TIDMPPHP
RNS Number : 5057L
Papillon Holdings PLC
30 April 2020
Papillon Holdings plc / Index: LSE / Epic: PPHP / Sector:
Investment
30 April 2020
Papillon Holdings PLC
('Papillon' or 'the Company')
Results for the year ended 31 December 2019
Chief Executive's Report
Appointment of Directors and new Chairman
On 15 August 2019 the board was pleased to announce that it had
appointed Lord Nicholas Monson to the Board of Directors (the
'Board') as Non-Executive Chairman to the Company. Additionally,
Papillon is pleased to announce that Mr. Anthony Eastman has been
appointed to the Board as a Non-Executive Director.
Lord Monson has 35 years of experience in the City where he has
advised financial institutions and quoted companies in different
sectors on investor relations. Most recently he has served as a
director of AIM-listed Legendary Investments and continues to serve
the company under its new name, Eight Peaks Group plc.
Mr. Eastman is a Chartered Accountant (Australian qualified)
with a number of years' experience in financial management and
corporate advisory services, primarily in the natural resources
sector, along with extensive experience in the public company
environment, having been a director and company secretary of a
number of ASX and AIM junior mining and oil and gas focused
companies. He has previously worked with Ernst & Young and
CalEnergy Gas Ltd, a subsidiary of the Berkshire Hathaway Group of
Companies in both Australia and the UK.
On 18 May 2018, we reached agreement via a non-binding head of
terms to make an investment in 50% of the issued share capital of a
fintech company, Pace Cloud Limited, focussed on the used car
market. Pace Cloud has developed innovative technology that bridges
the gap between private and retail vehicle sales and delivers
consistently high values for the user. It has an aggressive growth
strategy, utilising its unique technology to expand its offering to
an, as yet, underexploited area of the private car sale market;
currently +200,000 private cars are sold and brought every month in
the UK. The app has been launched and can be searched and
downloaded under the name, "CarCloud". The service had not yet been
launched nationally as yet but the metrics continue to be very
promising.
The transaction is progressing well, albeit slower than we would
have liked, due to certain matters that have delayed progress and
more recently the Covid-19 Pandemic outbreak. We have executed a
Share Purchase Agreement to acquire a 50% interest in Pace Cloud
Limited. Additionally, Papillon has, to date, raised GBP500,000 via
the issue of 10% convertible loan notes.
The proceeds from the issue of the Loan Notes have been used, in
conjunction with existing resources, to continue to finance the
costs of developing the CarCloud App and business together with the
day-to-day running expenses of Papillon Holdings PLC. The directors
believe that the investment in Car Cloud has enormous potential in
a very large market, despite the current reduced economic activity
but that it will be well placed to take advantage of the pick-up in
economic activity expected later this year. The proposed investment
should therefore add significant shareholder value and the
directors of Pace Cloud and Papillon continue to investigate routes
to enhance the offering, the valuation and the route to market of
CarCloud. The investment proposes to break new ground in the market
in which it operates, and the business model is a completely new
solution in the way that individuals own and protect their
vehicles, it is a complete ownership solution from purchase and
finance, through maintenance and on to the ultimate sale of a
vehicle.
The Company has submitted a full prospectus to the UK Listing
Authority ('UKLA'), which has already been approved twice and which
will be published in due course. However, we have to make a
re-submission to include these accounts of Papillon Holdings PLC
for the year ended 31 December 2019 as more recent financial
information is required therein. We also have to update
indebtedness statements but we do not expect this to result in many
queries from UKLA and we expect this to be agreed in the relatively
near future in order that the placing and re-admission of the
shares of your company to trading on the standard segment of the
LSE may take place. The Investment is subject, inter alia, to the
completion of due diligence, documentation and compliance with all
regulatory requirements.
Losses have increased from GBP582,000 for the year ended 31
December 2019 (2018: GBP397,000) due largely to higher provisions
for listing costs and higher administrative expenses and interest
payable. Administration costs have increased to GBP443,000 (2018:
GBP369,000) and interest costs have increased to GBP122,000 (2018:
GBP23,000). These are likely to be substantially lower in the
ensuing period. Certain creditors in the balance sheet will be
converted to equity upon re-listing.
