Location Sciences - Half-year Report
27/09/2022 07:00
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RNS Number : 6962A Location Sciences Group PLC 27 September 2022
27 September 2022
This announcement contains inside information for the purposes of Regulation
11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the
publication of this announcement via a Regulatory Information Service, this
inside information is now considered to be in the public domain.
Location Sciences Group PLC
("Location Sciences" or the "Company" or the "Group")
Interim Results for the six months ended 30 June 2022
Location Sciences (AIM: LSAI), the leading location data insight and
verification company, announces its interim results for the six months ended
30 June 2022.
CHAIRMAN'S REPORT FOR THE PERIOD ENDED 30 JUNE 2022
Introduction
Following the funding round in May 2021 which introduced new strategic
investors to the shareholder register and two new Board members, the executive
team successfully exited the location insights space, selling the Group's
insights dashboard and certain customer contracts to Digital Envoy, Inc, a
leading US IP intelligence business for US$700,000.
The proceeds from the aforementioned sale and the Group's share placing in May
2021, which raised approximately £3.74 million (before expenses), provided
the Group with a solid financial platform from which to increase shareholder
value which management and the Board are fully engaged in. As at 30 June 2022,
the net current assets of the Company were £4.4 million, including net cash
of £4,227,685.
Trading performance
Unaudited revenues for the six months ended 30 June 2022 were £145,430, which
included £99,022 of earn-out income from the sale of the Insights business
during 2021. Underlying Verify revenues were £46,408 in the period,
representing a decrease of 9% compared to H1 2021 revenues of £50,968.
Administration expenses were £489,552 in H1 2022 compared to £429,652 in H1
2021. The increase of 14% in administration expenses is due to the impact of
fee shares issued to the non-executive directors in the period and was not a
cash cost to the Company. Cash costs have been reduced during the period with
a number of staff cuts and overhead reductions being implemented by the Board.
EBITDA loss for the six months to 30 June 2022 was £362,809, representing a
decrease of 10% on the EBITDA loss in the six months to 30 June 2021 of
£404,628.
Loss before tax for the six months to 30 June 2022 was £492,353, representing
an decrease of 7% on the loss before tax in the six months to 30 June 2021 of
£527,237.
Outlook
The Board continues to review how best to maximise the value of the Company's
assets and will update shareholders in due course.
Simon Wilkinson
Chairman
LOCATION SCIENCES GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED 30 JUNE 2022
Note Six months Six months Year ended
ended
ended
31 December 2021
30 June
30 June
Audited
2022
2021
£
Unaudited
Unaudited
£
£
Revenue 4 145,430 50,968 167,940
Cost of sales (18,686) (25,944) (77,243)
Gross profit 126,743 25,024 90,697
Grant income - - -
Other income - - 11,267
Administrative expenses (489,552) (429,652) (801,432)
Amortisation and depreciation (130,524) (122.610) (216,392)
Exceptional administrative expenses - - (283,210)
Operating loss 4 (493,333) (527,238) (1,199,070)
Finance income 980 1 2
Finance expense - - -
Loss before tax (492,353) (527,237) (1,199,068)
Taxation - 71,514 113,871
Loss for the financial year from continuing operations (492,353) (455,723)
(1,085,197)
Discontinued Operations
Loss for the year from discontinued operations - (163,613)
(298,161)
Loss for the financial year (492,353) (619,336) (1,383,358)
Earnings per share
Loss per share - basic and diluted (0.02p) (0.06p) (0.076p)
The above results were derived from continuing operations.
