TIDMPATH
RNS Number : 7199D
Path Investments plc
28 June 2019
28 June 2019
Path Investments plc
("Path" or "the Company")
Final Results for the Year Ended 31 December 2018
Path Investments plc (TIDM: PATH), announces its audited results
for the year ended 31 December 2018.
Highlights
-- Broadened focus on the acquisition of producing natural resource
assets.
-- A number of transactions were considered and certain progressed
in detail during the year.
-- Withdrawal from Conditional Farm-In Agreement with 5P Energy
GmbH.
-- Subsequent to year-end, sale of legacy Turkish assets.
For further information:
Path Investments plc +44 (0) 20 3934 6630
Christopher Theis,
Shard Capital (Financial Adviser
and Broker) +44 (0) 20 7186 9900
Simon Leathers, Damon Heath
IFC Advisory (Financial PR &
IR) +44 (0) 20 3934 6630
Tim Metcalfe, Heather Armstrong,
Miles Nolan
CHAIRMAN'S STATEMENT
Review
The Directors pro-actively reviewed a large number of
opportunities as they presented themselves. Those assets found to
be increasingly of interest are within the producing natural
resources area.
In November 2018 the Company announced that it had decided to
withdraw from its previously announced Conditional Farm-In
Agreement with 5P Energy GmbH. Post the review period, in January
2019 the Company also announced the signing of a Heads of Agreement
for the proposed acquisition of ARC Marlborough Pty. Limited. The
Company withdrew from those negotiations in March 2019.
Whilst this was regrettable as considerable time and resources
had been devoted to the task, there is a risk/reward trade-off to
each transaction, whereby the risk to our shareholders may change
over time, particularly during a negotiation period. This proved to
be the case in both of these instances.
Subsequent to year end, the sale of the legacy Turkish assets
was announced in January 2019. This was a welcome development and
the result of patient discussion. Further details are contained
within the Financial Review.
The Company recently announced the broadening of its strategic
focus to that of the wider natural resources sector.
The Directors are aware of a number of opportunities within that
sector, at differing stages of transaction maturity, and have
focused time and resources to advance one particular transaction.
At this time a non-binding Letter of Intent has been entered into,
which may lead to an acquisition in conformity with the Company's
stated strategy. The Directors are working towards a binding
commitment, but there can be no certainty until close. The
Directors would hope to be in a position to be able to announce
further information on this shortly
Nigel Brent Fitzpatrick
Non-Executive Chairman
CHIEF EXECUTIVE OFFICER'S REPORT
OPERATIONAL REVIEW
The Company was incorporated and registered in England and Wales
on 2 June 2000 under the Companies Act 1985 as a public company
limited by shares with the name Hallco 459 plc and with registered
number 04006413. On 28 November 2000, the Company changed its name
to The Niche Group PLC. On 20 February 2016, the Company changed
its name to Path Investments Plc. It is domiciled and its principal
place of business is in the United Kingdom and is subject to the
City Code.
The strategy of the Company is focused on delivering a material
acquisition in natural resources production or near production
assets with the objective of providing the Company's shareholders
with access to a low risk and, over time, diversified portfolio
which can offer a dividend stream as well as offering development
potential for capital growth. The Directors are looking to create a
diversified portfolio of assets that is mindful of the maturity of
asset developments, life of income stream and the potential for
growth, and a number of opportunities have been evaluated and
developed. The Company is open to ideas but intends that the
Reverse Takeover will be of a business that can act as the
cornerstone for building a substantial group within the sector.
The Company was admitted to the Official List by way of a
Standard Listing and to trading on the London Stock Exchange's Main
Market for listed securities on 30 March 2017. The Company's shares
are currently suspended from trading pending completion of a
binding transaction, for which there can be no guarantee of
certainty.
The Company has not traded over the past twelve months. Over
that period its expenses have related to pre-deal costs,
professional and associated expenses related to advisory and
consultancy fees, along with general administration expenses.
The previous sustained period of high commodity prices had seen
companies in the sector raise their appetite for risk. The
subsequent fall in commodity prices has led to pressure on project
commitments and cash flow shortages which have left many proven and
producing projects starved of capital. This is particularly acute
at the smaller end of the quoted sector where capital commitment
obligations are much higher.
The Directors believe that attractive opportunities currently
exist to acquire interests in producing resource assets which are
profitable and have future development potential. In addition to
the decreased costs at which interests in assets can be acquired in
the current climate, new entrant advantages include ongoing
reductions in project costs along with, in many cases, the benefits
of significant historically incurred costs, existing infrastructure
and technical understanding. Revenue generation from some of these
assets can be either immediate or imminent.
The Company intends to focus on identifying acquisition
opportunities which are, in the opinion of the Directors,
underperforming, undeveloped and/or currently undervalued, and
where the Directors believe that their expertise and experience, in
conjunction with that of the incumbent management, can be deployed
to facilitate growth and unlock inherent value.
A number of transactions were considered and certain progressed
in detail during the year. On 5(th) November 2018 the Company
announced that it had decided to withdraw from its previously
announced Conditional Farm-In Agreement with 5P Energy GmbH, under
which Path will acquire a 50% Participating Interest in the
Alfeld-Elze II License and field, subject to completion. Post the
review period, on 18(th) January 2019 the Company also announced
the signing of a Heads of Agreement for the proposed acquisition of
ARC Marlborough Pty. Limited. The Company withdrew from
negotiations on 13 March 2019.
