credit risk arises from the Group's trade receivables. Where no independent
rating of customers is available, credit control assesses the quality of
customers by reference to their financial position, past experience and any
other relevant factors.
Interest rate risk management
The Group is not exposed to interest rate risk on financial liabilities.
Liquidity risk management
The Group manages liquidity risk by maintaining adequate reserves and by
continuously monitoring forecast and actual cash flows and matching the
maturity profiles of financial assets and liabilities. The Group seeks to
manage financial risk, to ensure sufficient liquidity is available to meet
foreseeable needs and to invest cash assets safely and profitably.
Capital risk management
The Group manages its capital to ensure that it will be able to continue as a
going concern while maximising the return to stakeholders. The Group's capital
structure primarily consists of equity attributable to equity holders of the
parent, comprising issued capital, reserves and retained losses.
4) Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
The Group makes estimates and judgements concerning the future. The resulting
accounting estimates and judgements will, by definition, seldom equal the
related actual results. The estimates and judgements that have a significant
risk of causing a material adjustment to the carrying amount of assets and
liabilities within the next financial year are addressed below:
Intangible assets
Intangible assets comprise of goodwill and Intellectual Property acquired on
acquisitions. Goodwill is not amortised, Intellectual Property is amortised
at 20% per annum on a straight-line basis.
Useful lives are based on management's estimates of the period that the assets
will generate revenues with such records being periodically reviewed for
continual appropriation.
On acquisitions the group values intangible assets excluding goodwill.
The Group test annually whether goodwill has suffered any impairment, and of
other intangible assets where there is an indication of impairment, in
accordance with the accounting policy. Where applicable, the recoverable
amounts of cash generating units have been determined based on value in use
calculations. The value in use calculations require the entity to estimate
future cash flows expected to arise from the cash generating unit and apply a
suitable discount rate in order to calculate present value. These calculations
require the use of estimates (note 14).
Inventory
The Group carries its inventory at the lower of cost of net realisable
value. Net realisable value for the inventory of masks and their components
was considered to have no net realisable value at 31 December 2021 as detailed
in the Chairman's Statement, leading to an impairment of £586,013 (note 6).
Share Options
The Group issued employee share options during the year.
The valuation of options used is the Black Scholes model and is detailed in
Note 21. Changes to inputs and assumptions, in particular concerning the
volatility of the Company's share price and the time to exercise can have a
significant effect on the valuation.
5) Segmental analysis
Management considers that during 2021 there was only one continuing activity
as set out below. The revenue below excludes that of the discontinued
operations (note 12).
Total revenue from continuing operations is recognised at a point in time and
comprises:
Revenue from external customers:
2021 2020
£ £
Utilisation of functional nanoparticles 208,778 600
Revenues from continuing operations are generated by geographical areas as
follows:
2021 2020
£ £
United Kingdom 178,082 600
Europe 9,467 -
Rest of World 21,229 -
208,778 600
The following customers generated more than 10% of the Group's revenue from
continuing operations:
2021 2020
£ £
Customer 1 50,350 600
Customer 2 50,278 -
Carrying amount of assets:
2021 2020
£ £
United Kingdom 5,666,225 7,552,089
United States of America - -
5,666,225 7,552,089
Carrying amount of liabilities:
2021 2020
£ £
United Kingdom 496,320 423,337
United States of America 210,238 201,947
706,558 625,284
The segmental analysis of the balance sheet is not part of routine management
reporting and consequently no activity segmental analysis of assets is shown.
6) Administrative expenses and impairments
The following have been charged in arriving at operating loss:
2021 2020
£ £
Staff costs 992,237 144,603
Foreign exchange gains and losses (19,200) 13,985
Depreciation 13,714 6,211
Audit fees (note 9) 34,130 22,500
Share based payments expense - share options 165,835 434,474
Other expenses 1,351,218 338,584
2,537,934 960,357
Impairments relate to impairment provisions of £586,013 against the carrying
value of inventory of masks and their components and of £101,643 against
other receivables.
