TIDMAPPS
RNS Number : 6518H
appScatter Group PLC
02 August 2019
02 August 2019
appScatter Group plc
("appScatter" or the "Company")
Audited Final Results for the year ended 31 December 2018
appScatter Group plc (AIM: APPS), the app management and data
intelligence platform, is pleased to announce its audited results
for the year ended 31 December 2018.
2018 Highlights:
-- Completion of the acquisition of Priori Data GmbH for GBP10.6
million, enhancing the capabilities of the Group to provide market
leading, data-led app insights.
-- Completion of the acquisition of Abilott Limited for GBP0.8
million initial consideration, enabling the Group to increase its
offering of security products and improve margins.
-- Strategic partnerships concluded with Dow Jones, Iron Source and IHS.
-- GBP6.6 million in cash raised, GBP2.0 million of which was
used to fund the cash element of Priori & Abilott acquisitions.
Funds were raised at a significant premium to the prevailing market
price.
-- Operating cash flow improved by GBP2 million to an outflow of
GBP6.2 million, down from GBP8.2 million in 2017.
-- Advisory board established to further support the plc board
in enhancing appScatter's offering and opportunities.
Post period highlights
-- Announced the intention to acquire the entire issued share
capital of Airpush Inc, a US registered company with worldwide
operations. This transaction will enable the Group to dramatically
increase its revenues from the new 1.8M registered users across the
Airpush group, improve the quality and range of data including data
from 250 million devices and 400,000 apps all of which will
complement the current 11 million apps tracked daily and the
audience data from 3.5 billion devices.
-- Work on the Airpush acquisition is well underway and we
expect to be able to convene a meeting of appScatter shareholders
to consider and if thought fit, approve the deal following
publication of the Admission Document.
-- New partnerships include working with Bango Plc to give our
developers access to audiences more likely to make-in app
purchasing and appScatter Japan the new JV with inter-arrows.
Philip Marcella, CEO of appScatter Group plc commented:
"I am pleased today to release our 2018 annual report, with our
investment into the appScatter platform and the completion of the
two strategic acquisitions, we have built the foundations for our
goal to build a combined single platform for app publishers and
developers. As a result of last years' progress we were able to
announce the proposed acquisition of Airpush Inc., if approved by
shareholders the new enlarged group will have 1.8 M registered
users and a single platform to build, distribute, secure and
monetise apps whilst having the market intelligence to truly
promote apps to the correct audience. I would like to thank all our
new partners and staff for their support"
For enquiries, please contact:
appScatter Group plc Tel: +44 (0)20 8004 7212
Philip Marcella, Chief Executive Officer www.appscatter.com
finnCap Limited Tel: +44 (0)20 7220 0500
Nominated Adviser and Joint Broker www.finncap.com
Jonny Franklin-Adams / Hannah Boros/ Edward Whiley
Corporate Broking- Alice Lane
IFC Advisory Limited Tel: +44 (0)20 7934 6630
PR/IR www.ifcadvisory.co.uk
Graham Herring / Heather Armstrong / Florence Chandler
About appScatter Group plc
appScatter is a scalable B2B SaaS platform that allows paying
users to distribute their apps to, and manage their apps on,
multiple app stores. Additionally, the centralised platform enables
app developers and publishers to manage and track performance of
their own and competing apps across all of the app stores on the
platform.
Chairman's Statement
Introduction
2018 was our first full year as a public company. In addition to
completing a number of strategic partnerships we made two
acquisitions with a combined valuation of GBP11.5 million,
furthering our goal to create a single end-to-end platform for the
mobile app developer and publisher community.
These partnerships and acquisitions placed the Company in a much
stronger position, such that in April 2019, we were able to
announce the proposed acquisition of Airpush Inc, an established
international mobile technology company registered in the United
States.
The Airpush acquisition constitutes a reverse takeover under the
AIM Rules and until a new Admission Document covering the combined
Group is published, (which is now expected to be published in
September), trading in the Company's shares will remain
suspended.
Work on the Airpush acquisition is well underway and we expect
to be able to convene a meeting of appScatter shareholders to
consider and if thought fit, approve the deal following publication
of the Admission Document.
A review of trading
While the platform was opened for the period under review, its
full roll-out was delayed successively by the impact of the
acquisition of Priori and more recently the proposed acquisition of
Airpush, resulting in delaying SaaS subscription revenues. This is
reflected in the financial results for the year under review.
GDPR impact
A major boost for us during the year was the introduction across
the EU of the GDPR directive under which fines based on an
organisation's turnover were introduced to individuals and
organisations guilty of not properly safeguarding third party
data.
During the preparation phase for the introduction of the GDPR
regime many organisations focused on the security of their websites
sometimes at the expense of their other mobile platforms.
The appScatter platform can be used to identify risks from
security weak or non-compliant mobile applications. This is a major
plus for the business model but highlighted that while we were
instrumental in identifying security issues, we were not able, at
the start of the year under review, to assist the customer
concerned with fixing the problem.
Acquisitions
We made two strategic acquisitions in 2018. The first was of the
Berlin based Priori Data and the second was UK based Abilott,
further details of which are set out in the CEO Report.
Board and senior management changes
In June 2018, Manish Kotecha our CFO, who was heavily involved
throughout our IPO, left the Company. Since that time, we have been
supported by an interim CFO. We expect to announce the appointment
of a full time CFO in the near future.
In October 2018, we were pleased to welcome Andy Bushby to the
board as a Non-executive director. Andy has over 25 years in the
industry, including working previously for Oracle Corporation, Sun
Microsystems and Novell. His experience includes Networking,
Operating Systems, Security, Identity, Cyber threat and modern
Cloud and Mobile solutions.
Upon completion of the proposed acquisition of Airpush, the
board will be expanded to include Stefans Keiss, the current CEO at
Airpush, as Chief Operating Officer and two new Non-executive
directors Paul Wu, CEO of Carota, and Inman Breaux, Airpush
President.
Advisory board
In October 2018, Michael Buchen, a non-executive director at the
time of the IPO, left the board to establish our advisory board,
which now also includes Dr. Thomas Endres, Chairman of the European
CIO Association and formerly Lufthansa CIO as Chairman and Jörg
Rieker, formerly a partner in Deloitte Deutschland Risk Advisory
and currently part of the Executive team at Software One . Further
biographical details are set out on page 26 of the report and
accounts.
During the period under review and subsequently our focus has
been on pursuing Enterprise customers, who typically spend more but
take significantly longer to commit.
Audit opinion
We note the qualification in the audit report in respect of the
carrying value of the investment in Priori Data GmbH ("Priori"),
and in particular the lack of audit evidence to support a valuation
based on the component parts of the Priori business, as required by
accounting standards.
We prepared an analysis of the estimated aggregate fair value of
the acquired combined intangibles at the date of acquisition, based
on assumptions which were reviewed by a third party.
However, given the unique nature of the transaction and the
assets being acquired, we did not find it possible to build up the
valuation in the way mandated in the accounting standard, such that
each component part could be substantiated to the level required to
avoid an audit qualification.
In particular, we could not arrive at a definitive view on the
appropriate valuation in isolation of the data element of the
acquisition. Accordingly, the extent of any goodwill element of the
acquisition consideration could not be reliably determined.
Nevertheless, the board is pleased to confirm the price paid for
Priori was only very slightly greater than the under bidder, and
the terms of the proposed Airpush transaction implies a greater
value for Priori than either paid on acquisition or at which the
asset is valued in these financial statements.
Professional advisers
We are pleased to welcome to the team finnCap as our combined
nominated adviser and broker.
Our staff
We thank our staff for their continued professionalism and
commitment to the Company.
Outlook
In the opinion of your board, the changes made to our business
and our platform, have positioned the Company for a successful
future. The opportunities flowing from the proposed Airpush deal
further strengthen that position, not least because on completion,
we shall have a further 600,000 new potential customers for our
single platform.
The integration of Priori and appScatter is now complete and the
expected benefits from the Priori acquisition are beginning to show
through.
Over the coming weeks we will be announcing new strategic
partnerships and joint ventures aimed at boosting current revenues.
Additionally, our R&D investment is expected to further
increase revenues from recently completed new products.
We believe investor support from the International Tech
community remains strong, as has been shown with the recently
announced fundraise at a 56% premium to the market price.
With the business improvements and platform developments in
place, the remainder of 2019 is set to be very exciting. We
therefore look forward to the future with confidence.
Clive Carver
Non-Executive Chairman
1 August 2019
Chief Executive Officer's Statement
I am pleased to report on the continued development of the
appScatter Group as we mark our first full year as a public company
on AIM. As stated, before it is our mission to be the number one
ecosystem for businesses with a stake in the mobile app industry.
This mission is being realised by creating a single end to end
solution for developers and publishers worldwide.
In the period under review we have added to our product range
creating one new unique app management and data intelligence
stack.
New products made available include:
-- app management tools such as keyword intelligence and app-store optimisation
-- an increased selection of ad-networks, which now cover over 50% of the market
-- new data products covering market and app intelligence and
our new audience usage data which covers 3.5 billion devices
daily
-- security and threat analysis tools, including GDPR app compliance scanning
And more recently following completion of the acquisition of
Abilott a full stack of digital security services aimed at mobile
development has been added including:
-- Cyber Security Audit
-- PCI DSS
-- GDPR
-- Gaming and Gambling Compliance
-- Mobile App and infrastructure Pen testing
-- Managed Vulnerability Scanning
The number of businesses and individuals that registered their
interest in using our platforms rose by 350% in the first half of
the year to approximately 10,000, which was also broadly the number
at 31 December 2018, as during the second half we focused on our
active user base and enterprise clients. Since the acquisition of
Priori Data, we continued seeing many significant contract wins and
renewals from the likes of Alpha Studio, tapResearch and True
Digital Plus.
We also completed the integration works required to merge Priori
Data and appScatter to the new single B2B SaaS platform, which not
only includes the original core appScatter management and
distribution services but also now includes a full data suite
including app and market intelligence, key-word optimisation and
mobile app audience intelligence covering over 3.5 billion
devices.
While we intend to continue to develop the platform, adding new
features as appropriate, the roll out of the new single platform
will now be after the completion of the Airpush acquisition, which
should reduce the significant investment required in marketing and
technical costs. It will also allow the new platform to be launched
with the 600,000 users already registered.
Data
Data is an integral part of appScatter's business model, and it
is an essential part of the products that we offer. We are able to
offer our customers app analytics from around the globe in a
variety of forms including public, private and device data.
At the time of the IPO, appScatter was collecting data from 842
million app URLs from 7.2 million apps whilst monitoring 1.7
million active app publishers on a daily basis. We have grown these
numbers during the year and subsequently are now collecting over
1.3 billion app URLs from 11 million apps whilst monitoring 3.2
million active app publishers on a daily basis. In addition, we
observe the usage of 900,000 apps on 3.5 billion devices daily.
Regulation (GDPR, ISO Certification & the appScatter
Security Service)
The Company obtained its ISO certification ahead of its planned
timetable in June 2018, therefore we can now provide an
independent, expert verification to assure that information
security is managed in line with international best practice and
business objectives. Though not obligatory, we have implemented
this standard to reassure our customers and clients that we aim to
meet a gold standard.
Since 25 May 2018, organisations operating in the EU are
required to demonstrate that they have operational and technical
procedures in place to ensure ongoing compliance with the EU
General Data Protection Regulation ("GDPR"). GDPR requires all
organisations operating in the EU to protect the personal data and
privacy of European citizens and violation of the requirements of
the GDPR can have severe financial consequences for organisations,
with potential fines for severe data breaches of up to EUR20
million or four percent of global revenues.
To address this market opportunity, we launched the appScatter
app Scanning Service. This service can be used, in conjunction with
the wider appScatter platform, by appScatter users to identify and
highlight areas of potential vulnerability in their app portfolios
(such as security of underlying app users' personal data) and
enabling appScatter users to address any potential security issues
as part of app maintenance.
The Scanning Service application is part of the Company's
planned wider platform development programme and is being made
available to existing and new customers for an additional
subscription fee.
Acquisitions
We were pleased to report that in July 2018 appScatter completed
the acquisition of Priori Data for GBP13.5 million and subsequently
completed on the acquisition of Abilott security services for
GBP825,000 in December 2018.
Priori Data GmbH
As we refined our business model, the importance and value of
data owned and held by an organisation rather than bought in became
clear. It also became apparent that the number of such independent
organisations was falling fast as they became part of larger
enterprises.
