TIDMCINH
RNS Number : 0155J
Cindrigo Holdings Limited
18 August 2021
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, WITHIN, INTO OR IN THE UNITED STATES, AUSTRALIA, CANADA
OR JAPAN.
18 August 2021
Cindrigo Holdings Limited
('Cindrigo' or the 'Company')
Availability of Audited Accounts
Cindrigo Holdings Limited (LSE: CINH) announces that its audited
accounts for the year ended 31 December 2020 have been approved and
extracts are attached to this announcement and otherwise available
shortly on the Company's website at www.cindrigo.com.
**S**
For more information please contact
Cindrigo Holdings Limited
Lars Guldstrand +44 (0) 7408 861 667
St Brides Partners Ltd (PR)
Frank Buhagiar +44 (0) 20 7236 1177
Cindrigo Limited
Mustaq Patel +44 (0) 7408 886 668
CEO's Statement
For Cindrigo Holdings Limited (formerly Challenger Acquisitions
Limited), the year 2020 was a year where the company has entered an
agreement to acquire Cindrigo Energy Limited as a reverse takeover.
Cindrigo Energy Limited, a company incorporated in British Columbia
Canada, is part of a group of companies pursuing renewable energy
projects in the Ukraine built on broad Swedish expertise and
experience in the waste to energy and biomass energy sector.
The company's new Board of Directors reflects the industry
expertise necessary to pursue this opportunity.
Proposed acquisition of Cindrigo Energy Limited
On the 19 August 2020, the company entered a Letter of Intent of
Intent with Cindrigo Limited and Cindrigo Energy Limited, which are
part of a group of companies pursuing renewable energy projects in
the Ukraine.
The company has since entered into an agreement with Cindrigo
Energy Limited in respect of a proposal involving the acquisition
of Cindrigo Energy Limited and its wholly owned subsidiary Cindrigo
Limited. The Acquisition will proceed pursuant to a new Plan of
Arrangement under the British Columbia Business Corporations Act.
Under the proposed arrangement the company will acquire each share
in the issued share capital of Cindrigo Energy Limited in exchange
for one new share issued by the company. As a result of the
proposed exchange the current shareholders of Cindrigo Energy
Limited would hold some 96.5% of the enlarged issued share capital
of the company.
The Acquisition constitutes a reverse takeover for the
Company.
It is anticipated that in due course the shares of Cindrigo
Limited will be distributed to the company following completion of
the acquisition and Cindrigo Energy Limited will then be
liquidated.
The Company intends to make an application for its enlarged
ordinary share capital to be readmitted to the standard segment of
the Official List of the FCA and to trading on the Main Market of
the London Stock Exchange.
Board of director changes
To pursue the proposed acquisition of Cindrigo Energy Limited as
a reverse takeover several directors of Cindrigo Limited have
joined the Board of Cindrigo Holdings Limited (formerly Challenger
Acquisitions Limited). Lars Guldstrand joined as CEO and Mustaq
Patel as an Executive Director in September 2020, Jorgen Andersson
as Chairman in October 2020, Dag Andresen as an Independent
Director in November 2020
Jordan Oxley joined the Board as an Independent Director and
Simon Fawcett as Chief Financial Officer in January 2021.
George Lucan and Rupert Baring resigned voluntarily as
Non-Executive directors in September 2020 and Mark Gustafson as CEO
in October 2020.
Jonathan Tidswell-Pretorius and Lars Frithiof were appointed
during 2020 and both resigned voluntarily prior to 31 December
2020.
Investments
The company still holds 2 investments from previous ventures on
the statement of financial position.
Dallas, Texas investment
In January 2019, the company agreed to sell its US$300,000
investment in the Odyssey of Texas back to the original developers
in tranches over the course of 2019. To date, the Company has
received US$275,000 of the principal sum and US$7,625 of the
interest. The remaining balance of US$25,000 is still outstanding
and being pursued by the Company, however given the uncertainty of
the recoverability of this balance in has been impaired in full.
Until the remaining balance has been received, the original
convertible promissory note and securities purchase agreement stays
in place.
New York Wheel equity units
The Company retains two equity units in this project. Since the
value of these units relates directly to the stalled project on
Staten Island, there is no carrying value on the balance sheet for
this investment.
Note holders
The two remaining convertible note holders have been informed of
the search process for a potential new project and we are seeking
their cooperation in this process.
On behalf of the new Cindrigo Holdings Board, we would like to
take this opportunity to thank our shareholders and note holders
for their patience and support during another challenging year.
Lars Guldstrand
Chief Executive Officer
Strategic and Operational Review
Cindrigo Holdings Limited (formerly Challenger Acquisitions
Limited) was formed in November 2014 to undertake one or more
acquisitions in the entertainment and leisure sectors with a
particular focus on the attractions sector.
The Company was admitted to the Official List by way of a
Standard Listing and commenced trading on the London Stock
Exchange's main market for listed securities on 19 February 2015.
The US$3 million investment in the New York Wheel was announced on
26 May 2015. The lack of funding for completing this project by the
New York Wheel developer was announced on 24 October 2018. The
acquisition of the Starneth companies was closed on 15 July 2015
and the disposition of the Starneth companies was announced on 30
January 2017. Cindrigo Holdings Limited (formerly Challenger
Acquisitions Limited) announced the GBP100k loan to the
London-based Star Sanctum on 7 November 2017 and an agreement to
recover the Star Sanctum loan was announced on 31 July 2018. The
principal has been fully recovered in 2018 and 2019. The US$300k
investment in the Dallas-based wheel project was announced on 18
January 2018 and the restructuring of the repayment terms of the
investment in this project was announced on 16 January 2019. To
date US$275k of the principal has been recovered along with
accumulated interest.