7) Staff costs
The average number of employees, including Directors, was:
2021 2021 2020 2020
Total Continuing operations Total Continuing operations
No. No.
No. No.
Directors (including subsidiaries) 14 6 12 4
Sales and development 8 7 2 -
Administration 2 2 - -
24 15 14 4
Employees', including Directors' costs comprise:
2021 2021 2020 2020
Total Continuing operations Total Continuing operations
No. No.
No. No.
Wages, salaries and other staff costs 951,404 901,145 319,697 134,746
Share option expense 165,835 165,835 434,474 434,474
Social security costs 78,158 73,388 23,876 9,569
Pension costs 18,786 17,704 3,358 288
1,214,183 1,158,072 781,405 579,077
Pension costs represent contributions to defined contribution pension schemes.
8) Directors
The Directors during the year, together with Jeremy McNamara, were considered
to be the Key Management of the Group.
2021 2020
Group Short term employee benefits Pension Share option expense Total Short term employee benefits Pension Share option expense Total
£ £ £ £ £ £ £ £
Nigel Burton - - - - (9,182) - - (9,182)
Paul Ryan 1,032 - - 1,032 48,000 - 217,237 265,237
Trevor Brown 42,500 - - 42,500 54,167 - 217,237 271,404
John Richardson 204,290 660 - 204,950 85,000 1,500 - 86,500
Antony Legge 79,399 729 - 80,128 - - - -
Richard Clarke 35,532 610 - 36,142 - - - -
Alexander Vergopoulos - - 63,479 63,479 - - - -
Gareth Cave 51,028 595 - 51,623 - - - -
Felicity Sartain 25,385 595 - 25,980 - - - -
Mark Duffin 65,644 7,770 86,622 160,036 - - - -
Jeremy McNamara 41,575 2,350 - 43,925 - - - -
546,385 13,309 150,101 709,795 177,985 1,500 434,474 613,959
Included in the above charges are amounts paid to Nottingham Trent University
totalling £25,643 in respect of the services of Gareth Cave.
In addition to the above the company issued shares valuing £113,600 to Ordian
Limited and paid fees of £150,000 to FortOak Rolls Limited, companies owned
by Alex Vergopoulos, for work and related expenses relating to the mask
machine and securing supplies.
Paul Ryan was paid his short term employee benefits through a service company,
Warande1970 BVBA. In the prior year Nigel Burton agreed to waive some of his
accrued benefits on his resignation.
During the year share options were exercised by the directors with an
aggregate differential between exercise price and mid market price on the
issue date totalling £759,501.
The share option expense is detailed further in note 21.
9) Auditors remuneration
2021 2020
£ £
Fees payable for the audit of the Group and Parent Company's Financial 30,000 22,500
Statements
Additional fees in respect of the audit for the prior year 1,350 -
Fees payable for other services during the current year 2,780 -
34,130 22,500
10) Finance costs
2021 2020
£ £
Interest payable and other finance costs 545 4,085
11) Tax
2021 2020
£ £
Group
Income tax
Current tax
UK Corporation tax credit - -
Deferred tax
Current year - -
Tax credit - -
The tax on the Group's loss before tax differs from the theoretical amount
that would arise using the weighted average tax rate applicable to the
profits/(losses) of the consolidated entities as follows:
2021 2020
£ £
Group
Loss before tax (3,179,384) (968,905)
Tax at the applicable rate of 19.00% (2020 19.00%): (604,083) (184,092)
Effect of:
Expenses/income not deductible/chargeable for tax purposes 883 11,572
Advanced capital allowances over depreciation (3,422) 1,180
Enhanced capital allowances (1,771) -
Expense timing differences 1,881 -
Net tax effect of losses carried forward 606,512 171,340
Tax credit for the year - -
The tax rate used for 2021 is the standard rate of corporation tax in the UK.
The Group has tax losses of approximately £8,300,000 (2020 £5,200,000)
available to carry forward against future taxable profits. No deferred tax
asset has been recognised in view of the uncertainty over the timing of future
taxable profits against which the losses may be offset.
