TIDMEQT
RNS Number : 0762B
EQTEC PLC
29 September 2022
29 September 2022
EQTEC plc
("EQTEC", the "Company" or the "Group")
Interim results for the six months ended 30 June 2022
EQTEC plc (AIM: EQT), a global technology innovator powering
distributed, decarbonised, new energy infrastructure through its
waste-to-value solutions for hydrogen, biofuels, and energy
generation, announces its unaudited interim results for the six
months ended 30 June 2022 ("H1 2022"), with post-period progress
and financial outlook.
Financial highlights
-- Revenue and other operating income EUR2.98 million (H1 2021: EUR0.48 million)
-- Gross profit EUR0.24 million (H1 2021 EUR0.07 million)
-- EBITDA loss EUR1.97 million (H1 2021 EUR3.49 million)
-- Capital raise of GBP3.75 million through the placing of shares
-- Loan facility for up to GBP10 million with initial drawdown of GBP5 million
Commercial and operational highlights
-- Two of three Market Development Centres progress toward key milestones
-- UK RDF projects move ahead with top-tier partners
-- Contaminated plastics and liquid fuels added to solution portfolio
-- Project finance accelerates project development in Greece, UK and USA
Current trading and outlook
Advanced technology innovation and integration significantly,
with:
-- Acquisition of a failed gasification plant in France, for
upgrade to EQTEC technology, recommissioning and operation for
three, different waste feedstocks;
-- Launch into the contaminated plastic waste treatment business
in France, with a French partner following completion of successful
contaminated plastic waste trials;
-- Progress with project development for two UK,
multi-technology plants to transform MSW into biogas, power and/or
hydrogen; and
-- New or strengthened partnerships with Anaergia for anaerobic
digestion solutions, Wood for integrated Waste-to-hydrogen and
Waste-to-SNG solutions and CompactGTL for Waste-to-biofuels
solutions.
Project execution through EQTEC go-to-markets and development
partners, including:
-- Upgrade, restoration and cold commissioning of Italia Market
Development Centre ("MDC") toward full commercial operation by
year's end;
-- Successful acquisition of a MDC for France, with numerous
contracts already in place and with feedstock and offtake
arranged;
-- Transition of approach to project funding, with corporate
centre team actively engaging infrastructure investors through
top-tier advisors;
-- Heads of terms for sale of the Deeside, UK project to a
corporate investor, with funds to develop the project to financial
close, acquire EQTEC's equity, and pay all EQTEC development
services fees due, with financial impact expected before the year
end;
-- Successful renegotiation of agreement at the Southport, UK
project, releasing the Company from liabilities for acquisition of
project scope deploying non-EQTEC technology whilst preserving its
right to develop project scope and deploy integrated
syngas-to-hydrogen technology, with the combined capabilities of
EQTEC and Wood;
-- Improved financial modelling and development strategy for the
Billingham project, for a multi-technology, multi-use facility
built around the existing, consented syngas-to-power facility, with
Petrofac appointed as the FEED partner;
-- Successful arrangement of a debt facility with Greek lenders,
backed by the European RRF, amounting to 80 per cent of the funding
required for the Livadia project in Boeotia, Greece; and
-- Accelerated progress with funding and planning for the BMEC project in California, USA.
David Palumbo, CEO of EQTEC, commented:
"As we witness the cost-of-living crisis alongside the worsening
situation with Russia, attention inevitably leads back to our
energy needs, their costs and their consequences. It is now clearer
than ever that new responses to these are needed. EQTEC has some of
those responses, and as the world's needs become more urgent, not
only does our resolve strengthen, but our capability to respond
increases.
"Our MDCs will demonstrate those responses for the world to see,
in live, commercial environments. The first will be operational
this year, in one of the greenest, most beautiful parts of Italy.
We are commissioning Italia MDC now and will shortly thereafter
move on to MDCs in Croatia and France. Not only will these showcase
numerous feedstocks for a range of offtake solutions, but they will
demonstrate new business models to power a decarbonised world.
"Our RDF projects in the UK are gaining momentum, benefitting
from innovative, multi-technology solutions, sharper financial
models and world-class partnerships. We are excited about these
integrated solutions we will introduce to the UK, right in line
with its move away from traditional solutions and its need for
energy independence and security. We now have Deeside on a path to
be fully funded through to financial close and Southport re-focused
for accelerated development.
"Our 2022 will be less backloaded than last year, but we still
have an ambitious Q4 ahead of us. Behind our progress is an
increasingly focused, collaborative and professional team that will
drive the Company forward through Q4 and into 2023 with increasing
success and global impact."
Chief Executive's statement and outlook
EQTEC's purpose is to decarbonise local communities and
transform waste into value, deploying our innovative, carbon
engineering capabilities to baseload energy and biofuel solutions
across a wide range of decentralised business models. This purpose
is enabled by our world-leading proficiency with synthesis gas
("syngas").
EQTEC's syngas technology is proprietary, patented and proven.
It accommodates the widest range of feedstocks including forestry
and agricultural wastes, municipal wastes and industrial wastes.
EQTEC's growing library of nearly 60 waste feedstocks, together
with its highly accurate, proprietary computational modelling
capability enable EQTEC to design tailored and highly efficient
syngas production facilities to support the widest range of
applications including thermal energy, electrical power, hydrogen,
SNG, chemicals and liquid fuels. Because EQTEC designs all aspects
of the syngas production process and programs its proprietary
control systems in-house, it is able to achieve the highest levels
of efficiency and operational availability.
The Company's target business model positions EQTEC as a leading
technology innovator for production of clean, renewable, baseload
energy and biofuels. The Company envisions three, priority customer
types for its solutions:
-- Industrial: manufacturing companies with captive waste,
hazardous or not, with the business case to safely and cleanly
transform that waste into electrical power, thermal energy,
hydrogen, synthetic natural gas ("SNG") and/or liquid fuels. The
Company's longest-standing deployment of EQTEC technology is in a
large-scale, agro-industrial facility in southern Spain and has
delivered strong performance there for over a decade. The Company
is engaged with several, multi-national companies in the consumer
products, industrial products and agro-industrial sectors who are
considering EQTEC solutions.
-- Utility: generators and distributors of heat, power and/or
fuel for sale to consumers or industrial customers. These owners
and commercial operators of generation facilities, many of whom are
looking to transition away from traditional, fossil fuel-led and/or
incineration technologies, are looking at EQTEC technologies as a
sustainable alternative for future business.
-- Municipalities: local or super-local (e.g., state, regional)
authorities with waste management requirements who want to dispose
of waste cleanly and efficiently and also generate value from it
for the local community. Nearly every project in EQTEC's portfolio
focuses on value creation for local communities but public sector
entities are becoming increasingly active in driving energy
transition toward technologies such as EQTEC's.
The three pillars of the Company's business strategy aim to
position EQTEC as a renewable technology leader, able to scale
globally:
-- Global leadership with syngas technology innovation and integration
-- Project execution through a Group operating model and partner ecosystem
-- Global scale through licensing, modular deployment and digital tooling
As the Company deploys its technology into an increasing number
of fully operational, high-performance plants, its revenues will
shift from one-off project revenues to recurring revenues, derived
from annual licensing and value-added services. Its near-term focus
is establishing a critical mass of operational plants and
well-funded projects with the world's leading finance, development,
delivery and technology partners.