The Company has been looking for a suitable project after the
termination of its previous projects, and believe the Energy
sector, in particular renewable Energy, is an attractive segment to
focus its continued development. The company has entered into an
agreement with Cindrigo Energy Limited in respect of a proposal
involving the acquisition of Cindrigo Energy Limited and its wholly
owned subsidiary Cindrigo Limited. The company to be acquired is
part of a group of companies pursuing renewable energy projects,
initially in the Ukraine, built on broad Swedish expertise and
experience in the waste to energy and biomass energy sector.
Lars Guldstrand
Chief Executive Officer
6 August 2021
Financial Review
Overview
The Company posted a loss in the year under review as a result
of administrative expenses and cost of interest on the convertible
loan notes. The company's historic investments had no transactions
during the year. There was no revenue for the year ended 31
December 2020.
Profit for the year
For the year, the Company recorded a loss of GBP325k (2019
profit: GBP936k). The biggest cost driver was the GBP173k (2019:
GBP194k) in accrued interest and finance costs for the two
outstanding convertible notes and administrative expenses of
GBP107k (2019: GBP170k). The company recorded an impairment of
GBP22k on its investment in the Dallas Wheel. The Company reports a
total comprehensive loss of GBP325k (2019 loss: profit:
GBP936k).
Balance Sheet
The total amount of assets on the balance sheet as per the
balance sheet date is GBP12k (2019: GBP44k). The assets consist
mainly of the investment in the Dallas Wheel project of GBP22k
which was impaired in full in 2020. In addition the Company shows
cash and cash equivalents of GBP5k (2019: GBP16k) and trade and
other receivables of GBP7k (2019: GBP6k).
A mix of equity and convertible notes has financed these assets.
The equity at the balance sheet date amounted to (GBP2,409k) (2019:
(GBP2,220k)) and the liabilities were GBP2,421k (2019:
GBP2,264k).
Cash flow
During the year the company issued new convertible loan note for
GBP89k and additionally received funds from Cindrigo Limited to
cover costs associated with the reverse takeover and settle the
company's current payables.
Cash used in operations totalled GBP177k (2019: GBP266k).
Closing cash
As at 31 December 2020, the Company held GBP5k (2019: GBP16k) in
the bank account.
Simon Fawcett
Chief Financial Officer
6 August 2021
Statement of Comprehensive Income
The statement of comprehensive income is set out below.
Year ended Year ended
31 December 31 December
2020 2019
Note GBP'000 GBP'000
Administrative expenses (107) (170)
Receipt of Star Sanctum monies - 40
Operating profit / (loss) (107) (130)
Release of liabilities against a share
of the New York Wheel 9 - 1,269
Amounts written off investments 9 (22) -
Finance costs 11 (196) (203)
------------- -------------
Profit / (Loss) before income taxes (325) 936
Income tax expense 15 - -
------------- -------------
Profit / (Loss) after taxation (325) 936
Profit / (Loss) for the year (325) 936
Total comprehensive profit / (loss) attributable
to owners of the parent (325) 936
------------- -------------
Earnings / (Loss) per share:
Basic from continuing operations 16 (0.001) 0.003
Diluted from continuing operations 16 (0.001) 0.003
Statement of Financial Position
The statement of financial position as at 31 December 2020 is
set out below:
As at 31 As at 31
December December
2020 2019
Note GBP'000 GBP'000
Assets
Current assets
Cash and cash equivalents 7 5 16
Trade and other receivables 8 7 6
Short-term investments 9 - 22
---------- ----------
Total current assets 12 44
---------- ----------
Total assets 12 44
========== ==========
Equity and liabilities
Capital and reserves
Share capital account 6 8,394 8,364
Equity component of convertible
instruments 106 106
Retained earnings (10,909) (10,690)
---------- ----------
Total equity attributable to equity
holders (2,409) (2,220)
---------- ----------
Current liabilities
Borrowings 10 1,949 1,923
Trade and other payables 12 472 341
---------- ----------
Total current liabilities 2,421 2,264
---------- ----------
Total equity and liabilities 12 44
========== ==========
Statement of Changes in Equity
The statement of changes in equity is set out below:
Share Equity component
Capital of convertible Retained
account instruments earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
As at 1 January
2019 8,324 106 (11,626) (3,196)
Profit for the
year - - 936 936
Total comprehensive
profit for the
year - - 936 936
-------- ---------------- --------- -------
Transaction with
owners
Issue of shares 40 - - 40
Equity component - - - -
convertible notes:
Release on settlement
of convertible
loans
Total 40 - - 40
As at 31 December
2019 8,364 106 (10,690) (2,220)
-------- ---------------- --------- -------
Share Equity component
Capital of convertible Retained
account instruments earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
As at 1 January
2020 8,364 106 (10,690) (2,220)
Profit for the
year - -
Total comprehensive
loss for the
year - - (325) (325)
-------- ---------------- --------- -------
Transaction with
owners
Issue of shares 30 - - 30
Equity component - - - -
convertible notes:
Release on settlement
of convertible
loans
Capital contribution
of funding by
Cindrigo Limited - - 106 106
Total 30 - 106 136
As at 31 December
2020 8,394 106 (10,909) (2,409)
-------- ---------------- --------- -------
Share capital comprises the Ordinary Shares issued by the
Company.
Retained earnings represent the aggregate retained losses of the
Company since incorporation.
Equity component of convertible instruments represents the
equity element of instruments with a convertible element.