12) Discontinued operations
As detailed in note 17, during the year the Group disposed of 74% of its
interest in Gyrometric Systems Ltd and its entire interest in Cloudveil Ltd.
During December 2019 the group reached agreement to sell the fixed assets and
goodwill within Geocurve Limited. At the same time, a formal plan was made to
discontinue the Geocurve business. The disposal was completed in January 2020
with the company being dissolved in the current year.
In addition, the purchaser agreed to pay a finders fee as a percentage of
sales arising from existing customers of the Geocurve business for a limited
period. These amounts will be credited to income when the respective sales are
settled and shown within discontinued operations.
Results of the discontinued operations were as follows:
2021 2020
£ £
Revenue 5,938 109,841
Cost of sales (8,025) (48,364)
Depreciation and amortisation (658) (15,289)
Goodwill impairment - (324,812)
Other costs (120,557) (331,664)
Other income 18,883 10,000
Income tax - 120,471
(104,419) (479,817)
Loss on disposal (see below) (68,847) -
(173,266) (479,817)
Included in the Group Cash Flow Statement are the following amounts relating
to discontinued operations:
2021 2020
£ £
Cash flow from operating activities (165,286) (513,629)
Cash flow from investing activities (833) 160,275
Cash flow from financing activities (20,000) (90,325)
2021 2020
£ £
Disposal of discontinued operations
Property, plant and equipment 2,490 -
Trade, other receivables and inventories 13,658 -
Cash 43,548 -
Trade and other payables (83,283) -
(23,587) -
Non controlling interests 92,435 -
Proceeds received (1) -
Loss on disposal 68,847 -
13) Earnings per share
Basic earnings per share has been calculated by dividing the loss attributable
to equity holders of the Company after taxation by the weighted average number
of shares in issue during the year. There is no difference between the basic
and diluted loss per share on loss making operations.
Basic and Diluted 2021 2020
£
Loss after taxation - continuing operations (3,179,384) (968,905)
(Loss)/profit after taxation - discontinued operations (161,510) (447,183)
Loss after taxation - total (3,340,894) (1,416,088)
Weighted average number of shares 2,069,455,379 813,456,106
Earnings per share (pence) - continuing operations (0.15) (0.12)
Earnings per share (pence) - discontinued operations (0.01) (0.05)
Earnings per share (pence) - total (0.16) (0.17)
14) Intangible assets
2021 2020
£ £
Goodwill - Group
Cost 2,215,214 450,795
At 1 January
Additions (note 17) - 1,764,419
Disposals (note 17) (450,795) -
At 31 December 1,764,419 2,215,214
Impairment
At 1 January 450,795 125,983
Arising during the year - 324,812
Disposals (450,795) -
At 31 December - 450,795
Net book value at 31 December 1,764,419 1,764,419
At the year end, management has reassessed the recoverable amount of the
goodwill relating to Pharm 2 Farm Limited based on forecast NPV calculations.
Management budgeted operating margin based upon current estimated costing and
its expectations of market development. The discount rates reflect specific
risks relating to the relevant operating segment. The value in use
calculations and headroom is sensitive to any change in the key assumptions.
Management concluded that the goodwill is not impaired.
