TIDMCHAL
RNS Number : 2925V
Challenger Acquisitions Limited
06 August 2020
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, WITHIN, INTO OR IN THE UNITED STATES, AUSTRALIA, CANADA
OR JAPAN.
For Immediate Release
6 August 2020
Challenger Acquisitions Limited
("Challenger" or the "Company")
Interim Results
Challenger Acquisitions Limited (LSE: CHAL) is pleased to
announce its interim results for the period ended 30 June 2020.
Interim Management Report
As stated in our final results on 13 May 2020 Challenger is
seeking out a new project that can properly utilise the public
company platform from a financial and regulatory perspective. The
following is a summary of changes for the first six months of this
year and to the date of this report:
New Funding:
In May, the Company issued an unsecured convertible note for
GBP40,800 for working capital purposes. The note is convertible at
a fixed price of 0.1p per ordinary share, accrues interest at 5%
per annum and is due on 21 May 2021.
New Director:
In May, Mr. Jonathan Tidswell-Pretorius joined the board of
directors as a non-executive director. His corporate experience
will be useful in the active search for an appropriate project for
Challenger.
Note holders:
The other two remaining convertible note holders are updated
regularly on the search process for a potential new project and are
actively cooperating in this process.
Dallas Wheel Investment:
To date, the Company has received US$275,000 of the original
US$300,000 investment in the Odyssey of Texas project. The
remaining balance of US$25,000 is still outstanding and being
pursued by the Company. Until the remaining balance has been
received, the original convertible promissory note and securities
purchase agreement stays in place.
New York Wheel investment:
The Company still retains two equity units in this project.
Since the value of these units relates directly to the stalled
project on Staten Island, there is no carrying value on the balance
sheet for this investment.
On behalf of the Challenger Board we would like to take this
opportunity to thank our shareholders, note holders and all
stakeholders for their patience and support during this search
process.
Financial and Corporate Overview
During the six month period we received GBP40,800 from the
issuance of new unsecured convertible notes. The funds received
plus the continued cost control measures have enabled the Company
to continue operating this year.
The half year results report a loss of GBP133k (2019 six month
profit was GBP1,086k), which includes regulatory and public company
costs for Challenger of GBP45k and non-cash finance charges of
GBP88k. The 2019 profit is due primarily to the one-time reversal
of the 1,250k euro liability plus accrued interest related to the
Starneth transaction in 2017.
The financial position at 30 June includes borrowings of
GBP1,939k related to three convertible notes, including the most
recent note issued in May of this year. Trade and other payables of
GBP433k include regular trade payables of GBP68k, accrued interest
payable of GBP358k on the convertible notes and a short term audit
provision of GBP7k.
Corporate activities to date include the completion of the 2019
yearend audit, continued cost control measures, expanding the board
of directors, completing another funding, evaluation of potential
projects and communicating with noteholders and shareholders.
Outlook
Looking forward we expect positive results from the ongoing
process to seek out, evaluate and review a potential project that
can utilise the public company platform in a manner that makes
sense from a financial and regulatory perspective.
I would like to take this opportunity to thank our patient
stakeholders and the Board for their continued support.
Mark Gustafson
Chief Executive Officer
5 August 2020
Responsibility Statement
The Directors are responsible for preparing the Interim Report
in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority ('DTR') and with
International Accounting Standard 34 on Interim Financial Reporting
(IAS 34).
The Directors confirm that the interim financial statements have
been prepared in accordance with IAS 34 and that as required by DTR
4.2.7 and DTR 4.2.8, the Interim Report includes a fair review
of:
-- important events that have occurred during the first six months of the year;
-- the impact of those events on the financial statements;
-- a description of the principal risks and uncertainties for
the remaining six months of the financial year; and
-- details of any related party transactions that have
materially affected the Company's financial position or performance
in the six months ended 30 June 2020.