Whilst this was regrettable, there is a risk/reward trade-off to
each transaction, where the risk may change over time, particularly
during a negotiation period. This proved to be the case in both of
these instances.
FINANCIAL REVIEW
Loss for the year
In the year ended 31 December 2018, the Company recorded a loss
of GBP1,059,060. There was no income in the period.
Cash flow
During the year, the Company issued convertible loan notes
amounting to GBP93,000 pursuant to an instrument to issue
GBP150,000 nominal convertible unsecured loan stock 2018 (see note
0).
On 30 January 2019, the Company disposed of its 5% interest in
ARAR and Alpay Enerji AS for a consideration of GBP400,000,
together with the transfer by their major shareholder of 357,412
Ordinary Shares in the Company to be held in Treasury and 357,412
Deferred Shares for cancellation. The Company currently has no
distributable earnings from which a distribution to deferred
shareholders can be made, and alternative methods of returning
value to such shareholders are under consideration. Such funds
received were therefore used towards the satisfaction of the
Company's debts.
Going concern
The financial statements have been prepared on the assumption
that the Company will continue as a going concern. Under this
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 statements.
The Directors consider the use of the going concern assumption
to be appropriate. At the latest reported date of 31 December 2018,
the Company had cash and cash equivalents totalling GBP473. On 30
January 2019, the Company disposed of its 5% interest in ARAR and
Alpay Enerji AS for a consideration of GBP400,000 together with the
transfer by their major shareholder of 357,412 Ordinary Shares in
the Company to be held in Treasury and 357,412 Deferred Shares for
cancellation. Such funds received were used towards the
satisfaction of the Company's debts.
On 26 June 2019, the Company had cash equivalents totalling
GBP16,227 and had a net current liabilities. The Company is
therefore able to continue as a going concern only as a result of
the support of its creditors and Directors. The Company plans to
raise further funds by a placing of ordinary shares at the time of
its announcement of a binding transaction by the Company. Should a
placing not take place in a timely manner, or should the Company's
creditors demand payment, the Directors will need to immediately
raise additional funds in order to be able to continue as a going
concern. The ability of the Company to raise additional funds is
dependent upon investor appetite and if necessary the Directors'
ability to obtain alternative sources of funding.
For the above detailed reasons, the Directors believe there is a
material uncertainty over the Company's status as a going concern.
However, the Directors have a reasonable expectation that the
Company will be able to raise sufficient funding when required to
allow it to cover its working capital for a period of at least
twelve months from the date of approval of the financial
statements. It is for this reason they continue to adopt the going
concern basis of accounting in preparing the financial
statements.
Due to the early stage of development of the Company, the
responsibilities normally delegated to the Audit & Risk
Committee were discharged by the full Board during the period. When
operational, the committee will oversee the Company's financial
reporting and internal controls, and provides a formal reporting
link with the external auditors. The ultimate responsibility for
reviewing and approving the Annual Report and Accounts and the
half-yearly reports will remain with the Board.
The Company's external auditors and the board of directors will
closely monitor the level of audit and non-audit services they
provide to the Company. In the year ended 31 December 2018, the
external auditors provided non-audit services to the Company in
respect of its aborted conditional acquisition of a 50%
participating interest in an onshore producing conventional gas
field, the Alfeld-Elze II Licence and Gas Field in Germany and AIM
admission.
Christopher Theis
Chief Executive Officer
strategic report
The Directors present their strategic report on the company for
the year ended 31 December 2018.
Principal Activities
Path Investments Plc is a public company incorporated under the
Companies Act 1985 and domiciled in the United Kingdom. The
strategy of the Company is focused on delivering a material
acquisition in natural resources production or near production
assets with the objective of providing the Company's shareholders
with access to a low risk and, over time, diversified portfolio
which can offer a dividend stream as well as offering development
potential for capital growth.
Business Review
The Directors are looking to create a diversified portfolio of
assets that is mindful of the maturity of asset developments, life
of income stream and the potential for growth, and a number of
opportunities have been evaluated and developed. The Company is
open to ideas but intends that the Reverse Takeover will be of a
business that can act as the cornerstone for building a substantial
group within the sector.
The requirements of the enhanced business review are contained
in the Chairman's Statement and in the Operational and Financial
Reviews on pages 2 - 4 of this document.
Key performance indicators
The Company has not traded over the past twelve months and the
Directors are of the opinion that analysis using key performance
indicators is not necessary for an understanding of the business at
the present time.
Position of the Company's business at the year-end
At the year-end, the Company's Statement of Financial Position
shows net liabilities totalling GBP1,072,760.
The future plans of the Company
At this time a non-binding Letter of Intent has been entered
into, which may lead to an acquisition in conformity with the
Company's stated strategy. The Directors are working towards a
binding commitment, but there can be no certainty until close. The
Directors would hope to be in a position to be able to announce
further information on this shortly.
Employees
The Company's only employees are its two Executive Directors.
There are no other employees.