Risks and uncertainties
The Company is a relatively new entity, with only a brief
operating history, and therefore, investors have no basis on which
to evaluate the Company's ability to achieve its objective of
identifying, acquiring and operating one or more companies or
businesses.
Whilst the company has executed a Share Purchase Agreement to
acquire a 50% interest in Pace Cloud Limited, the directors are
unable to offer assurance that the relisting of Papillon Holdings
PLC will complete and /or that we will be able to raise the
necessary funds via a placing upon re-listing to enable Car Cloud
to fulfil its short-term plans.
I would personally like to thank very much our shareholders
again for their patience during this process and the extended time
in which the shares of your company have been suspended from
trading and we look forward to a successful future post the
completion of our investment in Car Cloud.
__________________
James Longley
Director
29 April 2020
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2019
Year ended Year ended
31 December 31 December
2019 2018
GBP '000 GBP '000
Notes
Continuing operations
Listing costs 5 (33) (12)
Administrative expenses 5 (443) (369)
Finance costs (122) (23)
Other Income: Interest received 21 16 7
------------- -------------
Loss before taxation (582) (397)
Taxation 7 - -
------------- -------------
Loss and comprehensive loss
for the period (582) (397)
------------- -------------
Basic and diluted loss per
share 8 (0.508p) (0.299p)
Since there is no other comprehensive loss, the loss for the
period is the same as the total comprehensive loss for the period
attributable to the owners of the Company.
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2019
As at 31 December
2019 2018
Notes GBP '000 GBP '000
Assets
Current assets
Other receivables 10 23 169
Cash and cash equivalents 12 - 31
Non-current asset
Other receivables 11 457 -
Total Assets 480 200
Equity and liabilities
Current liabilities
Trade and other payables 13 789 227
Convertible loan notes 14 478 194
Total Liabilities 1,267 421
Equity attributable to equity holders
of the company
Share Capital - Ordinary shares 15 132 132
Share Premium account 15 602 602
Loan Notes Equity Reserve 14 22 6
Accumulated Deficit 16 (1,543) (961)
Total Equity (787) (221)
Total Equity and liabilities 480 200
-------------- --------------
The Statement of Financial Position of the Company is stated
below:
Approved by the Board and authorised for issue on 29 April
2020
James Longley
Director
STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2019
31 December 31 December
2019 2018
Notes
GBP'000 GBP'000
Cash flows from operating activities
Operating loss 5 (582) (397)
(Increase)/decrease in receivables (311) (45)
Increase/(decrease) in payables 562 204
------------ ------------
Cash flow from operating activities (331) (238)
------------ ------------
Cash flows from financing activities
Issue of 10% Convertible Loan Notes 14 300 200
------------ ------------
Net cash from/(used in) financing
activities 300 200
------------ ------------
Net increase/decrease in cash and
cash equivalents (31) (38)
Cash and cash equivalents at the
beginning of the period 31 69
------------ ------------
Cash and cash equivalents at end
of period - 31
------------ ------------
Represented by: Bank balances and
cash - 31
------------ ------------
STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2019
Notes Share Share Loan Note Accumulated Total
capital premium Equity deficit equity
reserve
GBP'000 GBP'000 GBP'000 GBP'000
As at 31 December
2017 132 602 - (564) 170
Equity element
of the issue of
10% convertible
loan notes - - 6 - 6
Loss for the year - - - (397) (397)
As at 31 December
2018 132 602 6 (961) (221)
Equity element
of the issue of
10% convertible
loan notes - - 16 - 16
Loss for the year - - - (582) (582)
As at 31 December
2019 132 602 22 (1,543) (787)
========= ========= ========== ============ ========
Accumulated deficit represents the cumulative loss of the
company attributable to equity shareholders.
**S **
For further information visit http://papillonholdingsplc.com or
contact the following:
Charles Tatnall Papillon Holdings plc info@papillonholdings.com
Isabel de Salis St Brides Partners Limited info@stbridespartners.co.uk
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2019
1 General information
Papillon Holdings Plc ('the company') is an investment company
incorporated in the United Kingdom. The address of the registered
office is disclosed on the company information page at the front of
the annual report. The Company was incorporated and registered in
England and Wales on 19 October 2015 as a private limited company
and re-registered on 24 June 2016 as a public limited company when
listed on London Stock Exchange.