In H1 2022, our strategy sharpened amidst challenging market
conditions. We responded with speed and resilience, focusing
execution on our highest-priority projects. We redoubled our
efforts driving Italia MDC and Croatia MDC toward live operations,
and France MDC toward full funding and financial close. We
significantly improved the viability of our large, UK RDF projects
at Deeside, Southport and Billingham through collaboration with
top-tier partners including Anaergia, Black & Veatch, Wood and
Petrofac. With our development partners, we accelerated funding at
Livadia in Greece and Blue Mountain Electric Company ("BMEC") in
USA.
Concurrently, we de-risked EQTEC's financial position on
projects by offloading development liabilities, reaffirming our
role as technology provider and core engineering partner. Despite
supply-side challenges, demand for EQTEC syngas technology
continues to grow. In response, we formalised our France entry,
affirmed our capabilities with contaminated plastics and partnered
with CompactGTL for liquid fuel production.
Even as demand grows, project developers face challenging
financing conditions and this has slowed our pace, so that some
projects will achieve revenues later than previously anticipated,
resulting in an adjustment to our 2022 revenue forecast.
Alongside completion of a modest capital raise, we grew our
innovation and engineering team, rationalised our corporate centre
and focused it on targeting and securing project funding. Our
outlook remains conservative, given difficult financial markets,
but our business strategy and project execution focus remain
firm.
In Q4 2022, we will launch the Italia MDC into full operation
and complete establishment of a steam-oxygen gasification
capability to produce syngas for hydrogen and SNG applications, at
our R&D centre at the Université de Lorraine in France.
Through the end of 2022 and on into 2023, we will continue our
pursuit of growth and strategic development in the face of
difficult trading conditions and in a market that is likely to
become more volatile. We will continue monitoring and supporting
project development efforts and drive strong engagement with global
infrastructure investors and top-tier partners.
Investor presentation
In line with EQTEC's commitment to ensuring appropriate
communication structures are in place for all shareholders,
management will deliver an online presentation on the interim
results for the six months ended 30 June 2022. The presentation is
available to all existing and potential shareholders, via the
Investor Meet Company platform, today at 10:30am UK time.
Questions may be submitted prior to the event through the
platform, or at any time during the live presentation. Management
may not be in a position to answer every question it receives but
will address those it can while remaining within the confines of
information already disclosed to the market.
Q&A responses will be published at the earliest opportunity
on the Investor Meet Company platform.
Investors can sign up for free via:
https://www.investormeetcompany.com/eqtec-plc/register-investor .
Those who have already registered and requested to meet the Company
will be invited automatically.
This announcement contains inside information as defined in
Article 7 of the EU Market Abuse Regulation No 596/2014, as it
forms part of United Kingdom domestic law by virtue of the European
Union (Withdrawal) Act 2018, as amended, and has been announced in
accordance with the Company's obligations under Article 17 of that
Regulation.
ENQUIRIES
EQTEC plc +44 20 3883 7009
David Palumbo / Nauman Babar
---------------------
Strand Hanson - Nomad & Financial Adviser +44 20 7409 3494
---------------------
James Harris / Richard Johnson
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Panmure Gordon - Joint Broker +44 20 7886 2500
---------------------
John Prior / Harriette Johnson
---------------------
Canaccord Genuity - Joint Broker +44 20 7523 8000
---------------------
Henry Fitzgerald-O'Connor / James Asensio
/ Patrick Dolaghan
---------------------
Alma PR - Financial Media & Investor
Relations +44 20 3405 0205
---------------------
Josh Royston / Sam Modlin EQTEC@almapr.co.uk
---------------------
+44 20 7457 2381
Instinctif - General Media Enquiries +44 788 788 4794
---------------------
Chris Speight / Tim Field EQTEC@instinctif.com
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Technology innovation and integration
The versatility of EQTEC technology makes it suitable for a wide
range of emerging business models for distributed, decarbonised new
energy infrastructure. At present, the Company is focused on
specific projects best able to showcase its capabilities here and
now, building partnerships and driving R&D efforts to make it
able to rapidly pursue innovation opportunities in future, as the
market evolves.
-- On 14 March 2022, the Company announced its intention to
acquire a failed gasification plant and recommission it with EQTEC
technology, to process a mixture of diverse feedstocks, including
wood, contaminated wood and RDF ("France MDC").
-- On 14 March 2022, the Company also announced a partnership
with SEPS SAS ("SEPS"), a French company specialising in waste
management and recycling of industrial waste, indicating the
partners' joint intent to develop contaminated waste treatment
plants that apply their combined capabilities. The Company also
announced the partners' first project opportunity at an on-premise,
industrial facility in Haute-Garonne, France.
-- On 30 May 2022, the Company acknowledged a report published
by t he Université de Lorraine ("UdL") in France verifying that
EQTEC's Advanced Gasification Technology successfully converts
contaminated plastic waste into syngas cleanly, stably and
efficiently. The report followed a series of tests on contaminated
plastics carried out in December 2021 at EQTEC's technology
innovation facility in France and opened the market for this
difficult feedstock to the Company and its partners.
-- On 30 June 2022, in line with its strategic collaboration
agreement with global engineering leader Wood, the Company
announced its selection of Wood and its VESTA technology as its
partner for co-development of an integrated
RDF-to-syngas-to-hydrogen solution for its Southport project.
-- On 07 July 2022, the Company announced it had entered into a
collaboration agreement with CompactGTL Limited ("CompactGTL"), a
gas-to-liquids company specialising in the production and use of
synthetic fuels from gases, including syngas. The partners
committed to collaborate on waste-to-fuel projects and other
synthetic fuel and energy infrastructure projects, starting with a
pilot demonstration project at a location already identified.
-- Throughout H1 2022, the Company announced progress with its
three waste-to-value projects in the UK, including a
multi-technology plant for MSW-to-biogas and power at Deeside,
Flintshire, a multi-technology plant for MSW-to-biogas and hydrogen
at Southport, Merseyside and RDF-to-combined heat and power and
hydrogen at Billingham, Teesside.
-- Throughout H1 2022, the Company strengthened its partnership
with Anaergia, Inc. ("Anaergia"), a technology provider with
capabilities focused on materials recovery facilities ("MRF") and
anaerobic digestion ("AD"), announcing further collaboration at its
Deeside and Southport projects.
In addition to working on concept designs and detailed designs
across a range of projects, with construction advisory,
commissioning leadership and Operations and Maintenance ("O&M")
preparations at others, EQTEC's technical team has also been hard
at work with Research and Development ("R&D"): testing new
feedstocks for prospective projects and preparing the full-scope,
end-to-end R&D facility at UdL for trials of new solutions
including for hydrogen, SNG and advanced biofuels. The Company
intends to install steam-oxygen capabilities at the UdL site this
autumn, which is critical for syngas production that supports these
offtakes.
Market Development Centres
MDCs are live, profitable plants operated by the Company and
employed as showcases of EQTEC technology in full-scale, commercial
environments. Strategically, MDCs are catalysts for accelerated
engagement of project finance, owner-operators and other key
stakeholders.