LOCATION SCIENCES GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 JUNE
2022
Six months Six months Year ended
ended
ended
31 December
30 June
30 June
2021
2022
2021
Audited
Unaudited
Unaudited
£
£
£
Loss for the year (492,353) (619,336) (1,383,358)
Foreign currency translation losses - (4,719) (4,718)
Total comprehensive income for the year attributable to owners of the company (492,353) (624,055) (1,388,076)
LOCATION SCIENCES GROUP PLC
CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2022
Note 30 June 30 June 31 December
2022
2021
2021
Unaudited
Unaudited
£
£ Audited
£
Non-current assets
Intangible assets 406,967 1,153,954 537,491
Property, plant and equipment - 3,198 -
1,157,152 537,491
Current assets
Trade and other receivables 259,564 505,232 331,559
Current tax asset 113,871 71,514 113,871
Cash and cash equivalents 4,227,685 4,333,115 4,378,825
4,601,120 4,909,861 4,824,255
Current liabilities
Trade and other payables (202,088) (148,577) (183,175)
(202,088) (148,577) (183,175)
Net current assets 4,399,032 4,761,284 4,641,080
Net assets 4,805,999 5,918,436 5,178,571
Capital and reserves
Called up share capital 5 16,340,507 16,298,007 16,298,007
Share premium reserve 20,088,118 21,170,312 20,034,993
Merger relief reserve 11,605,556 11,605,556 11,605,556
Capital reserve 209,791 209,791 209,791
Other reserves (9,225,108) (9,225,108) (9,225,108)
Equity Reserve 1,135,319 - 1,135,319
Retained earnings (35,348,184) (34,140,122) (34,879,987)
Total equity 4,805,999 5,918,436 5,178,571
LOCATION SCIENCES GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 JUNE 2022
EQUITY ATTRIBUTABLE TO THE PARENT COMPANY
Share capital Share premium Merger relief reserve Capital reserve Reverse acquisition reserve Retained earnings Total
£
£
£
£
£
£
£
Equity reserve
£
At 1 January 2021 14,280,258 19,315,231 11,605,556 209,791 (9,225,108) - (33,540,223) 2,645,505
Loss for the period - - - - - - (619,336) (619,336)
Other comprehensive income - - - - - - (4,719) (4,719)
Issue of shares 2,017,749 1,855,081 - - - - - 3,872,830
Share based payments - - - - - - 24,156 24,156
At 30 June 2021 16,298,007 21,170,312 11,605,556 209,791 (9,225,108) - (34,140,122) 5,918,436
At 1 January 2021 14,280,258 19,315,231 11,605,556 209,791 (9,225,108) - (33,540,223) 2,645,505
Loss in year - - - - - - (1,383,358) (1,383,358)
Other Comprehensive Income - - - - - - (4,718) (4,718)
Issues of shares 2,017,749 1,855,081 - - - - - 3,872,830
Warrants issued - (1,135,319) - - - 1,135,319 - -
Share based payments - - - - - - 48,312 48,312
At 31 December 2021 16,298,007 20,034,993 11,605,556 209,791 (9,225,108) (34,879,987) 5,178,571
1,135,319
At 1 January 2022 16,298,007 20,034,993 11,605,556 209,791 (9,225,108) 1,135,319 (34,879,987) 5,178,571
Loss for the period - - - - - - (492,353) (492,353)
Other comprehensive income - - - - - - - -
Issue of shares 42,500 53,125 - - - - - 95,625
Share based payments - - - - - - 24,156 24,156
At 30 June 2022 16,340,507 20,088,118 11,605,556 209,791 (9,225,108) 1,135,319 (35,348,184) 4,805,999
LOCATION SCIENCES GROUP PLC
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 30 JUNE 2022
Note Six months Six months Year ended
ended
ended
31 December
30 June
30 June
2021
2022
2021
Audited
Unaudited
Unaudited
£
£
£
Cash flows from operating activities
Loss for the year from continuing activities (492,353) (455,723) (1,085,197)
Loss for the year from discontinued activities - (163,613) (298,161)
Adjustments to cash flows from non-cash items:
Depreciation and amortisation 130,524 204,351 508,862
Impairment charge - - 283,210
Foreign exchange (gains) / losses - (4,719) (4,718)
Finance income (980) (1) (2)
Finance costs - - -
Share based payment transactions 24,156 24,156 48,312
Income tax expense - (71,514) (113,871)
Up lift in fair value of directors' fees 10,625 195,500 195,500
Shares issued other than for cash 85,000 120,000 120,000
(243,028) (151,563) (636,705)
Working capital adjustments
Decrease in trade debtors 71,995 (90,128) 88,225
Increase in trade creditors 18,913 (62,480) (33,114)
Cash used in operations (152,120) (304,171) (581,594)