2 Accounting policies
2.1 Basis of Accounting
This financial information has been prepared in accordance with
International Financial Reporting Standards (IFRS), including IFRIC
interpretations issued by the International Accounting Standards
Board (IASB) as adopted by the European Union and with those parts
of the Companies Act 2006 applicable to companies reporting under
IFRS. The financial statements have been prepared under the
historical cost convention. The principal accounting policies
adopted are set out below.
These policies have been consistently applied.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Company's accounting policies. The areas involving a
higher degree of judgment or complexity, or areas where assumptions
and estimates are significant to the financial statements are
disclosed in Note 3. The preparation of financial statements in
conformity with IFRSs requires management to make judgments,
estimates and assumptions that affect the application of accounting
policies and reported amounts of assets, liabilities, income and
expenses. Although these estimates are based on management's
experience and knowledge of current events and actions, actual
results may ultimately differ from these estimates.
The estimates and underlying assumptions are reviewed on an
on-going basis. Revisions to accounting estimates are recognised in
the period in which the estimates are revised if the revision
affects only that period or in the period of the revision and
future periods if the revision affects both current and future
periods.
a) Going concern
These financial statements have been prepared on the assumption
that the Company is a going concern. When assessing the foreseeable
future, the Directors have looked at a period of at least twelve
months from the date of approval of this report and the working
capital requirements of the Company.
After making enquiries, the Directors firmly believe that
together with their support the Company has adequate resources to
continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the financial statements.
The Directors have considered the available cash resources of
the Company and its current forecasts and has a reasonable
expectation that the Company have adequate resources and support to
continue in operational existence for the foreseeable future,
considered to be at least 12 months for the date of approval from
the financial statements. Further details of the Directors'
assessment are provided in the Strategic Report. The Directors draw
attention to the current uncertainty in respect of the Covid-19
global pandemic.
b) Changes in accounting policies and disclosures
(a) New and amended standards adopted by the Company
The Company has applied any applicable new standards, amendments
to standards and interpretations that are mandatory for the
financial year beginning on or after 1 January 2019 including IFRS
16. The company has no leases therefore IFRS 16 has no impact.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 supersedes IAS 11 Construction Contracts, lAS 18 Revenue
and related Interpretations and it applies, with limited
exceptions, to all revenue arising from contracts with its
customers. IFRS 15 establishes a five-step model to account for
revenue arising from contracts with customers and requires that
revenue be recognised at an amount that reflects the consideration
to which an entity expects to be entitled in exchange for
transferring goods or services to a customer.
IFRS 15 requires entities to exercise judgement, taking into
consideration all of the relevant facts and circumstances when
applying each step of the model to contracts with their customers
The standard also specifies the accounting for the incremental
costs of obtaining a contract and the costs directly related to
fulfilling a contract. In addition, the standard requires extensive
disclosures.
(b) New, amended standards, interpretations not adopted by the
Company
A number of new standards, amendments to standards and
interpretations to existing standards have been published that are
mandatory for the Company's accounting periods beginning after 1
January 2018, or later periods, where the Company intends to adopt
these standards, if applicable, when they become effective. The
Company has disclosed below those standards that are likely to be
applicable to the Company and is currently assessing the impact of
these standards.
-- IFRS 16 Lease, effective date 1 January 2019 sets out the
principles for the recognition, measurement, presentation and
disclosure of leases for both parties to a contract, i.e. the
customer ('lessee') and the supplier ('lessor'). IFRS 16 completes
the IASB's project to improve the financial reporting of leases and
replaces the previous leases Standard, IAS 17 Leases, and related
Interpretations.
-- IFRIC 23 "Uncertainty over Income Tax Treatments", effective
date 1 January 2019 clarifies application of recognition and
measurement requirements in IAS 12 Income Taxes when there is
uncertainty over income tax treatments.
Management has fully assessed the impact of these standards but
does not believe they have a material impact on the financial
statements.