The key assumptions used for the Pharm 2 Farm value-in-use calculations were
as follows:
EBITDA Specific rates to year 4 then 54% thereafter
Growth rate Specific annual estimates to year 5 then nil thereafter
Discount rate 20%
Intellectual Property
£
Other intangibles - Group
Cost
At 1 January 2020 73,000
At 31 December 2020 73,000
Disposals (73,000)
At 31 December 2021 -
Amortisation
At 1 January 2020 19,467
Amortisation 14,600
Impairment 38,933
At 31 December 2020 73,000
Disposals (73,000)
At 31 December 2020 -
Net book value
At 31 December 2020 -
At 31 December 2021 -
15) Property, Plant and Equipment
Right of use leasehold Plant & equipment
£ £ Software Total
£ £
Group
Cost
At 1 January 2020 95,875 38,137 13,050 147,062
Acquisition of subsidiary - 24,377 - 24,377
Additions - 518 - 518
Disposals - (28,956) - (28,956)
At 31 December 2020 95,875 34,076 13,050 143,001
Additions - 37,562 - 37,562
Disposals (95,875) (5,667) - (101,542)
On disposals of subsidiaries - (5,787) - (5,787)
At 31 December 2021 - 60,184 13,050 73,234
Accumulated depreciation
At 1 January 2020 95,875 35,134 5,075 136,084
Acquisition of subsidiary - 3,312 - 3,312
Charge for the year - 2,550 4,350 6,900
Disposals - (28,956) - (28,956)
At 31 December 2020 95,875 12,040 9,425 117,340
Charge for the year - 10,089 3,625 13,714
Disposals (95,875) (1,039) - (96,914)
On disposal of subsidiaries - (3,297) - (3,297)
At 31 December 2021 - 17,793 13,050 30,843
Net book value
At 31 December 2020 - 22,036 3,625 25,661
At 31 December 2021 - 42,391 - 42,391
Plant & Software
equipment £ Total
£ £
Company
Cost
At 1 January 2020 4,226 13,050 17,276
Additions - - -
At 31 December 2020 4,226 13,050 17,276
Additions 16,797 - 16,797
At 31 December 2021 21,023 13,050 34,073
Accumulated depreciation
At 1 January 2020 4,226 5,075 9,301
Charge for the year - 4,350 4,350
At 31 December 2020 4,226 9,425 13,651
Charge for the year 1,091 3,625 4,716
At 31 December 2021 5,317 13,050 18,367
Net book value
At 31 December 2020 - 3,625 3,625
At 31 December 2021 15,706 - 15,706
16) Investment in subsidiary undertakings
2021 2020
£ £
Company
As at 1 January 60,000 384,601
Additions (note 17) 51 60,000
Impairment - (384,601)
Cost at 31 December 60,051 60,000
The impairment in 2020 relates to the company's investments in GyroMetric
Limited and Strat Aero International, Inc.
The following are the principal subsidiaries of the Company at 31 December
2021 and at the date of these Financial Statements. All these were
incorporated in the UK. Where applicable these subsidiaries are taking
advantage in their individual financial statements of audit exemption.
Whilst Virosynth Limited commenced activity during December 2021, there were
no financial transactions during the period to 31 December 2021.
Name of company Parent company Class of shares Share capital held Nature of business
Registered Address
Pharm 2 Farm Limited 27-28 Eastcastle Street, London nanosynth group plc Ordinary 100% Nanoparticle applications
W1W 8DH, UK
Virosynth Limited Biocity Pennyfoot Street nanosynth group plc Ordinary 51% Anti-pathogenic product development
Nottingham, NG1 1GF, UK
In addition to the above the company has non trading fully owned subsidiaries
at 31 December 2021 as follows:
Incorporated in the UK
Nanosynth Limited
Nanosynth (Medical) Limited
Incorporated and Registered in United States of America
Strat Aero International, Inc.
17) Acquisition and disposal of subsidiary undertakings
Acquisitions
In November 2020 the entire issued share capital of Pharm 2 Farm Limited was
acquired.
In the share purchase agreement dated 21 August 2020 the purchase
consideration was stated as £1,800,000 to be settled through the issue of
600,000,000 ordinary shares. Due to the need for regulatory and shareholder
approval the consideration shares were not issued until 5 November 2020 when
control of Pharm 2 Farm Limited was obtained. Under IFRS 3 the consideration
would be based on the market value of those shares at the point of issue which
would equate to £17,700,000. Management does not believe this fairly
reflects the acquisition given the volatility of the share price leading up to
5 November 2020 and have used the consideration within the agreement of
£1,800,000 as a fairer reflection of the agreement. Pharm 2 Farm is based
in the UK and its principal activity is that of utilisation of functional nano
particles.