Income taxes received - 166,272 166,272
Net cash used in operating activities (152,120) (137,899) (415,322)
Cash flows from investing activities
Interest received 980 1 2
Disposals of discontinued operations - - 450,138
Acquisitions of tangible assets - - -
Acquisition of intangible assets - (214,435) (341,441)
Net cash used in investing activities 980 (214,434) (108,699)
Cash flows from financing activities
Proceeds from issue of ordinary shares, net of issue costs - 3,557,330 3,557,330
Net cash generated from financing activities - 3,557,330 3,557,330
Net (decrease)/increase/ in cash and cash equivalents (151,140) 3,204,997 3,250,707
Cash and cash equivalents at beginning of period 4,378,825 1,128,118 1,128,118
Cash and cash equivalents at end of period 4,227,685 4,333,115 4,378,825
Note Six months Six months Year ended
ended
ended
31 December
30 June
30 June
2021
2022
2021
Audited
Unaudited
Unaudited
£
£
£
Non-cash financing activities
Share warrants exercised in period - - 10,000
Fees settled by share issues - 265,500 120,000
Directors' fees settled by share issues 95,625 280,500 163,625
LOCATION SCIENCES GROUP PLC
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2022
1 General information
Location Sciences Group PLC and its subsidiary Location Sciences AI Limited
(together the "Group") provide location verification services, utilising
sophisticated machine learning and pattern recognition technologies Verify
detects location ad-fraud and checks the accuracy and quality of location
signals used to improve the performance of digital advertising.
The Company is a public limited company which is quoted on the AIM market of
the London Stock Exchange and is incorporated and domiciled in the United
Kingdom.
2 Basis of preparation
The financial information has been prepared in accordance with International
Financial Reporting Standards ("IFRS") as adopted by the European Union, IFRIC
interpretations and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS. The accounting policies adopted are consistent
with those of the financial statements for the year ended 31 December 2021, as
described in those financial statements.
The figures for the six-month periods ended 30 June 2022 and 30 June 2021 have
not been audited. The figures for the year ended 31 December 2021 have been
extracted from, but do not constitute, the consolidated financial statements
of Location Sciences Group PLC for that year. Those financial statements have
been delivered to the Registrar of Companies and included an unqualified
auditors' report and did not contain a statement under Section 498(2) or
Section 498(3) Companies Act 2006.
3 Loss per share
Six months Six months Year ended
ended
ended
31 December
30 June
30 June
2021
2022
2021
Audited
Unaudited
Unaudited
£
£
£
Loss attributable to shareholders (492,353) (619,336) (1,383,358)
No. No. No.
Weighted average number of shares (basic) 2,611,934,620 990,887,398 1,814,571,645
The calculation of basic loss per share of 0.02p (June 2021: 0.06p; December
2021: 0.076p) is based on loss after taxation and the weighted average number
of ordinary shares in issue during the period.
4 Segmental analysis
Operating segments are based on internal reports about components of the
Company, which are regularly reviewed and used by the Board of Directors being
the Chief Operating Decision Maker ("CODM") for strategic decision making and
resource allocation, in order to allocate resources to the segment and to
assess its performance.
During the first half of 2022 the Group has operated through its trading
company Location Sciences AI Limited. The business provides location
verification services, utilising sophisticated machine learning and pattern
recognition technologies Verify detects location ad-fraud and checks the
accuracy and quality of location signals used to improve the performance of
digital advertising.
It should be noted that a segmental analysis of the Consolidated Statement of
Financial Position is not part of routine management reporting and,
consequently, no segmental analysis of assets is shown here.