On this basis, we decided to make the acquisition of such an
organisation a key priority. Accordingly, in June 2018, we
announced the purchase of Priori Data GmbH ("Priori") for a
reported consideration of GBP13.5 million, satisfied by the issue
of up to 16,667,157 new appScatter shares at an agreed issue price
of 70p. 16,290,325 shares were issued on completion on 3 July 2019.
The balance of up to 376,832 shares was due once completion
accounts confirmed the net assets at the date of completion.
Following the preparation of the completion accounts a total of
357,698 shares were issued on 30 August 2019. The market price per
share on the completion date was 53.15 pence and the market price
on the date the retention shares were issued was 36.5 pence making
the fair value of the shares issued GBP8.8 million. In addition,
there was a payment of approximately GBP1.8 million in cash
consideration. The total fair value of the consideration was
GBP10.6 million. The acquisition of Priori was approved by
appScatter shareholders in July 2018.
Priori was founded in 2013, as a B2B SaaS platform provider of
mobile app intelligence based in Berlin, Germany with proprietary
core data intelligence software and 16 full-time employees with
experience in monetising app market data, including data
scientists, engineers and sales.
Priori's data is sourced from more than 3.5 billion unique user
devices in 55 territories and its proprietary core machine learning
data intelligence software provides intelligence across keywords,
apps, markets, usage and audience. Priori's active customers
include blue-chip multinational organisations.
Benefits of the Acquisition
The board believes that the acquisition of Priori significantly
enhances the prospects of the Group and allows appScatter to
provide enhanced, market leading, data-led app insights. The board
believes that these insights, when combined with Priori's data
intelligence software, will also improve the appScatter Group's
ability to meet the increasing data demands of existing and
prospective customers.
Combining the businesses creates a source of data intelligence
drawing on 299 billion downloads annually across 5 million apps in
252 categories. With the appScatter data set, the combined business
intelligence supports an additional 25 app stores across 175
territories.
Integration
The integration of Priori and the established appScatter
business is proceeding as planned with both parties beginning to
sell the services and data of the other. The planned integration of
the two technologies has been put on hold pending the completion of
the proposed Airpush acquisition.
Abilott
On 17 December 2018, we announced the acquisition of Abilott.
For several years Abilott was our security partner of choice. In
particular, Abilott had been working closely with appScatter for
the previous two years providing security and regulatory compliance
for the Group and supporting appScatter threat analysis products
for appScatter customers.
The maximum consideration was GBP1.85 million, comprising
GBP825,000 of initial consideration.
The equity element of the initial consideration was reported as
GBP500,000 but the fair value was GBP350,000 as described below. In
addition, Directors loans not repayable of GBP245,000 which were
deducted from the net assets of the company on acquisition.
Initial consideration consisted of:
- GBP200,000 cash consideration on completion
- GBP300,000 deferred cash consideration due post completion,
- 1,666,667 shares at an agreed issue price of 30 pence valuing
the shares at GBP500,000, the market price of appScatter shares on
the date of completion was 19.5pence making the fair value of the
share element GBP325,000.
A further GBP1 million payable by the award of up to a maximum
of 3,333,333 deferred consideration shares. The deferred
consideration is dependent on Abilott achieving revenue criteria in
connection with sales to certain customers for the year ending 31
December 2019 and the corresponding shares would not be issued
until January 2020. Based on trading to date we do not expect that
the deferred consideration shares will be payable.
Background
Abilott was established in 2007 and provides digital security
solutions, specialising in companies who are launching new products
or seeking to become a gaming operator or expanding into new global
territories. Customers include Gamesys, Paddy Power, Betfair,
Virgin Games and Bodog.
Abilott helps both established organisations and emerging
clients, providing security services for data and IT infrastructure
with technologies such as Distributed Denial of Service,
Penetration testing and Zero Day Vulnerability reporting. Abilott
also provide consultancy services helping business reach compliance
in a number of areas, such as GDPR, ISO27001, PCI-DSS or
regulations from the UK Gaming Commission.
Benefits of the acquisition
The acquisition of Abilott presents appScatter with an
opportunity to increase its current security products offered
whilst increasing margins to existing and planned customers for
current products. In addition, Abilott will assist in the building
of automated GDPR compliance app tools into the appScatter
platform. The Group will not only be able to identify security
issues in customers mobile applications but also to rectify the
issues identified, thereby significantly increasing the revenue
opportunities from each Enterprise customer.
Technology
As noted in connection with the Priori acquisition work on the
technologies behind Abilott's products are on hold pending the
completion of the Airpush acquisition.
Strategic Partnerships
In 2018 we made many strategic partnerships included the likes
of Dow Jones, Statista Airpush, Iron source and IHS. There were
also many data partnerships made and we also now supply press
resources such as the Financial Times, the Daily Telegraph and
Gruenderszene with our industry data.
March 2018 saw the announcement of our first major partnership
with Airpush Inc. They have amassed more than 600,000 registered
developers and publishers, over the years and using its Software
Development Kits ("SDK" s) or Over The Air ("OTA") technology
reaches over 250 million mobile devices increasing at 7 million new
devices each month. These devices reached are a result of the
current 60 OEM contracts which allow Airpush OTA technology to be
pre-installed at factory level.
Operational KPI's
appScatter's original data metrics remained consistent in
respect of number of app stores supported for distribution (75) and
data gathering (25 and 150 countries) total number of app URLs
increased to 1.4 Bn (1 billion 2017) and number of unique apps was
11 million with 2.8 million publishers (10 million and 2.2 million
2017).
Completion of the Priori Data acquisition in July 2018
significantly improved the groups data offering with now 775
billion data points for metrics such as downloads, revenue and
usage across apps in google play and Apple App Store and device
information on 3.5 billion devices as well as priority machine
learning software for the estimations of app store data
Financial review
Financial KPI's consist of revenue, cost of sales,
administrative expenses and operating cash flow.
Revenue for the year ended 31 December 2018 was GBP0.95 million,
a decrease of GBP1.0 million on the prior year due, in part, to
changes in the way that revenue is recognised. IFRS 15 was
introduced during the year and it introduces a single framework for
revenue and clarifies principles of revenue recognition. During the
prior year, the Group had recognised accrued revenue where the work
had been carried out on long term engagements and where invoicing
was expected to take place in future periods. Going forward the
Group will only recognise revenue when the services have been
provided and consideration is known.
Cost of sales increased by GBP1.7 million due to an increase in
the amortisation of intangible assets. This represents capitalised
development costs and acquired intellectual property. Amortisation
for the year ended 31 December 2018 was GBP2.3 million (2017:
GBP0.7 million).
Year on year Administrative expenses increased by GBP1.1 million
from GBP7.4 million to GBP8.5 million. The main components of
Administrative expenses are staff and sub-contractor costs (GBP3.6
million) and hosting costs (GBP1.4 million).
The loss before tax for the year was GBP11.0 million (2017:
GBP6.3 million) due to the decrease in revenue (GBP1.0 million),
increase in cost of sales (GBP1.7 million) and increase in
administrative expenditure (GBP1.1 million) and exceptional items
of GBP0.9 million.
Exceptional items includes GBP0.9m in costs incurred in
completing the transactions.
Operating cash flow improved by GBP2.0 million to an outflow of
GBP6.2 million (2017: GBP8.2 million) due to a decrease in
receivables. Cash at the end of the period was GBP83,000 (2017:
GBP3.8 million).
Functional currency
Should the proposed Airpush acquisition complete, to reflect the
future mix of the enlarged Group's businesses, the Company
anticipates its functional currency will change from the present
GBP Sterling to the US dollar.
Fundraisings
During the year under review and subsequently the Company raised
a total of GBP6.6m million in cash, including for the GBP1.8
million cash element of the Priori acquisition, and a further
GBP2.2 million fundraising was announced in April 2019. Of this
GBP2.2 million, GBP1.6 million has been received to date.
In both cases the funds were raised at share prices
significantly greater than the prevailing market price, with the
funds raised in April 2019 being at a 56% premium to the market
price.
Corporate Governance
In September 2018, the Company elected to follow the new Quoted
Companies Alliance ("QCA") Governance Code. The essence of the QCA
Code is a requirement to set out how the Company complies with 10
general principles of Corporate Governance and to explain any
divergence from the 10 principles.
Accordingly, the basis of our compliance and the reasons for
non-compliance in certain limited areas was posted to the Company's
website www.appscattergroup.com.
The Corporate Governance Report contains further relevant
information and is set out at page 14 of the Report and
Accounts.
Current trading
Until its formal launch, which is now scheduled after the
completion of the proposed Airpush acquisition, revenues from
subscribers use of the appScatter platform, are likely to continue
to be significantly lower than management's previous expectations.
At Priori, sales remain in line with management expectations while
the changes brought about at Abilott following its acquisition make
it too early for a reliable assessment.
Action has been taken to reduce costs where required. In
particular, we have initiated an operational restructuring of the
Priori sales team in Berlin with sales now being centred on the
London office. We have also significantly reduced the costs of
cloud hosting services. In aggregate these actions are expected to
save in excess of $100,000 per month.
Airpush
Introduction
As noted above, on 9 April 2019, the Company announced the
intention to acquire the entire issued share capital of Airpush
Inc, a Group operating internationally and registered in the United
States.
The proposed purchase is to be satisfied by the issue of new
appScatter shares. This will result in the relative percentages in
the enlarged appScatter, before the addition of any new funding,
being 25% appScatter and 75% Airpush. The proposed acquisition of
Airpush constitutes a reverse takeover under the AIM Rules and
accordingly, trading in the shares of appScatter have been
suspended until the publication of an Admission Document covering
both businesses. Due diligence on the proposed acquisition of
Airpush has been ongoing. However, certain tax restructuring
measures have taken far longer to complete than had previously been
anticipated, and as such we now expect to be in a position to
publish the associated Admission Document in September 2019, after
which, trading will recommence on AIM.
Background
Airpush was founded in 2011 and is registered in Delaware, USA.
It has 125 employees and consultants located across the US, China
and Europe. It operates in four principal business areas: app
monetisation using artificial intelligence, data sales, security
and e-commerce. Airpush has contracts with multiple OEMs using it's
over the air technology, reaching 250 million mobile devices,
increasing by 7 million new devices each month.
Both appScatter and Airpush share the same vision to provide an
end-to-end SaaS platform for the management and monetisation of
mobile apps that meets the needs of app owners, developers and
publishers.
If completed the proposed acquisition will expand the Company's
product suite by adding AI-powered targeted revenue generating
services on mobile platforms; e-commerce revenue share
partnerships; and an improved security portfolio with detection and
monetisation of pirated installs. The merger will provide the
enlarged Group with the opportunity to sell its wider product suite
to its combined 600,000 registered developers and publishers,
whilst increasing revenue and profit margins.
The Proposed Acquisition will also enable the Group to improve
the quality and range of data currently utilised. New data sources
will include app data from 850 million active users and 250 million
devices, complementing the current 11 million apps tracked daily
and audience data from 3.5 billion devices.
Airpush employees are based principally in territories where
appScatter has little or no presence thereby adding greater
capacity, more scale and a wider geographical reach to the
Company's existing teams. The combination of the two businesses
offers significant operational efficiencies in IT hosting, software
development and marketing.
The proposed acquisition will be funded by the issue of further
new Ordinary Shares in appScatter, subject to approval by
shareholders of appScatter in a general meeting of the Company.
Funding
To cover the costs of the proposed Airpush acquisition and to
provide further working capital to the Company, we announced a
planned GBP2.2 million subscription for new ordinary appScatter
shares, at 26.8 pence per share. The subscribers for this funding
will also be issued warrants on a 1 for 1 basis, valid for 24
months, to purchase further new appScatter shares at a price of
26.8p, of this, GBP1.6m million has been received to date with
further funds expected in the coming weeks.
Philip Marcella
Chief Executive Officer
1 August 2019
Strategic Report
Company overview
appScatter offers a centralised app management and distribution
platform offering unrivalled audience reach, efficient app
management and precision monitoring all on a global scale. It also
offers services for data and mobile app security, services enhanced
since the acquisitions of Priori Data and Abilott.
Market overview
There are estimated to be more than 300 legitimate app stores
worldwide and appScatter has grouped these app stores into four
main categories being stores related to: 1) Operating Systems; 2)
Wireless Carriers; 3) Device Manufacturers; and 4) Independent app
stores.
The Apple App Store and Google Play app store are dominant in
the US where they currently are estimated to account for a combined
85 per cent. of US downloads, however, they account for as little
as 62 per cent. of EU downloads in the top five countries (UK,
Germany, France, Spain and Italy) and only 24 per cent. of
downloads in China.