In 2022, the Company has progressed work on two MDCs, with a
focus on funding the third:
-- At the Italia MDC in Gallina, Tuscany, Italy, the Company in
H1 delivered new equipment and completed critical upgrades. It also
arranged for additional funding from existing investors, to cover
price increases for remaining equipment and unforeseen work. In Q3,
the Company recruited the plant operations team and commenced
commissioning.
At the France MDC in Villers-sous-Montrond, Doubs, France, the
Company on 14 March announced its intention to acquire, upgrade and
recommission the 6.5 MWe plant, replacing the failed gasification
technology with EQTEC technology. On 07 September, the acquisition
was approved and finalised by France's Ministère de l'Économie, des
Finances et de l'Industrie (MINEFI). The France MDC would process
diverse feedstock, with a combination of wood, contaminated wood
and RDF and is expected to be France's largest ever gasification
project for combined heat and power.
To support the French market and projects, the Company in March
announced the launch of EQTEC France SAS and appointment of David
Le Saint as market lead.
For the Croatia MDC in Belišće, Croatia, key components were
manufactured in H1 to support the plant's capacity upgrade to
1.5MWe from the original 1.2MWe. Discussions with investors and
operators for the sale of the project started in July and continue.
Once the final business model and ownership of the project have
been formalised with the ultimate buyer/s, construction and
commissioning will be completed with a view toward full commercial
operations as early as Q1 2023.
The Italia MDC is expected to complete commissioning and become
fully operational before the end of 2022, with the Croatia MDC
requiring final funding to complete its commissioning and the
France MDC finalising funding arrangements toward construction work
in 2023.
UK RDF projects
The Company's UK projects are expected to produce some of the
first, commercially viable gasification plants for RDF in the
world, qualifying EQTEC and its partners as leaders in the
high-growth sector for municipal waste-to-value. The UK plants will
also demonstrate business solutions for industrial customers and
municipalities.
In 2022, the Company progressed development of three UK projects
and collaborated with top-tier ecosystem partners to bring quality
execution and risk mitigation to them:
-- At Deeside Industrial Estate, at Deeside, Flintshire, the
Company on 01 April announced its appointment of global
engineering, procurement, consulting and construction company Black
& Veatch ("B&V") to review the project, with a particular
focus on integration risks in light of the multiple technologies
for the plant, provided by EQTEC and technology partner Anaergia.
On 11 July, the Company announced its appointment of B&V as
Front-end Engineering and Design ("FEED") partner with the added
remit of preparing an Engineering, Procurement and Construction
("EPC") cost estimate for power generation equipment and systems.
The Company confirmed on 01 April that based on successful
completion of feasibility work for hydrogen production from syngas
in future phases of work, EQTEC had received proposals from
prospective partners for provision of syngas-to-hydrogen
technology. On 26 September, the Company confirmed that it and
development partner Logik Developments Limited had signed
non-binding heads of terms for full acquisition of the project by a
corporate investor. A completed contract with the party would allow
the project to proceed to financial close and compensate the
Company for development services fees.
-- At Southport Hybrid Energy Park, Southport, Merseyside, the
Company on 24 June announced that technology partner Anaergia had
reached agreement with the project for construction and operation
of its Phase 1 scope of work. On 30 June, the Company announced its
selection of Wood as its technology partner for co-development of
an integrated RDF-to-syngas-to-hydrogen solution for its Phase 2
scope of work. The Company then announced on 21 September that it
had agreed with development partner Rotunda Group Limited
("Rotunda") a new agreement under which Rotunda would retain Phase
1 of the project and deploy Anaergia technology, allowing the
Company to focus on development of Phase 2, deploying EQTEC
technology for the UK's first waste-to-hydrogen plant, whilst still
recovering all development services fees due to the Company for
Phase 1.
-- At the Haverton Hill project in Billingham, Teesside, the
Company on 15 February confirmed that it had a fully consented
scheme for advanced thermal conversion and that it was exploring a
range of additional solutions for syngas-to-power, syngas-to-heat
and syngas-to-chemical applications on the 17-acre site. At its AGM
in May, the Company went on to confirm that it was developing
financial models for a variety of scenarios, including
syngas-to-hydrogen production on the site, indicating that there
were other technologies also seeking to use the land on the site.
On 18 July, the Company announced its selection of Petrofac Limited
("Petrofac") as FEED contractor and potential EPC partner. Out of
period, the Company has secured heads of terms for over 250 per
cent of its feedstock requirement at attractive gate fees, with a
grid connection and highly favourable power purchase agreement
("PPA"). The Company is further discussing private wire
opportunities with local companies. Once funded, the project is
expected to move quickly into FEED work with Petrofac. Petrofac has
confirmed it will support the Company's efforts with engagement of
funding candidates toward that end.
The UK RDF projects remain some of the most complex in the
Company's portfolio, but with the quality of partners now in place
and with strong progress on commercial, engineering and planning
work, funding remains the key that will unlock further progress to
financial close and construction. The Company is prioritising
funding at project level therefore as its key focus in H2 2022.
Other projects
Funding has proven to be the critical key to progressing
projects at pace. Beyond the projects outlined above, the Company
and its partners have put other projects in good positions to move
forward at pace once full funding is secured.
-- For the Livadia project in Boeotia, Greece, the Company
announced on 21 June 2022 that its partners ewerGy GmbH and ECO
Hellas M IKE had confirmed a new debt facility with Optima Bank S.A
("Optima") to support construction of the plant, making it 80 per
cent funded. The Optima facility is backed in part by the Recovery
and Resilience Facility for Greece.
Additionally, the Company and its partners have been pursuing
equity funding with institutional funds for the remaining
requirement and intend to secure heads of terms as soon as
possible.
The project has already secured all licenses, building permits
and a grid connection and PPA.
-- For the Blue Mountain Electric Company ("BMEC") project in
Wilseyville, California, USA, development funding has been secured
to support concept design work toward application for a large,
federal loan to support construction of the plant. Additional term
sheets have been received from both equity investors and lenders. A
strong project manager appointed to BMEC with funding from the
Company has engaged a range of top-tier EPCs to bid for work on the
project and the Company anticipates applying for the loan in Q4
with confirmation of funding expected in early 2023.
-- At the North Fork Community Power ("NFCP") project in North
Fork, California, USA, the power purchase agreement ("PPA") for the
project has been extended to Q3 2023 to provide additional time for
project commissioning and EPC works are progressing under an
updated construction schedule. The project has been impacted by
several local fires, causing delays that exacerbated the effect of
cost inflation due to global supply issues. The drawdown on the
convertible loan facility committed by the Company in 2021 has
therefore been suspended until the additional gap funding has been
secured by NFCP. In the meantime, NFCP Managing Members, including
the Company, are engaged in advanced discussions with the project
lender and the State of California, toward a solution to the
funding challenge.
The Company's pipeline of interest and demand expands weekly,
and the team is closely managing and prioritising new
opportunities, communicating with high-priority prospects. However,
the near-term priorities are focused less on generation or pursuit
of new demand and more on execution of existing projects and
commissioning of plants.