2.2 Segmental reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the steering committee that makes
strategic decisions. In the opinion of the director, the company
has one class of business, being that of an investment Company. The
company's primary reporting format is determined by the
geographical segment according to the location of its
establishments. There is currently only one geographic reporting
segment, which is the UK. All costs are derived from the single
segment.
2.3 Cash and cash equivalents
Cash and cash equivalents comprised of cash at bank and in
hand.
2.4 Equity
Equity comprises the following:
-- Share capital: the nominal value of equity shares
-- Share premium
-- Loan notes equity reserve and
-- Accumulated deficit.
Equity instruments
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 proceeds.
Financial assets
On initial recognition, financial assets are classified as
either financial assets at fair value through the statement of
profit or loss, held-to-maturity investments, loans and receivables
financial assets, or available-for-sale financial assets, as
appropriate.
Loans and receivables
The Company classifies all its financial assets as trade and
other receivables. The classification depends on the purpose for
which the financial assets were acquired.
Trade receivables and other receivables that have fixed or
determinable payments that are not quoted in an active market are
classified as loans and receivables financial assets. Loans and
receivables financial assets are measured at amortised cost using
the effective interest method, less any impairment loss. Interest
income is recognised by applying the effective interest rate,
except for short-term receivables when the recognition of interest
would be immaterial.
The Company's loans and receivables financial assets comprise
other receivables (excluding prepayments) and cash and cash
equivalents included in the Statement of Financial Position.
Financial liabilities
Financial liabilities are recognised when, and only when, the
Group becomes a party to the contracts which give rise to them and
are classified as financial liabilities at fair value through the
profit and loss or loans and payables as appropriate. When
financial liabilities are recognised initially, they are measured
at fair value plus directly attributable transaction costs and
subsequently measured at amortised cost using the effective
interest method other than those categorised as fair value through
income statement.
Fair value through the income statement category comprises
financial liabilities that are either held for trading or are
designated to eliminate or significantly reduce a measurement or
recognition inconsistency that would otherwise arise. Derivatives
are also classified as held for trading unless they are designated
as hedges. There were no financial liabilities classified under
this category.
The Company determines the classification of its financial
liabilities at initial recognition and re-evaluate the designation
at each financial year end.
A financial liability is de-recognised when the obligation under
the liability is discharged, cancelled or expires.
When an existing financial liability is replaced by another from
the same party on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or
modification is treated as a de-recognition of the original
liability and the recognition of a new liability, and the
difference in the respective carrying amounts is recognised in the
income statement.
Convertible loan notes and derivative financial instruments
The presentation and measurement of loan notes for accounting
purposes is governed by IAS 32 and IAS 39. These standards require
the loan notes to be separated into two components:
- A derivative liability, and
- A debt host liability.
This is because the loan notes are convertible into an unknown
number of shares, therefore failing the 'fixed-for-fixed' criterion
under IAS 32. This requires the 'underlying option component' of
the loan note to be valued first (as an embedded derivative), with
the residual of the face value being allocated to the debt host
liability (refer financial liabilities policy above).
Compound financial instruments issued by the Group comprise
convertible notes denominated in British pounds that can be
converted to ordinary shares at the option of the holder, when the
number of shares to be issued is fixed and does not vary with
changes in fair value.
The liability component of compound financial instruments is
initially recognised at the fair value of a similar liability that
does not have an equity conversion option. The equity component is
initially recognised at the difference between the fair value of
the compound financial instrument as a whole and the fair value of
the liability component. Any directly attributable transaction
costs are allocated to the liability and equity components in
proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a
compound financial instrument is measured at amortised cost using
the effective interest method. The equity component of a compound
financial instrument is not remeasured.
Interest related to the financial liability is recognised in
profit or loss. On conversion at maturity, the financial liability
is reclassified to equity and no gain or loss is recognised.
The Group's financial liabilities include amounts due to a
director, trade payables and accrued liabilities. These financial
liabilities are classified as FVTPL are stated at fair value with
any gains or losses arising on re-measurement recognised in profit
or loss. Other financial liabilities, including borrowings are
initially measured at fair value, net of transaction costs.
2.5 Taxation
Income tax expense represents the sum of the tax currently
payable and deferred tax.