Accessing more than just the most popular app stores can greatly
increase market penetration for commercial and other enterprises
but requires significant effort on behalf of app developers and
publishers to register, monitor and manage each app store used and
draw holistic analysis of downloads across multiple stores.
This B2B SaaS platform for the management of mobile apps and
games has a growing suite of tools to enable publishers to
effectively manage their app portfolio. These tools include app
distribution across multiple app stores consolidated report
generation from advertising and analytic networks, mobile data
intelligence and, more recently, app security reporting and
scanning for data protection.
Business Review
A detailed review of the business is included in the Chairman's
statement and the report of the Chief Executive Officer above.
Business Model
During 2018 we refined our business model to focus on Enterprise
customers for the use of the appScatter platform and to make
strategic acquisitions in the Data and Security sectors.
Under the revised business model appScatter offers mobile app
management, data and security services to a range of customers.
There are two types of paying customer: Enterprise users and
Professional users (consisting of small, medium and large
professional customers). The Enterprise users are typically from
regulated industries such as Finance, Insurance, Aviation
Automotive and Real Money Gaming. Professional users tend to have a
small portfolio of apps and use appScatter to increase downloads
and sales.
The appScatter Marketplace, which launched in Q1 2018, allows
users to integrate with third party tools and products (add-ons);
for an additional monthly charge in the case of paid for add-ons.
The add-ons it makes available will further enhance the Group's
ability to both increase user numbers and retain existing paying
users whilst increasing individual user spend.
The appScatter Platform is highly scalable and uses cloud
technology. Hosted in Amazon Web Services, appScatter uses a micro
services architecture to allow each component of the Platform to
scale independently based on demand. Amazon Web Services'
relational database services are used for storage in parallel with
MongoDB for big data sets and Amazon Elastic Search services are
used in providing appScatter's proprietary app and publisher search
engine.
Strategy
Growth is planned to come from increasing the user base through
product development, targeted sales campaigns and partnerships and
by acquisition.
The Group's focus is rapidly growing its free users and
converting those into paying users with an initial focus on
enterprise customers and to continue to seek to improve the
functionality of the platform.
The Group has already begun to form strategic partnerships with
key industry partners such as analytics services or mobile
advertising networks, some of which have hundreds of thousands of
their own users who are potential appScatter users.
Principal risks & uncertainties
Reliance on third party data availability
Certain aspects of the appScatter Platform rely on the continued
availability of extensive data, free of charge, from app stores
regarding such matters as the level of sales of apps, which data is
then processed or re-presented by the appScatter software for the
benefit of users. Access to such data is regulated by the terms and
conditions of each app store and by the agreements between users
and the app stores. To date the Group has received no notification
from any app store or user that the use to which the app store data
is put by the appScatter Platform infringes the app store's rights
to such data, or that any app store has any intention of
restricting access to or use of such data or levying charges for
access to it, and the Directors believe that app stores are
unlikely to restrict or charge for access to such data, or the use
to which the data may be put, in a way which impacts the appScatter
Platform. However, such a decision is out of the hands of the
Company. If one or more app stores sought to impose or enforce
restrictions on access to and/or use of such data, or to levy
charges for it, the ability of appScatter to continue to provide
the full range of services, and accordingly the credibility of the
appScatter Platform, could be seriously diminished and, in the
extreme, certain elements of the appScatter Platform would be
unable to operate, or the costs of operation could be significantly
increased.
Technological risks
The Group's business is dependent upon technology which could be
superseded by superior technology, more competitively priced
technology or a shift in working practices which could affect both
the potential profitability and saleability of the Group's product
offering.
Staying abreast of technological changes may require substantial
investment. The Group's existing software products need to develop
continually in order to meet customer requirements. The technology
used in the Group's products is still evolving and is highly
complex and may change. Research and development by other companies
may render any of the Group's products in development or currently
available obsolete.
Intellectual property protection
The Group may be unable to successfully establish and protect
its intellectual property which may be significant to the Group's
competitive position. The Group's current or future intellectual
property rights may or may not have priority over other third
parties' claims to the same intellectual property.
The steps which the Group has taken and intends to take to
protect its intellectual property may be inadequate to prevent the
misappropriation of its proprietary technology. Any
misappropriation of the Group's intellectual property could have a
negative impact on the Group's business and its operating results.
Furthermore, the Group may need to take legal action to enforce its
intellectual property, to protect trade secrets or to determine the
validity or scope of the proprietary rights of others. Litigation
relating to the Group's intellectual property, whether instigated
by the Group to protect its rights or arising out of alleged
infringement of third party rights, may result in substantial costs
and the diversion of resources and management attention and there
can be no guarantees as to the outcome of any such litigation, or
that it can be effectively used to enforce the Group's rights.
Dependence on key executives and personnel
The future performance of the Group will to a significant extent
be dependent on its ability to retain the services and personal
connections or contacts of key executives and to attract, recruit,
motivate and retain other suitably skilled, qualified and industry
experienced personnel. The loss of the services of any of the key
executives or personnel may have a material adverse effect on the
business, operations, relationships and/or prospects of the
Group.
appScatter Platform and its market
The Group derives substantially all of its revenue and cash
flows from subscriptions for, and services related to, the
Platform. Demand for the Platform is affected by several factors
beyond the Group's control, including market acceptance of the
Platform by existing customers and potential new customers, the
extension of the Platform for new user cases, the timing of
development and release of new products by the Group's competitors
and additional capabilities and functionality by the Group,
technological change, and growth or contraction of the market in
which the Group competes. In addition, the Group cannot assure
investors that the Platform and future enhancements to the Platform
will be able to address future advances in technology or
requirements of existing customers or potential new customers. If
the Group is unable to continue to meet customer demands or to
achieve more widespread market acceptance of the Platform, its
business, results of operations, financial condition and growth
prospects will be adversely
affected.
The Group has encountered and will continue to encounter risks
and uncertainties frequently experienced by growing companies
operating in new or developing markets. If the Group's assumptions
regarding these uncertainties, which the Group uses to plan its
business, are incorrect or change in reaction to changes in its
markets, or if the Group does not address these risks successfully,
its results of operations and financial condition could differ
materially from its expectations and its business could suffer.
The market for services such as the appScatter Platform is still
new, and therefore, it is difficult to predict the size and growth
rate of this market, whether and how rapidly customers will adopt
the Platform, whether the Group will be able to retain such
customers and expand their usage of the Platform, and the impact of
competitive products and services. If the market for services such
as the Platform does not achieve significant growth or there is a
reduction in demand for solutions in the Group's market for any
reason, it could result in reduced customer adoption of the
Platform, decreased customer retention, or weaker customer
expansion with respect to the use of the Platform, any of which
would adversely affect the Group's business, results of operations,
and financial condition.
The Directors believe that there are currently no direct
competitors to appScatter that offer a similar breadth of tools to
those being offered by appScatter. There are companies which offer
some of the services provided by appScatter, but these competitors
typically cover only a handful of app stores and with only a
portion of the services offered by appScatter.
The Directors also believe that these competitors do not provide
pre-existing integration (together with future add-ons which will
be available via the Marketplace) to best-of-breed workflow tools.
For a number of reasons, including the complexity of the Platform's
technology and historical data already gathered by appScatter new
entrants seeking to enter the market would, the Directors believe,
face significant barriers to entry.
By order of the Board
Clive Carver
Chairman
1 August 2019
Consolidated Income Statement & Statement of Comprehensive
Income
Group Group
Note 2018 2017
GBP GBP
Revenue 951,345 1,937,020
Cost of sales (2,590,355) (856,101)
------------- ------------
Gross (loss) / profit (1,639,010) 1,080,919
Administrative expenses (8,484,156) (7,373,552)
Operating loss 3 (10,123,166) (6,292,633)
Exceptional item - transaction costs 21 (882,445) -
Finance income 118 397
Finance costs 6 (5,417) (48,326)
------------- ------------
Loss before taxation (11,010,910) (6,340,562)
Taxation 7 520,395 500,000
------------- ------------
Loss for the year (10,490,515) (5,840,562)
Other comprehensive income
Exchange gains / (losses) arising
on the translation of foreign subsidiaries 26,661 (55,405)
Total comprehensive loss for the
period attributable to the owners
- continuing and total operations (10,463,854) (5,895,967)
Loss per share - basic & diluted 8 0.25 0.46
The accompanying notes form an integral part of these financial
statements.
Consolidated Statement of Changes in Equity
Share Share Shares Share Merger Reverse Foreign Retained Total
Capital Premium to be Option Reserve acquisition exchange earnings
issued Reserve reserve reserve
GBP GBP GBP GBP GBP GBP GBP GBP GBP
At 1 January
2017 - - 4,824,227 - 14,113,765 (4,422,859) (23,422) (11,329,906) 3,161,805
Loss for the
period - - - - - - - (5,840,562) (5,840,562)
Other
comprehensive
income
FX Gains /
(Losses) - - - - - - (55,405) - (55,405)
--------------- ---------- ------------ ------------ ---------- ------------ ------------ --------- ------------- -------------
Total
comprehensive
loss - - - - - - (55,405) (5,840,562) (5,895,967)
Unpaid shares
paid
for - (4,824,227) - 4,824,227 - - - -
Shares issued
pre-IPO - - - - 2,023,476 - - - 2,023,476
Shares issued
appScatter
Ltd acquired
by PLC 2,466,599 - - - (2,466,599) - - - -
Issued share
capital
on IPO 692,308 8,307,692 - - - - - - 9,000,000
Expenses
associated
with Placing - (1,634,952) - - - - - (1,634,952)
Share options
issued - - - 528,876 - - - - 528,876
--------------- ---------- ------------ ------------ ---------- ------------ ------------ --------- ------------- -------------
At 31 December
2017
and 1 January
2018 3,158,907 6,672,740 - 528,876 18,494,869 (4,422,859) (78,827) (17,170,468) 7,183,238
Loss for the
period - - - - - - - (10,490,515) (10,490,515)
Other
comprehensive
income
FX Gains /
(Losses) - - - - - - 26,661 - 26,661
--------------- ---------- ------------ ------------ ---------- ------------ ------------ --------- ------------- -------------
Total
comprehensive
loss - - - - - - 26,661 (10,490,515) (10,463,854)
Issue of share
capital
for cash 476,166 6,190,162 - - - - - - 6,666,328
Acquisition of
Priori
Data GmbH 832,402 - - - 7,957,256 - - - 8,789,658
Acquisition of
Abilott 83,333 - - - 241,667 - - - 325,000
Expenses
associated
with Placing - (1,029,911) - - - - - - (1,029,911)
Share options
issued - - - 539,346 - - - - 539,346
--------------- ---------- ------------ ------------ ---------- ------------ ------------ --------- ------------- -------------
At 31 December
2018 4,550,808 11,832,991 - 1,068,222 26,693,792 (4,422,859) (52,166) (27,660,983) 12,009,805
See note 16 for a description of each reserve included
above.
Company Statement of Changes in Equity
Share Share Premium Share Option Merger Reserve Retained Total
Capital Reserve earnings
GBP GBP GBP GBP GBP GBP
At incorporation on 3 April - - - - - -
Loss for the period - - - - (891,942) (891,942)
Other comprehensive income
FX Gains / (Losses) - - - - - -
------------------------------ ---------- -------------- ------------- --------------- ------------ ------------
Total comprehensive loss - - - - (891,942) (891,942)
appScatter Ltd acquired by
PLC 2,466,599 - - 664,540 - 3,131,139
Issue of share capital 692,308 8,307,692 - - - 9,000,000
Expenses associated with
Placing - (1,634,952) - - - (1,634,952)
Share options issued - - 528,876 - - 528,876
------------------------------ ---------- -------------- ------------- --------------- ------------ ------------
At 31 December 2017 and 1
January
2018 3,158,907 6,672,740 528,876 664,540 (891,942) 10,133,121
Loss for the period - - - - (2,053,241) (2,053,241)
Other comprehensive income
FX Gains / (Losses) - - - - - -
------------------------------ ---------- -------------- ------------- --------------- ------------ ------------
Total comprehensive loss - - - - (2,053,241) (2,053,241)
Issue of share capital 476,166 6,190,162 - - - 6,666,328
Acquisition of Priori Data
GmbH 832,402 - - 7,957,256 - 8,789,658
Acquisition of Abilott 83,333 - - 241,667 - 325,000
Expenses associated with
Placing - (1,029,911) - - - (1,029,911)
Share options issued - - 539,346 - - 539,346
------------------------------ ---------- -------------- ------------- --------------- ------------ ------------
At 31 December 2018 4,550,808 11,832,991 1,068,222 8,863,463 (2,945,183) 23,370,301
See note 16 for a description of each reserve included
above.