Group operations and financial management
In H1 2022, the Company grew its technical and engineering team
and rationalised its corporate centre team to fit its near-term
objectives of project funding, at the project level, executing
projects and commissioning plants. Especially given tighter capital
availability, the Company reviewed and reduced its working capital
requirements and cut non-essential expenditure for focus on
strategic execution.
Financial performance
For H1 2022, the Company recorded a five-fold increase in
revenues over the same period last year, with EUR2.98 million in
revenues (H1 2021: EUR0.48 million). Gross profit increased to
EUR0.24 million (H1 2021: EUR0.07 million) and EBITDA loss
decreased by 44% over the same period last year, to EUR1.97 million
(H1 2021: EUR3.49 million).
The net assets were recorded at EUR40.9 million at the end of H1
2022 compared to EUR43.4 million as at 31 December 2021.
On 29 March 2022, the Company announced a new loan facility for
up to GBP10 million with an initial disbursement of GBP5 million
received by the Company the same day.
On 14 July, the Company announced completion of a fundraising
that raised GBP3.75 million (before expenses) through the placing
of 233,385,650 placing shares, subscription for 73,614,350 Primary
Bid shares and subscription for 443,000,000 subscription shares, in
each case at an issue price of 0.5 pence per share.
Financial outlook
With revenue dependent on funding sufficient to meet project
milestones, based on a re-focused portfolio, the Company
anticipates its total revenues for 2022 to be in the range of EUR10
- 12 million. In line with the project re-focus, the Company
currently forecasts an EBITDA loss in the range of EUR2 - 3 million
(2021: (EUR3.8) million). The revenue and EBITDA guidance is
predicated on the progression of projects' meeting anticipated
timelines, in particular Deeside.
EQTEC plc
Unaudited condensed consolidated statement of profit or loss
for the six months ended 30 June 2022
Notes 6 months ended 6 months ended
30 June 2022 30 June 2021
EUR EUR
Revenue 6 2,981,006 481,720
Cost of sales (2,742,168) (414,549)
Gross profit 238,838 67,171
Operating income/(expenses)
Administrative expenses (2,464,310) (2,277,559)
Impairment of project costs (1,872) -
Other gains/(losses) 7 - (1,404,755)
Foreign currency gains/(losses) 253,214 123,044
Operating loss (1,974,130) (3,492,099)
Share of loss from equity
accounted investments (7,322) (2,914)
Gains from sales to equity (83,504) -
accounted investments deferred
Loss on revaluation of equity (488) -
accounted investment
Change in fair value of investments (249,120) (52,846)
Finance income 233,953 21,711
Finance costs (199,751) (512,414)
Loss before taxation 6 (2,280,362) (4,038,562)
Income tax 8 - -
LOSS FOR THE FINANCIAL PERIOD (2,280,362) (4,038,562)
Loss/(Profit) attributable
to:
Owners of the company (2,280,379) (4,037,800)
Non-controlling interest 17 (762)
(2,280,362) (4,038,562)
6 months ended 6 months ended
30 June 2022 30 June 2021
EUR per share EUR per share
Basic loss per share:
From continuing operations 9 (0.0003) (0.0005)
From continuing and discontinued
operations 9 (0.0003) (0.0005)
Diluted loss per share:
From continuing operations 9 (0.0003) (0.0005)
From continuing and discontinued
operations 9 (0.0003) (0.0005)
EQTEC plc
Unaudited condensed consolidated statement of other
comprehensive income
for the six months ended 30 June 2022
6 months 6 months
ended ended
30 June 2022 30 June
2021
EUR EUR
Loss for the financial period (2,280,362) (4,038,562)
Other comprehensive income/(loss)
Items that may be reclassified
subsequently to profit or loss
Exchange differences arising on
retranslation
of foreign operations (235,360) 88,473
(235,360) 88,473
Total comprehensive loss for the
financial period (2,515,722) (3,950,089)
Attributable to:
Owners of the company (2,574,813) (3,843,401)
Non-controlling interests 59,091 (106,688)
(2,515,722) (3,950,089)
EQTEC plc
Unaudited condensed consolidated statement of financial
position
At 30 June 2022
Notes 30 June 2022 31 December
2021
ASSETS EUR EUR
Non-current assets
Property, plant and equipment 10 353,868 446,861
Intangible assets 11 17,640,532 17,702,833
Investments accounted for
using the equity method 12 11,087,383 8,074,184
Financial assets 3,835,738 4,050,030
Other financial investments 252,018 506,976
Total non-current assets 33,169,539 30,780,884
Current assets
Development costs 13 5,015,864 3,455,496
Loans receivable from project
development 13 3,748,458 3,000,469
Trade and other receivables 14 8,754,929 6,876,747
Cash and cash equivalents 2,221,662 6,446,217
Total current assets 19,740,913 19,778,929
Total assets 52,910,452 50,559,813
EQUITY AND LIABILITIES EUR EUR
Equity
Share capital 15 25,977,130 25,977,130
Share premium 83,610,562 83,610,562
Other reserves 2,353,868 2,353,868
Accumulated deficit (68,751,885) (66,177,072)
Equity attributable to the
owners of the company 43,189,675 45,764,488
Non-controlling interests (2,325,098) (2,384,189)
Total equity 40,864,577 43,380,299
Non-current liabilities
Lease liabilities 17 - 56,855
Total non-current liabilities - 56,855
Current liabilities
Trade and other payables 18 6,314,360 6,921,806
Borrowings 16 5,575,757 -
Lease liabilities 17 155,758 200,853
Total current liabilities 12,045,875 7,122,659
Total equity and liabilities 52,910,452 50,559,813
EQTEC plc
Unaudited condensed consolidated statement of changes in
equity
for the six months ended 30 June 2022 and the six months ended
30 June 2021
Equity
attributable
Share Accumulated to owners of Non-controlling
Capital Share premium Other reserves deficit the company interests Total
EUR EUR EUR EUR EUR EUR EUR
Balance at
01 January
2021 24,355,545 62,896,521 2,148,220 (61,875,561) 27,524,725 (2,223,986) 25,300,739
Issue of
ordinary
shares 1,403,448 21,344,046 - - 22,747,494 - 22,747,494
Issue of share
capital on
exercise
of employee
share warrants 46,884 89,351 - - 136,235 - 136,235
Share issue
costs - (1,470,869) - - (1,470,869) - (1,470,869)
Transactions
with owners 1,450,332 19,962,528 - - 21,412,860 - 21,412,860
Loss for the
financial
period - - - (4,037,800) (4,037,800) (762) (4,038,562)
Unrealised
foreign
exchange
gains/(losses) - - - 194,399 194,399 (105,926) 88,473
Total
comprehensive
loss for the
financial
period - - - (3,843,401) (3,843,401) (106,688) (3,950,089)
Balance at
30 June 2021 25,805,877 82,859,049 2,148,220 (65,718,962) 45,094,184 (2,330,674) 42,763,510
Balance at
01 January
2022 25,977,130 83,610,562 2,353,868 (66,177,072) 45,764,488 (2,384,189) 43,380,299
Transactions
with owners - - - - - - -
Loss/(profit)
for the
financial
period - - - (2,280,379) (2,280,379) 17 (2,280,362)
Unrealised
foreign
exchange
losses - - - (294,434) (294,434) 59,074 (235,360)
Total
comprehensive
loss for the
financial
period - - - (2,574,813) (2,574,813) 59,091 (2,515,722)
Balance at
30 June 2022 25,977,130 83,610,562 2,353,868 (68,751,885) 43,189,675 (2,325,098) 40,864,577
EQTEC plc
Unaudited condensed consolidated statement of cash flows
for the six months ended 30 June 2022
Notes 6 months ended 6 months ended
30 June 2022 30 June 2021
EUR EUR
Cash flows from operating
activities