There is no tax currently payable based on the Company making a
loss for the year. Taxable profit differs from net profit as
reported in the statement of comprehensive income because it
excludes items of income and expense that are taxable or deductible
in other years, and it further excludes items that are never
taxable or deductible. The Company's liability for current tax is
calculated using tax rates that have been enacted or substantively
enacted by the end of the reporting period.
Deferred tax is recognised on temporary differences between the
carrying amount of assets and liabilities in the consolidated
financial statements and the corresponding tax bases used in the
computation of taxable profit. Deferred tax liabilities are
generally recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all deductible
temporary differences to the extent that it is probable that
taxable profits will be available against which those deductible
temporary differences can be utilised. Such deferred tax assets and
liabilities are not recognised if the temporary differences arise
from 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 profit.
Deferred tax liabilities are recognised for taxable temporary
differences associated with investments in subsidiaries, except
where the Company 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 assets arising
from deductible temporary differences associated with such
investments are only recognised to the extent that it is probable
that there will be sufficient taxable profits against which to
utilise the benefits of the temporary differences and they are
expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the
end of the each reporting period and reduced to the extent that it
is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the period in which the
liability is settled or the asset realised. The measurement of
deferred tax assets and liabilities reflects the tax consequences
that would follow from the manner in which the Company expects, at
the end of the reporting period, to recover or settle the carrying
amount of its assets and liabilities.
Current or deferred tax for the year is recognised in profit or
loss, except when it relates to items that are recognised in other
comprehensive income or directly in equity, in which case the
current and deferred tax is also recognised in other comprehensive
income or directly in equity respectively. Where current tax or
deferred tax arises from the initial accounting for a business
combination, the tax effect is included in the accounting for the
business combination.
3 Critical accounting estimates and judgments
The company makes certain judgements and estimates which affect
the reported amount of assets and liabilities. Critical judgements
and the assumptions used in calculating estimates 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.
In the process of applying the Company's accounting policies,
which are described above, the Directors do not believe that they
have had to make any assumptions or judgements that would have a
material effect on the amounts recognised in the financial
information.
Impairment of receivables
The company's management reviews receivables on a regular basis
to determine if any provision for impairment is necessary. The
policy for the impairment of receivables of the company is based
on, where appropriate, the evaluation of collectability and ageing
analysis of the receivables and on management's judgement. A
considerable amount of judgement is required in assessing the
ultimate realisation of these outstanding amounts, including the
current creditworthiness and the past collection history of each
debtor. If the financial conditions of debtors of the company were
to deteriorate, resulting in an impairment of their ability to make
payments, provision for impairment may be required.
4 Financial risk management
The Company's activities may expose it to some financial risks.
The Company's overall risk management programme focuses on the
unpredictability of financial markets and seeks to minimise
potential adverse effects on the company's financial
performance.
a) Liquidity risk
Liquidity risk is the risk that the Company will encounter
difficulty in meeting obligations associated with financial
liabilities. The responsibility for liquidity risks management
rest
with the Board of Directors, which has established appropriate
liquidity risk management framework for the management of the
company's short term and long-term funding risks management
requirements. During the period under review, the Company has not
utilised any borrowing facilities. The Company manages liquidity
risks by maintaining adequate reserves by continuously monitoring
forecast and actual cash flows, and by matching the maturity
profiles of financial assets and liabilities.
b) Capital risk
The Company takes great care to protect its capital investments.
Significant due diligence is undertaken prior to making any
investment. The investment is closely monitored.
Financial Risk Management Financial instruments by category
Financial assets 31 December 2019 31 December 2018
GBP'000 GBP'000
Other receivables 457 148
Prepayments and Accrued interest 23 21
Cash and cash equivalents -__ 31
Total current financial assets 480 200
Financial liabilities 31 December 2019 31 December 2018
GBP'000 GBP'000
Trade and other payables 789 227
Convertible Loan notes 478 194
Total current financial liabilities 1,267 421
Fair value hierarchy All the financial assets and financial
liabilities recognised in the financial statements which are
short-term in nature are shown at the carrying value which also
approximates the fair values of those financial instruments.
Therefore, no separate disclosure for fair value hierarchy is
required.
The Company's activities expose it to a variety of financial
risks, mainly credit risk and liquidity risk.