An analysis of operating revenue is as follows:
Six months Six months Year ended
ended
ended
31 December
30 June
30 June
2021
2022
2021
Audited
Unaudited
Unaudited
£
£
£
Location data and insights* - 226,986 373,448
Verify 145,430 50,968 167,940
145,430 277,954 541,388
*disclosed within discontinued operations
An analysis of EBITDA is as follows:
Six months Six months Year ended
ended
ended
31 December
30 June
30 June
2021
2022
2021
Audited
Unaudited
Unaudited
£
£
£
Location data and insights - (397,291) (299,972)
Verify 362,809 (89,209) (682,706)
362,809 (486,500) (982,678)
An analysis of loss before tax is as follows:
Six months Six months Year ended
ended
ended
31 December
30 June
30 June
2021
2022
2021
Audited
Unaudited
Unaudited
£
£
£
Location data and insights - (236,847) (298,161)
Verify (492,353) (454,003) (1,199,098)
(492,353) (690,850) (1,497,229)
5 Share
capital
30 June 30 June 31 December
2022
2021
2021
Unaudited
Unaudited
Audited
£
£
£
2,647,587,398 ordinary shares of 0.1p (June 2021 - 2,605,087,398 of 0.1p, 2,647,587 2,605,087 2,605,087
December 2021 2,605,087,398 of 0.1p) each
1,040,712,398 deferred shares of 0.99p each 10,303,054 10,303,054 10,303,054
376,651,734 New Deferred shares of 0.9p each 3,389,866 3,389,866 3,389,866
16,340,507 16,298,007 16,298,007
Share issue
On 1 June 2022 42,500,000 ordinary shares of 0.1p were issued at 0.2p per
ordinary share to the non-executive directors in settlement of their
second-year fees.
Share rights
Ordinary shares have attached to them full voting, dividend and capital
distribution (including on winding up) rights; they do not confer any rights
of redemption.
Deferred shares have attached to them no voting, dividend or capital
distribution (including on winding up) rights; they do not confer any rights
of redemption.
Warrants in Issue
1) Promoter Warrants - non-transferable warrants to subscribe for up to
1,500,000,000 Ordinary Shares, exercisable at the 0.20p for five years from 25
May 2021, were issued to certain members of the Concert Party in consideration
of those persons assembling and co-ordinating the Concert Party's investment
in the Company in May 2021 and facilitating the appointment of Simon Wilkinson
as Non-Executive Chairman.
Name
Number of Ordinary Shares subject to Promoter Warrants
Richard Hughes 500,000,000
Mahmud Kamani
500,000,000
Simon Wilkinson 500,000,000
2) Cornerstone Investor Warrants - non-transferable warrants to subscribe for
up to 250,000,000 Ordinary Shares, exercisable at 0.20p for five years from 25
May 2021, were issued to the Cornerstone Investors of the May 2021 placing.
Name
Number of Ordinary Shares subject to Cornerstone Investor Warrants
Ben Turner 50,000,000
Donna Turner 75,000,000
James Pope 50,000,000
Maxine Pope 75,000,000
3) Broker Warrants - transferable warrants to subscribe for up to 100,000,000
Ordinary Shares, exercisable at the 0.20p for five years from 25 May 2021 were
issued as shown below.
Name
Number of Ordinary Shares subject to Broker Warrants
Turner Pope 58,750,000
Dr Nigel Burton 25,000,000
Mark Slade 10,000,000
David Rae 6,250,000
4) Director Warrants - non-transferable warrants to subscribe for, in
aggregate, 120,000,000 Ordinary Shares were issued to the Executive Directors
and the Non-Executive Directors, exercisable at 0.20p for five years from 25
May 2021, provided that the Ordinary Shares have traded at a Volume Weighted
Average Price (VWAP) at or above 0.30p for 20 consecutive Business Days, or on
a change of control of the Company.
Name
Number of Ordinary Shares subject to Broker Warrants
Mark Slade 30,000,000
David Rae 30,000,000
Simon Wilkinson 30,000,000
Dr Nigel Burton
30,000,000
6 Availability of half-year report
Copies of the half-year report are available on request from the Company's
registered office at First Floor, St James House, St James Square, Cheltenham,
Gloucestershire GL50 3PR and can also be viewed at:
https://www.locationsciencesgroup.ai/investor-relations/reports-presentations/
(https://www.locationsciencesgroup.ai/investor-relations/reports-presentations/)
For further information please contact:
Location Sciences Group
PLC
via Allenby Capital
Simon Wilkinson, Chairman
Allenby Capital Limited (Nominated
Adviser)
Tel: +44 (0)20 3328 5656
David Hart
Vivek Bhardwaj
Turner Pope Investments (TPI) Ltd
(Broker)
Tel: +44 (0)20 3657 0050
James Pope
Andy Thacker
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