Employee gender diversity
Male Female
Directors of the company 4 -
Total number of employees 2 -
Principal risks and uncertainties
The Company is subject to various risks relating to investments,
industry, business and financial conditions. The following risk
factors, which are not exhaustive, are particularly relevant to the
Company and its business activities:
Risk Mitigation
Due diligence on potential investments
Any due diligence by the Company The Company intends to conduct
in connection with a proposed such due diligence as it deems
investment may not reveal all reasonably practicable and appropriate
relevant considerations or liabilities, based on the facts and circumstances
which could have a material applicable to any potential
adverse effect on the Company's investment prior to entering
financial condition or results into any legally binding agreement
of operations. There can be in connection therewith to acquire
no assurance that the due diligence any assets. The objective of
undertaken with respect to a the due diligence process will
potential investment opportunity be to identify material issues
will reveal all relevant facts which might affect the decision
that may be necessary to evaluate to proceed with any one particular
such opportunity. The Company investment opportunity or the
may also make subjective judgements consideration payable for that
regarding the results of operations, investment.
financial condition and prospects
of a potential investment opportunity
which by their nature may subsequently
result in substantial impairment
charges or other losses.
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Lack of control over investment
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It is likely that, in many cases, The Company will seek the greatest
the Company will acquire an protection it can when negotiating
interest in an underlying asset the investment instrument. The
which does not confer upon it company considers contingency
the ability to control the underlying plans in the event of default
asset. Accordingly, the Company's or non-performance of partners
decision making authority may or material counterparties.
be limited. Such investments
may also involve the risk that
such other stakeholders may
become insolvent or unable or
unwilling to fund additional
investments in the underlying
asset.
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Operational risk in sector
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Activities in the resources The Company will make use of
sector can be dangerous and industry norm insurance arrangements
may be subject to interruption. as well as ensuring best operational
The assets in which the Company practices are strictly adhered
will make investments are subject to.
to the significant hazards and
risks inherent in the resources
sector and countries in which
the underlying assets are located.
Disruption caused by such risks
could affect the Company's performance,
financial condition and business
prospects.
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Lack of operational control
----------------------------------------
The Company will need to rely The Company will, through its
on third parties to operate membership of each respective
its assets and will not have asset's Operational Committee,
direct control over production have direct involvement in day
from its assets. Any failure to day decisions.
by an external contractor may
lead to delays or curtailment
of the production, transportation,
or delivery of natural resources
products and result in adverse
effect on the revenues to the
Company.
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Additional cost contribution
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The Company may be required Whilst it is difficult to mitigate
to contribute to unexpected against unexpected costs, best
costs in the underlying assets operational practices and tight
in which it invests. budgetary control assist in
the avoidance of such events.
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Investments that do not proceed
to completion
----------------------------------------
The Company expects to incur The Company will seek to minimise
certain third party costs associated such costs with reference to
with any investment opportunity its current financial resources.
that may ultimately lead to
a completed transaction. The
greater the number of these
deals that do not reach completion,
the greater the impact of such
costs on the Company's performance,
financial condition and business
prospects.
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Resource Sector conditions
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The Company's revenues, profitability The Company takes a conservative
and future growth are substantially approach to making investment
dependent on prevailing prices decisions and these decisions
of the natural resources into are based upon a detailed assessment
which it chooses to invest and of expected natural resource
its ability to either enter prices. The methodologies used
into, realise or seek a return to assess investments against
from its investments. The prices future natural resource prices
of natural resources are subject are in line with best practice
to large fluctuations in response generally adopted in the natural
to a number of factors including resources industry.
relatively minor changes in
the supply of, and demand for
natural resources, in addition
to other factors beyond the
control of the Company.
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Foreign currency exposure
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Investments in overseas assets The Company may seek to manage
will expose the Company to exchange its foreign exchange exposure
rate fluctuations. by active use of hedging and
derivative instruments.
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Further funding for investments
----------------------------------------
The Company's investments or The Company will not enter into
future acquisitions, expansion, any binding agreement without
activity and/or business development assurance of requisite funding
will require additional capital, being in place. The company
whether from equity or debt is actively seeking to diversify
sources. There can be no guarantee its sources of funding to mitigate
that the necessary funds will against the risk of any single
be available on a timely basis, source becoming inaccessible.
on favourable terms, or at all,
or that such funds if raised,
would be sufficient.
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Credit & Counterparty risks
----------------------------------------
Any investment concluded by The Company considers the credit
the Company could underperform and counterparty risks of the
due to one or more of the partners different partners and customers
or counterparties (both suppliers in any investment it considers
and customers) to the project and where necessary seeks to
defaulting or not performing. transfer, insure or prepares
contingency plans in the event
of default or non-performance.
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Regulatory Risks
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In all EU markets where access The Company will invest in countries
to markets and to most of the with established and stable
logistical infrastructure are regulatory regimes and actively
regulated, the Company is exposed monitors the regulatory policies
to changes in regulations that and regimes to anticipate and
could substantially alter the wherever possible mitigate the
economics of market access and impact of regulatory changes.
logistics. In turn, this could
alter the economics of investments
in natural resources. Similarly,
all markets have regulated fiscal
regimes for natural resources
and changes to these natural
resource regimes could materially
impact the returns on investments.
----------------------------------------
The Strategic Report was approved by the board of Directors and
signed on its behalf by:
Christopher Theis
Chief Executive Officer
INDEPENT AUDITORS' REPORT
Opinion
We have audited the financial statements of Path Investments Plc
(the 'company') for the year ended 31 December 2018 which comprise
the Statement of Comprehensive Income, the Statement of Changes in
Equity, the Statement of Financial Position and the Statement of
Cash Flows and notes to the financial statements, including a
summary of significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards (IFRSs) as
adopted by the European Union.