Market risk Market risk is defined as the risk that the fair
value of future cash flows of a financial instrument will fluctuate
because of changes in market prices. Company's market risks arise
from open positions in (a) interest bearing assets and liabilities,
and (b) foreign currencies; to the extent that these are exposed to
general and specific market movements (see details below).
(i) Interest rate risk The Company's interest-bearing assets
comprise of only cash and cash equivalents. As Papillon Holdings'
interest-bearing assets do not generate significant amounts of
interest; changes in market interest rates do not have any
significant direct effect on its income.
(ii) Currency risk The Company is exposed to movement in foreign
currency exchange rates arising from normal trading transactions
that are denominated in currencies other than the respective
functional currencies of the entity, primarily with respect to GBP.
The Company does not have a policy to hedge its exposure to foreign
currency exchange risk as the Company has both revenue and
exposures denominated in GBP such that the net exposure is
declining as the Company moves towards being naturally hedged.
Credit risk Credit risk refers to the risk that a counterparty
will default on its contractual obligations resulting in financial
loss to the Company. Credit risk arises from cash balances
(including bank deposits, cash and cash equivalents) and credit
exposures to trade receivables. The Company's maximum exposure to
credit risk is represented by the carrying value of cash and cash
equivalents and trade receivables.
Liquidity risk: Trade and other payables are monitored as part
of normal management routine.
Borrowings and other liabilities mature according to the
following schedule:
2019 2018
Within 1 year Within 1 year GBP'000 GBP'000
Trade and other payables 789 227
Convertible Loan notes 478 194
5 Operating loss, expenses by nature and personnel
Year to 31 Year to
December 31
2019 December
2018
GBP'000 GBP'000
Operating loss is stated after
charging:
Directors Remuneration - 2
Consulting and advisory fees 72 116
Consulting and advisory fees (reverse 200 -
costs)
Premises 18 35
Legal and professional fees 111 56
Listing costs 33 12
Audit fees 10 9
Non-audit fees 10 -
Other administrative expenses 33 154
----------- ----------
Total administrative expenses 487 384
=========== ==========
6 Personnel
The average monthly number of employees during the period was
two, being the directors.
There were no benefits, emoluments or remuneration payable
during the period for key management personnel including the two
directors other than the information disclosed in note 20.
7 Taxation
Year ended Year to
31 December 31 December
2019 2018
GBP'000 GBP'000
Total current tax - -
------------- -------------
Factors affecting the tax charge
for the period
Loss on ordinary activities before
taxation (582) (397)
------------- -------------
Loss on ordinary activities before
taxation multiplied by standard
rate of UK corporation tax of
19% (2018: 19%) (110) (75)
Effects of:
Non-deductible expenses 46 26
Tax losses carried forward 64 49
Current tax charge for the period - -
------------- -------------
No liability to UK corporation tax arose on ordinary activities
for the current period.
The company has estimated excess management expenses of
GBP848,000 available for carry forward against future trading
profits.
The tax losses have resulted in a deferred tax asset of
approximately GBP161,000 (2018: GBP109,000) which has not been
recognised in the financial statements due to the uncertainty of
the recoverability of the amount.
8 Earnings per share
Year to 31 Year to 31
December December
2019 2018
Basic loss per share
is calculated by dividing
the loss attributable
to equity shareholders
by the weighted average
number of ordinary shares
in issue during the period:
Loss after tax attributable (GBP582,404) (GBP396,749)
to equity holders of
the company
Weighted average number
of ordinary shares 132,400,000 132,400,000
Basic and diluted loss
per share (0.440p) (0.299p)
============= =============
There were no potential dilutive shares in issue during the
period.
9 Capital risk management
The Directors' objectives when managing capital are to safeguard
the Company's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. At the date of this financial information, the
Company had been financed by the introduction of capital. In the
future, the capital structure of the Company is expected to consist
of borrowings and equity attributable to equity holders of the
Company, comprising issued share capital and reserves.