Consolidated Statement of Financial Position
31 December 31 December
Note 2018 2017
GBP GBP
Non-current assets
Intangible assets 9 10,822,443 1,444,349
Goodwill 10 2,105,179 -
------------- -------------
Total non-current assets 12,927,622 1,444,349
Current assets
Trade & other receivables 12 1,397,645 3,464,229
Cash & cash equivalents 83,402 3,781,109
------------- -------------
Total current assets 1,481,047 7,245,338
Total assets 14,408,669 8,689,687
------------- -------------
Share capital 15 4,550,808 3,158,907
Share premium 11,832,991 6,672,740
Share option reserve 17 1,068,222 528,876
Merger reserve 26,693,792 18,494,869
Reverse acquisition reserve (4,422,859) (4,422,859)
Foreign exchange reserve (52,166) (78,827)
Retained earnings (27,660,983) (17,170,468)
------------- -------------
Total equity 12,009,805 7,183,238
Current liabilities
Trade & other payables 13 2,217,579 1,506,449
Loans & borrowings 14 61,800 -
------------- -------------
Total current liabilities 2,279,379 1,506,449
Non-current liabilities
Loans & borrowings 14 119,485 -
------------- -------------
Total current liabilities 119,485 -
Total liabilities 2,398,864 1,506,449
Total equity & liabilities 14,408,669 8,689,687
------------- -------------
The accompanying notes on page 41 to 61 form an integral part of
these financial statements.
These financial statements were approved by the Board of
Directors and authorised for issue on 1 August 2019 and are signed
on its behalf by:
Clive Carver
Director
Company Statement of Financial Position
31 December 31 December
Note 2018 2017
GBP GBP
Non-current assets
Investment in subsidiaries 11 15,127,128 3,131,139
Intercompany receivables 11 8,793,793 3,815,922
------------ ------------
Total non-current assets 23,920,921 6,947,061
Current assets
Trade & other receivables 12 92,023 70,215
Cash & cash equivalents 12,035 3,200,654
------------ ------------
Total current assets 104,058 3,270,869
Total assets 24,024,979 10,217,930
------------ ------------
Share capital 15 4,550,808 3,158,907
Share premium 11,832,991 6,672,740
Share option reserve 17 1,068,222 528,876
Merger reserve 8,863,463 664,540
Retained earnings (2,945,183) (891,942)
------------ ------------
Total equity 23,370,301 10,133,121
Current liabilities
Trade & other payables 13 654,678 84,809
------------ ------------
Total current liabilities 654,678 84,809
Total liabilities 654,678 84,809
------------ ------------
Total equity & liabilities 24,024,979 10,217,930
------------ ------------
The accompanying notes on page 41 to 61 form an integral part of
these financial statements.
As permitted by Section 408 Companies Act 2006, the Company has
not presented its own Statement of Comprehensive Income. The
Company's loss and comprehensive loss for the financial year was
GBP2,053,241.
These financial statements were approved by the Board of
Directors and authorised for issue on 1 August 2019 and are signed
on its behalf by:
Clive Carver
Director
Company number: 09786498
Consolidated Statement of Cash flows
Year ended 31 Year ended
December 31 December
2018 2017
Cash flows from operating activities
Operating loss before taxation (11,010,910) (6,340,562)
Adjustments for:
Finance costs 5,417 48,326
Finance income (118) (397)
Amortisation 2,282,286 729,202
Share based payments charge 539,346 528,876
Tax Credit 600,395 -
Exchange differences 9,984 12,324
-------------- -------------
Operating loss before working
capital changes (7,573,601) (5,022,231)
Changes in working capital
Decrease / (increase) in trade
& other receivables 2,121,902 (1,773,058)
(Decrease) in trade & other payables (731,645) (1,392,659)
-------------- -------------
Net cash used in operations (6,183,344) (8,187,948)
Investing activities
Capitalised R&D Costs (1,037,350) (1,282,178)
Interest received 118 397
Acquisition of business (net of
cash) (2,108,136) -
-------------- -------------
Net cash flows used in investing
activities (3,145,369) (1,281,781)
Financing activities
Finance costs (5,411) (48,326)
Issue of ordinary shares (net
of expenses) 5,636,417 13,298,938
-------------- -------------
Net cash flows from financing
activities 5,631,006 13,250,612
Net change in cash and cash equivalents (3,697,707) 3,780,883
Cash and cash equivalents at the
beginning of the period 3,781,109 226
Cash and cash equivalents at the
end of the period 83,402 3,781,109
-------------- -------------
The accompanying notes on page 41 to 61 form an integral part of
these financial statements.
Company Statement of Cash flows
Year ended 31 Year ended
December 31 December
2018 2017
Cash flows from operating activities
Operating loss before taxation (2,053,241) (891,942)
Adjustments for:
Finance income (117) (397)
Finance costs 729 -
Share-based payment charge 539,346 528,876
Unrealised foreign exchange gain 790 13
-------------- -------------
Operating loss before working
capital changes (1,512,493) (363,450)
Changes in working capital
(Increase) in trade & other receivables (21,808) (70,217)
(Increase) in intercompany receivables (4,903,892) (3,815,922)
Increase in trade & other payables 269,871 84,809
-------------- -------------
Net cash used in operations (6,168,322) (4,164,780)
Investing activities
Acquisition of business (net of
cash) (2,644,101) -
Interest received (729) 397
-------------- -------------
Net cash flows used in investing
activities (2,644,830) 397
Financing activities
Finance income 117 -
Issue of ordinary shares (net
of expenses) 5,624,416 7,365,037
-------------- -------------
Net cash flows from financing
activities 5,624,533 7,365,037
Net change in cash and cash equivalents (3,188,619) 3,200,654
Cash and cash equivalents at the
beginning of the period 3,200,654 -
Cash and cash equivalents at the
end of the period 12,035 3,200,654
-------------- -------------
The accompanying notes on page 41 to 61 form an integral part of
these financial statements.
Notes to financial statements
1. Accounting policies
1.1. Authorisation of financial statements and statement of
compliance with IFRS
The Group financial statements of appScatter Group Plc for the
year ended 31 December 2018 were authorised for issue by the Board
on 1 August 2019 and signed on the Board's behalf by Clive
Carver.
appScatter Group Plc is a public limited company incorporated
and domiciled in England and Wales with its registered office at
Salisbury House, London Wall, London EC2M 5PS. It was incorporated
on 3 April 2017. The Company's ordinary shares are traded on
AIM.
1.2. Basis of preparation
The principal accounting policies applied in the preparation of
the financial information are set out below. These policies have
been consistently applied to all periods presented, unless
otherwise stated below.
The financial information has been prepared in accordance with
International Financial Reporting Standards, International
Accounting Standards and Interpretations (collectively IFRSs), as
adopted by the European Union.
The preparation of financial statements in compliance with
adopted IFRSs requires the use of certain critical accounting
estimates. It also requires Group management to exercise judgment
in applying the Group's accounting policies. The key estimates and
underlying assumptions concerning the future and other key sources
of estimation uncertainty at the statement of financial position
date, that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next
financial period are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the
estimate is 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.
The Company does not believe there were any areas where
significant judgments and estimates have been made in preparing the
financial statements except for the intangible assets and the
review for impairment of goodwill, which is discussed in the
accounting policy below.
The presentation currency of the financial information is Pound
Sterling (GBP) rounded to the nearest pound. The Company,
appScatter Limited and Abilott Limited's functional currency is
Pound Sterling (GBP) and its other subsidiaries' functional
currencies are US Dollar (US$) and Euro (EUR).
Year ended 31 December 2018
The financial information for 2018 reporting year is that of
appScatter Group, headed by appScatter Group PLC.
Year ended 31 December 2017
The financial information for 2017 reporting year is that of
appScatter Group, headed by appScatter Group PLC as explained
above, and the results of appScatter Group PLC from incorporation
to 31 December 2017. appScatter Group PLC had carried out no
transactions prior to the date of the combination.
1.3. Composition of the group
appScatter Group PLC was incorporated on 3 April 2017. The
Company acquired the share capital of the trading entity,
appScatter Limited, on 21 August 2017. Therefore, these
consolidated financial statements for the year ended 31 December
2018, including the comparative financials the year ended 31
December 2017 represent the trading results of appScatter Limited
(a company with the same registered address as the appScatter Group
PLC) and its subsidiaries (appScatter LLC and DSH Labs LLC) and the
Company's results from the date of incorporation see note 1.9.
A list of the subsidiary undertakings which, in the opinion of
the Directors, principally affected the amounts of profit or loss
and net assets of the Group is given in note 10 of the financial
information.
The Company's subsidiaries are:
- appScatter Limited registered in England and Wales with the registration number 09786498
- appScatter LLC registered in Delaware with the federal ID number 46-3445738
- DSH Labs LLC registered in Delaware with the federal ID number 46- 3918193
- Priori Data GmbH German limited liability company
(Gesellschaft mit beschränkter Haftung, GmbH) incorporated in
Berlin under no. HRB 150508 B
- Abilott Limited registered in England and Wales with the registration number 6203799
1.4. Changes in accounting policies and disclosures
The Group adopted IFRS 15 during the year which is described in
more detail below. The core principle is that an entity should
recognise revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration
to which the entity expects to be entitled in exchange for those
goods or services. The Group no longer recognises any accrued
revenue for work carried out, where a contract or purchase order is
not in place. Previously revenue had been accrued on long term
projects where work had been carried out and invoicing for this
work was expected to occur in a subsequent period.
1.5. New and amended standards adopted by the Group
The Group has applied any applicable new standards, amendments
to standards and interpretations that are mandatory for the
financial year beginning on or after 1 January 2018. However, none
of them has a material impact on the Group's consolidated financial
statements, except as explained below.
IFRS 15
Revenue from Contracts with Customers, effective date 1 January
2018. IFRS 15 is intended to clarify the principles of revenue
recognition and establish a single framework for revenue
recognition. This standard replaces the previous standard IAS 11
Construction Contracts, IAS18 Revenue and revenue related IFRICs.
The core principle is that an entity should recognise revenue to
depict the transfer of promised goods or services to customers in
an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services.
IFRS 9
Financial Instruments, effective date 1 January 2018. IFRS 9 is
a replacement for IAS 39 'Financial Instruments' and covers three
distinct areas. Phase 1 contains new requirements for the
classification and measurement of financial assets and liabilities.
Phase 2 relates to the impairment of financial assets and requires
the calculation of impairment on an expected loss basis rather than
the current incurred loss basis. Phase 3 relates to less stringent
requirements for general hedge accounting.
1.6. New, amended standards, interpretations not adopted by the
Group
At the date of authorisation of this financial information,
certain new standards, amendments and interpretations to existing
standards applicable to the Company's accounting period beginning
after 1 January 2018 have been published but are not yet effective
and have not been adopted early by the Company. These are listed
below:
-- IFRS 16 Leases, 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. This standard is not expected to have a material
impact on the reported figures given the value of leases to which
the Company is party to.
-- IFRIC 23 Uncertainty over income tax treatments - effective date 1 January 2019
-- IFRIC 22 Foreign currency, transactions and advance consideration - 1 January 2019
-- IFRS 9 Prepayment features with negative compensation - effective 1 January 2019
1.7. Going concern
The consolidated entity has incurred a loss after tax of
GBP10,490,515 for the year (2017: GBP5,840,562) and had a net cash
outflow from operations of GBP6,183,344 (2017: GBP8,187,948).
The Financial Statements of the Group are prepared on a going
concern basis. The loss and cash outflow have been incurred as the
Group is currently in a growth phase as it develops its platform
and launches its initial customer propositions. Further detail on
the trading prospects of the Group are included in the Strategic
Report above. The Company has raised GBP1.6 million in new equity
since the balance sheet date from new and existing investors.
Under the Company's forecasts, based on the Group as currently
constituted, the funds raised do not provide sufficient funding for
at least the next twelve months based on anticipated outgoings and
the receipt of revenues from production. In the event of a
completed Reverse Takeover with Airpush the Directors expect the
combined Group would on the basis of forecast prepared have
sufficient funding for at least the next twelve months, based on
anticipated outgoings and revenues. In the event the proposed
reverse takeover with Airpush does not complete, or completes later
than currently expected, the Group as currently constituted, would
require additional funding. The extent of the additional funding
required could to some extent be mitigated by management action to
reduce costs, but this alone would not bridge any funding gap.
