Interim results for the period ended 30 June 2020

Condensed Consolidated Statement of Financial Position

For the 6 months ended 30 June 2020

 

		As at 30 June 2020	As at 30 June 2019	As at 31 December 2019
	Note	Unaudited	Unaudited	Audited
		£	£	£
Assets
Non-current assets
Investments		25,917	25,153	24,229
Property, plant and equipment		663,208	651,159	633,491
Right of use assets		239,277	-	249,706
Non-current assets		928,402	676,312	907,426
Current assets
Inventories		37,525	-	35,038
Trade and other receivables		492,497	473,811	437,075
Cash and cash equivalents		588,858	221,274	107,243
Current assets		1,118,880	695,085	579,356
TOTAL ASSETS		2,047,282	1,371,397	1,486,782
Equity and liabilities
Non-current liabilities
Loans and borrowings		-	1,170,000	-
Lease liabilities		177,260	-	186,612
Non-current liabilities		177,260	1,170,000	186,612
Current liabilities
Trade and other payables		763,485	701,646	959,360
Loans and borrowings	5	700,017	502,152	668,319
Lease liabilities		43,601	-	37,526
Current liabilities		1,507,103	1,203,798	1,665,205
TOTAL LIABILITIES		1,684,363	2,373,798	1,851,817
Share capital	6	116,758	80,847	91,666
Share premium account	6	6,945,074	3,858,691	5,466,376
Share based payment reserve		88,850	15,167	21,703
Accumulated losses		(6,795,093)	(4,921,930)	(5,878,716)
Translation reserve		42,291	(390)	(36,190)
Non-controlling interests		(34,960)	(34,786)	(29,874)
Total shareholders' equity		(362,919)	(1,002,401)	(365,035)
TOTAL EQUITY AND LIABILITIES		2,047,282	1,371,397	1,486,782

 

 

 

Condensed Statement of Changes in Equity    

For the 6 months ended 30 June 2020

 

 

 

	Issued share capital	Share Premium	Share based payment reserve	Accumulated losses	Translation reserve	Non-controlling interest	Total
	£	£	£	£	£	£	£
As at 1 January 2019	80,847	3,858,691	8,727	(3,817,534)	749	(243,929)	(112,449)
Change in Accounting Policy IFRS 16 adjustment	-	-	-	24,189	-	-	24,189
Loss for the period	-	-	-	(897,543)	-	(1,105)	(898,648)
Translation of subsidiary	-	-	-	-	(3,129)	5,385	2,256
Total comprehensive loss for the period	-	-	-	(897,543)	(3,129)	4,280	(896,392)
Acquisition of NCI without a change in control	-	-	-	(206,853)	1,990	204,863	-
Total change in ownership interests	-	-	-	(206,853)	1,990	204,863	-
Share based payment reserve	-	-	6,440	-	-	-	6,440
Shareholders' equity at 30 June 2019	80,847	3,858,691	15,167	(4,897,741)	(390)	(34,786)	(978,212)
Loss for the period	-	-	-	(1,867,957)	-	3,644	(1,864,313)
Translation of subsidiary	-	-	-	-	(38,928)	(5,014)	(43,942)
Total comprehensive loss for the period	-	-	-	(1,867,957)	(38,928)	(1,370)	(1,908,255)
Acquisition of NCI without a change in control	-	-	-	(217,415)	1,990	215,425	-
Total change in ownership interests	-	-	-	(217,415)	1,990	215,425	-
Issue of shares net of expenses	10,819	1,607,685	-	-	-	-	1,618,504
Share based payment reserve	-	-	12,976	-	-	-	12,976
Shareholders' equity at 31 December 2019	91,666	5,466,376	21,703	(5,878,717)	(36,189)	(29,874)	(365,035)
Loss for the period	-	-	-	(916,377)	-	(1,800)	(918,177)
Translation of subsidiary	-	-	-	-	78,480	(3,286)	75,194
Total comprehensive loss for the period	-	-	-	(916,377)	78,480	(5,086)	(842,984)
Issue of shares net of expenses	25,092	1,478,698	-	-	-	-	1,503,790
Share based payment reserve	-	-	67,147	-	-	-	67,147
Shareholders' equity at 30 June 2020	116,758	6,945,074	88,850	(6,795,093)	42,291	(34,960)	(362,919)