In our opinion, the financial statements:
-- give a true and fair view of the state of the company's
affairs as at 31 December 2018 and of its loss for the
year then ended;
-- have been properly prepared in accordance with IFRSs as
adopted by the European Union; and
-- have been prepared in accordance with the requirements
of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the company
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 1.3 in the financial statements, which
identifies conditions that may cast significant doubt on the
company's ability to continue as a going concern. The company
incurred a net loss of GBP1,059,060 during the year ended 31
December 2018 and, as of that date, the company held net current
liabilities of GBP1,072,760.
The ability of the company to continue as a going concern is
dependent on the continued financial support of its creditors and
Directors and the ability to raise further equity funds.
As stated in note 1.3, these events or conditions indicate that
a material uncertainty exists that may cast significant doubt on
the company's ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
Our application of materiality
We have determined our overall financial statement Materiality
to be GBP26,200 which is based on 2% of expenses incurred and 3% of
loss before tax.
We consider these two benchmarks to be the most significant
determinant of the company's financial performance used by
shareholders. Until the company finds a suitable investment, it
will be non-revenue generating and so we have based our assessment
of materiality on total expenses and loss before tax to reflect
activity during the period.
We set performance materiality at 65% of overall financial
statement materiality.
An overview of the scope of our audit
In designing our audit, we determined materiality and assessed
the risk of material misstatement in the financial statements.
There were no areas within the financial statements which involved
significant accounting estimates or judgements by the directors. We
also addressed the risk of management override of internal
controls, including evaluating whether there was evidence of bias
by the directors that represented a risk of material misstatement
due to fraud. The company finance function is located in the United
Kingdom. Our audit was conducted from our London office, with
regular contact from the key individuals responsible for the
accounting function.
Key audit matters
Except for the matter described in the Material uncertainty
related to going concern section, we have determined that there are
no key audit matters to communicate in our report.
Other information
The other information comprises the information included in the
annual report, other than the financial statements and our
auditor's report thereon. The directors are responsible for the
other information. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon. In connection with our audit of the
financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required
to determine whether there is a material misstatement in the
financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion the part of the directors' remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company
and its environment obtained in the course of the audit, we have
not identified material misstatements in the strategic report or
the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the financial statements and the part of the directors'
remuneration report to be audited are not in agreement with the
accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Statement of directors'
responsibility, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the
directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Other matters which we are required to address
We were appointed by the Board on 20 May 2019 to audit the
financial statements for the year ended 31 December 2018. Our total
uninterrupted period of engagement is 1 year.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the company and we remain independent of the
company in conducting our audit.
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on the financial
statements from our sector experience and through discussions with
the directors. We considered the extent of compliance with those
laws and regulations as part of our procedures on the related
financial statement items. We communicated identified laws and
regulations throughout our audit team and remained alert to any
indications of non-compliance throughout the audit. As with any
audit, there remained a higher risk of non-detection of
irregularities, as these may have involved collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal controls.
Our audit opinion is consistent with the additional report to
the audit committee.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone, other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
David Thompson (Senior Statutory Auditor)
1 Westferry Circus
For and on behalf of PKF Littlejohn LLP
Canary Wharf
Statutory Auditor London E14 4HD
27 June 2019
STATEMENT OF COMPREHENSIVE INCOME
Year Year
ended ended
31 December 31 December
Note 2018 2017
GBP GBP
Administrative expenses (965,608) (585,533)
Operating loss 4 (965,608) (585,533)
Finance income 7 81 56
Finance cost 7 (93,533) (38,500)
Loss on ordinary activities before
taxation (1,059,060) (623,977)
Income tax 8 - -
Loss for the year and total comprehensive
loss attributable to the equity
holders (1,059,060) (623,977)
============== ==============
Loss per share
- Basic & diluted attributable
to the equity holders 9 (0.54) (0.42)
All operating income and operating gains and losses relate to
continuing activities.
There was no other comprehensive income for the year
(2017:GBPNil)
The notes form an integral part of the financial statements.
STATEMENT OF CHANGES IN EQUITY
Share Share Share Retained Total
Capital Premium based earnings
payments
reserve
GBP GBP GBP GBP GBP
As at 1 January
2017 8,805,838 24,134,750 715,752 (34,902,611) (1,246,271)
Comprehensive income
Loss for the period - - - (623,977) (623,977)
Total Comprehensive
loss - - - (623,977) (623,977)
Issue of share capital 173,929 1,565,363 - - 1,739,292
Issue costs - (286,496) - - (286,496)
Lapsed or waived
share options - - (382,479) 382,479 -
Transfer to retained
reserves - - (333,273) 333,273 -
Share based payment - - - 403,752 403,752
Total contributions
by and distributions
to owners of the
company 173,929 1,278,867 (715,752) 1,119,504 1,856,548
As at 31 December
2017 8,979,767 25,413,617 - (34,407,084) (13,700)
Comprehensive income
Loss for the period - - - (1,059,060) (1,059,060)
As at 31 December
2018 8,979,767 25,413,617 - (35,466,144) (1,072,760)
The Share Capital represents the nominal value of the equity
shares.