While there is no guarantee that future funding will be
available, based on recent support from new and existing investors
the Board believes that such funding, if required, would be
obtained through debt or equity to enable the company to trade and
meet its liabilities as they fall due for at least twelve months
from the date of approval of the financial statements and
consequently the financial statements have been prepared on a going
concern basis and do not include the adjustments that would result
if the Company was unable to continue as a going concern.
1.8. Basis of consolidation
The consolidated financial statements include the results of the
Company and its subsidiaries ("the Group") as if they formed a
single entity for the full period or, in the case of acquisitions,
from the date control is transferred to the Group. The Company
controls an entity when the Company has the power, either directly
or indirectly, to govern the financial and operating policies of
another entity or business so as to obtain benefits from its
activities. The entity which it controls it is classified as a
subsidiary. Intercompany transactions and balances between Group
companies are therefore eliminated in full.
1.9. Business combinations
Acquisition of Priori Data GmbH by appScatter Group plc
On 3 July 2018 appScatter Group plc completed the purchase of
Priori Data GmbH ("Priori") for a reported consideration of GBP13.5
million, satisfied by the issue of up to 16,667,157 new appScatter
shares at an agreed issue price of 70p. 16,290,325 shares were
issued on completion on 3 July 2019. The balance of up to 376,832
shares was due once completion accounts confirmed the net assets at
the date of completion. Following the preparation of the completion
accounts a total of 357,698 shares were issued on 30 August 2019.
The market price per share on the completion date was 53.15 pence
and the market price on the date the retention shares were issued
was 36.5 pence making the fair value of the shares issued GBP8.8
million. In addition, there was a payment of approximately GBP1.8
million in cash consideration. The total fair value of the
consideration was GBP10.6 million. The acquisition of Priori was
approved by appScatter shareholders in July 2018.
On acquisition, the assets, liabilities and contingent
liabilities of subsidiaries are measured at their fair values at
the date of acquisition. Any excess of cost of acquisition over net
fair values of the identifiable assets, liabilities and contingent
liabilities acquired is recognised as goodwill. Any deficiency of
the cost of acquisition below the net fair values of the
identifiable assets, liabilities and contingent liabilities
acquired (i.e. discount on acquisition) is credited to profit and
loss in the period of acquisition.
The fair value of the acquired business comprised the platform
which the company had developed, and the 775 billion historic data
records which Priori held. On acquisition we assigned a value of
GBP4 million to the platform based on the estimated cost to rebuild
the platform and the balance was assigned to the data. This implies
a cost per thousand records of less than GBP0.01 which is prudent
in relation to industry standards.
Acquisition of Abilott Limited by appScatter Group plc
On 17 December 2018 appScatter Group plc acquired 100% of the
issued share capital of Abilott Limited. Further detail on the
acquisition is included in the Strategic Report and CEO Statement.
Initial consideration was GBP0.825 million, consisting of GBP0.5
million in cash (of which GBP0.2m was on completion and GBP0.3m was
deferred) and GBP0.325 million in shares by way of the issue of
1,666,666 new ordinary shares at an effective issue price of 19.5
pence. Directors loans not repayable of GBP245,000 were deducted
from the net asset value on acquisition.
For several years Abilott was our security partner of choice. In
particular, Abilott had been working closely with appScatter for
the previous two years providing security and regulatory compliance
for the Group and supporting appScatter threat analysis products
for appScatter customers.
The maximum consideration is GBP1.85 million, comprising
GBP0.825 million of initial consideration and GBP1 million deferred
consideration.
Initial consideration consisted of:
-- GBP200,000 cash consideration on completion
-- GBP300,000 deferred cash consideration due post completion,
-- 1,666,667 shares at an agreed issue price of 30 pence valuing
the shares at GBP500,000, the market price of appScatter shares on
the date of completion was 19.5pence making the fair value of the
share element GBP325,000.
A further GBP1 million payable by the award of up to a maximum
of 3,333,333 deferred consideration shares. The deferred
consideration is dependent on Abilott achieving revenue criteria in
connection with sales to certain customers for the year ending 31
December 2019 and the corresponding shares would not be issued
until January 2020. Based on trading to date we do not expect that
the deferred consideration shares will be payable.
On acquisition, the assets, liabilities and contingent
liabilities of subsidiaries are measured at their fair values at
the date of acquisition. Any excess of cost of acquisition over net
fair values of the identifiable assets, liabilities and contingent
liabilities acquired is recognised as goodwill. Any deficiency of
the cost of acquisition below the net fair values of the
identifiable assets, liabilities and contingent liabilities
acquired (i.e. discount on acquisition) is credited to profit and
loss in the period of acquisition.
Acquisition of appScatter LLC by appScatter Limited
On 18 May 2017 appScatter Merger Sub LLC, a subsidiary of
appScatter Limited was merged with and into appScatter LLC, with
the latter company continuing as the surviving entity. The entire
issued share capital of appScatter LLC was for acquired for a
consideration of GBP12,659,030 and this was satisfied by the issue
of 9,967,740 shares in appScatter Limited.
The Board have treated the acquisition as a reverse takeover,
after identifying appScatter LLC (the accounting acquirer or
"appScatter") as the acquirer under IFRS 3 'Business Combinations'.
In addition, this transaction cannot be considered a business
combination, as appScatter Limited did not meet the definition of a
business, under IFRS 3 'Business Combinations'. Based on available
guidance, the difference on consolidation arising on such
transactions should be treated as a share-based payment transaction
and therefore accounted for under IFRS 2 'Share-based payment'. Any
difference between the consideration transferred, which is the fair
value of the shares deemed to have been issued by appScatter and
the fair value of appScatter Limited's identifiable net assets
represents service received by the accounting acquirer. This deemed
cost on reverse takeover is expensed to profit or loss.
The fair value of the consideration transferred is calculated
using the number of appScatter's shares that would have been issued
to the owners of appScatter Limited on the acquisition date to give
them an equivalent ownership interest in appScatter as it has in
the combined company at the share price of the Company at the
acquisition date. The fair value of each share of the Company is
deemed to have been issued by appScatter is based on the fair value
of the share price of appScatter Limited at the time of the
acquisition, which was the market price third party investors were
subscribing for new shares at shortly before the transaction.
Although the consolidated financial information has been issued
in the name of the Company, the legal parent, it represents in
substance continuation of the financial information of appScatter
LLC and DSH LLC, its subsidiary ("appScatter subgroup").
The assets and liabilities of appScatter subgroup are recognised
and measured in the Group financial statements at the
pre-combination carrying amounts and not re-stated at fair
value.
Acquisition of appScatter Limited by appScatter Group PLC
On 21 August 2018 appScatter Limited was acquired by appScatter
Group PLC. The entire issued share capital of appScatter Limited
was acquired for a consideration of GBP32,065,792 and this was
satisfied by the issue of 49,331,988 shares in appScatter Group PLC
in a share for share exchange.
The Board have treated the acquisition as a group reconstruction
using guidance available in the UK Accounting standard FRS102. IFRS
does not contain requirements for accounting for common control
transactions and an accounting policy for accounting for the
transaction therefore needs to be formulated based on other
available guidance. Management has chosen to use FRS102 as a
reference. appScatter group PLC was incorporated a short time
before the combination with an identical ownership structure to
appScatter Limited with the sole purpose of completing the
acquisition of appScatter Limited to facilitate the initial public
offering and listing on AIM.
Group reconstructions can be accounted for using merger
accounting where the use of merger accounting is not prohibited by
law, where the ultimate equity holders remain the same and no
non-controlling interest is altered by the transaction. The
combination of appScatter Group plc and appScatter Limited meets
all three of these criteria.
The carrying values of assets and liabilities are not adjusted
to fair value and the difference between the nominal value of the
shares issued and the nominal value of the shares received has been
transferred to the merger reserve and is shown in the statement of
changes in equity.
The results and cash ows of all the combining entities have been
brought into the nancial statements of the combined entity from the
beginning of the nancial year in which the combination occurred,
adjusted so as to achieve uniformity of accounting policies. The
comparative information did not need to be restated as appScatter
Group plc was incorporated during 2018 and thus figures reported in
the Admission document represent the Group in 2017.
1.10. Goodwill
The Group has recognised goodwill on companies acquired during
the period.
On acquisition, the assets, liabilities and contingent
liabilities of subsidiaries are measured at their fair values at
the date of acquisition. Any excess of cost of acquisition over net
fair values of the identifiable assets, liabilities and contingent
liabilities acquired is recognised as goodwill. Any deficiency of
the cost of acquisition below the net fair values of the
identifiable assets, liabilities and contingent liabilities
acquired (i.e. discount on acquisition) is credited to profit and
loss in the period of acquisition.
1.11. Investments in subsidiaries
Investments in subsidiaries are initially recognised at cost and
include any directly-attributable costs associated with each
acquisition.
The carrying amounts of investment in subsidiaries is reviewed
at each reporting date to determine whether there is any indication
of impairment. An impairment loss is recognised when the carrying
amount exceeds its recoverable amount. Impairment losses are
recognised in the Statement of Comprehensive Income.
An impairment loss is reversed if there has been a change in
estimates used to determine the recoverable amount. This loss is
reversed only to the extent that the asset's carrying amount does
not exceed the carrying amount that would have been determined if
no impairment loss had been recognised.
The Company carried out an impairment review on the carrying
value of investments in subsidiaries at the balance sheet date and
has not recognised any impairment charge.
1.12. Foreign Currency
The functional currency for the Company's US registered
subsidiaries are US$ and the functional currency of Priori Data
GmbH is Euro.
(i) Foreign currency transactions are translated into the
functional currency using the exchange rates
prevailing at the dates of the transactions.
(ii) Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at the
reporting period end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the
income statement.
(iii) Share capital, share premium and brought forward earnings
are translated using the exchange rates prevailing at the dates of
the transactions.
1.13. Consolidation of foreign entities
On consolidation, results of the foreign entities are translated
from the local functional currency to Pound Sterling using average
exchange rates during the period. All asset and liabilities are
translated from the local functional currency to Pound Sterling
using the reporting period end exchange rates. These exchange
differences arising from the translation of the net investment in
foreign entities are recognised in other comprehensive income and
accumulated in a separate component of equity.
Post transition exchange differences are recycled to profit or
loss as a reclassification adjustment upon disposal of the foreign
operation.
1.14. Revenue recognition
Revenue comprises the fair value of the consideration received
or receivable for the sale of goods and services in the ordinary
course of the Group's activities. Revenue is shown net of Value
Added Tax, returns, rebates and discounts and after eliminating
sales within the Group.
The Group recognises revenue when the amount of revenue can be
reliably measured, it is probable that future economic benefits
will flow to the entity and when specific criteria have been met
for each of the Group's activities as described below. The Group
sells licences to use its software products either on a rental
basis for a fixed period of time. Revenue from licenses sold on a
rental or subscription basis is recognised over the period for
which the Group has obligations under the contract. The Group also
carries out non-recurring work under contracts or statements of
work.
Revenue from contracts is recognised in accordance with IFRS 15
as follows:
a) Identify the contract or statement of works with the customer
b) Identify the performance obligations
c) Determine the transaction price
d) Allocate the transaction price to performance obligations
e) Recognise revenue when an entity satisfies a performance obligation
The above criteria have been applied for the year ended 31
December 2018.
Annual contracts for services are recognised on a monthly basis.
Where advanced payments are made, these amounts are transferred to
deferred revenue and recognised over the length of the
contract.
Contracts for non-recurring services are invoiced and recognised
when the performance obligations in a contract or statement of work
has been completed.
This has not impacted the way in which revenue has been
accounted for and the comparatives have not changed.
1.15. Intangible assets
Acquired IP
The externally acquired developed technologies which are the
distribution platform for mobile applications are initially
recognised at cost. This asset will be amortised over its useful
life when it is being sold or used. Subsequent to initial
recognition, this intangible asset is reported at cost less
accumulated amortisation and accumulated impairment losses. The
carrying values are tested for impairment when there is an
indication that the value of the assets might be impaired during
the period. The amortisation period and amortisation method with a
finite useful life are reviewed annually at year end. The assets
are being amortised over three reporting years. During the period
the Company acquired the assets of Priori Data GmbH and has
recorded a fair value in the accounts for its platform and its
accumulated data records.
Developed IP
Research expenditure is recognised in income statement in the
period in which it is incurred. Internal development expenditure is
capitalised only if it meets the recognition criteria of IAS 38
'Intangible Assets'. Where the criteria are not met, the
expenditure is expensed to income statement. GBP1.0m has met
recognition criteria and been capitalised in 2018 (2017: GBP1.2m).
This expenditure is being amortised over an expected useful
economic life of three years.