Statement of Cash Flows
The cash flow statement is set out below:
Year ended Year ended
31 December 31 December
2020 2019
GBP'000 GBP'000
Cash flow from operating activities
Loss for the period before taxation (325) 936
Non-cash profit Starneth agreement w/o
interest - (1,269)
Premium paid on convertible loan note 10 -
repayment
Net unrealised FX effect (2) 25
Interest 186 194
-------------- --------------
Operating cash flows before movements
in working capital (-131) (114)
(Increase)/Decrease in receivables (1) 8
Decrease in accounts payable and accrued
liabilities (45) (160)
-------------- --------------
Net cash used in operating activities (177) (266)
Amounts written of investments 22 -
Payback from investments - 213
Net cash outflow from investing activities 22 213
Issue of convertible instruments net of 89 -
issue costs
Issue of share capital - 40
Repayment of convertible instruments issued (51) -
Funding received from Cindrigo Limited 106 -
--------------
Net cash inflow from financing activities 144 40
Net decrease in cash and cash equivalents (11) (13)
Cash and cash equivalent at beginning
of period 16 29
Cash and cash equivalent at end of period 5 16
There were significant non-cash transactions being the issue of
share capital to settle convertible debt and interest. These are
detailed in Note 10.
Notes to the financial statements
1. General information
The Company was incorporated under section II of the Companies
(Guernsey) Law 2008 on 24 November 2014, it is limited by shares
and has registration number 59383.
The Company had an investment of US$3m in New York Wheel
Investor LLC, a company that was set up to fund the equity
component for the project to build a New York Wheel which includes
an approximate 630 foot high observation wheel with 36 capsules, a
68,000 square foot terminal and retail building, and a 950 space
parking garage. This investment was fully impaired as a result of
the termination of the project and litigation between New York
Wheel Investor LLC and one of the primary contractors. One share
with a nominal value of US$1m was given to the former Starneth
owners to pay the debt resulting from the second tranche of the
purchase contract. The Company entered into an investment into the
Dallas Wheel project. The investment was sold in 2019 for
consideration of US$300k of which US$275k was received however no
further sums have been received since. Given the uncertainty as to
whether the project will ultimately proceed t he fair value of the
Dallas wheel investment was fully impaired as at year end.
On the 19 August 2020, the company entered into a Letter of
Intent of Intent with Cindrigo Limited and Cindrigo Energy Limited,
which are part of a group of companies pursuing renewable energy
projects in the Ukraine.
The company has since entered into an agreement with Cindrigo
Energy Limited in respect of a proposal involving the acquisition
of Cindrigo Energy Limited and its wholly owned subsidiary Cindrigo
Limited. The Acquisition will proceed pursuant to a new Plan of
Arrangement under the British Columbia Business Corporations Act.
Under the proposed arrangement the company will acquire each share
in the issued share capital of Cindrigo Energy Limited in exchange
for one new share issued by the company. As a result of the
proposed exchange the current shareholders of Cindrigo Energy
Limited would hold some 96.5% of the enlarged issued share capital
of the company.
The Acquisition constitutes a reverse takeover for the
Company.
It is anticipated that in due course the shares of Cindrigo
Limited will be distributed to the company following completion of
the acquisition and Cindrigo Energy Limited will then be
liquidated.
The Company intends to make an application for its enlarged
ordinary share capital to be readmitted to the standard segment of
the Official List of the FCA and to trading on the Main Market of
the London Stock Exchange.
The Company's registered office is located at PO Box 186, Royal
Chambers, St Julian's Avenue, St. Peter Port, Guernsey GY1 4HP,
Channel Islands.
2. Significant Accounting Policies
Basis of preparation
The financial statements of Cindrigo Holdings Limited (formerly
Challenger Acquisitions Limited) for the year ended 31 December
2020 have been prepared in accordance with International Financial
Reporting Standards as adopted by the EU (IFRS's as adopted by the
EU), issued by the International Accounting Standards Board (IASB),
including interpretations issued by the International Financial
Reporting Interpretations Committee (IFRIC) applicable to the
companies reporting under IFRS.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the company's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial
statements are disclosed in note 3.
The financial information has been presented in British Pound
(GBP), being the functional currency of the Company.
Going concern
At 31 December 2020 the company had net current liabilities of
GBP2,387k. The financial statements have been prepared on the
assumption that the Company will continue as a going concern. Under
the going concern assumption, an entity is ordinarily viewed as
continuing in business for the foreseeable future with neither the
intention nor the necessity of liquidation, ceasing trading or
seeking protection from creditors pursuant to laws or regulations.
In assessing whether the going concern assumption is appropriate,
the Directors take into account all available information for the
foreseeable future, in particular for the twelve months from the
date of approval of the financial information.
The Directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for the
foreseeable future due the financing provided by Cindrigo Limited
to complete the reverse takeover and readmission to the Main Market
of the London Stock Exchange. The company has significant
liabilities in respect of convertible loans note of GBP1,949k (of
which GBP1,899k are past maturity date) and GBP445k in accrued
interest. As at date of issue of the financial statements the
company and the noteholders have agreed, conditional upon the
acquisition of Cindrigo Energy Limited completing, that the
existing, interest bearing loan notes, principal and accrued but
unpaid interest, will be settled by the issue of new 10-year, zero
coupon, convertible loan notes which the Company will be able to
convert as soon as it is readmitted to listing. Therefore on
admission, the liability causing the material uncertainty as to
Cindrigo Holdings Limited's ability to continue as a going concern,
will be converted to equity.
The Directors' objectives when managing capital are to safeguard
the Company's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders. At the date of this financial information, the
Company had been financed from equity and convertible notes. In the
future, the capital structure of the Company is expected to consist
of convertible notes and equity attributable to equity holders of
the Company, comprising issued share capital and reserves.
New standards, interpretations and amendments effective from 1
January 2020
There were no new standards or interpretations effective for the
first time for periods beginning on or after 1 January 2020 that
had a significant effect on the company's financial statements.