The Share Premium represents the amount subscribed for share
capital, in excess of the nominal amount, less costs directly
relating to the issue of shares.
The Retained Earnings reserve represents the cumulative net
gains and losses less distributions made. Retained Earnings also
includes the share based payment reserve which represents the
cumulative fair value of options and warrants granted,
The notes form an integral part of the financial statements.
STATEMENT OF FINANCIAL POSITION
As at As at
31 December 31 December
2018 2017
GBP GBP
Note
ASSETS
Non-current assets
Investments - available for 10 - -
sale
- -
Current assets
Trade and other receivables 11 2,220 8,978
Cash and cash equivalents 15 473 159,505
2,693 168,483
LIABILITIES
Current liabilities
Trade and other payables 12 (1,075,453) (182,183)
Net Current Liabilities (1,075,453) (13,700)
NET LIABILITIES (1,072,760) (13,700)
SHAREHOLDERS' EQUITY
Called up share capital 13 195,943 195,943
Deferred shares 13 8,783,824 8,783,824
Share premium account 25,413,617 25,413,617
Retained earnings (35,466,144) (34,407,084)
TOTAL EQUITY (1,072,760) (13,700)
The financial statements were approved by the board of directors
and authorised for issue on 27 June 2019 and signed on its behalf
by:
Christopher Theis
Chief Executive Officer
The notes form an integral part of the financial statements.
STATEMENT OF CASH FLOWS
Notes Year ended Year ended
31 December 31 December
2018 2017
GBP GBP
Cash flows from operating activities
Cash expended from operations 14 (158,580) (1,317,018)
Net cash outflow from operating
activities (158,580) (1,317,018)
Cash flows from investing activities
Interest received 81 56
Finance costs (533) -
Net cash generated from investing
activities (452) 56
Cash flows from financing activities
Net proceeds from the issue of
ordinary shares - 1,452,795
Net cash inflow from financing
activities - 1,452,795
Net increase/(decrease) in cash
and cash equivalents (159,032) 135,833
Cash and cash equivalents at beginning
of year 159,505 23,672
Cash and cash equivalents at end
of year 15 473 159,505
The notes form an integral part of the financial statements
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
1.1 Basis of preparation
Path Investments Plc is a public limited company incorporated in
the United Kingdom, registered under company number 04006413. The
address of the registered office is Aston House, Cornwall Avenue,
London, N3 1LF, England. The principal activity of the Company is
the investment in both mining and oil and gas development and
production companies.
The financial statements have been prepared and approved by the
Directors in accordance with International Financial Reporting
Standards as adopted by the European Union ('IFRS') and with those
parts of the Companies Act 2006 applicable to companies reporting
under IFRS.
The financial statements are presented in UK pounds Sterling
which is the Company's functional and presentational currency and
all values are rounded to the nearest pound except where indicated
otherwise.
The financial statements have been prepared under the historical
cost convention or fair value where appropriate. The significant
accounting policies adopted are described below.
The financial statements disclose information about the company
only and not its group on the basis that its subsidiaries are
dormant and have not traded (see note 20).
The preparation of the Financial statements in conformity with
IFRS requires the use of certain critical accounting estimates, It
also requires the board 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 1.9.
1.2 Property, plant and equipment
Property, plant and equipment are stated at cost on acquisition
less accumulated depreciation and accumulated impairment
losses.
Depreciation is provided on all property, plant and equipment
categories at rates calculated to write off the cost, less
estimated residual value on a straight line basis over their
expected useful economic life. The depreciation rates are as
follows:
Basis of depreciation
Office equipment 3 years straight line
1.3 Going concern
The Directors have prepared the financial statements on a going
concern basis. The Directors consider the use of the going concern
assumption to be appropriate. At the latest reported date of 31
December 2018, the Company had cash and cash equivalents totalling
GBP473. On 30 January 2019, the Company disposed of its 5% interest
in ARAR and Alpay Enerji AS for a consideration of GBP400,000
(together with the transfer by their major shareholder of 357,412
Ordinary Shares in the Company to be held in Treasury and 357,412
Deferred Shares for cancellation). Such funds received were used
towards the satisfaction of the Company's debt.As at 26 June 2019,
the Company had cash equivalents totalling GBP16,227 and had a net
current liabilities. The Company is therefore able to continue as a
going concern only as a result of the support of its creditors and
Directors.
The Company plans to to raise further funds by a placing of
ordinary shares at the time of its announcement of a binding
transaction by the Company. Should a placing not take place in a
timely manner, or should the Company's creditors demand payment,
the Directors will need to immediately raise additional funds in
order to be able to continue as a going concern. The ability of the
Company to raise additional funds is dependent upon investor
appetite and if necessary the Directors' ability to obtain
alternative sources of funding.
For the above detailed reasons, the Directors believe there is a
material uncertainty over the Company's status as a going concern.
However, the Directors have a reasonable expectation that the
Company will be able to raise sufficient funding to allow it to
cover its working capital for a period of twelve months from the
date of approval of the financial statements. It is for this reason
they continue to adopt the going concern basis of accounting in
preparing the financial statements.
1.4 Financial instruments
The Company has elected to apply the limited exemption in IFRS 9
relating to classification, meaurment and impairing requirements
for financial instruments, and accordingly comparative periods have
not been restated and remain in line with the previous standard IAS
39 "Financial Instruments: Recognisiton and Measurement";
Classification and measurement
The Company classifies its financial assets into the following
categories: those to be measured subsequently at fair value (either
through other comprehensive income (FVOCI) or through the income
statement (FVPL) and those to be held at amortised cost.