The Directors who served during the period and up to the date of
signing the interim financial statements were:
Mark Gustafson
George Lucan
Rupert Baring
Jonathan Tidswell-Pretorius (appointed 22 May 2020)
Company Secretary:
Markus Kameisis
By Order of the Board
Markus Kameisis
Chief Financial Officer
5 August 2020
Condensed Consolidated Statement of Comprehensive Income
The condensed consolidated statement of comprehensive income of
the Group for the six month period from 1 January 2020 to 30 June
2020 is set out below.
Period ended Period ended
30 June 30 June
2020 2019
(unaudited) (unaudited)
Note GBP'000 GBP'000
Administrative expenses (45) (90)
Profit from sale of financial asset - 1,269
Recovery of written off loan receivable - 15
-------------- --------------
Operating loss / profit on ordinary
activities before taxation (45) 1,194
Finance costs (88) (108)
-------------- --------------
Loss / Profit before income taxes (133) 1,086
Income tax expense - -
-------------- --------------
Loss / Profit after taxation (133) 1,086
Loss / Profit for the period (133) 1,086
Fair value movement on available for - -
sale financial asset
-------------- --------------
Total comprehensive loss / profit attributable
to owners of the parent (133) 1,086
-------------- --------------
Loss / Profit per share:
Basic & diluted 8 (0.0004) 0.004
Condensed Consolidated Statement of Financial Position
The condensed consolidated statement of financial position as at
30 June 2020 is set out below:
As at 30
June As at 31 December
2020 2019
unaudited audited
Note GBP'000 GBP'000
Assets
Current assets
Cash and cash equivalents 14 16
Trade and other receivables 14 6
Short-Term investments 22 22
----------- ------------------
Total current assets 49 44
----------- ------------------
Total assets 49 44
=========== ==================
Equity and liabilities
Capital and reserves
Share capital account 5 8,394 8,364
Equity component of convertible
instruments 106 106
Accumulated deficit (10,823) (10,690)
Total equity attributable to equity
holders (2,323) (2,220)
Current liabilities
Borrowings 9 1,939 1,923
Trade and other payables 433 341
----------- ------------------
Total current liabilities 2,372 2,264
Total equity and liabilities 49 44
Condensed Consolidated Statement of Changes in Equity
The unaudited condensed consolidated statement of changes in
equity of the Group for the period from 1 January 2019 to 30 June
2019 is set out below:
Share Equity component Available
Capital of convertible for sale Retained
account instruments reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
On 1 January 2019 8,324 106 - (11,626) (3,196)
Profit for the period - - - 1,086 1,086
Total comprehensive
profit for the period - - - 1,086 1,086
-------- ---------------- --------- --------- -------
As at 30 June 2019 8,324 106 - (10,540) (2,110)
-------- ---------------- --------- --------- -------
The unaudited condensed consolidated statement of changes in
equity of the Group from 1 January 2020 to 30 June 2020 is set out
below:
Share Equity component
Capital of convertible Retained
account instruments earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
On 1 January 2020 8,364 106 (10,690) (2,220)
Profit for the period (133) (133)
Total comprehensive
profit for the period (133) (133)
-------- ---------------- --------- -------
Issuance of shares 30 30
As at 30 June 2020 8,394 106 (10,823) (2,323)
-------- ---------------- --------- -------
Share capital comprises the Ordinary Shares issued by the
Company.
Retained earnings represent the aggregate retained losses of the
Company since incorporation.
Equity component of convertible instruments represents the
equity element of instruments with a convertible element.