Standards and interpretations issued but not yet applied
A number of new standards and amendments to standards and
interpretations have been issued but are not yet effective.
The directors do not expect that any of these standards and
interpretations will have a material impact on the financial
statements of the company.
Segment Reporting
For the purpose of IFRS 8, the Chief Operating Decision Maker
"CODM" takes the form of the board of directors. The Directors are
of the opinion that after the sale of the Starneth entities the
business of the Company comprised a single activity, being the
identification and acquisition of target companies or businesses in
the energy sector.
Foreign Currency Translation
Functional and presentation currency
Items included in the financial statements are measured using
the currency of the primary economic environment in which the
entity operates ('the functional currency'). The financial
statements are presented in British Pounds (GBP), which is Cindrigo
Holdings functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation of monetary assets and
liabilities denominated in foreign currencies at year end exchange
rates are generally recognised in profit or loss. Foreign exchange
gains and losses are presented in the statement of profit or loss,
within finance income or finance costs.
Non-monetary items that are measured at fair value in a foreign
currency are translated using the exchange rates at the date when
the fair value was determined. Translation differences on assets
and liabilities carried at fair value are reported as part of the
fair value gain or loss. For example, translation differences on
non-monetary assets and liabilities such as equities held at fair
value through profit or loss are recognised in profit or loss as
part of the fair value gain or loss and translation differences on
non-monetary assets such as equities classified as
available-for-sale financial assets are recognised in other
comprehensive income.
Fair value of assets
Assets are tested for fair value whenever events or changes in
circumstances indicate that the carrying amount may not be
recoverable. A reduction in fair value is recognised for the amount
by which the asset's carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset's fair
value less costs of disposal and value in use. For the purposes of
assessing fair value, assets are grouped at the lowest levels for
which there are separately identifiable cash inflows which are
largely independent of the cash inflows from other assets or groups
of assets (cash-generating units). Non-financial assets other than
goodwill that suffered a significant reduction in fair value are
reviewed for possible reversal of the significant reduction in fair
value at the end of each reporting period.
Cash and cash equivalents
For the purpose of presentation in the statement of cash flows,
cash and cash equivalents includes cash on hand, deposits held at
call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that
are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value, and bank
overdrafts. Bank overdrafts are shown within borrowings in current
liabilities in the balance sheet.
Investments and other financial assets
Recognition and derecognition
Regular way purchases and sales of financial assets are
recognised on trade-date, the date on which the company commits to
purchase or sell the asset. Financial assets are derecognised when
the rights to receive cash flows from the financial assets have
expired or have been transferred and the company has transferred
substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the company measures a financial asset
at its fair value plus, in the case of a financial asset not at
fair value through profit or loss, transaction costs that are
directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at fair value through
profit or loss are expensed in profit or loss.
The Company's investments in corporate debt securities which are
held within a business model whose objective is achieved both by
collecting contractual cash flows and by selling securities are
classified as held at fair value through profit or loss
(FVTPL).
Investments in equity securities have been classified as
measured at FVTPL.
Interest income from financial assets at fair value through
profit or loss is included in the net gains/(losses). Interest on
financial assets held at amortised cost, calculated using the
effective interest method is recognised in the statement of profit
or loss as part of revenue from continuing operations.
Impairment of financial assets
Financial assets are assessed for indicators of decline in fair
value at the end of the reporting period. The Company recognises an
allowance for expected credit losses (ECLs) for all debt
instruments not held at fair value through profit or loss. ECLs are
based on the difference between the contractual cash flows due in
accordance with the contract and all the cash flows that the
Company expects to receive, discounted at an approximation of the
original effective interest rate.
For credit exposures for which there has not been a significant
increase in credit risk since initial recognition, ECLs are
provided for credit losses that result from default events that are
possible within the next 12-months (a 12-month ECL). For those
credit exposures for which there has been a significant increase in
credit risk since initial recognition, a loss allowance is required
for credit losses expected over the remaining life of the exposure,
irrespective of the timing of the default (a lifetime ECL).
If, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised (such as an
improvement in the debtor's credit rating), the reversal of the
previously recognised impairment loss is recognised in profit or
loss.
Income recognition
Interest income
Interest income is recognised using the effective interest
method. When a receivable is impaired, the company reduces the
carrying amount to its recoverable amount, being the estimated
future cash flow discounted at the original effective interest rate
of the instrument, and continues unwinding the discount as interest
income. Interest income on impaired loans is recognised using the
original effective interest rate.
Trade and other payables
These amounts represent liabilities for goods and services
provided to the company prior to the end of financial year which
are unpaid. The amounts are unsecured and are usually paid within
30 days of recognition. Trade and other payables are presented as
current liabilities unless payment is not due within 12 months
after the reporting period. They are recognised initially at their
fair value and subsequently measured at amortised cost using the
effective interest method.
Borrowings
Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of
transaction costs) and the redemption amount is recognised in
profit or loss over the period of the borrowings using the
effective interest method. Fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan to the
extent that it is probable that some or all of the facility will be
drawn down. In this case, the fee is deferred until the draw down
occurs. To the extent there is no evidence that it is probable that
some or all of the facility will be drawn down, the fee is
capitalised as a prepayment for liquidity services and amortised
over the period of the facility to which it relates.
The fair value of the liability portion of a convertible bond is
determined using a market interest rate for an equivalent
non-convertible bond. This amount is recorded as a liability on an
amortised cost basis until extinguished on conversion or maturity
of the bonds. The remainder of the proceeds is allocated to the
conversion option. This is recognised and included in shareholders'
equity, net of income tax effects.