£
Purchase consideration 1,800,000
Fair value of net assets acquired 35,581
Goodwill 1,764,419
At acquisition Pharm 2 Farm Limited had rights over intellectual property
under 15 year licences signed in 2019. Whilst management believe there is
now significant intrinsic value of these licences, at the time of acquisition
the estimate of timing and value of income generation was insufficiently
robust for a reasonable estimate of the valuation of these rights at
acquisition to be made.
The goodwill acquired also includes employee knowledge and expertise with
regard to nano particle technology applications.
There were no adjustments processed during the year to the fair value of the
net assets acquired on the acquisition.
Disposals
In August 2021 the Company returned 74% of its interest in Gyrometric Systems
Limited back to its founders for nominal consideration. The interest
retained represents 15% of the share capital and is included within
investments at its estimated fair value of nil.
In November 2021 the Company returned its entire interest in Cloudveil Limited
back to its founder for nominal consideration.
Both disposals were made following a strategic review of the Group's
operations and future investment objectives.
18) Trade and other receivables
2021 2020
Group Company Group Company
£ £ £ £
Amounts due from group undertakings - 1,858,024 - 430,124
Trade receivables 11,362 - 11,535 -
VAT receivable 50,436 30,008 68,424 23,035
Other receivables 15,990 - 1,813,877 1,505,000
Prepayments 2,560 1,373 32,151 28,841
At 31 December 80,348 1,889,405 1,925,987 1,987,000
Less: non-current portion - (1,858,024) - (428,974)
Current portion 80,348 31,381 1,925,987 1,558,026
Amounts due from group undertakings were impaired by a further net £85,972
(2020 £255,600) during the year within the Company.
Other receivables for the Group were impaired during the year by £101,643
(Company £24,750) (2020 Group and Company - nil).
The fair value of all receivables is the same as their carrying values stated
above.
2021 2020
£ £
Ageing of trade receivables net of provisions - Group:
Not due 867 630
0 - 30 days - -
Over 30 days 10,495 10,905
11,362 11,535
The carrying amount of the Group's trade receivables are all denominated in GB
pounds.
The maximum exposure to credit risk at the reporting date is the carrying
value reported above. The Group does not hold collateral as security.
Provisions totalling £2,451 (2020 £20,345) have been made at the year end in
respect of trade receivables.
19) Cash and cash equivalents
Cash at bank is held with credit institutions with an A credit rating. The
carrying amount of the Group's cash and cash equivalents are all denominated
in GB pounds.
20) Share capital
Group and Company 2021 2020
Issued equity share capital Number £ Number £
Issued and fully paid
Ordinary shares of 0.01p each 2,079,071,986 207,907 1,983,270,231 198,327
Deferred shares of 0.1p each 2,358,954,414 2,358,954 2,358,954,414 2,358,954
Deferred shares of 0.19p each 774,006,790 1,470,613 774,006,790 1,470,613
A Deferred shares of 0.001p each 17,678,567,358 1,767,857 17,678,567,358 1,767,857
5,805,331 5,795,751
Group and Company Number of Number of ordinary Share premium Total
deferred shares Share capital £ £
shares £
As at 1 January 2020 20,037,521,772 500,656,790 5,128,124 6,822,694 11,950,818
Issue of new shares 17 and 20 April 2020 - 160,400,000 320,800 53,488 374,288
Issue of new shares 10 July 2020 - 112,950,000 225,900 46,086 271,986
Share subdivision 774,006,790 - - - -
Loan note conversion 27 October 2020 - 12,801,543 1,280 34,564 35,844
Exercise of warrants 27 October 2020 - 12,618,928 1,262 34,071 35,333
Exercise of warrants
26 October 2020 to 2 November 2020 - 97,200,000 9,720 476,280 486,000
Issue of new shares 5 November 2020 - 600,000,000 60,000 (12,200) 47,800
Exercise of warrants
11 to 13 November 2020 - 51,200,000 5,120 250,880 256,000
Exercise of warrants 12 November 2020 - 12,618,928 1,262 34,071 35,333