Condensed Consolidated Statement of Cash Flows
The condensed consolidated cash flow statement of the Group from
1 January 2020 to 30 June 2020 is set out below:
Period ended Period ended
30 June 30 June
2020 2019
Unaudited Unaudited
GBP'000 GBP'000
Net cash used in operating activities
Profit / Loss for the period before taxation (133) 1,086
Non-Cash Profit from sale of financial
asset - (1,269)
Interest 85 108
Operating cash flows before movements in
working capital (48) (75)
Decrease (increase) in receivables (8) 195
Increase (decrease) in accounts payable
and accrued liabilities (17) (30)
------------- -------------
Net cash used in operating activities (73) 90
Investment in available for sale financial - -
asset
Net cash outflow from investing activities - -
Issue of ordinary shares net of issue costs 30 -
Issue of convertible instruments 41 -
Finance Expenses - (82)
Net cash inflow from financing activities 71 (82)
Net increase (decrease) in cash and cash
equivalents (2) 8
============= =============
Cash and cash equivalent at beginning of
period 16 29
Cash and cash equivalent at end of period 14 37
============= =============
Notes to the Condensed Consolidated Interim Report
1. General information
The Company was incorporated under section II of the Companies
(Guernsey) Law 2008 on 24 November 2014, it is limited by shares
and has registration number 59383.
The Company had an investment of US$3m in New York Wheel
Investor LLC, a company that was set up to fund the equity
component for the project to build a New York Wheel. This
investment was fully impaired as a result of the termination of the
project and litigation between New York Wheel Investor LLC and one
of the primary contractors. One share with a nominal value of US$1m
was given to the former Starneth owners to pay the debt resulting
from the second tranche of the purchase contract. The Company
entered into an investment into the Dallas Wheel project. This
investment was largely recovered during 2019 and the remaining
amount should be paid back in the second half of 2020.
The Company's registered office is located at PO Box 186, Royal
Chambers, St Julian's Avenue, St. Peter Port, Guernsey GY1 4HP,
Channel Islands.
The company has not prepared individual financial statements in
accordance with section 244 of the Companies (Guernsey) Law
2008.
2. BASIS OF PREPARATION
The interim condensed unaudited financial statements for the
period ended 30 June 2020 have been prepared in accordance with IAS
34 interim financial reporting. They do not include all the
information required for a complete set of IFRS financial
statements. However, selected explanatory notes are included to
explain events and transactions that are significant to an
understanding of the changes in the group's financial position and
performance since the last annual consolidated financial statements
as at the year ended 31 December 2019. The results for the period
ended 30 June 2020 are unaudited.
The condensed unaudited consolidated financial statements for
the period ended 30 June 2020 have adopted accounting policies
consistent with those followed in the preparation of the group's
annual consolidated financial statements for the year ended 31
December 2019.
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements requires the use of
accounting estimates which, by definition, will seldom equal the
actual results. Management also needs to exercise judgement in
applying the group's accounting policies.
This note provides an overview of the areas that involved a
higher degree of judgement or complexity, and of items which are
more likely to be materially adjusted due to estimates and
assumptions turning out to be wrong. Detailed information about
each of these estimates and judgements is included together with
information about the basis of calculation for each affected line
item in the financial statements.
Significant estimates and judgements
The areas involving significant estimates or judgements are:
-- Going concern
At 30 June 2020 the group had net current liabilities of
GBP2,323k. The financial statements have been prepared on the
assumption that the Company will continue as a going concern. Under
the going concern assumption, an entity is ordinarily viewed as
continuing in business for the foreseeable future with neither the
intention nor the necessity of liquidation, ceasing trading or
seeking protection from creditors pursuant to laws or regulations.
In assessing whether the going concern assumption is appropriate,
the Directors take into account all available information for the
foreseeable future, in particular for the twelve months from the
date of approval of the financial information.
Based on the continued support from all three convertible note
holders and maintaining stringent costs control measures, the
Directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for the
foreseeable future although future funding may be required in the
period. The primary note holder is supportive of the Company and
there are no material external creditors. In order to support a new
acquisition, the fund raising options may include a substantial
equity offering or a new financing facility. The fund raising
options are early stage and there is a material uncertainty as to
whether additional funding will be received and therefore regarding
the going concern basis of preparation. The financial statements do
not include any adjustments that would be required if the going
concern basis was not appropriate.
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. At the date of this financial information, the
Company had been financed from equity and convertible notes. In the
future, the capital structure of the Company is expected to consist
of convertible notes and equity attributable to equity holders of
the Company, comprising issued share capital and reserves.