Employee benefits
Short term obligations
Liabilities for wages and salaries, including non-monetary
benefits and accumulating sick leave that are expected to be
settled wholly within 12 months after the end of the period in
which the employees render the related service are recognised in
respect of employees' services up to the end of the reporting
period and are measured at the amounts expected to be paid when the
liabilities are settled. The liabilities are presented as current
employee benefit obligations in the balance sheet.
The obligations are presented as current liabilities in the
balance sheet if the entity does not have an unconditional right to
defer settlement for at least twelve months after the reporting
period, regardless of when the actual settlement is expected to
occur.
Share based payments
Employee options
The fair value of options granted is recognised as an employee
benefits expense with a corresponding increase in equity. The total
amount to be expensed is determined by reference to the fair value
of the options granted:
-- including any market performance conditions (eg the entity's share price)
-- excluding the impact of any service and non-market
performance vesting conditions (eg profitability, sales growth
targets and remaining an employee of the entity over a specified
time period), and
-- including the impact of any non-vesting conditions (eg the
requirement for employees to save or holdings shares for a specific
period of time).
The total expense is recognised over the vesting period, which
is the period over which all of the specified vesting conditions
are to be satisfied. At the end of each period, the entity revises
its estimates of the number of options that are expected to vest
based on the non-market vesting and service conditions. It
recognises the impact of the revision to original estimates, if
any, in profit or loss, with a corresponding adjustment to
equity.
Social security contributions payable in connection with an
option grant are considered an integral part of the grant itself
and the charges are treated as cash-settled transactions.
The options are administered by Cindrigo Holdings Limited. When
the options are exercised, Cindrigo Holdings Limited transfers the
appropriate amount of shares to the employee. The proceeds received
net of any directly attributable transaction costs are credited
directly to equity.
Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new
shares or options are shown in equity under share capital as a
deduction, net of tax, from the proceeds.
Earnings per share
Basic earnings per share is calculated by dividing:
-- the profit attributable to owners of the company, excluding
any costs of servicing equity other than ordinary shares
-- by the weighted average number of ordinary shares outstanding during the financial year.
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account:
-- the after income tax effect of interest and other financing
costs associated with dilutive potential ordinary shares, and
-- the weighted average number of additional ordinary shares
that would have been outstanding assuming the conversion of all
dilutive potential ordinary shares.
3. Critical estimates, judgements and errors
The preparation of financial statements requires the use of
accounting estimates which, by definition, will seldom equal the
actual results. Management also needs to exercise judgement in
applying the company's accounting policies.
This note provides an overview of the areas that involved a
higher degree of judgement or complexity, and of items which are
more likely to be materially adjusted due to estimates and
assumptions turning out to be wrong. Detailed information about
each of these estimates and judgements is included together with
information about the basis of calculation for each affected line
item in the financial statements. In addition, this note also
explains where there have been actual adjustments this year as a
result of an error and of changes to previous estimates.
Significant estimates and judgements
The areas involving significant estimates or judgements are:
-- Going concern
See accounting policies (note 2) for details of the assessment
made.
-- Fair value of the Investments
The equity units in New York Wheel Investor LLC are not quoted.
Based on the developments of the New York Wheel, mainly in regard
to the full stop of the construction works and the communication in
regard to the failure to secure additional funds, the Directors do
not believe that the project will be completed. Hence the directors
took the decision to fully impair the asset.
The loan given to the Dallas Wheel project had been almost fully
paid back as at 31 December 2019. From the initial 300k USD
outstanding there was 25k USD outstanding at the end of 2020.
However the project is suffering liquidity shortfalls at the moment
and no further funds were received during the year ended 31
December 2020, given this uncertainty the directors have decided to
fully impair the asset.
Estimates and judgements are continually evaluated. They are
based on historical experience and other factors, including
expectations of future events that may have a financial impact on
the entity and that are believed to be reasonable under the
circumstances.
4. FINANCIAL RISK MANAGEMENT
This note explains the Company's exposure to financial risks and
how these risks could affect the Company's future financial
performance. Current year profit and loss information has been
included where relevant to add further context.
Risk Exposure arising Measurement Management
from
-------------------- ----------------------- ---------------------- --------------------
Market risk Future commercial Cash flow forecasting No hedging
- foreign exchange cash flows Sensitivity
not denominated analysis
in GBP No hedging
Recognised
financial assets
and liabilities
not denominated
in GBP
Credit risk Cash and cash Aging analysis Diversification
equivalents, Credit ratings of bank deposits.
trade receivables, Follow-ups
other receivables to loan investment
Liquidity risk Borrowings Rolling cash Availability
and other liabilities flow forecasts of committed
credit lines
and borrowing
facilities
Foreign exchange risk
The Company is especially focused on the currency pairs USD/GBP.
The Company's only active investment is denominated in USD.
The company's exposure to foreign currency risk at the end of
the reporting period, expressed in GBP'000 was as follows:
Currency Assets Assets 10% change Liabilities Liabilities 10% change
in CCY in GBP in CCY in GBP
-------- -------- ----------- ------------ ------------ -----------
USD 26 22 (2) - - -
EUR - - - - - -
CHF - - - - - -
The company's exposure to foreign currency risk at the end of
the prior period, expressed in GBP'000 was as follows:
Currency Assets Assets 10% change Liabilities Liabilities 10% change
in CCY in GBP in CCY in GBP
-------- -------- ----------- ------------ ------------ -----------
USD 27 23 (2) - - -
EUR 1 1 - - - -
CHF - - - - - -
During the year, GBP6k foreign-exchange related losses were
recognised in profit or loss.
As described above the company is primarily exposed to changes
in the USD/GBP exchange rate. The sensitivity of profit or loss to
changes in the exchange rates as summarized in the above table
arises mainly from the company's USD denominated asset.