Loss for the financial period (2,280.362) (4,038,562)
Adjustments for:
Depreciation of property,
plant and equipment 117,055 59,596
Amortisation of intangible 62,301 -
assets
Share of loss from equity
accounted investments 7,322 2,914
Gains from sales to equity 83,504 -
accounted investments deferred
Loss on revaluation of equity 488 -
accounted investment
Change in fair value of investments 249,120 52,846
Loss/(gain) on debt for equity
swap - 1,404,755
Unrealised foreign exchange
movements (468,471) 328,535
Operating cash flows before
working capital changes (2,229,043) (2,189,916)
Increase in:
Development costs (1,444,134) (1,929,353)
Trade and other receivables (1,296,294) (840,758)
(Decrease)/(increase) in Trade
and other payables (186,641) 87,226
Cash used in operating activities
- continuing operations (5,156,112) (4,872,801)
Finance income (233,953) (21,711)
Finance costs 199,751 512,414
Cash used in operating activities (5,190,314) (4,382,098)
Cash flows from investing
activities
Additions to property, plant (26,465) -
and equipment
Additions to intangible assets (1,000,000)
Deposit paid on land purchase (593,799) -
Investment in related undertakings (356,279) -
Loans advanced to equity accounted
investments (2,715,253) (492,000)
Loans advanced to project
development undertakings (781,483) (1,283,801)
Cash used in investing activities (4,473,279) (2,775,801)
Cash flows from financing activities
Proceeds from borrowings and
lease liabilities 5,981,262 1,391,174
Repayment of borrowings and
lease liabilities (212,847) (2,929,858)
Proceeds from issue of ordinary
shares - 19,034,484
Share issue costs - (1,266,913)
Loan issue costs (328,769) -
Interest paid (608) -
Net cash generated from financing
activities 5,439,038 16,228,887
Net (decrease)/ increase in
cash and cash equivalents (4,224,555) 9,070,988
Cash and cash equivalents at
the beginning of the financial
period 6,446,217 6,270,581
Cash and cash equivalents at
the end of the financial period 2,221,662 15,341,569
EQTEC plc
Notes to the unaudited condensed consolidated financial
statements
1. GENERAL INFORMATION
The unaudited interim condensed consolidated financial
statements of EQTEC plc ("the Company") and its subsidiaries ("the
Group") for the six months ended 30 June 2022 were authorised for
issue in accordance with a resolution of the directors on 28
September 2022.
EQTEC plc ("the Company") is a company domiciled in Ireland. The
Company's registered office is at Building 1000, City Gate, Mahon,
Cork T12 W7CV, Ireland. The Company's shares are quoted on the AIM
market of the London Stock Exchange plc.
The Group is a waste-to-value group, which uses its proven
proprietary Advanced Gasification Technology to generate safe,
green energy from nearly 60 different kinds of feedstock such as
municipal, agricultural and industrial waste, biomass, and
plastics. The Group collaborates with waste operators, developers,
technologists, EPC contractors and capital providers to build
sustainable waste elimination and green energy infrastructure.
Our income currently comes from the following streams:
gasification technology sales including software, engineering &
design and other related services; maintenance income from
operating plants; and we receive development fees from projects
where we invest development capital. In the future we expect to
receive potential revenue from licensing opportunities and revenue
from live operations where EQTEC has an equity stake in a
plant.
2. BASIS OF PREPERATION
The unaudited interim condensed consolidated financial
statements are for the six months ended 30 June 2022 and are
presented in Euro, which is the functional currency of the parent
company. They have been prepared on a going concern basis in
accordance with International Accounting Standard (IAS) 34 Interim
Financial Reporting.
The annual financial statements of the group are prepared in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the EU. The condensed set of financial statements has
been prepared applying the accounting policies and presentation
that were applied in the preparation of the Company's published
consolidated financial statements for the financial year ended 31
December 2021, except for the adoption of new standards effective
as of 01 January 2022. The Group has not early adopted any other
standard, interpretation or amendment that has been issued but is
not yet effective.
The financial information contained in this interim statement,
which is unaudited, does not constitute statutory accounts as
defined by the Companies Act, 2014. The interim condensed
consolidated financial statements do not include all the
information and disclosures required in the annual financial
statements and should be read in conjunction with the Group's
financial statements for the financial year ended 31 December 2021.
The financial statements of the Group were prepared in accordance
with IFRSs as adopted by the European Union and can be found on the
Group's website at www.eqtec.com .
The financial information for the six months ended 30 June 2022
and the comparative financial information for the six months ended
30 June 2021 have not been audited or reviewed by the Company's
auditors pursuant to guidance issued by the Auditing Practices
Board. The comparative figures for the financial year ended 31
December 2021 are not the Group's statutory accounts for that
financial year. Those accounts have been reported on by the
Company's auditor and will be delivered to the Company's
Registration Office in due course. The audit report on those
statutory accounts
was unqualified.
The Group incurred a loss on continuing operations of
EUR2,280,362 (1H 2021: EUR4,038,562) during the six-month period
ended 30 June 2022 and had net current assets of EUR7,578,894 (31
December 2021: EUR12,656,270) and net assets of EUR40,864,577 (31
December 2021: EUR43,380,299) at 30 June 2022.
Going concern
The unaudited interim financial statements have been prepared on
the going concern basis, which assumes that the Company will have
sufficient funds available to enable them to continue to trade for
the foreseeable future.
During July 2022 the Company raised GBP3.75 million (before
expenses) by way of a Placing and Retail Offer. The directors
consider that this is sufficient funding for the Company to
continue as a going concern beyond the twelve months of the date of
this report.
The directors are confident that the funding received by the
Company in June 2022 will ensure that it will continue as a going
concern and that there will be sufficient funding in the Company to
continue to support its activities for the foreseeable future being
not less than twelve months from the date of approval of these
financial statements. The directors have therefore prepared the
financial statements on a going concern basis.
The financial statements do not include any adjustments that
would arise if the Company were unable to continue as a going
concern.
3. BASIS OF CONSOLIDATION
The unaudited interim condensed consolidated financial
statements include the financial statements of the Group and all
subsidiaries. The financial period ends of all entities in the
Group are coterminous.