4. Business Segments
For the purpose of IFRS8, the Chief Operating Decision Maker
"CODM" takes the form of the board of directors. The Directors are
of the opinion that the Company comprised a single activity, being
the identification and acquisition of target companies or
businesses in the entertainment sector.
5. SHARE CAPITAL
Issued and fully paid Number of shares Share capital
account
GBP'000
----------------- --------------
At 31 December 2019 296,001,572 8,364
----------------- --------------
Issue of shares 19,535,676 30
----------------- --------------
At 30 June 2020 315,537,248 8,394
----------------- --------------
On 30 June 2020, the number of Ordinary Shares authorised for
issue was unlimited. All Ordinary Shares have equal voting rights
and rank equally on a winding up.
6. CASH AND CASH EQUIVALENTS
Period ended Period ended
30 June 2020 31 December
2019
(unaudited) (audited)
GBP'000 GBP'000
--------------------------------- -------------- -------------
Cash at bank and in hand 14 16
--------------------------------- -------------- -------------
Total cash and cash equivalents 14 16
7. TRADE AND OTHER RECEIVABLES
Period ended Period ended
30 June 2020 31 December
2019
(unaudited) (audited)
GBP'000 GBP'000
----------------------------------- -------------- -------------
Prepayments 13 6
Total trade and other receivables 13 6
8. INVESTMENTS
Short-term
Investments
GBP'000
Fair value
At 31 December 2017 -
Investment in Dallas Wheel
project 220
Foreign exchange movement
in Dallas Wheel 14
At 31 December 2018 234
-------------
Repayments Dallas Wheel (212)
-------------
At 31 December 2019 22
-------------
Repayments Dallas Wheel -
-------------
At 30 June 2020 22
-------------
The company holds investments in the New York Wheel Investor
LLC, which is fully written off and the Dallas Wheel Project, which
is shown under short-term investments.
In 2018 the Company invested US$300k into the Dallas Wheel
project. This financing was in the form of a convertible loan. On
31 December 2018 the Company signed a contract to change the
repayment terms for its investment in the Dallas wheel. The Company
will receive US$50,000 plus interest each month for the first six
month in 2019 until the US$300,000 investment is repaid. The
contract has been changed. The Company expects the last payment
during the second half of 2020. Based on the ongoing contact with
the Dallas Wheel, the Directors do not see any indications that the
nominal investment amount should be impaired. The fair value of the
Dallas wheel project was GBP22k as at 30 June 2020 .
The equity units in New York Wheel Investor LLC are not quoted,
in the prior year the Directors had regard to recent transactions
in equity units of the New York Wheel and therefore assessed the
value as a level 3 valuation. As the project has been stopped and
the probability of the project restarting is very low, the
investment in the New York Wheel was written off in full.
One unit of the New York Wheel investment was held as security
over the second part of the deferred cash consideration of EUR 1.25
million. It was agreed in March 2019, to transfer one previously
pledged equity unit in the New York Wheel to the principal of
Starneth in exchange for a complete release of all claims between
the companies. This has taken place as communicated. As the equity
unit of the New York Wheel was already impaired to a value of GBP0,
the release of the second part of the deferred cash consideration
including accrued interest resulted in a gain of GBP 1,269k in
2019.
A further unit of the New York Wheel investment was held as
security over the 29 January 2016 convertible loan.