 

 

 

 

 

Condensed Statement of Cash Flows

For the 6 months ended 30 June 2020

 

 

	Note
		H1 2020	H1 2019		FY 2019
		Unaudited	Unaudited		Audited
		£	£		£
Operating activities
Loss before tax from continuing operations		(918,177)	(898,648)		(1,864,313)
Adjustment for:
Depreciation		43,208	9,157		70,742
Loss on disposal of assets		-	-		1,119
Finance costs		74,875	72,316		203,779
Financial income		(52)	(180)		(185)
Share based payment expenses		67,147	6,440		12,976
		(732,999)	(810,915)		(1,575,882)
Working capital adjustments
(Increase) / decrease in inventory		(2,487)	-		(35,038)
(Increase) / decrease in trade and other receivables		(55,422)	(42,713)		(24,961)
Increase / (decrease) in trade and other payables		(147,837)	92,955		311,596
Cash used in operations		(938,745)	(760,673)		(1,324,285)
Taxation		-	-		-
Net cash outflow from operating activities		(938,745)	(760,673)		(1,324,285)
Investing activities
Purchase of fixed assets		(2,568)	(164,042)		(156,399)
Net cash outflow from investing activities		(2,568)	(164,042)		(156,399)
Financing activities
Issue of ordinary share capital	6	1,456,791	-		521,469
Interest paid		-	(1,936)		(134)
Finance income		51	180		180
Loan received/ (repayable)		-	458,909		455,076
Payment of lease liabilities		(36,409)	-		(71,686)
Net cash inflow from financing activities		1,420,433	457,153		904,905
Net (decrease)/increase in cash and cash equivalents		479,120	(467,562)		(575,779)
Cash and cash equivalents at the beginning of the period		107,279	683,885		683,885
		586,399	216,323		108,106
Exchange gains on cash and cash equivalents		2,459	4,951		(863)
Cash and cash equivalents at the end of the period		588,858	221,274		107,243

 

Notes to the Condensed Financial Statements

 

1.     General Information

 

The Interim Financial Statements are for the six months ended 30 June 2020 and are presented in British Pounds (£), which is the functional currency of the parent company. 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 IFRS and should be read in conjunction with the consolidated financial statements for the year ended 31 December 2019.

 

Verditek plc ("Verditek", "Company") 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 29 Farm Street, London W1J 5RL.

 

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 3^rd September 2020.

 

2.     Basis of Preparation

 

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 International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board, as adopted by the European Union.  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 2019.

 

The financial information for the year ended 31 December 2019 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 2019 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 2019 was unqualified and did not draw attention to any matters by way of emphasis and did not contain statements under s498(2) or (3) of the Companies Act 2006.  The financial information for the periods ended 30 June 2019 and 30 June 2020 is unaudited.

 

A copy of the audited consolidated financial statements for the year ended 31 December 2019 is available on the Company's website.

 

New Standards adopted as at 1 January 2020

 

Accounting pronouncements which have become effective from 1 January 2020 are:

 

·      IFRS 3 Business Combinations - definition of a business

·      IAS 1 and IAS 8 - definition of material

·      IFRS 9, IFRS 7 and IAS 39 - interest rate benchmark

·      IFRS 7 - Insurance contracts

 

These accounting pronouncements do not have a significant impact on the Group's financial results or position.