EQTEC plc
Notes to the unaudited condensed consolidated financial
statements
4. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies used in preparing the
unaudited interim condensed consolidated financial information are
consistent with those disclosed in the Annual Report and Accounts
of EQTEC plc for the financial year ended 31 December 2021, except
for the amendment to the development assets policy and the adoption
of new standards and interpretations and revisions of existing
standards as of 1 January 2022 noted below:
New/revised standards and interpretations adopted in 2022
The following amendments to existing standards and
interpretations were effective in the period to 30 June 2022, but
were either not applicable or did not have any material effect on
the Group:
-- Amendments to IFRS 3 Reference to the Conceptual Framework;
-- Amendments to IFRS 16: COVID-19 Rent Related Concessions beyond 30 June 2021;
-- Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use;
-- Amendments to IAS 37 Onerous Contracts - Costs of fulfilling a contract;
-- Annual improvements to IFRS Standards 2018-2020 cycle
Amendments to IFRS 1 First time adoption of International Financial
Reporting Standards, IFRS 9 Financial Instruments, IFRS 16 Leases
and IAS 41 Agriculture ;
The directors do not expect the adoption of the above amendments
and interpretations to have a material effect on the interim
condensed financial statements in the period of initial
application.
5. ESTIMATES
The preparation of the interim condensed consolidated financial
statements requires management to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of certain assets, liabilities, revenues and expenses
together with disclosure of contingent assets and liabilities.
Estimates and underlying assumptions are reviewed on an on-going
basis. Revisions of accounting estimates are recognised in the
period in which the estimate is revised.
The judgements, estimations and assumptions applied in the
interim financial statements, including the key sources of
estimation uncertainty, were the same as those applied in the
Group's last annual financial statements for the financial year
ended 31 December 2021.
6. SEGMENT INFORMATION
Information reported to the chief operating decision maker for
the purposes of resource allocation and assessment of segment
performance focuses on the products and services sold to customers.
The Group's reportable segments under IFRS 8 Operating Segments are
as follows:
Technology Sales: Being the sale of Gasification Technology and
associated Engineering and Design Services;
Power Generation: Being the development and operation of
renewable energy electricity and heat generating plants.
The chief operating decision maker is the Chief Executive
Officer. Information regarding the Group's current reportable
segment is presented below. The following is an analysis of the
Group's revenue and results from continuing operations by
reportable segment:
Segment Revenue Segment Profit/(Loss)
6 months ended 6 months ended
30 June 2022 30 June 2021 30 June 30 June
2022 2021
EUR EUR EUR EUR
Technology Sales 2,981,006 481,720 (536,346) (427,114)
Power Generation - - (63) (185)
Total from continuing
operations 2,981,006 481,720 (536,409) (427,299)
Central administration costs and directors'
salaries (1,689,063) (1,783,089)
Impairment of project costs (1,872) -
Other gains and losses - (1,404,755)
Foreign currency gains/(losses) 253,214 123,044
Share of loss of equity accounted
investments (7,322) (2,914)
Gains from sales to equity (83,504) -
accounted investments deferred
Loss on revaluation of equity (488) -
accounted investment
Change in fair value of investments (249,120) (52,846)
Finance income 233,953 21,711
Finance costs (199,751) (512,414)
Loss before taxation (continuing operations) (2,280,362) (4,038,562)
EQTEC plc
Notes to the unaudited condensed consolidated financial
statements
6. SEGMENT INFORMATION - continued
Revenue reported above represents revenue generated from
associated undertakings and external customers. Inter-segment sales
for the financial period amounted to EURNil (2021: EURNil).
Included in revenues in the Technology Sales Segment are revenues
of EUR2,550,000 (2021: EURNil) which arose from sales to associate
undertakings and joint ventures of EQTEC plc.
Segment profit or loss represents the profit or loss earned by
each segment without allocation of central administration costs and
directors' salaries, other operating income, share of losses of
jointly controlled entities, investment revenue and finance costs.
This is the measure reported to the chief operating decision maker
for the purposes of resource allocation and assessment of segment
performance.
Other segment information: Depreciation and Additions to non-current
amortisation assets
6 months ended 6 months ended
30 June 30 June 30 June 30 June
2022 2021 2022 2021
EUR EUR EUR EUR
Technology sales 61,794 41,732 26,465 -
Power Generation - - - -
Head Office 117,563 17,864 - 2,658,570
179,357 59,596 26,465 2,658,570
The Group operates in four principal geographical areas:
Republic of Ireland (country of domicile), the European Union,
United States and the United Kingdom. The Group's revenue from
continuing operations from external customers and information about
its non-current assets* by geographical location are detailed
below:
Revenue from Associates Non-current assets*
and External Customers
6 months 6 months
ended ended As at As at
30 June 30 June 30 June 31 December
2022 2021 2022 2021
EUR EUR EUR EUR
Republic of - - - -
Ireland
European Union 2,981,006 481,720 2,620,797 2,720,427
United States - - - -
United Kingdom - - 90,144 147,808
2,981,006 481,720 2,710,941 2,868,235
*Non-current assets excluding goodwill, financial instruments,
deferred tax and investment in jointly controlled entities and
associates.
The management information provided to the chief operating
decision maker does not include an analysis by reportable segment
of assets and liabilities and accordingly no analysis by reportable
segment of total assets or total liabilities is disclosed.
OTHER GAINS AND LOSSES 6 months ended 6 months ended
7.
30 June 2022 30 June 2021
EUR EUR
Gain/(Loss) on debt for equity swap - (1,404,755)
During the financial period the Group extinguished some of its
borrowings by issuing equity instruments. In accordance with IFRIC
19 Extinguishing Financial Liabilities with Equity Instruments, the
gain recognised on these transactions was EURNil (H1 2021: loss of
EUR1,404,755).
INCOME TAX 6 months ended 6 months ended
8.
30 June 2022 30 June 2021
EUR EUR
Income tax expense comprises:
Current tax expense - -
Deferred tax credit - -
Adjustment for prior financial periods - -
Tax expense - -
An income tax charge does not arise for the six months ended 30
June 2022 or 30 June 2021 as the effective tax rate applicable to
expected total annual earnings is Nil as the Group has sufficient
tax losses carried forward to offset against any taxable profits. A
deferred tax asset as not been recognised for the losses coming
forward.
EQTEC plc
Notes to the unaudited condensed consolidated financial
statements
LOSS PER SHARE 6 months 6 months ended
9. ended 30 June 2021
30 June 2022
EUR per share EUR per share
Basic loss per share
From continuing operations (0.0003) (0.0005)
From discontinued operations - -
Total basic loss per share (0.0003) (0.0005)
Diluted loss per share
From continuing operations (0.0003) (0.0005)
From discontinued operations - -
Total diluted loss per share (0.0003) (0.0005)
The loss and weighted average number of ordinary shares used in
the calculation of the basic and diluted loss per share are as
follows:
6 months 6 months ended
ended 30 June 2021
30 June 2022
EUR EUR
Loss for period attributable to equity
holders of the parent (2,280,379) (4,037,800)
Profit for the period from discontinued
operations used in the calculation - -
of basic earnings per share from discontinued
operations
Losses used in the calculation of basic
loss per share from continuing operations (2,280,379) (4,037,800)
No. No.