Classification depends on the business model for managing the
financial assets and the contractual terms of the cash flows.
Management determines the classification of financial assets at
initial recognition. The Company's policy with regard to financial
risk management is set out in note 16. Generally, the Company does
not acquire financial assets for the purpose of selling in the
short term.
The Company's business model is primarily that of "hold to
collect" (where assets are held in order to collect contractual
cash flows). When the Company enters into derivative contracts,
these transactions are designed to reduce exposures relating to
assets and liabilities, firm commitments or anticipated
transactions.
Financial Assets held at amortised cost
The classification applies to debt instruments which are held
under a hold to collect business model and which have cash flows
that meet the "solely payments of principal and interest" (SPPI)
criteria.
Other financial assets are initially recognised at fair value
plus related transaction costs, they are subsequently measured at
amortised costs using the effective interest method. Any gain or
loss on derecognition or modification of a financial asset held at
amortised cost is recognised in the income statement.
Financial Assets held at fair value through other comprehensive
income (FVOCI)
The classification applies to the following financial
assets:
- Equity investments where the Company has irrevocably elected
to present fair value gains and losses on revaluation of such
equity investments, including any foreign exchange component, are
recognised in other comprehensive income. When equity investment is
derecognised, there is no reclassification of fair value gains or
losses previously recognised in other comprehensive income to the
income statement. Dividends are recognised in the income statement
when the right to receive payment is established.
Financial Assets held at fair value through profit or loss
(FVPL)
The classification applies to the following financial assets. In
all cases, transaction costs are immediately expensed to the income
statement.
- Debt instruments that do not meet the criteria of amortised
costs or fair value through other comprehensive income.
The Company has a significant proportion of trade receivables
with embedded derivatives for professional pricing. These
receivables are generally held to collect but do not meet
the SPPI criteria and as a result must be held at FVPL.
Subsequent fair value gains or losses are taken to the
income statement.
- Equity investments which are held for trading or where
the FVOCI election has not been applied. All fair value
gains or losses and related dividend income are recognised
in the income statement.
- Derivatives which are not designated as a hedging instrument.
All subsequent fair value gains or losses are recognised
in the income statement.
Financial liabilities
Borrowings and other financial liabilities (including trade
payables but excluding derivative liabilities) are recognised
initially at fair value, net of transaction costs incurred, and are
subsequently measured at amortised costs.
Impairment of financial assets
A forward looking expected credit loss (ECL) review is required
for: debt instruments measured at amortised costs are held at fair
value through other comprehensive income: loan commitments and
financial guarantees not measured at fair value through profit or
loss; lease receivables and trade receivables that give rise to an
unconditional right to consideration.
As permitted by IFRS 9, the Company applies the "simplified
approach" to trade receivable balances and the "general approach"
to all other financial assets. The general approach incorporates a
review for any significant increase in counter party credit risk
since inception. The ECL reviews including assumptions about the
risk of default and expected loss rates. For trade receivables, the
assessment takes into account the use of credit enhancements, for
example, letters of credit. Impairments for undrawn loan
commitments are reflected as a provision.
1.5 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and at bank and
other short-term deposits. They are stated at carrying value which
is deemed to be fair value.
1.6 New Standards and Interpretations
The IASB and IFRIC have issued the following standards and
interpretations which are in issue but not in force at 31 December
2018:
Effective date
for accounting
period beginning
on or after
IFRS (Amendments) Business Combinations Not yet determined*
3
IFRS Leases - new standard 1 January 2019
16
Amendments resulting from Annual Improvements 1 January 2019
2015-2017 Cycle (income tax consequences
of dividends)
IAS 19 Amendments regarding plan amendments, 1 January 2019
curtailments or settlements
IAS 28 Long-term interests in associates 1 January 2019
and joint venture
IFRIC Uncertainty over Income tax treatments 1 January 2019
23
*Not yet endorsed in the EU
The Directors anticipate that the adoption of these Standards
and Interpretations in future periods will have no material impact
on the financial statements other than in terms of
presentation.
1.7 Share-based payments
The Company operates a number of equity-settled share-based
compensation plans, under which the entity receives services from
employees or suppliers as consideration for equity instruments
(options) of the Company. The fair value of the employee or
supplier services received in exchange for the grant of options is
recognised as an expense. The total amount to be expensed is
determined by reference to the fair value of the options
granted:
-- including any market performance conditions;
-- excluding the impact of any service and non-market performance
vesting conditions (for example, profitability, sales growth
targets and remaining an employee of the entity over a
specified time period); and
-- excluding the impact of any non-vesting conditions (for
example, the requirement of employees to save).
Non-market vesting conditions are included in assumptions about
the number of options that are expected to vest. 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 reporting period, the entity revises its
estimates of the number of options that are expected to vest based
on the non-marketing vesting conditions. It recognises the impact
of the revision to original estimates, if any, in the income
statement, with a corresponding adjustment to equity.
When the options are exercised, the Company issues new shares.
The proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share
premium when the options are exercised.
1.8 Taxation
Current tax, including UK corporation tax and foreign tax, is
provided at amounts expected to be paid (or recovered) using the
tax rates and laws that have been enacted or substantially enacted
by the balance sheet date.