Acquired Data
The accumulated data records in Priori Data GmbH were assigned a
fair value of GBP6.6m on completion of the transaction. The
accumulated data records have a long-term value as they are used to
create extrapolations. The useful economic life of the data has
been assessed at five years.
Impairment
The assessment of the future economic benefits generated by the
above intangible asset involves a significant degree of judgement
based on management estimation of future potential revenue and
profit and the useful life of the assets. Reviews are performed
regularly to ensure the recoverability of this intangible
asset.
1.16. Employee benefits
Short-term benefits
Wages, salaries, paid annual leave and sick leave, bonuses and
non-monetary benefits are accrued in the period in which the
associated services are rendered by employees of the Company.
Share-based payments
The Group operates an equity-settled share-based payment
arrangement whereby the fair value of services provided is
determined indirectly by reference to the fair value of the
instrument granted. The fair value of options granted to Directors
and other employees in respect of services provided is recognised
as an expense in the profit or loss account with a corresponding
increase in equity reserves.
On exercise or lapse of share options, the proportion of the
share-based payment reserve relevant to those options is
transferred to retained earnings. On exercise, equity is also
increased by the amount of the proceeds received.
The fair value is measured at grant date and charged over the
vesting period during which the option becomes unconditional.
The fair value of options is calculated using the Black-Scholes
model taking into account the terms and conditions upon which the
options were granted. The exercise price is fixed at the date of
grant.
Non-market conditions are performance conditions that are not
related to the market price of the entity's equity instruments.
They are not considered when estimating the fair value of a
share-based payment. Where the vesting period is linked to a
non-market performance condition, the Group recognises the goods
and services it has acquired during the vesting period based on the
best available estimate of the number of equity instruments
expected to vest. The estimate is reconsidered at each reporting
date based on factors such as a shortened vesting period, and the
cumulative expense is 'trued up' for both the change in the number
expected to vest and any change in the expected vesting period.
Market conditions are performance conditions that relate to the
market price of the entity's equity instruments. These conditions
are included in the estimate of the fair value of a share-based
payment. They are not taken into account for the purpose of
estimating the number of equity instruments that will vest. Where
the vesting period is linked to a market performance condition, the
Group estimates the expected vesting period. If the actual vesting
period is shorter than estimated, the charge is being accelerated
in the period that the entity delivers the cash or equity
instruments to the counterparty. When the vesting period is longer,
the expense is recognised over the originally estimated vesting
period.
1.17. Deferred taxation
Deferred tax assets and liabilities are recognised where the
carrying amount of an asset or liability in the statement of
financial position differs from its tax base, except for
differences arising on:
- the initial recognition of goodwill;
- the initial recognition of an asset or liability in a
transaction which is not a business combination and at the time of
the transaction affects neither accounting or taxable profit;
and
- investments in subsidiaries where the Company is able to
control the timing of the reversal of the difference and it is
probable that the difference will not reverse in the foreseeable
future.
Recognition of deferred tax assets is restricted to those
instances where it is probable that taxable profit will be
available against which the difference can be utilised.
The amount of the asset or liability is determined using tax
rates that have been enacted or substantially enacted by the
balance sheet date and are expected to apply when the deferred tax
liabilities or assets are settled or recovered. Deferred tax
balances are not discounted.
Deferred tax assets and liabilities are offset when the Company
has a legally enforceable right to offset current tax assets and
liabilities.
1.18. Operating segments
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision maker has been identified as Philip
Marcella.
The Board considers that the Group's activity constitutes one
reporting segment, as defined under IFRS 8 and reviews the
performance of the Group against forecasts.
The profit measures are operating profit and profit for the
period, both disclosed on the face of the income statement. No
differences exist between the basis of preparation of the
performance measures used by management and the figures in the
Group financial information.
1.19. Equity instruments
Ordinary shares are classified as equity. Costs, net of VAT,
directly attributable to the issue of new shares or options are
shown in equity as a deduction from share premium.
1.20. Financial assets
The Group classifies its financial assets into the categories,
discussed below, based upon the purpose for which the asset was
acquired. Financial assets are recognised when the Group becomes
party to the provisions of a contract.
1.21. Loans and receivables
The Group classifies all its financial assets other than cash
and cash equivalents as trade and other receivables (excluding
prepayments). The classification depends on the nature of the
financial assets.
1.22. Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held
on call, together with other short-term highly liquid investments
which are not subject to significant changes in value and have
original maturities of less than three months.
1.23. Trade and other receivables
Trade and other receivables are classified as loans and
receivables under financial assets where they have fixed or
determined payments and are not quoted in an active market. Loans
and receivables included in 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.
1.24. Financial liabilities
Financial liabilities are recognised when the Group becomes
party to the provisions of a contract. The Group's financial
liabilities are all categorised as loans and payables. The loans
and payables are made up of:
- Trade payables and other short-term monetary liabilities
excluding other taxes and social security costs and deferred income
which are initially recognised at fair value and subsequently
carried at amortised cost using the effective interest method.
- Bank and other borrowings are initially recognised at fair
value net of any transaction costs directly attributable to the
issue of the instrument and, if interest-bearing, are subsequently
measured at amortised cost using the effective interest rate
method.
A financial liability is no longer recognised when the
obligation under the liability is discharged, cancelled or
expires.
1.25. Significant accounting judgements, estimates and assumptions
The preparation of the consolidated financial statements in
conformity with IFRSs requires management to make estimates and
assumptions that affect the application of policies and reported
amounts of assets, liabilities, income, expenses and related
disclosures. The estimates and underlying assumptions are based on
practical experience and various other factors that are believed to
be reasonable under the circumstances, the results of which form
the basis for making the judgments about carrying values of assets
and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Changes in accounting estimates may be necessary if
there are changes in the circumstances on which the estimate was
based or as a result of new information. Such changes are recorded
in the period in which the estimate is revised. The application of
the Group's accounting policies may require management to make
judgements, apart from those involving estimates, which can have a
significant effect on the amounts amortised in the financial
statements. Management judgement is particularly required when
assessing the substance of transactions that have a complicated
structure or legal form.
In the process of applying the Group's accounting policies,
management has made the following judgements, which have the most
significant effect on the amounts recognised in the consolidated
financial statements:
- Accounting for the business combination of appScatter Limited
and appScatter Group PLC (see note 1.9 above).
- Treatment of research & development expenditure (see note 1.15 above).
- Fair value of intangible assets (see note 1.9 above).
- Impairment (see note 1.11 above).
In assessing whether any impairment is required on Group
intangible assets and goodwill and the Company investments and
intercompany receivables, the Group have reviewed discounted cash
flow models for the assets and the expected terminal value, if
those assets were to be sold in the future. These forecasts assume
a fourfold growth in annual revenues over the next five years. This
will be more likely to occur if the Airpush transaction completes
as planned.
In the process of applying the Group's accounting policies,
management has made the following estimates, which have the most
significant effect on the amounts recognised in the consolidated
financial statements:
- Accounting for share-based payments (see note 17 below).
- R&D tax credit recoverable.
In assessing the amount recoverable in R&D tax credits the
Group have used the calculations prepared to submit the claim to
HMRC which are consistent to the methodology used in previous
periods.
1.26. Fair value measurement
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to
sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability; or
- In the absence of a principal market, in the most advantageous
market for the asset or liability.
The principal or the most advantageous market must be accessible
by the Group.
The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their
economic best interest.
A fair value measurement of a non-financial asset takes into
account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset
in its highest and best use.
The Group uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable
inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest
level input that is significant to the fair value measurement as a
whole:
- Level 1 - Quoted (unadjusted) market prices in active markets
for identical assets or liabilities;
- Level 2 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement is directly
or indirectly observable; and
- Level 3 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable.
For assets and liabilities that are recognised in the financial
statements on a recurring basis, the Group determines whether
transfers have occurred between levels in the hierarchy by
re-assessing categorisation (based on the lowest level input that
is significant to the fair value measurement as a whole) at the end
of each reporting period.
For the purpose of fair value disclosures, the Group has
determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the
level of the fair value hierarchy as explained above.
2. Financial Risk Management
2.1. Financial instruments by category
Group Group Company Company
2018 2017 2018 2017
Financial assets
Cash & equivalents 83,402 3,781,109 12,035 3,200,654
Trade receivables 631,615 1,204,330 - -
Other receivables 519,617 1,325,966 10,940 20,150
Shares issued for prepaid
services - 502,509 - -
Loans due from related
parties 136,123 60,664 - -
---------- ---------- -------- ----------
Loans and receivables 1,370,757 6,874,578 22,975 3,220,804
Financial liabilities
Trade payables 1,233,183 1,097,168 241,395 17,810
Other payables 320,083 5 300,825 -
Accruals 391,496 145,882 100,550 34,340
Loans and borrowings -
current 61,800 - - -
Loans and borrowings -
non-current 119,485 - - -
---------- ---------- -------- ----------
Loans and payables 2,126,047 1,243,055 644,770 52,150
2.2. 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.
2.3. Risk and sensitivity analysis
The Group's activities expose it to a variety of financial
risks, mainly credit risk, interest risk, foreign exchange risk and
liquidity risk.
The Group's overall risk management programme focuses on
unpredictability and seeks to minimise the potential adverse
effects on the Group's financial performance. The Group's Board, on
a regular basis, reviews key risks and, where appropriate, takes
actions to mitigate the key risks identified.
2.4. Credit risk
The aggregate financial exposure is continuously monitored. The
maximum exposure to credit risk is the value of the outstanding
amount of other receivables and bank balances. The Group does not
consider that there is any concentration of risk within other
receivables, therefore, no impairment was required. The Group's
exposure to credit risk on cash and cash equivalents is considered
low as the bank accounts are with banks with high credit
ratings.
The table below shows the aging of accounts receivable at the
balance sheet date.
Less than 30 to 60 to Over 90
Current 30 days 60 days 90 days days
GBP GBP GBP GBP GBP
31 December Group: trade receivables
2018 gross 129,840 102,945 25,090 2,058 478,682
Group: trade receivables
provision - - - - (107,000)
---------------------------------------- -------- ---------- --------- --------- ----------
Group: trade receivables 129,840 102,945 25,090 2,058 371,682
Company: trade
receivables - - - - -
31 December
2017 Group: trade receivables 352,810 245,810 245,810 121,900 238,000
Company: trade
receivables - - - - -
2.5. Interest risk
The Group's exposure in these areas as at the financial position
date was minimal.
2.6. Foreign exchange risk
The Group's exposure to foreign currency risk related primarily
to cash and cash equivalents, trade and other payables that are
denominated in US$ other than the functional currency of the
relevant group entities.
2.7. Exposure to currency risk
The following table details the Group's exposure at the end of
the reporting period to currency risk arising from recognised
assets or liabilities denominated in US$ and in Euro. Differences
resulting from the translation of the financial statements of the
entity within the Group into the Group's presentation currency are
excluded.
Group Group Company Company
US Dollar 2018 2017 2018 2017
GBP GBP GBP GBP
Cash & equivalents 1,693 2,288 - -
Trade & other receivables - 60 - -
Other payables and accruals (296,812) (54,764) - -
---------- --------- -------- --------
(295,119) (52,416) - -
Euro 2018 2017 2018 2017
GBP GBP GBP GBP
Cash & equivalents 60,149 - - -
Trade & other receivables 178,729 - - -
Other payables and accruals (234,879) - - -
---------- ----- ----- -----
3,999 - - -
2.8. Sensitivity analysis
The following table indicates the change in the Group's loss for
the period and accumulated losses that would arise if foreign
exchange rates in US$ and Euro to which the Group has significant
exposure at the end of each reporting period had changed at that
date, assuming all other risk variables remained constant.
USD Currency change Year ended Year ended
31 December 31 December
2018 2017
Group
Profit or loss GBP GBP
10% strengthening of sterling 70,890 49,897
10% weakening of sterling (86,643) (60,985)
Equity
10% strengthening of sterling 190,145 86,630
10% weakening of sterling (232,400) (105,881)
EURO Currency change Year ended Year ended
31 December 31 December
2018 2017
Group
Profit or loss GBP GBP
10% strengthening of sterling 49,182 -
10% weakening of sterling (60,111) -
Equity
10% strengthening of sterling 49,482 -
10% weakening of sterling (60,477) -
There is no foreign exchange impact on
the Company.
2.9. Liquidity risk
The Group and the Company currently hold cash balances to
provide funding for normal trading activity. Trade and other
payables are monitored as part of normal management routine.