Loan note conversion 12 November 2020 - 12,824,042 1,283 34,624 35,907
Issue of new shares 16 November 2020 - 10,000,000 1,000 24,000 25,000
Issue of new shares 18 December 2020 - 400,000,000 40,000 4,637,100 4,677,100
Release of warrants reserve - - - 9,911 9,911
As at 31 December 2020 20,811,528,562 1,983,270,231 5,795,751 12,445,569 18,241,320
Group and Company Number of Number of ordinary Share premium Total
deferred shares Share capital £ £
shares £
As at 1 January 2021 20,811,528,562 1,983,270,231 5,795,751 12,445,569 18,241,320
Issue of new shares
13 January to 12 February 2021 - 62,801,755 6,280 872,944 879,224
Exercise of warrants 29 January 2021 - 6,000,000 600 29,400 30,000
Issue of new shares 23 February 2021 - 21,000,000 2,100 296,100 298,200
Exercise of warrants 15 April 2021 - 6,000,000 600 29,400 30,000
Release of warrants reserve - - - 801 801
As at 31 December 2021 20,811,528,562 2,079,071,986 5,805,331 13,674,214 19,479,545
Between 13 January 2021 and 12 February 2021 the Company issued 62,801,755 new
ordinary shares of 0.01p each at a price of 1.4p per share raising gross
proceeds of £879,224 on the exercise of options by two directors.
On 29 January 2021 6,000,000 warrants for shares were exercised at a price of
0.5p each.
On 23 February 2021 the Company issued 21,000,000 new ordinary shares of 0.01p
each in settlement of services provided by two directors and compensation and
in place of options held by another director.
On 15 April 2021 6,000,000 warrants for shares were exercised at a price of
0.5p each.
Share options in the Company
At 31 December 2020 there were 77,603,512 outstanding share options which had
been issued on 9 November 2020. The options vested on issue, had a term of 5
years and an option price of 1.4 pence per share. All these options were
either exercised or forfeited during 2021.
At 31 December 2021 there were the following options that were outstanding
that had been issued during the year, all of which had vested:
Number Exercise price Expiry date
7,000,000 1.85p 17 February 2024
2,000,000 1.50p 22 August 2024
In addition 2,000,000 options had been issued during the year which had
subsequently been forfeited.
During the year agreement had been made for share options to be issued under
the 2021 incentive plan at prices between 1p and 4p. At 31 December 2021 all
the 103,953,600 options were outstanding and had not vested at that date.
The expiry date of these options was 31 August 2028. As detailed in note 35
these options were varied after 31 December 2021.
Warrants
Warrants to subscribe for new Ordinary Shares in the Company were in issue as
follows:
2021 2020
Weighted average price Weighted average price
No. of £ No. of warrants £
warrants
At 1 January 12,000,000 0.0047 49,451 0.0500
Issued during the year - - 185,637,856 0.0047
Lapsed during the year - - (49,451) 0.0500
Exercised during the year (12,000,000) 0.0047 (173,637,856) 0.0047
Outstanding at 31 December - - 12,000,000 0.0047
The warrants outstanding at 31 December 2020 had a weighted average remaining
contractual life of 4 months.
The fair value of the warrants granted in the prior year were calculated using
the Black Scholes model.
Share options in GyroMetric Systems Limited
At 31 December 2020 share options were in issue relating to shares in
GyroMetric Systems Limited. There was no exercise of these options prior to
the disposal of 74% of the holding in GyroMetric Systems Limited detailed in
note 17.
21) Share-based payments
Share option plan
During the year 7,000,000 share options were granted to Alex Vergopoulus, a
director of the company, under the existing incentive plan at that time. The
options vested immediately. In addition 4,000,000 share options were granted
to employees. Details of the options are set out below.
Agreement was also made for the issue of 103,953,600 share options to Mark
Duffin under the 2021 incentive plan. There were varying vesting and
exercise conditions on the options as set out below.