9. BORROWINGS
Period ended Period ended
30 June 2020 31 December
2019
(unaudited) (audited)
Current GBP'000 GBP'000
------------------------------- ------------------ -------------
Convertible notes 1,939 1,923
Deferred cash consideration - -
1,939 1,923
Note Note Note Total
1 2 3
GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------------- -------------- -------- --------
Balance at 31 December
2018 (liability) 1,089 821 - 1,910
Balance at 31 December
2018 (equity) 106 - - 106
------------------------- -------------- -------------- -------- --------
Finance charge 102 79 - 181
------------------------- -------------- -------------- -------- --------
(Increase)/decrease
in accrued interest (101) (66) - (167)
------------------------- -------------- -------------- -------- --------
Balance at 31 December
2019 (liability) 1,090 833 - 1,923
------------------------- -------------- -------------- -------- --------
Balance at 31 December
2019 (equity) 106 - - 106
Issued for cash - - 41 41
------------------------- -------------- -------------- -------- --------
Conversion - (25) - (25)
------------------------- -------------- -------------- -------- --------
Finance Charge - - - -
------------------------- -------------- -------------- -------- --------
(Increase)/decrease
in accrued interest (53) (32) - (85)
------------------------- -------------- -------------- -------- --------
Balance at 30 June
2020 (liability) 1,090 808 41 1,939
------------------------- -------------- -------------- -------- --------
Balance at 30 June
2020 (equity) 106 - - 106
------------------------- -------------- -------------- -------- --------
Note 1
On 29 January 2016, the Company issued GBP1 million of secured
convertible notes. The notes are unlisted, secured, transferable
and convertible. Maturity date was 30 June 2019. The Secured
Convertible Notes are secured by one common unit of New York Wheel
Investor LLC. Interest is accrued at 8% per annum and payable
quarterly. The notes are convertible in cash or shares at the
option of the holder and can be converted into Ordinary Shares at a
fixed conversion price of GBP0.80 per Ordinary Share. The Company
can redeem the notes at a 10% premium anytime. As per the nature of
this convertible instrument, GBP106k has been recognised as an
equity component in of convertible instruments in statement of
changes of equity, using a discount rate of 12%. Despite reaching
maturity, this note is still outstanding and continues to accrue
interest in accordance with the interest terms stated.
Note 2
Of the GBP1 million funding facility announced by the Company on
13 June 2017, all of it has been drawn and the remaining balance
(net of conversions) is now GBP800,000. The notes are unlisted,
unsecured, transferable and convertible. Maturity date was 8 June
2019. The conversion price is the lowest volume weighted average
price over 10 days prior to the conversion. Interest rate is 8% per
annum and payable upon conversion at the Company's option in cash
or ordinary shares at the conversion price. The Company can redeem
in cash all or any part of the outstanding convertible note with a
25% premium to the principal amount. Despite reaching maturity this
note is still outstanding and continues to accrue interest in
accordance with the interest terms stated.
Note 3
On 27 May 2020, the Company issued GBP40.8k of unsecured
convertible notes. The notes are unlisted, unsecured, transferable
and convertible. Maturity date is 19 May 2021. Interest is accrued
at 5% per annum and payable quarterly or upon conversion. The notes
are convertible in cash or shares at the option of the Company and
can be converted into Ordinary Shares at a fixed conversion price
of 0.1p per Ordinary Share. The Company can redeem the notes at a
25% premium anytime.
10. LOSS PER SHARE
The calculation for loss per share (basic and diluted) for the
relevant period is based on the loss after income tax attributable
to equity holder for the period from 1 January 2020 to 30 June 2020
and is as follows:
Period ended Period ended
30 June 2019 30 June 2019
(unaudited) (unaudited)
-------------- --------------
Profit/Loss attributable to equity
holders (GBP) (133,000) 1,086,000
-------------- --------------
Weighted average number of shares 315,537,248 269,001,572
-------------- --------------
Profit/Loss per share basic (GBP) (0.0004) 0.004
-------------- --------------
Basic loss per share is calculated by dividing the loss after
tax attributable to the equity holders of the group by the weighted
average number of shares in issue during the year.
Diluted loss per share is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion
of all potential dilutive ordinary shares namely the conversion of
the convertible loan note in issue. The effect of these potential
dilutive shares would be anti-dilutive and therefore are not
included in the above calculation of diluted earnings per
share.
11. SUBSEQUENT EVENTS
None.
12. RELATED PARTY TRANSACTIONS
There were no related party transactions in the period under
review.
13. ULTIMATE CONTROLLING PARTY
As at 30 June 2020, no one entity owns greater than 50% of the
issued share capital. Therefore the Company does not have an
ultimate controlling party.
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
IR SSAESIESSELA
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