Borrowings and other liabilities mature according to the
following schedule:
Within 1yr 1-2 years 2-5 years
Group - 2018
Trade & other payables 2,217,578 - -
Loans & borrowings - - -
----------- ---------- ----------
2,217,578 - -
Group - 2017
Trade & other payables 1,506,449 - -
----------- ---------- ----------
1,506,449 - -
Company - 2018
Trade & other payables 654,680 - -
Loans & borrowings 61,800 119,485 -
----------- ---------- ----------
716,480 119,485 -
Company - 2017
Trade & other payables 84,809 - -
Loans & borrowings - - -
----------- ---------- ----------
84,809 - -
2.10. Capital risk management
The Group's capital management objectives are to ensure its
ability to continue as a going concern by pricing products and
services commensurate with the level of risk; and to provide an
adequate return to shareholders.
To meet these objectives, the Board reviews the budgets and
forecasts on a regular basis to ensure there is sufficient capital
to meet the needs of the Group through to profitability and
positive cash flow. All working capital requirements have been
financed to date through fundraising and borrowings.
3. Loss from operations
2018 2017
GBP GBP
The Group operating loss is stated after charging
Auditor's remuneration
- fees payable to the Company's auditors for the
audit of the Group and company 30,000 18,000
- fees payable to the Company's auditor for the
audit of subsidiaries 12,500 12,000
- fees payable to the Company's auditor for tax
advice 29,479 13,683
- fees payable to the Company's auditor for corporate
finance advice - 95,500
Research & development expenses 951,770 1,217,062
Legal & professional fees 295,959 379,254
Staff costs (note 4) 2,834,813 2,397,395
Foreign exchange losses 5,417 12,324
Amortisation of intangible assets 2,282,286 729,202
---------- ----------
4. Staff costs
The aggregate employment costs of staff (including Directors)
for the year was:
2018 2017
GBP GBP
Wages & salaries 1,903,871 1,659,241
Pension 37,763 6,768
Social security costs 353,833 184,510
Employee share-based payment charge 539,346 528,876
---------- ----------
Total staff costs 2,834,813 2,379,395
---------- ----------
The average number of employees (including Directors) during the
period was made up as follows:
The average number of employees in the period
was: 2018 2017
Executives 5 5
Administration 1 1
Other 33 24
----- -----
39 30
----- -----
5. Directors' emoluments
Key management personnel compensation included in the loss for
the following periods were as follows:
Fees Consulting Termination Bonus Pension Total
fees payments
2018 GBP GBP GBP GBP GBP GBP
Executive directors
Philip Marcella 124,167 93,750 - - 3,725 221,642
Manish Kotecha 64,584 - 142,083 - 5,388 212,055
Jason Hill 146,667 - - - 900 147,567
-------- ----------- ------------ ------ -------- --------
335,418 93,750 142,083 - 10,013 581,264
Non-executive
directors
Clive Carver 40,000 42,000 - - - 82,000
Andy Bushby 6,250 - - - - 6,250
Michael Buchen 20,833 43,596 - - - 64,429
-------- ----------- ------------ ------ -------- --------
67,083 85,596 - - - 152,679
Fees Consulting Bonus Pension Total
fees
2017 GBP GBP GBP GBP GBP
Executive directors
Philip Marcella 195,619 - 97,500 975 294,094
Manish Kotecha 125,542 70,000 - 196 195,738
Jason Hill 110,206 - 83,880 391 194,477
-------- ----------- -------- -------- --------
431,367 70,000 181,380 1,562 684,309
Non-executive directors
Clive Carver 30,000 83,849 - - 113,849
Michael Buchen 25,000 10,704 - - 35,704
-------- ----------- -------- -------- --------
55,000 94,553 - - 149,553
The majority of remuneration to directors in 2017 was paid in
shares.
6. Finance costs
2018 2017
GBP GBP
Interest paid on loans - 41,938
Foreign exchange loss 5,417 -
Finance arrangement fees - 6,388
------ -------
5,417 48,326
------ -------
7. Taxation
2018 2017
The tax credit is as follows: GBP GBP
UK Corporation tax - -
Total current tax 520,395 500,000
Origination and reversal of timing differences - -
--------------------------------- ---------------------------------
520,395 500,000
================================= =================================
Factors affecting the tax credit
The reasons for the difference between the actual tax charge for
the year and the standard rate of corporation tax in the United
Kingdom applied to the result for the year are as follows:
2018 2017
GBP GBP
Loss on ordinary activities before income tax (11,010,910) (5,572,650)
Standard rate of corporation tax 19.00% 19.25%
Loss before tax multiplied by the standard rate
of corporation tax 2,092,073 1,220,558
Adjustments
R&D enhancement 520,395 500,000
Losses carried forward (2,092,073) (1,220,558)
Tax credit 520,395 500,000
------------- ------------
Changes in tax rates for the two periods
The UK corporation tax rate for small company profit has reduced
to 19% from 1 April 2017. Accordingly, the deferred tax asset or
liability would have been calculated based on the rate of 19% at
the balance sheet date. Future enacted tax rates of 17% will apply
from 1 April 2020.
Deferred tax assets have not been recognised in respect of tax
losses due to lack of certainty of future profitability as the
Group is still in an early stage.
8. Loss per share
2018 2017
GBP GBP
Loss for the year and earnings used in basic
& diluted EPS (10,490,515) (5,840,562)
Weighted number of average shares 42,740,711 50,904,125
Loss per share GBP (0.25) (0.11)
Weighted number of fully diluted shares 47,176,943 55,340,477
Loss per share GBP (0.25) (0.11)
Fully diluted shares include the number of outstanding share
options, details of which are included in note 17. These options
are anti-dilutive and therefore basic and diluted loss per share
are the same.
9. Intangible assets
Acquired Developed Acquired
IP IP Data Total
Cost GBP GBP GBP GBP
At 1 January 2016 798,196 - - 798,196
Additions - - - -
Exchange adjustment 160,905 - - 160,905
At 31 December 2016
& 1 January 2017 959,101 - - 959,101
Additions - 1,282,178 - 1,282,178
Exchange adjustment (67,728) - - (67,728)
At 31 December 2017
& 1 January 2018 891,373 1,282,178 - 2,173,551
Additions 4,020,000 1,037,350 6,581,662 11,639,012
Exchange adjustment 33,570 - - 33,570
At 31 December 2018 4,944,943 2,319,528 6,581,662 13,846,133
Amortisation GBP GBP GBP GBP
At 1 January 2016
& 31 December 2016 - - - -
At 1 January 2017 - - - -
Charge for the year (729,202) - - (729,202)
------------ ---------- ---------- ----------------
At 31 December 2017
& 1 January 2018 (729,202) - - (729,202)
Charge for the year (972,616) (651,503) (658,166) (2,282,286)
Exchange adjustment (12,202) - 0 (12,202)
------------ ---------- ---------- ----------------
At 31 December 2018 (1,714,020) (651,503) (658,166) (3,023,690)
Carrying value
At 31 December 2018 3,230,922 1,668,025 5,923,496 10,822,443
At 31 December 2017 162,171 1,282,178 - 1,444,349
At 1 January 2017 - - - -
On 1 October 2013 appScatter LLC entered into a conditional
agreement to purchase the intellectual property of the developed
technologies of the application distribution platform from Digital
Software House Limited (a related party because Mr Philip Marcella
and Mr William Booth were directors of this entity) for a
consideration of GBP488,537 ($800,000). However, as the conditions
were not met, this transaction only took place in October 2015 when
the purchase consideration was revised up to GBP765,793
($1,170,000). This was satisfied by the issue of shares in
appScatter LLC of GBP654,524 ($1,000,000) and cash of GBP111,269
($170,000).
On 2 July 2018, appScatter Group acquired Priori Data GmbH. On
acquisition the fair value of the assets, being the platform and
the underlying data records was assessed.
The estimated cost to rebuild the Priori platform was assessed
at GBP4,020,000 and the carrying value of the platform has been
increased to this amount in the accounts. This expenditure is being
amortised over three years.
The fair value of the data is estimated to be at least
GBP6,581,662 being the balance between the purchase consideration
and the remaining net asset value. The company possessed 775
billion data records and this approach values each record at less
than GBP0.01 CPM. The standard valuation for such data is typically
above GBP0.03 CPM so the valuation assigned above is believed to be
prudent. Based on the estimated future cash flows from the asset's
management believe that no impairment is required at the balance
sheet date. This expenditure is being amortised over five
years.
During 2017 and 2018 the Group has capitalised research and
development expenditure directly related to products which have
been implemented in the appScatter platform. This expenditure is
being amortised over three years.
The fair value of intangible assets have been assessed with
reference to the future cash flows anticipated from the assets at a
discount rate of 10% and assuming a terminal value of the business
which is greater than the value paid. Based on these calculations
no impairment is due at the reporting date (2017: nil).
In carrying out their impairment review management have also
taken additional assurance from the proposed transaction with
Airpush Inc, which was not in existence at year end. This
transaction places a third-party valuation on the combined assets
of appScatter Group plc which is in excess of the current carrying
values.
10. Goodwill
Goodwill
Cost GBP
At 1 January 2016 -
Additions -
At 31 December 2016 & 1 January 2017 -
Additions -
At 31 December 2017 & 1 January 2018 -
Additions 2,105,179
At 31 December 2018 2,105,179
Goodwill arose on the acquisition of Abilott Limited as
discussed in note 1.9 above, where net liabilities of GBP1.3m were
acquired for consideration of GBP825,000 as shown in note 11.
The fair value of the goodwill has been assessed by preparing
discounted cash flow forecasts using a discount rate of 10%. Based
on the estimated future cashflows from Abilott Limited management
believe that no impairment is required at the balance sheet
date.
11. Investments in subsidiaries
The principal subsidiaries of the Company, all of which have
been included in the consolidated financial information, are as
follows:
Name Principal activity Parent % of ordinary shares
directly held by
parent
appScatter
appScatter Limited Software development Group Plc 100%
appScatter LLC appScatter
(Delaware) Software development Limited 100%
DSH Labs LLC appScatter
(Delaware) Software development LLC 100%
SaaS platform for mobile appScatter
Priori Data GmbH app intelligence Group Plc 100%
appScatter
Abilott Limited Digital security solutions Group Plc 100%
On 18 May 2016 appScatter Limited acquired the entire issued
share capital of appScatter LLC and its subsidiary for a
consideration of GBP12,659,030 satisfied by the issue of 9,967,740
shares.
On 21 August 2017 appScatter Group Plc acquired the share
capital of the trading entity appScatter Limited for the
consideration of GBP32,065,792 satisfied by the issue of 49,331,988
shares. This has been written down to reflect the fair value of the
net assets acquired.
On 3 July 2018 appScatter Group plc acquired 100% of the issued
share capital of Priori Data GmbH. Further detail on the
acquisition is included in the Strategic Report and CEO Statement.
Total consideration was GBP10.6 million, consisting of GBP1.8
million in cash and GBP8.8 million in shares by way of the issue of
16,667,157 new ordinary shares at an effective issue price of 53.15
pence. The issue of a further 357,698 shares were issued on 05
September 2018 once the completion accounts and net assets
statement had been finalised.
On 17 December 2018 appScatter Group plc acquired 100% of the
issued share capital of Abilott Limited. Further detail on the
acquisition is included in the Strategic Report and CEO Statement.
Initial consideration was GBP825,000, consisting of GBP0.5 million
in cash (of which GBP0.2m was on completion and GBP0.3m was
deferred), and GBP0.325 million in shares by way of the issue of
1,666,666 new ordinary shares at an effective issue price of 19.5
pence.
Investment in subsidiaries continued
2018 2017
GBP GBP
Opening balance 3,131,139 -
Acquisition of appScatter Limited - 3,131,139
Acquisition of Priori Data Gmbh 10,623,024 -
Acquisition of Abilott Limited 825,000 -
Directly-attributable acquisition
costs 547,965 -
Closing balance 15,127,128 3,131,139
Intercompany receivables
From appScatter Limited 8,700,043 3,815,922
From Priori Data GmbH 93,750 -
----------- ----------
8,793,793 3,815,922
Book value Fair value Fair value
of assets adjustments of assets
acquired acquired
GBP GBP GBP
Priori Data
IP - platform 1,346,061 2,673,939 4,020,000
Data - 6,581,662 6,581,662
Debtors 39,487 - 39,487
Cash 201,877 - 201,877
Creditors (220,002) - (220,002)
Total consideration 1,367,423 9,255,601 10,623,024
------------ ------------- ------------
Satisfied by
Cash 1,834,157
Shares 8,788,867
10,623,024
------------
Abilott
Fixed assets 10,107 - 10,107
Debtors 95,831 - 95,831
Cash 24,143 - 24,143
Creditors (169,264) - (169,264)
Intercompany (1,053,508) - (1,053,508)
Loans (187,488) - (187,488)
Goodwill - 2,105,179 2,105,179
------------ ------------
Total consideration (1,280,179) 2,105,179 825,000
------------ ------------- ------------
Satisfied by
Cash 500,000
Shares 325,000
825,000
------------
Priori Data GmbH Shares Share Price Fair value
On completion 16,290,325 0.532 8,658,307
Deferred consideration 357,698 0.365 130,560
-----------
Fair value of shares 8,788,867
Cash 1,834,157
----------- ------------ -----------
Total consideration 10,623,024
Abilott Limited Shares Share Price Fair value
On completion 1,666,667 0.195 325,000
Cash 500,000
Total consideration 825,000
The fair values of the assets acquired is discussed in note 9
above.
