Condensed Consolidated Statement of Financial Position

As at 30 June 2022

Condensed Statement of Changes in Equity    

As at 30 June 2022

Condensed Statement of Cash Flows

For the 6 months ended 30 June 2022

Notes to the Condensed Financial Statements

1.     General Information

The Interim Financial Statements are for the six months ended 30 June 2022 and are presented in British Pounds (£), which is the functional currency of the parent company.

Verditek plc ("Verditek" or the "Company" or the "Group") is a public limited company incorporated, registered and domiciled in England Wales (registration number 10114644), whose shares are quoted on the Alternative Investment Market on the London Stock Exchange. Its registered office is located at 5 Chancery Lane, London, WC2A 1LG.

Verditek is the holding company of a group of companies engaged in the clean technology sector.

The Interim Financial Statements have been approved for issue by the Board of Directors on 7 September 2022.

2.     Basis of Preparation of Half-year Report

The financial information presented in this condensed consolidated interim report for the half-year has been prepared in accordance with the recognition and measurement requirements of UK adopted International Accounting Standards ("UK IAS"). The principal accounting policies adopted in the preparation of the financial information in this Interim Report are unchanged from those used in the Company's financial statements for the year ended 31 December 2021.

They have been prepared in accordance with IAS 34 'Interim Financial Reporting'. They do not include all of the information required in annual financial statements in accordance with UK IAS and should be read in conjunction with the consolidated financial statements for the year ended 31 December 2021.

The financial information for the year ended 31 December 2021 presented in this Interim Report does not constitute the Company's statutory accounts for that period but has been derived from them.  The Annual Report and Accounts for the year ended 31 December 2021 were audited and have been filed with the Registrar of Companies.  The Independent Auditors' Report on the Annual Report and Accounts for the year ended 31 December 2021 was unqualified and did not contain statements under s498(2) or (3) of the Companies Act 2006, but did contain a material uncertainty in relation to going concern. The financial information for the periods ended 30 June 2021 and 30 June 2022 is unaudited.

A copy of the audited consolidated financial statements for the year ended 31 December 2021 is available on the Company's website.

New Standards adopted as at 1 January 2022

Accounting pronouncements which have become effective from 1 January 2022 are:

•  Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37);

•  Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16);

•  Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41); 

•  References to Conceptual Framework (Amendments to IFRS 3).

These accounting pronouncements do not have a significant impact on the Group's financial results or position and no changes to existing accounting policies were required as a result of adopting any amendments

Going concern

The interim financial information has been prepared under the going concern basis as the Directors are satisfied that sufficient funds are or will become available to the Group to meet its on-going working capital requirements for at least the next 12 months. The Group's assessment takes account of current cash resources, expected costs and expected revenues. The Group has a pipeline of commercial opportunities and promising partnerships, and is focussed on converting these into sales in the next year. On 30 June 2022 the Company announced a raise of an additional £1.5m by way of a subscription for ordinary shares.

In the event that trading does not grow as envisaged, sufficient cost reductions are not made, or if there are unforeseen costs, then it is possible that the Company may need to seek additional funding in the next 18 months. Management has successfully raised money in the past, but there is no guarantee that adequate funds will be available when needed in the future.  As there can be no guarantee that any required future funding can be raised in the necessary timeframe, a material uncertainty exists that may cast significant doubt on the Company's future ability to continue as a going concern.

After considering the forecasts and the risks, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis of accounting.

Dividends

        The Directors do not propose an interim dividend.

Material changes in accounting estimates or judgments

The preparation of unaudited interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses for the current and its corresponding financial period under review. Actual results may differ from these estimates.

In preparing the unaudited interim financial information, the significant judgements made by the management in applying the Group's accounting policies and the sources of estimates uncertainty were consistent with those applied to the audited financial statements for the year ended 31 December 2021.

3.     Segmental Information

The chief operating decision-maker is considered to be the Board of Directors of Verditek. The chief operating decision-maker allocates resources and assesses performance of the business and other activities at the operating segment level.

The chief operating decision maker has determined that in the period ended 30 June 2022, Verditek had one operating segment, the development and commercialisation of clean technologies. 

Revenue and segmental information

The Group had two customers that exceeded 10% of revenue in H1 2022.

Geographical Segments

Apart from holding company activities in the UK, the Group had operations in Milan, Italy, in the period.  An analysis of revenue, operating loss and non-current assets by geographical market is given below:

4.    Other income

Grant income of £117,629 was recognised in association with an Innovate UK grant awarded in 2021, in respect of a project to design solar solutions for homes, schools and farms in Zimbabwe.

During the period there was also an unwind of discount on the receivable recognised upon disposal of the Group's investment Industrial Climate Solutions Inc (ICSI) in February 2022, £26,922.

5.     Loss Per Share 

The calculation of loss per share is based on the following loss and number of shares:

Basic loss per share is calculated by dividing the loss for the period from continuing operations of the Group by the weighted average number of ordinary shares in issue during the period. Due to the loss in the periods and there are no potentially dilutive ordinary shares, there is no difference between the basic and diluted loss per share.

6.     Non-current receivables

On 1 February 2022 the Company completed a sale of its stake in the ICSI business. An initial payment of £307,731 was received upon completion. Further payments are expected over a 5 year earn-out period. The payments are linked to achievement of various milestones in development of carbon capture technology, but have been estimated based on management's assessment of the likelihood of success, and discounted to present values. The valuation methodology at 30 June 2022 is consistent with the fair valuation methodology used at 31 December 2021 in measurement of the ICSI investment. During the period there was an unwind of discount of the earn-out receivable of £26,923 (see note 4) and an increase in valuation of £64,332 as a result of foreign exchange movements.

7.    Loans and Borrowings

Cashflow - net debt analysis

8.   Share capital and reserves

During the period there was an ordinary share issue of 101,333,333 shares at 1.5p per share. There have been no new options granted or exercised in the period and options over 500,000 shares lapsed.  The number of shares outstanding on which options have been granted at 30 June 2022 is 19,500,000.

9.   Events after the reporting date

There were no events after the reporting date.

10. Copies of the interim report

Copies of this interim report will be made available on the Company's website at www.verditek.plc.uk and from the Company's registered office, 5 Chancery Lane, London, WC2A 1LG.