Fair value of share options
The fair value of the share options granted in the year have been calculated
using the Black Scholes model assuming the inputs shown below:
Grant date 18 February 2021 23 February 2021 1 September 2021
No of options granted 7,000,000 4,000,000 103,953,600
Share price on date of grant 1.85p 1.50p 1.25p
Exercise price 1.85p 1.50p 1.00p - 4.00p
Continuous growth rate 0.00% 0.00% 0.00%
Dividend yield 0.00% 0.00% 0.00%
Volatility 75.49% 75.63% 76.71%
Time to maturity 3 years 3.5 years 7 years
Value of option in accounts 0.9068p 0.7867p 0.6192p - 0.9088p
Volatility was measured over a 3 year period.
22) Convertible loan stock
Group and Company 2021 2020
£ £
As at 1 January 2,000 103,000
Repayment/conversion of loan stock and interest - (105,085)
Interest waived (2,000) -
Accrued interest - 4,085
At 31 December - 2,000
23) Other reserves
The measurement requirements of IFRS 2 have been implemented in respect of
share options and warrants granted.
Group
Share option Merger relief reserve Merger
and warrants reserve
reserve Total
£ £ £ £
At 1 January 2020 24,846 - (499,999) (475,153)
Share based payments arising 434,474 - - 434,474
Share warrants issued 10,712 - - 10,712
Share warrants exercised (9,911) - - (9,911)
Share warrants lapsed (24,846) - - (24,846)
Arising on consolidation - 1,740,000 - 1,740,000
At 31 December 2020 435,275 1,740,000 (499,999) 1,675,276
At 1 January 2021 435,275 1,740,000 (499,999) 1,675,276
Share based payments arising 165,835 - - 165,835
Share based payments exercised (434,474) - - (434,474)
Share warrants exercised (801) - - (801)
At 31 December 2021 165,835 1,740,000 (499,999) 1,405,836
Company
Other reserves comprised share option and warrants reserve as above.
24) Non controlling interest
Total
Group £
As at 1 January 2020 (48,045)
Non controlling interest in share of losses for the year (32,634)
At 31 December 2020 (80,679)
Non controlling interest in share of losses for the year (11,756)
Disposal of non controlling interest 92,435
At 31 December 2021 -
25) Trade and other payables
2021 2020
Group Company Group Company
£ £ £ £
Trade payables 153,881 121,714 115,648 69,673
VAT payable - - 1,755 -
Corporation tax - - - -
Accruals 291,841 171,146 94,265 84,376
Other creditors 16,761 15,548 121,419 38,574
462,483 308,408 333,087 192,623
26) Lease obligations
2021 2020
Group - Lease liabilities £ £
Total at 31 December - 36,875
Less: non-current portion - (7,375)
Current portion - 29,500
Payment was made during the year in full and final settlement of the lease
obligation.
27) Provisions
2021 2020
Group £ £
Closure costs in respect of the Geocurve business - 13,000
28) Deferred tax
2021 2020
Group Company Group Company
£ £ £ £
Deferred tax liabilities
Deferred tax liability - - - -
There was no movement in the deferred tax account in either period.
29) Financial instruments
Categories of financial instruments
2021 2021
Group Company
£ £
Assets - Amortised cost
Trade and other receivables (excluding prepayments) 27,352 1,882,774
Cash and cash equivalents 3,760,992 3,719,134
3,788,344 5,601,908
Liabilities - At amortised cost
Trade and other payables (excluding non-financial liabilities) 170,642 191,615
2020 2020
Group Company
£ £
Assets - Amortised cost
Trade and other receivables (excluding prepayments) 1,825,412 1,935,124
Cash and cash equivalents 3,741,135 3,590,521
5,566,547 5,525,645
Liabilities - At amortised cost
Trade and other payables (excluding non-financial liabilities) 237,067 112,787
Lease liabilities 36,875 -
273,942 112,787
30) Notes to the cash flow statement
Changes in liabilities arising from financing activities
Group
1 January 2021 Cash flows from financing activities Non cash flows 31 December 2021
Repayments Lease payments waived
£ £ £ £
Lease liabilities (note 26) 36,875 (20,000) (16,875) -
Total liabilities from financing activities 36,875 (20,000) (16,875) -
1 January 2020 Cash flows from financing activities 31 December 2020
Repayments
£ £ £
Lease liabilities (note 26) 66,375 (29,500) 36,875
Finance lease obligations 60,825 (60,825) -
Total liabilities from financing activities 127,200 (90,325) 36,875
Company
There were no liabilities arising from financing activities in the Company.