Weighted average number of ordinary
shares for
the purposes of basic loss per share 8,599,024,945 7,358,418,295
Weighted average number of ordinary
shares for
the purposes of diluted loss per share 8,599,024,945 7,358,418,295
Dilutive and anti-dilutive potential ordinary shares
The following potential ordinary shares were excluded in the
diluted earnings per share calculation as they were
anti-dilutive.
30 June 2022 30 June 2021
Share warrants in issue 462,472,488 596,005,793
Share options in issue 67,304,542 67,304,542
Convertible loans 93,457,944 -
LTIP Shares in issue 23,045,003 -
Total anti-dilutive shares 646,279,977 663,310,355
Events after the balance sheet date
802,757,286 ordinary shares were issued after the period end. If
these shares were in issue prior to 30 June 2022, they would have
affected the calculation of the weighted average number of shares
in issue for the purposes of calculating both the basic loss per
share and diluted loss per share by 133,792,881.
PROPERTY, PLANT AND EQUIPMENT
10.
During the six-month period ended 30 June 2022, the Group acquired
property, plant and equipment to the value of EUR26,465.
GOODWILL
11.
Included are the following amounts relating to goodwill:
30 June 31 December 2021
2022
Cost EUR EUR
At start and at end
of the financial period 16,710,497 16,710,497
Accumulated impairment
losses
At start of the financial
period 1,427,038 1,427,038
Impairment losses - -
At end of the
financial period 1,427,038 1,427,038
Carrying value
At start and at end
of the financial period 15,283,459 15,283,459
EQTEC plc
Notes to the unaudited condensed consolidated financial
statements
12. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Investments accounted for using the equity method are made
up as follows:
30 June 2022 31 December
2021
EUR EUR
Investment in associate undertakings 7,714,902 6,951,064
Investment in joint ventures 3,372,481 1,123,120
11,087,383 8,074,184
The carrying amount of equity-accounted investments has changed
as follows in the six months to June 2022:
Associate Joint
Undertakings Ventures
6 months 6 months ended
ended 30 June 2022
30 June 2022
EUR EUR
Beginning of the period 6,951,064 1,123,120
Loans advanced in period 444,478 2,270,775
Interest accrued on loans in period 122,728 63,522
Share of profit/loss on equity-accounted
investments in period 4,080 (11,402)
Adjustment in respect of unrealised
gains on sales from the Group (8,709) (74,795)
Loss on revaluation of equity accounted
investment - (488)
Exchange differences 201,261 1,749
7,714,902 3,372,481
13. DEVELOPMENT ASSETS
30 June 2022 31 December
2021
EUR EUR
Costs associated with project development
5,015,864 3,455,496
Loan receivable from project development
undertakings 3,748,458 3,000,469
The Group uses its expertise in engineering, project management,
permitting, planning and financing to develop waste to value
projects. Once the projects reach a certain level of maturity,
third party investors are allowed invest in the project SPV. The
Group charges a premium to the project SPV for the development
services over and above the costs incurred in developing the
project.
Costs associated with project development, including loans
advanced to project undertakings (together "Total Project Costs")
comprise expenses associated with engineering, project management,
permitting, planning, financing and other services, incurred in
furthering the development of a project towards financial close.
Total Project Costs set out above represent the cost of delivery of
project development services and are transferred to cost of sales
when the project SPV is invoiced by the Group for project
development work.
As described in Note 20, the Company has cancelled its share
purchase agreement to purchase shares in Shankley Biogas Limited.
The exclusivity payment paid of GBP100,000 with respect to this
(classified as financial assets on 31 December 2021 (EUR119,119))
has been reclassified to project development assets at 30 June 2022
(EUR116,234).
Included in loans receivable from project development
undertakings is an amount of EUR550,000 which is receivable, along
with accrued interest, 18 months from the date of drawdown.
Interest is charged at 15% per annum. At 30 June 2022, the loan is
valued at EUR654,589 (31 December 2021: EUR613,678).
The remaining loans receivables were issued with no interest and
no fixed repayment date.
EQTEC plc
Notes to the unaudited condensed consolidated financial
statements
14. TRADE AND OTHER RECEIVABLES
Included in trade and other receivables is an amount of
EUR883,382 (31 December 2021: EUR309,708) being a deposit towards
the purchase of land on which the proposed up to 25 MWe Billingham
waste gasification and power plant at Haverton Hill, Billingham,
UK, will be constructed. On 15 February 2022, a further payment of
GBP250,000, along with a further fee towards the Variation was made
with respect to an agreement ("the Variation") to extend the
existing, conditional Land Purchase Agreement.
15. EQUITY
During the 6-month period ended 30 June 2022, Nil shares (6
months ended 30 June 2021:1,450,322,620 shares) were issued as
follows:
Amounts of shares 6 months 6 months
ended ended
30 June 2022 30 June 2021
Ordinary Shares of EUR0.001 each issued
and fully paid
* Beginning of the period 8,599,024,945 6,977,439,598
* Issued on exercise of warrants for cash - 156,773,543
* Issued on exercise of employee share warrants for
cash - 46,884,149
* Issued in settlement of suppliers and other creditors - 152,075,311
* Issued in exchange for shares in other entity - 27,932,961
* Share issue for cash - public and private placement - 1,066,666,656
Total Ordinary shares of EUR0.001
each authorised, issued and fully paid
at the end of the period 8,599,024,945 8,427,772,218
16. BORROWINGS
During the six months ended 30 June 2022, the following occurred
in relation to debt securities:
On 29 March 2022, the Company announced that it had agreed an
unsecured loan facility ("Loan Facility") of up to GBP10 million
with Riverfort Global Opportunities PCC Limited and YA II PN, Ltd
(together, the "Lenders"). The Loan Facility may be drawn down in
multiple instalments with the Initial Advance of GBP5million (net
of a commitment fee of 2.5% of the aggregate amount of the Loan
Facility) that was received on 29 March 2022. Each instalment of
the Loan Facility will have a maturity date of 12 months from the
date of advance with repayments of principal made on a monthly
basis, as set out in a closing statement to be agreed at the time
of each advance. The Loan Facility will accrue a fixed interest
coupon equivalent to 7.5% of the Initial Advance and of any further
advance, payable on a quarterly basis.
The Company and the Lenders may mutually agree that the Company
satisfies any payment of the amounts due under the Loan Agreement
by the issue of ordinary shares of EUR0.001 each in the capital of
the Company ("Ordinary Shares") at a reference price as set out in
the Loan Facility documents.
The Company and the Lenders have also entered into a performance
agreement pursuant to which the Company may pay a performance fee
to the Lenders if the share price of the Company significantly
increases whilst the facility is in place. The requirement to make
any payments under the performance agreement will only come into
effect 90 days following the entering into of the Loan Facility,
should the loan not be repaid within 90 days.
The Company will use the proceeds of the Loan Facility to fund
further growth and development activities in its key markets, and
for general working capital purposes.