12. Trade and other receivables
Group Group Company Company
2018 2017 2018 2017
GBP GBP GBP GBP
Trade receivables 631,615 1,204,330 - -
Prepayments 110,290 107,310 64,053 41,044
Other receivables 519,617 1,325,966 10,940 20,150
Shares issued for prepaid
services - 502,509 - -
Other taxes receivable - 263,450 17,030 9,021
Loans due from related parties 136,123 60,664 - -
---------- ---------- -------- --------
1,397,645 3,464,229 92,023 70,215
---------- ---------- -------- --------
13. Trade and other payables
Group Group Company Company
2018 2017 2018 2017
GBP GBP GBP GBP
Trade payables 1,233,183 1,097,168 241,395 17,810
Accruals & Deferred income 391,496 145,882 102,550 34,340
Social security & other taxes 272,817 263,394 9,908 32,659
Other payables 320,083 5 300,825 -
Loans due to related parties - - - -
---------- ---------- -------- --------
2,217,579 1,506,449 654,678 84,809
---------- ---------- -------- --------
14. Loans and borrowings
Group Group Company Company
2018 2017 2018 2017
Current 61,800 - -
Non-current 119,485 - - -
The carrying value of the loans and borrowings approximates to
their fair value.
15. Share Capital
Number GBP
At incorporation on 3 April 2017 2 0.10
Shares issued to shareholders of appScatter
Ltd 49,331,986 2,466,599
Shares issued on IPO 13,846,154 692,308
----------- ----------
At 31 December 2017 & 1 January 2018 63,178,142 3,158,907
----------- ----------
Acquisition of Priori Data GmbH 16,648,023 832,401
Acquisition of Abilott Limited 1,666,666 83,333
Placings 9,523,326 476,166
----------- ----------
At 31 December 2018 91,016,157 4,550,808
----------- ----------
appScatter Group plc was incorporated on 3 April 2017 with 2
ordinary shares of GBP0.05 allotted.
On 21 August 2017 appScatter Group plc acquired the entire
issued share capital of appScatter Ltd which was satisfied by the
issuance of 49,331,986 ordinary shares of GBP0.05 each, issued to
the shareholders of appScatter Ltd at the ratio of 2.5 shares for
every 1 held. On 5 September 2017, appScatter Group plc completed
the initial public offering and admission to AIM; 13,846,154
ordinary shares of GBP0.05 each were issued at a price of GBP0.65
per ordinary share.
On 21 June 2018, appScatter Group plc raised GBP3,074,623
through the issuing of 4,392,319 ordinary shares of GBP0.05 each
were issued at a price of GBP0.70 per ordinary share. On 26 June
2018, appScatter Group plc raised GBP1,623,050 through the issuing
of 2,318,643 ordinary shares of GBP0.05 each were issued at a price
of GBP0.70 per ordinary share. On 3 July 2018, appScatter Group plc
acquired the entire issued share capital of Priori Data GmbH, which
was satisfied, in part, by the issuance of 16,648,023 ordinary
shares of GBP0.05 each. On 22 August 2018, appScatter Group plc
raised GBP1,000,210 through the issuing of 1,428,871 ordinary
shares of GBP0.05 each were issued at a price of GBP0.70 per
ordinary share. On 16 October 2018, appScatter Group plc raised
GBP968,445 through the issuing of 1,383,493 ordinary shares of
GBP0.05 each were issued at a price of GBP0.70 per ordinary share.
On 17 December 2018, appScatter Group plc acquired the entire
issued share capital of Abilott Limited which was satisfied, in
part, by the issuance of 1,666,666 ordinary shares of GBP0.05
each.
16. Reserves
The following describes the nature and purpose of each reserve
within equity:
Share premium Amount subscribed for share capital in excess of
nominal value less any issue or fundraising costs related to shares
issued, written off against this account.
Shares to be issued Amount subscribed for share capital that has
been committed to but not yet issued in excess of nominal
value.
Share option reserve Value of share options granted and
calculated with reference to a binomial pricing model. When options
lapse or are exercised, amounts are transferred from this account
to retained earnings.
Merger reserve Effect on equity as a result of the group
reconstruction of appScatter Limited and appScatter Group plc and
the acquisitions during the year of Priori Data GmbH and Abilott
Limited as discussed in note 1.9.
Reverse acquisition reserve Effect on equity of the reverse
acquisition of appScatter LLC.
Foreign exchange reserve Foreign exchange translation gains and
losses arising on the translation of the financial statements from
the functional to the presentation currency.
Retained earnings Retained earnings represents all other net
gains and losses and transactions with shareholders (for example
dividends) not recognised elsewhere.
17. Share-based payments
Shortly after incorporation in April 2018, the Company has
established an employee share option plan to enable the issue of
options as part of the remuneration Directors and employees to
enable them to purchase ordinary shares in the Company. Under IFRS
2 "Share-based Payments", the Company determines the fair value of
the options issued to Directors and employees as remuneration and
recognises the amount as an expense in the Profit or Loss account
with a corresponding increase in equity.
At 31 December 2018, the Company had outstanding options to
subscribe for Ordinary shares as follows:
Company & Group 2018 2018
Options Weighted
average
exercise
price
No. GBP
Outstanding at the beginning of the period 4,436,232 0.583
Granted during the period 2,222,492 0.621
Forfeited during the period (442,247) 0.650
-------------------------------------------- ---------- ----------
Outstanding at the end of the period 6,216,477 0.684
Exercisable at the end of the period 4,899,248 0.585
The weighted average contractual life of the options outstanding
at 31 December 2018 was 10 years. Of the total number of options
outstanding at 31 December 2018, 4,899,248 had vested and were
exercisable (2017: 1,321,367). The weighted average share price (at
the date of exercise) of options exercised during the year was nil
as no options were exercised.
In October 2018 2,222,492 Options were issued to staff at an
average option price of GBP0.621 pence per Ordinary share.
On 15 May 2017 options were granted to employees of the Group to
subscribe for a total of 891,472 shares in appScatter Limited at
GBP1.29 per share (of which 193,798 were granted to Jason Hill, a
Director of the Company). Following the Company's acquisition of
the entire issued share capital of appScatter Limited on 21 August
2018, invitations were made to each grantee, in accordance with the
terms of their original option agreements, to release their options
in appScatter Limited in exchange for the grant to them of options
to subscribe for Ordinary Shares. All such holders agreed to do so
and accordingly on 22 August 2018 options were granted to these
employees to subscribe for up to 2,228,680 Ordinary Shares in the
Company at a price of GBP0.516 per Ordinary Share (of which 484,495
were granted to Jason Hill). These options are exercisable until 15
May 2027. With the exception of Jason Hill and one other employee,
one half of each holder's options vest on the first anniversary of
the commencement of their employment start date and the balance
vest in 24 equal instalments over a two-year period. In the case of
Jason Hill and one other employee, the initial 50 per cent. of the
Options granted to them vested immediately on grant.
On 21 August 2017 the Company granted to Ruffena Capital Limited
warrants to subscribe for up to 70,156 new Ordinary Shares at
GBP0.644 per Ordinary Share. These warrants expire in tranches on a
range of dates between 24 August 2023 and 4 May 2024 and were
issued by way of replacement of a warrant of equivalent value and
duration granted on 26 July 2017 which had entitled Ruffena Capital
Limited to subscribe for up to 28,060 ordinary shares in appScatter
Limited at GBP1.61 per appScatter Limited share.
On 24 August 2017 options were granted to the Directors, subject
to Admission, over a total of 2,137,396 new Ordinary Shares,
representing an aggregate of 3.38 per cent. of the Enlarged Share
Capital on Admission, at an exercise price equal to the Placing
Price. These options are exercisable until the tenth anniversary of
Admission and vest in three equal annual instalments commencing on
the first anniversary of Admission.
On 31 July 2018 we issued 1,047,949 share options over ordinary
shares in appscatter Group plc at 70 pence options to staff in
Priori Data GmbH and 1,174,543 options over ordinary shares in
appscatter Group plc at 55 pence to staff in appScatter Limited.
These options are exercisable until the tenth anniversary of the
date of issue and vest in three equal annual instalments commencing
on the first anniversary of the start of the employee's date.
The value of the options is measured by the use of a
Black-Scholes pricing model. The inputs into the model made in 2018
were as follows:
EMI Options Directors Warrants
Options
Weighted average shares price at
grant date, pence 64.4 65.0 65.0
Exercise price, pence 51.6 65.0 65.0
Weighted average contractual life,
months 10.0 10.0 10.0
Expected volatility % 50.00% 50.00% 50.00%
Expected dividend growth rate % 0.00% 0.00% 0.00%
Risk-free interest rate % 0.51% 0.51% 0.51%
Share based remuneration expense related to the share options
grant is included into the Administrative expenses line in the
Consolidated Income Statement in the amount of GBP539,346.
18. Commitments
Operating lease commitments
The commitment under non-cancellable operating leases as at 31
December 2018 was GBP123,279 (2017: GBP163,944). This was all due
within one year.
Capital commitments
There were no amounts contracted for but not provided as at 31
December 2018 (2017: nil).
Related Party Transactions
Group companies
During 2018 appScatter Group plc invoiced appScatter Limited for
GBP216,202 in Management charges and recharged GBP31,255 of costs.
appScatter Group plc also advanced GBP4,172,000 in cash to
appScatter Limited. appScatter Limited invoiced appScatter Group
plc for GBP646,697 in recharged costs. At the 31 December the net
intercompany balance owed by appScatter Limited to appScatter Group
plc was GBP8,793,793.
Directors
During the year the Company entered into the following
transactions with related parties:
Related party Type 2018 2018 2017 2017
Transactions Balance Transactions Balance
due (from)/ due (from)/
to to
Philip Marcella
(1) Fees 93,750 - 132,167 23,966
Elk Associates LLC
(2) Fees 42,000 - 100,833 -
Polar Lights 2 Ltd
(3) Fees 43,596 - 10,902 -
Manish Kotecha Fees - - 90,126 -
Notes
1. Philip Marcella is a director of appScatter Group plc as well
as the sole shareholder of Mobile Software House LLC. Philip
Marcella's current account for 2017 and 2018 included fees
GBP168,329 and GBPnil respectively. Included within loans due from
related parties is GBP23,966 in relation to reimbursable expenses
incurred in relation to travel on company business.
2. Clive Carver is a non-executive director of appScatter Group
plc and has an interest in ELK Associates LLP.
3. Michael Buchen was a non-executive director of appScatter
Group plc and has an interest in Polar Lights 2 Limited.
The amounts due from/(to) for the above parties are
non-interest-bearing balances and included under trade and other
receivables and trade and other payables notes.
19. Events after the reporting date
On 9 April 2019 the Company announced its intention to acquire
Airpush Inc., a technology company specialising in app monetisation
which, if approved and completed would constitute a reverse
takeover for the purposes of the AIM Rules for Companies (the
"Proposed Acquisition"). Accordingly, trading in the Company's
shares was suspended on AIM until such time as the Company is able
to publish an admission document in relation to the Proposed
Acquisition or confirms that the Proposed Acquisition is no longer
in contemplation.
On 9 April 2019, the Company announced it had raised GBP2.2
million fundraising. Of this GBP2.2 million, GBP1.6m million has
been received to date with further cash expected.
20. Exceptional items
Investment costs
During the year the Group acquired two companies, Priori Data
GmbH and Abilott Limited. The costs associated with these
investments have been expensed to the P&L during the period in
line with IFRS3 on consolidation. The costs that are classed as
directly attributable to the acquisitions had been capitalised as
part of the investment cost in the Company financial
statements.
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 SSWESFFUSEFA
(END) Dow Jones Newswires
August 02, 2019 02:00 ET (06:00 GMT)
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