10 Trade and other receivables
2019 2018
GBP'000 GBP'000
Other receivables - 148
Prepayments and accrued
interest 23 21
-------- --------
23 169
======== ========
11 Receivables due after one year
2019 2018
GBP'000 GBP'000
Other receivables 457 -
457 -
======== ========
Other receivables represent a loan advanced to Pace Cloud
Limited, a company which is still at the development stage and
pre-revenue and in which Papillon are acquiring 50% of upon
re-listing. This loan will be converted in full, together with
further advances and interest accrued to that date, to a maximum of
GBP800,000 in return for an investment in the ordinary equity of
Pace Cloud Limited of 50% upon which no further dilution is
permitted. Any further investments in Pace Cloud Limited, to a
maximum of GBP2,000,000, will be by way of a five-year 5%
Cumulative Preference Shares. The maximum may be reviewed in the
future depending on the performance of the investment in Pace Cloud
Limited. The Directors have undertaken a full impairment review and
have concluded no write down of the loan is required. The forecasts
have been reviewed for Pace Cloud Limited to determine the
recoverability by the Directors.
The interest on the loan is 5% per annum. The loan advanced and
interest accrued is repayable in equal monthly instalments over 48
months commencing on the third anniversary of the first draw down
of the loan.
Pace Cloud Limited is subject to numerous risks and
uncertainties, including the following key risks:
Risks associated with Pace Cloud's short operating history
Pace Cloud is a recently formed entity and is still at an early
stage of establishing its commercial development and has no
revenues to date. There is accordingly no guarantee that the
business will be successful, nor can there be any certainty that
the Group will achieve the projected revenues from its
operations.
Competition may limit Pace Cloud's operation and profits
Risk of competition and the company suffers the risk that it may
not grow its user base sufficiently or otherwise reach a critical
mass of users.
The company will be reliant on software developers and
programmers for operational support
Pace Cloud relies on sole third-party supplier to develop,
design and launch technology.
12 Cash and cash equivalents
2019 2018
GBP'000 GBP'000
Cash at bank - 31
---------- --------
- 31
========== ========
13 Trade and other payables
2019 2018
GBP'000 GBP'000
Trade payables 457 166
Accruals 332 61
-------- --------
789 227
======== ========
14 Borrowings
Convertible loans
On 26 October 2018 the Company issued GBP100,000 convertible
loan notes, repayable on 25 October 2019 if not converted into
shares prior to that date, and bearing interest at 10% p.a. payable
quarterly in arrears. On 28 November 2018 the Company also issued
GBP100,000 convertible loan notes, due for repayment on 27 November
2019 if not converted into shares prior to that date, and bearing
interest at 10% p.a. payable quarterly in arrears. Neither of the
loan note issues were converted on or by the due dates and both
continue to attract interest on the same terms at 10% pa payable
quarterly in arrears.
On 16 May 2019 the Company issued GBP300,000 convertible loan
notes, repayable on 15 May 2020 if not converted into shares prior
to that date, and bearing interest at 10% p.a. payable quarterly in
arrears.
The net proceeds from the issue of the loan notes issued have
been split between the liability element and an equity component,
representing the fair value of the embedded option to convert the
liability into equity of the Company:
The Directors estimate the fair value of the liability component
of the loan notes at 31 December 2019 to be approximately
GBP478,000. This fair value has been calculated by discounting the
future cash flows at the deemed market rate of 12%.
15 Share capital
2019 2018
GBP'000 GBP'000
Allotted, called up and fully paid
132,400,000 Ordinary shares of GBP0.001
each 132 132
-------- --------
132 132
======== ========
The 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.
The Company has issued Placing warrants to the Placees to
subscribe at 1.5 pence per Ordinary share for up to 41,200,000
Ordinary shares each on the basis of one Placing warrant for every
two Placing shares subscribed for by each Placee. The Placing
warrants are unlisted and are exercisable up to the second
anniversary of Admission in whole or in a minimum aggregate amount
of 50,000 Placing warrants.
The Company has issued Founder warrants to James Longley and
Charles Tatnall, to subscribe at 1.25 pence per Ordinary share for
up to 10 million Ordinary shares each, they also hold placee
warrants of 5 million each. The Founder warrants are unlisted and
are exercisable up to the third anniversary of Admission in whole
or in a minimum aggregate amount of 50,000 Founder warrants.