Interest rate risk
The company's fixed rate borrowings are carried at amortised
cost. They are therefore not subject to interest rate risk as
defined in IFRS 7, since neither the carrying amount nor the future
cash flows will fluctuate because of a change in market interest
rates.
Credit risk
Credit risk arises from cash and cash equivalents and deposits
with banks and financial institutions, as well as credit exposures
to customers, including outstanding receivables. To limit the risk
the company's main cash resources are held with banks with a
minimum external rating of A.
Liquidity Risk
The Company currently holds cash balances to provide funding for
normal trading activity. Trade and other payables are monitored as
part of normal management routine.
As at 31 December 2020 all financial assets were classified at
fair value. A maturity analysis of the Company's financial assets
is as follows:
As at As at
31 December 31 December
2020 2019
GBP'000 GBP'000
0 to 3 months 12 22
3 to 6 months - 22
6 months + - -
------------- -------------
Total 12 44
------------- -------------
As at 31 December 2020 all financial liabilities were classified
at amortised cost. A maturity analysis of the Company's financial
liabilities based on contractual undiscounted payments is as
follows:
As at As at
31 December 31 December
2020 2019
GBP'000 GBP'000
0 to 3 months 2,421 2,264
3 to 6 months - -
6 months + - -
------------- -------------
Total 2,421 2,264
------------- -------------
5. Business Segments
For the purpose of IFRS 8, the Chief Operating Decision Maker
"CODM" takes the form of the board of Directors. The Directors are
of the opinion that after the sale of the Starneth entities the
business of the Company comprised a single activity, being the
identification and acquisition of target companies or businesses in
the energy sector.
6. SHARE CAPITAL
Issued and fully Number of shares Share capital
paid account
GBP'000
At 31 December
2019 296,001,572 8,364
----------------- --------------
Issue of shares 119,535,676 30
----------------- --------------
Capital consolidation (413,979,504) -
----------------- --------------
At 31 December
2020 1,557,774 8,394
----------------- --------------
On the 6 January 2020 the company allotted 19,535,676 new
ordinary shares of GBP0.01 each to holders of the Unsecured
Convertible Note issued 8 June 2017, comprising 16,479,895 for the
conversion of GBP25k of notes and a further 3,055,781 New Ordinary
Shares for accumulated interest.
On the 7 September 2020 the company has allotted 100,000,000 new
ordinary shares of GBP0.01 each to holders of the Unsecured
Convertible Note issued 8 June 2017 for the conversion of
GBP100,000 of the principal value of the Notes.
The company undertook a share consolidation on 28th September
2020. Every 266.7609 of Existing Ordinary Shares of GBP0.01 were
consolidated into one New Ordinary Share of GBP2.667609 each.
7. CASH AND CASH EQUIVALENTS
2020 2019
GBP'000 GBP'000
--------------------------------- -------- --------
Cash at bank and in hand 5 16
--------------------------------- -------- --------
Total cash and cash equivalents 5 16
8. TRADE AND OTHER RECEIVABLES
2020 2019
GBP'000 GBP'000
----------------------------------- -------- --------
Prepayments 7 6
Total trade and other receivables 7 6
9. INVESTMENTS
Short-term
Investments
GBP'000
Fair value
At 31 December 2018 234
-------------
Repayments Dallas Wheel (212)
-------------
At 31 December 2019 22
-------------
Impairment of Dallas Wheel (22)
-------------
At 31 December 2020 -
-------------
The company holds investments in the New York Wheel Investor
LLC, which is fully written off and the Dallas Wheel Project, which
is shown under short-term investments.
In the 2018 the Company invested USD 300k into the Dallas Wheel
project. This financing was in the form of a convertible loan. On
31 December 2018 the Company signed a contract to change the
repayment terms for its investment in the Dallas wheel. The Company
received in 2019 USD 275k however has received no further sums
since. Given the uncertainty as to whether the project will
ultimately proceed t he fair value of the Dallas wheel investment
was fully impaired as at year end.
The equity units in New York Wheel Investor LLC are not quoted,
in the prior year the Directors had regard to recent transactions
in equity units of the New York Wheel and therefore assessed the
value as a level 3 valuation. As the project has been stopped and
the probability of the project restarting is very low, the
investment in the New York Wheel was written off in full.
A further unit of the New York Wheel investment is held as
security over the 29 January 2016 convertible loan.
10. Borrowings
2020 2019
Current GBP'000 GBP'000
----------------------------- -------- --------
Convertible notes 1,949 1,923
Deferred cash consideration - -
1,949 1,923
Note 1 Note Note Note Total
2 3 4
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- -------- -------- -------- --------
Balance at 31 December
2018 (liability) 1,089 821 - - 1,910
Balance at 31 December
2018 (equity) 106 - - - 106
-------------------------- -------- -------- -------- -------- --------
Finance Charge 102 79 - - 173
(Increase)/decrease
in accrued interest (101) (66) - - (167)
-------------------------- -------- -------- -------- -------- --------
Balance at 31 December
2019 (liability) 1,090 833 - - 1,923
-------------------------- -------- -------- -------- -------- --------
Balance at 31 December
2019 (equity) 106 - - - 106
-------------------------- -------- -------- -------- -------- --------
Issue of Note 3 - - 40 - 40
-------------------------- -------- -------- -------- -------- --------
Issue of Note 4 - - - 49
-------------------------- -------- -------- -------- -------- --------
Finance Charge 102 66 1 1 170
-------------------------- -------- -------- -------- -------- --------
Increase/decrease
in accrued interest (101) (66) - - (167)
-------------------------- -------- -------- -------- -------- --------
Premium on Note
3 - - 10 - 10
-------------------------- -------- -------- -------- -------- --------
Repayment of Note
3 - - (51) - (51)
-------------------------- -------- -------- -------- -------- --------
Partial conversion
of Note 2 - (25) - - (25)
-------------------------- -------- -------- -------- -------- --------
Balance at 31 December
2020 (liability) 1,091 808 - 50 1,949
-------------------------- -------- -------- -------- -------- --------
Balance at 31 December
2020 (equity) 106 - - - 106
-------------------------- -------- -------- -------- -------- --------
*notes issued during
the year are presented
net of conversion
costs
Note 1
On 29 January 2016, the Company issued further GBP1 million of
secured convertible notes. The notes are unlisted, secured,
transferable and convertible. Maturity date is 30 June 2019. The
Secured Convertible Notes are secured by one common unit of New
York Wheel Investor LLC, representing a total value US$1 million.