31) Financial commitments
Operating leases
The Group had no significant operating lease obligations at 31 December 2021
or 31 December 2020.
Other commitments
At 31 December 2021 the Group had no capital commitments. At 31 December
2020 the Group had capital commitments of £250,381 of which £227,904 had
been paid and is included within other receivables. The Company had no
capital commitments at 31 December 2021 or 31 December 2020.
32) Contingent liabilities
The Group has received a claim made against its subsidiary in the US following
the dismissal of an employee. The claim is in the hands of the Group's lawyers
and the outcome has not yet been reached, however the Directors believe that
the claim is without merit. In the event of a settlement, the exact level of
compensation is unknown at this stage. On this basis, the contingent liability
cannot be quantified.
33) Related party transactions
Directors' transactions
Directors' remuneration is disclosed in note 8.
At 31 December 2021 Paul Ryan, a former director owed the Company £24,750
(2020 £nil). A provision for impairment against the loan has been made.
Paul Ryan is the owner of Warande1970 BVBA which the Group pays in relation to
Paul's director fee. £8,000 was outstanding at 31 December 2020 which was
paid during the current year.
Trevor Brown is a former director and significant shareholder of Braveheart
Investment Group plc. During the prior year the Company purchased a 51.73%
interest in Pharm 2 Farm Limited from Braveheart Investment Group plc settled
through the issue of 310,354,815 ordinary shares.
During the previous year Hugo Gillum-Webb, a Director of that Company repaid a
loan made to him of £11,038.
Various amounts have been advanced by the Directors of the Parent Company and
Subsidiaries. The following amounts were outstanding:
2021 2020
At disposal At year end
P & R Orton 6,312 6,312
A Ferguson 19,200 19,200
Parent Company transactions with subsidiary companies
At the year end £1,858,024 (2020 £430,124) was due from the subsidiary
companies after provisions.
During the year the Company waived balances of £168,569 and £229,000 which
were due from GyroMetric Systems Ltd and Cloudveil Limited as part of the
disposal of interests in these entities. Impairments of £141,600 and
£114,000 respectively had been made to the balances at 31 December 2020.
During the year the Company wrote off the balance of £930,667 due to Geocurve
Limited when it was dissolved. Impairment of £986,664 had been made at 31
December 2020 resulting on a credit to the income statement of the company in
the current year.
34) Ultimate controlling party
There is not considered to be a controlling party. For details of major
shareholdings please refer to the Director's Report.
35) Events after the reporting year
On 10 February 2022 it was announced that in recognition of Mark Duffin's
significant additional hours being worked and also to further incentivise him
to continue to work towards raising value for the shareholders, the terms of
the share options agreed to be issued in 2021 detailed in note 21 were amended
such that the exercise price was reduced to 1 pence per share and the options
were to vest immediately with all being exercisable up until 1 September 2028.
In addition, as announced on that date, in order to incentivise the key
acquisitions management team options and cash bonuses have been granted
exercisable/payable on the successful completion of a significant acquisition.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR EAKKNAELAEFARecent news on Nanosynth
See all newsRCS - Truva Services Ltd - Trustee Notice to Noteholders
AnnouncementREG - AIM Nanosynth Group PLC - Cancellation - Nanosynth Group PLC
AnnouncementREG - Nanosynth Group PLC - Company Insolvency
AnnouncementRCS - Escher Marwick PLC - Escher Marwick PLC Issuer Announcement
AnnouncementREG - Nanosynth Group PLC - Accounts Update
Announcement