 

Going concern

 

The interim financial statements have 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. The Group's forecasts take account of ongoing impact from Covid-19, and appropriate steps have been taken to control costs. However, the Group has expanded its sales team and is actively pursuing new commercial opportunities. The Group has agreed several sales contracts in recent months in new sectors and geographies, including Pakistan and Libya.  The Group has also received further funding following the exercise of a warrant (granted at IPO) in August, which has raised a further £0.3m in funding. 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 2019.

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 2020 Verditek had one operating segment, the development and commercialisation of clean technologies, although it is likely that in future periods the Group's segmental reporting will be expanded as different technologies are developed and commercialised. 

 

Geographical Segments

 

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

 

	6 months ended 30 June 20	6 months ended 30 June 19	For the year ended 31 December 19
	Unaudited	Unaudited	Audited
	£	£	£
UK	26,460	27,981	24,994
Rest of Europe	901,942	648,331	882,431
Total	928,402	676,312	907,425

 

4.     Loss Per Share 

 

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

	6 months ended 30 June 20	6 months ended 30 June 19	For the year ended 31 December 19
	Unaudited	Unaudited	Audited
	£	£	£
Loss for the period from continuing operations (£)	(916,377)	(897,543)	(1,867,957)
Weighted average number of shares:  Basic	249,774,633	202,117,265	206,787,734
Loss per share (£)	(0.004)	(0.004)	(0.009)

 

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.

For diluted loss per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potential dilutive options and warrants over ordinary shares. Potential ordinary shares resulting from the exercise of share options and warrants have an anti-dilutive effect due to the Group being in a loss position. As a result, diluted loss per share is disclosed as the same value as basic loss per share.

 

5.    Loans and Borrowings

			6 months ended 30 June 20	6 months ended 30 June 19	For the year ended 31 December 19
			Unaudited	Unaudited	Audited
			£	£	£
Current
Interest free related party loan			43,243	43,243	43,243
Interest bearing related party secured loan			486,774	458,909	455,076
Convertible loans			170,000	-	170,000
Total Current loans and borrowings			700,017	502,152	668,319

 

			6 months ended 30 June 20	6 months ended 30 June 19	For the year ended 31 December 19
			Unaudited	Unaudited	Audited
			£	£	£
Non - current
Convertible loans			-	1,170,000	-
Total Non-current loans and borrowings			-	1,170,000	-

 

Cashflow - net debt analysis

 

	01-Jan-20	Debt Funding	Other cashflows	Finance costs	Foreign Exchange	30-Jun-20
	£	£	£	£	£	£
Cash and cash equivalents	(107,243)	36,409	(515,529)	-	(2,495)	(588,858)
Related party loan	43,243	-	-	-	-	43,243
Convertible bonds	170,000	-	-	-	-	170,000
Secured loan	455,076	-	-	-	31,698	486,774
Lease liability	224,138	(36,409)	-	17,884	15,248	220,861
	785,214	-	(515,529)	17,884	44,451	332,200

 

 

6.    Share capital and premium

	Number of Shares	Share capital	Share premium
	Par Value   £0.0004	£	£
At 31 December 2019	229,163,534	91,666	5,466,376
Shares issued (net of expenses) March 2020	20,230,000	8,092	493,405
Shares issued (net of expenses) May 2020	42,500,000	17,000	985,293
At 30 June 2020	291,893,534	116,758	6,945,074

 

On 9 March 2020, the company issued 20,230,000 ordinary shares of 0.04 pence each at 2.5 pence per share, raising £505,750 before expenses of £4,253. On 7 May 2020, the company issued 40,000,000 ordinary shares of 0.04 pence each at 2.5 pence per share, raising £1,000,000 before expenses. On 27 May 2020, the company issued 2,500,000 shares in satisfaction of outstanding debts with an advisor, valued at £47,000.

 

 

 

 

 

7.   Copies of the interim report

 

Copies of this interim report are available on the Company's website at www.verditek.plc.uk and from the Company's registered office, 29 Farm Street, London W1J 5RL.