Interest is accrued at 8% per annum and payable quarterly. One
eighth of the interest can be settled in cash or shares at the
Company's discretion. Seven eighths of the interest is settled in
new convertible notes with the same terms. The notes are
convertible in cash or shares at the option of the holder and can
be converted into Ordinary Shares at a fixed conversion price of
GBP0.80 per Ordinary Share. The Company can redeem the notes at a
10% premium anytime. As per the nature of this convertible
instrument, GBP106k has been recognised as an equity component in
of convertible instruments in statement of changes of equity, using
a discount rate of 12%. Despite reaching maturity, this note is
still outstanding and continues to accrue interest in accordance
with the interest terms stated.
Note 2
The last tranche of GBP400,000 of the GBP1 million funding
facility announced by the Company on 13 June 2017, has been drawn
on 18 January 2018 and subsequently the Company has issued
convertible note for GBP400,000. The notes are unlisted, unsecured,
transferable and convertible. Maturity date is 8 June 2019. No
conversions can happen in the first 120 days. The maximum amount
that can be converted in any 30 day period is 20% of the principal
amount. The conversion price is the lowest volume weighted average
price over 10 days prior to the conversion. Interest rate is 8% per
annum and payable upon conversion at the Company's option in cash
or ordinary shares at the conversion price. The Company can redeem
in cash all or any part of the outstanding convertible note with a
25% premium to the principal amount. Despite reaching maturity this
note is still outstanding and continues to accrue interest in
accordance with the interest terms stated
On the 6 January 2020 the company allotted 19,535,676 new
ordinary shares of GBP0.01 each to holders of the Unsecured
Convertible Note, comprising 16,479,895 for the conversion of
GBP25,000 of notes and a further 3,055,781 New Ordinary Shares for
accumulated interest.
Note 3
The company received GBP40,800 (US $50,000) pursuant to the
issue of an unsecured convertible on 27 May 2020. The noteholder
may convert all or part of the principal amount of its notes into
ordinary shares of the Company ('Ordinary Shares') at any time at a
fixed conversion price of 0.1p per Ordinary Share. The notes are
unlisted, unsecured, transferable and must be redeemed by the
Company on 19 May 2021, at the Company's option in cash or in
Ordinary Shares at 0.1p per Ordinary Share. Interest is accrued at
5% per annum and payable quarterly, or upon conversion, at the
Company's option in cash or by issuing Ordinary Shares. At any time
the Company can redeem in cash all or any part of the outstanding
notes from the holder at a 25% premium to the principal amount of
such notes. The notes were redeemed in cash in September 2020.
Note 4
The company issued GBP52,000 in unsecured convertible notes on
21 September 2020. The noteholder may convert all or part of the
principal amount of its notes into ordinary shares of the Company
('Ordinary Shares') at any time at a fixed conversion price of 0.1p
per Ordinary Share. The notes are unlisted, unsecured, transferable
and may be redeemed by the Company on 19 May 2021, at the Company's
option in cash or in Ordinary Shares at 0.1p per Ordinary Share.
Interest is accrued at 5% per annum and payable quarterly, or upon
conversion, at the Company's option in cash or by issuing Ordinary
Shares. At any time the Company can redeem in cash all or any part
of the outstanding notes from the holder at a 25% premium to the
principal amount of such notes.
11. FINANCE INCOME AND COSTS
2020 2019
GBP'000 GBP'000
-------------------------------------------- ------------------------------------- -------------------------------------
Interest
Income - (7)
Bank charges 10 10
Interest on
convertible
loan
notes 173 194
Interest on -
deferred
consideration
and other
interest
payables
Net foreign
exchange
costs 3 6
Premium to 10 -
settle
convertible
loan
-------------------------------------------- ------------------------------------- -------------------------------------
Finance costs 196 203
-------------------------------------------- ------------------------------------- -------------------------------------
12. TRADE AND OTHER PAYABLES
2020 2019
GBP'000 GBP'000
-------------------------------- -------- --------
Trade payables - 15
Accrued expenses 472 326
-------------------------------- -------- --------
Total trade and other payables 472 341
13. EMPLOYEE BENEFIT EXPENSE
2020 2019
GBP'000 GBP'000
----------------------------------------- ------------------------------------- -------------------------------------
Wages and
salaries 19 33
Share - -
options
granted to
directors,
employees
and
key
advisers
19 33
----------------------------------------- ------------------------------------- -------------------------------------
14. DIRECTORS' EMOLUMENTS
The Directors were paid emoluments of GBP19k as directors' fees
during the period under review (GBP33k in 2019). Of the GBP19k,
GBP7.5k were the director's fees for Mark Gustafson. Mr. Gustafson
billed an additional GBP9k (2019: GBP12k) as management fees,
booked under administrative expenses. At 31 December 2020 a total
amount of GBPnil (2019: GBP11k) was unpaid and due to Mr. Gustafson
for management services and director fees. The total compensation
for Mr. Gustafson in the year under review was GBP7.5k (2019:
GBP22k).