EQTEC plc
Notes to the unaudited condensed consolidated financial
statements
17. LEASES
Lease liabilities are presented in the statement of financial
position as follows:
30 June 2022 31 December
2021
EUR EUR
Current 155,758 200,853
Non-current - 56,855
155,758 257,708
The Group has a lease for its offices in Iberia, Spain and
London, United Kingdom. The lease liabilities are secured by the
related underlying asset. Further minimum lease payments at 30 June
2022 were as follows:
Minimum lease payments due
Within 1-2 2-3 3-4 4-5 After Total
1 year years years years years 5 years
EUR EUR EUR EUR EUR EUR EUR
30 June 2022
Lease payments 157,789 - - - - - 157,789
Finance charges (2,031) - - - - - (2,031)
Net Present
Values 155,758 - - - - - 155,758
31 December
2021
Lease payments 205,838 57,177 - - - - 263,015
Finance charges (4,985) (322) - - - - (5,307)
Net Present
Values 200,853 56,855 - - - - 257,708
18. TRADE AND OTHER PAYABLES
Included in trade and other payables at 30 June 2022 is an
amount of EUR2,557,158 (GBP2,200,000) (31 December 2021:
EUR2,977,963 (GBP2,500,000)) relating to consideration payable
under the share purchase contract to acquire Logik WTE Limited. On
01 April 2022 GBP300,000 was paid with respect to this share
purchase contract.
19. RELATED PARTY TRANSACTIONS
Transactions with associate undertakings and joint ventures
The following aggregated transactions were made with associate
undertakings and joint ventures in the six months ended 30 June
2022:
6 months 6 months
ended ended
30 June 2022 30 June
2021
Loans to associated undertakings EUR EUR
and joint ventures
Beginning of the financial period 3,621,307 -
Loans advanced in period 2,715,253 482,000
Interest accrued on loans in period 186,251 687
Exchange differences 203,103 -
At end of the financial period 6,725,914 482,687
6 months 6 months
ended ended
30 June 2022 30 June
2021
Sales of goods and services EUR EUR
Technology sales 2,550,000 -
Re-charge of costs - 93,148
EQTEC plc
Notes to the unaudited condensed consolidated financial
statements
19. RELATED PARTY TRANSACTIONS - Continued
Transactions with associate undertakings and joint ventures
- continued
30 June 2022 31 December
2021
Period-end balances EUR EUR
Included in trade receivables 4,951,310 4,243,628
Re-charge of costs 27,488 27,508
Transactions with key management
Key management of the Group are the members of EQTEC plc's board
of directors. There have been no non-remuneration transactions with
key management in the six months ended 30 June 2022.
Transactions with other parties
The Group is in the process of acquiring a 32% stake in Logik
WTE Limited. During the six-month period ended 30 June 2022, the
Group advanced EUR593,897 (or GBP500,083) (H1 2021: EUR741,702 (or
GBP643,962)) to Logik WTE Limited to advance the development of the
Deeside project. Included in the loans receivable from project
development undertakings is EUR2,082,441 (31 December 2021:
EUR1,538,420) of receivable from Logik WTE Limited. This loan was
issued with no interest and no fixed repayment date; however, the
Group can elect to use this investment raised directly at the
Project SPV level as consideration towards the acquisition of Logik
WTE Limited.
During the six-month period ended 30 June 2022, the Group
advanced EUR187,586 (or GBP157,954) (H1 2021: EUR339,930 (or
GBP295,135)) to Shankley Biogas Limited to advance the development
of the Southport project. Included in the loans receivable from
project development undertakings is EUR1,011,428 (31 December 2021:
EUR848,371) of receivable from Shankley Biogas Limited. This loan
was issued with no interest and no fixed repayment date.
20. EVENTS AFTER THE BALANCE SHEET DATE
Share placements
On 13 July 2022, the Company announced its intention to raise a
minimum of GBP3 million before expenses, by way of (i) a placing of
new Ordinary Shares ("Placing Shares") at a fixed price of 0.5
pence per share (the "Issue Price") to institutional and other
investors (the "Placing"), (ii) an offer for subscription of new
Ordinary Shares by PrimaryBid ("PrimaryBid Shares") at the Issue
Price to retail investors (the "PrimaryBid Offer"), and (iii)
direct subscriptions with the Company of new Ordinary Shares (the
"Subscription" and, together with the Placing and the PrimaryBid
Offer, the "Fundraising").
On 14 July 2022, the Company announced that the Fundraising
raised GBP3.75 million (before expenses) through the placing of
233,385,650 Placing Shares, subscription for 73,614,350 PrimaryBid
Shares and subscription for 443,000,000 Subscription Shares, in
each case at an Issue Price of 0.5 pence per share. In addition, a
further 32,657,286 shares were issued to suppliers at the Issue
Price to settle debts totalling GBP163,286.
On 01 September 2022, the Company announced that it is issuing,
in aggregate, 20,100,000 new Ordinary Shares (the "Supplier
Shares") to certain strategic service providers providing business
development and advisory services to the Group in satisfaction of
fees due to them. The issue of the Supplier Shares will further
align the interests of strategic advisers and service providers
with those of the Company and its shareholders.
Deeside Project Share Purchase Agreement and Sale of
Project:
On 01 September 2022, the Company announced that, further to its
announcement on 30 June 2022, Deeside WTV Limited ("Deeside WTV"),
a wholly owned subsidiary of EQTEC, and Logik Developments Limited
("Logik") were in advanced discussions with a third party for the
sale of Deeside Project.
On 26 September 2022, the Company announced that the Company,
Deeside WTV and Logik have signed non-binding Heads of Terms
("HoTs") for the acquisition by a publicly quoted corporate
investor ("Investor") of the project at Deeside, Flintshire, UK
that comprises a waste reception plant, anaerobic digestion
facility and EQTEC Advanced Gasification Technology facility (the
"Project").
To facilitate this transaction, Deeside WTV and Logik have
agreed to extend the longstop date specified in the Share Purchase
Agreement they signed on 07 December 2020 (the "SPA"), to 28
February 2023 (the "Long Stop Date").
Rationalisation and focus of Southport Project Ownership:
On 21 September 2022, the Company announced that it has executed
with Rotunda Group Limited ("Rotunda") and certain of its
subsidiaries a series of legal agreements to accelerate development
of the Southport Hybrid Energy Park (the "Project"), absolve the
Company of the requirement to purchase Shankley Biogas Limited
("Shankley") for Phase 1 of the Project and secure the Company's
right to develop Phase 2 of the Project through an Option to Lease,
valid through August 2025, signed between a newly-created and
wholly-owned subsidiary, EQTEC Southport H2 MDC Limited ("Southport
H2") and Rotunda. Following the cancellation of the Share Purchase
Agreement with Rotunda, the Company will secure the outstanding
GBP2,500,000 of development services fees in the form of a secured
convertible loan note ("CLN") with Shankley. The CLN, which bears
no interest, is due to be paid to the Company, following sale of or
investment into Shankley by any third party.
No other adjusting or significant non-adjusting events have
occurred until the date of authorisation of these financial
statements.
EQTEC plc
Notes to the unaudited condensed consolidated financial
statements
21. APPROVAL OF FINANCIAL STATEMENTS
The condensed consolidated financial statements for the six
months ended 30 June 2022, which comply with IAS 34, were approved
by the Board of Directors on 28 September 2022.
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END
IR KVLFLLKLBBBB
(END) Dow Jones Newswires
September 29, 2022 02:00 ET (06:00 GMT)
Eqtec (LSE:EQT)
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