Deferred tax is recognised, using the liability method, in
respect of temporary differences between the carrying amount of the
Company's assets and liabilities and their tax base.
Deferred tax liabilities are offset against deferred tax assets.
Any remaining deferred tax asset is recognised only when, on the
basis of all available evidence, it can be regarded as probable
that there will be suitable taxable profits, within the same
jurisdiction, in the foreseeable future against which the
deductible temporary difference can be utilised.
Deferred tax is determined using tax rates that are expected to
apply in the periods in which the asset is realised or liability
settled, based on tax rates and laws that have been enacted or
substantially enacted by the balance sheet date.
Current and deferred tax are recognised in the income statement,
except when the tax relates to items charged or credited directly
in equity, in which case the tax is also recognised in equity.
1.9 Sources of estimation uncertainty
The preparation of financial statements requires the use of
estimates and assumptions that affect the reported amount of assets
and liabilities at the date of the financial statements and the
reporting amount of income and expenses during the period. Although
these estimates are based on management's best knowledge of the
amount, event or actions, actual results ultimately may differ from
those estimates.
Share based payments
The share-based payment charge is calculated using the
Black-Scholes model which requires the estimation of share price
volatility, expected life and the bid price discount.
2. SEGMENTAL REPORTING
a. Primary segment - business
The Company has only one business segment, which is investing in
natural resources, primarily either by way of equity or convertible
loans.
b. Secondary segment - geographical
The Company's loss for the period was derived wholly from
activities undertaken in the United Kingdom.
The Company's net assets are located entirely in the United
Kingdom.
3. EXPENSES BY NATURE
2018 2017
GBP GBP
Staff costs 268,896 (620,838)
Share based payment - 400,346
Other expenses 696,712 806,025
965,608 585,533
4. OPERATING LOSS
The operating loss is stated after charging:
2018 2017
GBP GBP
Auditors remuneration - audit services 16,000 24,000
Non- Audit Services
Reporting accountants services in
respect of the
Company's Standard Listing - 38,845
Services in relation to the aborted
acquisition of a
participating interest in a German
licence and gas field
and admission to the Alternative
Investment Market - 47,700
Total non-audit fees - 86,545
5. EMPLOYEES
Number of employees
The average monthly number of employees (including Directors)
during the period was:
2018 2017
Number Number
Administration 4 4
2018 2017
GBP GBP
Employment costs
Wages and salaries (including benefits
in kind) 237,060 (520,091)
Social security costs 31,723 (56,008)
Pension costs 113 (44,739)
268,896 (620,838)
Included in employment costs above for 2017 is a waiver of
accrued remuneration of GBP940,905.
Included in employment costs above for 2018 are Directors'
accrued salaries, together with employer's national insurance
contributions, amounting to GBP239,798.
6. DIRECTORS' REMUNerATION
2018 2017
GBP GBP
Aggregate emoluments 237,060 (520,091)
Share based payment - 400,346
Pension costs 113 (44,739)
237,173 (164,484)
Remuneration for the highest paid director was GBP112,500 (2017:
GBP186,496 including a gross bonus of GBP94,621 paid to C Theis in
recognition of his efforts in assisting the company's listing on
the Standard Market and associated fundraising). However, included
in this amount at 31 December 2018 was remuneration accrued but not
paid of GBP210,719.
During the period, retirement benefits are accruing to two
Directors (2017: Nil).
7. FINANCE income and costs
2018 2017
GBP GBP
Finance Income
Bank interest 81 56
81 56
Finance costs
Bank charges (533) (1,000)
Convertible loan note interest (93,000) (37,500)
Net finance cost (93,452) (38,444)
8. TAXATION
No corporation tax charge arises in respect of the period due to
the trading losses incurred. The Company has surplus management
expenses available to carry forward and use against trading profits
arising in future periods of approximately GBP5,704,000 (2017:
GBP4,304,000). In addition, the Company has non-trading loan
relationship debits to carry forward to offset against future
non-trading loan relationship credits of approximately
GBP18,917,000 (2017: GBP18,880,000).
2018 2017
GBP GBP
Current tax charge - -
Loss on ordinary activities before
taxation (1,059,060) (623,977)
Loss on ordinary activities before
taxation multiplied by average effective
rate of corporation tax of 19% (2017:
19%) (201,221) (118,556)
Effects of:
Non-deductible expenses 27,869 131,856
Short term timing differences 63,232 (178,771)
Other adjustments - -
Tax losses upon which no deemed tax
asset is recognised 110,120 165,471
Current tax charge - -
A deferred tax asset of approximately GBP972,000 (2017:
GBP873,000) in respect of losses has not been recognised due to the
uncertainty regarding the availability of future profits against
which the losses of the Company could be offset.
9. LOSS PER SHARE
The calculation of the basic and diluted loss per share is based
on the loss on ordinary activities after taxation of GBP1,059,060
(2017: GBP623,977) and on the weighted average number of ordinary
shares of 195,943,802 (2017: 149,164,700) in issue. The basic and
diluted loss per share is 0.54p (2017: 0.42p). As the Company is
loss making, there was no dilutive effect from the share options or
warrants.