These details and the details for the other Directors can be
found within the Director's remuneration report on page 22.
The Directors were the key management personnel of the
Company.
15. TAXATION
Cindrigo Holdings Limited (formerly Challenger Acquisitions
Limited) is a Guernsey Corporation subject to a corporate tax rate
of nil, as at 31 December 2020. There are no unrecognised tax
losses.
16. EARNINGS PER SHARE
The calculation for earnings per share (basic and diluted) for
the relevant period is based on the profit / loss after income tax
attributable to equity holder for the period ending 31 December
2020 and is as follows:
31 December 2020
Loss from continued operations attributable
to equity holders (GBP) (325,000)
------------
Weighted average number of shares 238,106,119
------------
Loss per share basic (GBP) (0.001)
------------
Weighted average number of shares for dilutive
calculation 238,106,119
Loss per share diluted (GBP) (0.001)
------------
31 December 2019
Profit from continued operations attributable
to equity holders (GBP) 936,000
------------
Weighted average number of shares 276,250,887
------------
Profit per share basic (GBP) 0.003
------------
Weighted average number of shares for dilutive
calculation 276,250,887
Profit per share diluted (GBP) 0.003
------------
Basic earnings per share is calculated by dividing the loss
after tax attributable to the equity holders of the company by the
weighted average number of shares in issue during the year.
Diluted loss per share is calculated by adjusting the weighted
average number of ordinary shares outstanding to assume conversion
of all potential dilutive ordinary shares namely the conversion of
the convertible loan note in issue. The effect of these potential
dilutive shares would be anti-dilutive and therefore are not
included in the above calculation of diluted earnings per
share.
17. RELATED PARTY TRANSACTIONS
There were no related party transactions except for the
transactions disclosed in Note 14 to the accounts.
18. COMMITMENTS
The Company had not entered into any material commitments as at
31 December 2020.
19. SHARE BASED PAYMENTS
On 29 July 2015, options to acquire 615,000 Ordinary Shares
("Options 2015") were granted to employees and consultants. On 8
September 2015, options to acquire 730,000 Ordinary Shares
("Options 2015") were granted to the directors of the company.
These Options 2015 have a fixed exercise price of 40 pence, and are
exercisable in the following tranches; 25% as from the date of
grant and 25% every twelve months thereafter (and are therefore
fully vested after three years). They cannot be exercised after the
5th anniversary of the grant. The Company has no legal or
constructive obligation to repurchase or settle the options in
cash.
On 7 January 2016, options to acquire 160,000 Ordinary Shares
("Options 2016") were granted to consultants. These options have a
fixed exercise price of 45 pence, and are exercisable in the
following tranches:
Movements in the number of share options outstanding and their
related weighted average exercise prices are as follows: 25% as
from the date of grant and 25% every twelve months thereafter (and
are therefore fully vested after three years). They cannot be
exercised after the 5th anniversary of the grant. The Company has
no legal or constructive obligation to repurchase or settle the
options in cash.
2020 2019
Average Options Average Options
exercise (thousands) exercise (thousands)
price in price in
GBP per GBP per
share option share option
-------------- ------------- -------------- -------------
0.41 0.41 1,093 0.41 1,093
-------------- ------------- -------------- -------------
Granted 0.00 - 0.00 -
-------------- ------------- -------------- -------------
Forfeited 0.00 - 0.00 -
-------------- ------------- -------------- -------------
Exercised 0.00 - 0.00 -
-------------- ------------- -------------- -------------
Expired 0.00 (933) 0.00 -
-------------- ------------- -------------- -------------
End of period 0.00 160 0.41 1,093
-------------- ------------- -------------- -------------
Out of the outstanding 160,000 (2019: 1,092,500) share options
160,000 (2019: 1,092,500) were exercisable. No options were
exercised in 2019 and 2020.
Share options outstanding at the end of the year have the
following expiry date and exercise prices:
Grant-vest Expiry Exercise Share options (thousands)
date price in
GBP
------------ --------- ---------- ----------------------------
2020
------------ --------- ---------- --------------------------
2016-01 2021-01 0.45 160
160
--------------------------
303,000 share options granted in January 2015 expired in July
2020.
630,000 share options granted in February 2015 expired in
September 2020.
The weighted average fair value of the Options 2015 determined
using the Black-Scholes valuation model was 1.4 pence per option.
The significant inputs to the model were share price of 38 pence at
the grant date, exercise price of GBP0.40, volatility of 14%,
dividend yield of 0% an expected option life (to expiry) of 5 years
with 25% vesting each year and an annual risk free interest rate of
0.5%. The volatility measured at the standard deviation of
continuously compounded share returns is based on the statistical
analysis of daily share prices from listing of the Company until
the grant date.
The weighted average fair value of the Options 2016 determined
using the Black-Scholes valuation model was 2.49 pence per option.
The significant inputs to the model were share price of 37.5 pence
at the grant date, exercise price of GBP0.45, volatility of 14%,
dividend yield of 0% an expected option life (to expiry) of 5 years
with 25% vesting each year and an annual risk free interest rate of
0.5%. The volatility measured at the standard deviation of
continuously compounded share returns is based on the statistical
analysis of daily share prices from listing of the company until
the grant date.
20. SUBSEQUENT EVENTS
There are no subsequent events requiring disclosure in the
financial statements.
21. ULTIMATE CONTROLLING PARTY
As at 31 December 2020, no one entity owns greater than 50% of
the issued share capital. Therefore the Company does not have an
ultimate controlling party.
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END
FR UWONRASUWARR
(END) Dow Jones Newswires
August 18, 2021 02:45 ET (06:45 GMT)
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