The Company has issued Broker warrants to JIM Nominees Limited
to subscribe at the Placing Price for up to 10,300,000 Ordinary
Shares. The Broker warrants are unlisted and are exercisable up to
the fifth anniversary of Admission in whole or in a minimum
aggregate amount of 50,000 Broker warrants.
16 Accumulated deficit
2019 2018
GBP'000 GBP'000
At start of period (961) (564)
Loss for the period (582) (397)
As at 31 December (1,543) (961)
======== ========
17 Contingent liabilities
The company has no contingent liabilities in respect of legal
claims arising from the ordinary course of business.
18 Capital commitments
There was no capital expenditure contracted for at the end of
the reporting period but not yet incurred.
19 Ultimate controlling party
As at 31 December 2019 the ultimate controlling parties of the
Company are the Directors, Charles Tatnall and James Longley, who
have a combined shareholding of more than 50% of the ordinary share
capital of the company.
20 Events after the reporting period
A non-adjusting post balance sheet event has been recognised
with the anticipated financial effect of more widespread
coronavirus infection having significant impact on the Group in
relation to the following accounting treatments:
Going concern and funding:
Management have to make judgements on various uncertain future
outcomes of events or conditions, consideration when determing
whether or not the Company can prepare its financial statements on
the going concern bases:
The degree of uncertainty associated with the outcome of
Coronavirus increases significantly the further into the future.
Management will assess all available information and will
continually assess the situation.
21 Related party transactions
During the year ended 31 December 2019 the Directors received
consultancy fees through the following companies:
2019 Fees 2018
Director Company paid Fees paid
GBP GBP
James Longley
James Longley Limited 57,600 56,400
Charles Tatnall Tatbels Limited 57,600 56,400
---------- ------------
115,200 112,800
During the year ended 31 December 2019 neither of the Directors
were any paid fees
2019 Fees 2018 Fees
Director paid paid
GBP GBP
James Longley - -
Charles Tatnall - 2,578
------------ ----------
- 2,578
During the year ended 31 December 2019 the Company paid rent of
GBP17,700 (2018: GBP35,400) in respect of rental of offices. The
head lease on these offices is owned by James Longley.
During the year ended 31 December 2019 the Company received a
loan of GBP8,915 from Fandango Holdings PLC at a rate of 5% per
month payable upon demand. Charles Tatnall is a director of
Fandango Holdings PLC.
During the year ended 31 December 2019 the Company made loans of
GBP57,000 to Stranger Holdings PLC at an interest rate of 5% per
month. The loan amount was fully repaid by 17 December 2018. Both
Charles Tatnall and James Longley are directors of Stranger
Holdings PLC.
Assignment of Loan and Transfer of Litigation Rights
On 18 April 2018, James Longley assigned to the Company all of
James Longley' s legal and beneficial right, title and interest in
a GBP100,000 loan that James Longley had made to an individual,
namely James Thorpe, between 5 February 2016 and 20 September 2017,
to fund two new ventures started by Mr Thorpe ("New Ventures" ).
James Longley' s interests in bringing claims against Mr Thorpe and
the New Ventures in respect of James Longley' s GBP100,000 loan are
aligned with the interests of the Company, which had also loaned
monies to Mr Thorpe and the New Ventures in anticipation of a
possible reverse takeover by the Company of the New Ventures. In
exchange for making this assignment, James Longley is to receive
GBP 90,000 from the Company. The amount due to James Longley is
included in 'Other payables' and an impairment of GBP90,000 has
been booked against claims receivable from Mr Thorpe and New
Ventures.
Separately, on 18 April 2018, James Longley transferred to the
company rights to bring a claim against Mr Thorpe arising out of an
arrangement between James Longley, individually, and Mr Thorpe,
individually, for James Longley to have business opportunities in
respect of New Ventures. In exchange for making this transfer,
James Longley is to receive GBP95,000 from the Company.
Accordingly, by virtue of James Longley's loan assignment and
litigation- rights transfer, the Company has a contingent liability
to James Longley and a contingent asset on the recovery from Mr
Thorpe and New Ventures.
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 or visit www.rns.com.
END
FR IMMMTMTIJBRM
(END) Dow Jones Newswires
April 30, 2020 07:00 ET (11:00 GMT)
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