In order to calculate the diluted earnings per share, the
weighted average number of ordinary shares in issue is adjusted to
assume conversion of all dilutive potential ordinary shares
according to IAS33. Dilutive potential ordinary shares include
convertible loan notes and share options granted to Directors and
consultants where the exercise price (adjusted according to IAS 33)
is less than the average market price of the Company's ordinary
shares during the period.
10. INVESTMENTS - AVAILABLE FOR SALE
Unlisted investments are recorded at cost less impairment.
Unlisted investments are instruments that do not have a quoted
market price in an active market and their fair value cannot be
measured reliably. The range of reasonable fair value estimates is
significantly wide and the probabilities of the various estimates
cannot be reasonably assessed as they relate to the underlying gas
reserves in blocks which are currently being explored by a third
party company.
The unlisted investments as at 31 December 2018 comprised of a 5
per cent. interest each in ARAR and Alpay Enerji as at an aggregate
cost of GBP8 million. In 2016, Mr. S. Faith Alpay, the majority
owner of ARAR and Alpay Enerji AS, made an initial offer to the
Company of GBP1,050,000 for its 5% interest in both companies
payable in instalments. However, since the offer was received,
progress towards a legal sale and purchase agreement had not
occurred, and as the payment was by instalment over a period of
time, the directors considered the likelihood of finding an
alternative buyer to be low and accordingly impaired the asset to
GBPnil in the year ended 31 December 2016. On 30 January 2019, the
Company disposed of its 5% interest in ARAR and Alpay Enerji AS for
a consideration of GBP400,000 (together with the transfer by their
major shareholder of 357,412 Ordinary Shares in the Company to be
held in Treasury and 357,412 Deferred Shares for cancellation).
11. Trade and other receivables
2018 2017
GBP GBP
Prepayments 2,220 8,978
2,220 8,978
12. TRade and other payables
2018 2017
GBP GBP
Trade payables 369,939 38,711
Taxation and social
security - 8,542
Other payables (including convertible 193,956 -
loan notes)
Accruals and deferred
income 511,558 134,930
1,075,453 182,183
Convertible Unsecured Loan Stock
In October and December 2016, the Company raised GBP75,500 under
the Convertible Unsecured Loan Stock 2016 instrument issued on 26
October 2016. In January and February 2017, the Company raised a
furtherGBP37,500 under the instrument. From the total of
GBP113,000, the following amounts were raised from the
directors:
Director GBP
C Theis* 67,000
A Yeo 10,000
N Fitzpatrick*** 10,000
T Corrado 3,000
D Boylan (resigned 22.5.17) 20,000
R Patel** (resigned 22.5.17) 3,000
Total 113,000
--------
* GBP57,000 from Chris Theis's Pension fund and GBP10,000
from Networkguru Limited, a company owned and controlled
by Chris Theis' son.
** Including GBP1,500 from Adler Shine LLP, a firm in
which Rakesh Patel, a former director, has an interest.
*** From Ocean Park Developments Limited, a company controlled
by N Fitzpatrick.
At the option of the loan stockholder, on an Admission of the
Company to AIM or other recognised investment exchange, the loan
would either be convertible into shares at the price at which the
placing associated with the listing occurs or would be repayable
out of the placing proceeds together with 100% interest to
compensate for the risk associated with the loan.
On the Standard Listing of the Company in March 2017, the loans
were either repaid or converted into shares. Directors loans of
GBP198,000 (including related interest of GBP106,500) were
converted into shares. In total GBP203,000 was converted into
shares, and GBP23,000 was repaid of which GBP21,500 related to
loans from Directors.
On 3 April 2018 the Company constituted an instrument to issue
GBP150,000 nominal convertible unsecured loan stock 2018. On
admission of the Company to AIM or other recognised investment
exchange, the convertible loan notes are, at the option of the loan
note holder, either convertible into shares at the price at which
the placing associated with the listing occurs or will be repayable
out of the placing proceeds together with 100% interest to
compensate for the risk associated with the loan. If the listing
did not occur before 31 July 2018 the loan note holder may convert
the loan together with interest into fully paid Ordinary Shares in
the Company at the nominal value of an Ordinary Share.
Subsequently the Company raised GBP93,000 under this instrument
including the following amounts raised from the Directors:
Director Amount
GBP
C Theis(1) 50,000
A Yeo 25,000
Brent Fitzpatrick 8,000
Total 83,000
(1) The amount was provided by Networkguru Limited, a company
owned and controlled by Chris Theis' son.
At 31 December 2018, the convertible loans amounting to
GBP186,000 , including accrued interest of GBP93,000 remained
outstanding. On 11 March 2019, GBP10,000 was repaid to the holder
of a convertible loan note for GBP10,000 with interest thereon
remaining due. The remaining loan note holders, all of whom were
directors or their related parties, agreed to extend conversion or
repayment of the loans from 31 July 2018 until 30 September 2019.
or earlier if the company was admitted to the Standard List of the
London Stock Exchange or a material transaction is completed.
13. SHARE Capital
Allotted, called up and
fully paid
Ordinary Shares of Deferred shares
0.1p each of 39.9p each
no GBP no GBP
At 1 January 2017 22,014,596 22,014 22,014,596 8,783,824
On 30 March 2017 the company
issued 1,400,000 Ordinary
shares at par 140,000,000 140,000 - -
On 16 May 2017 the company
issued 20,300,000 Ordinary
shares at par on conversion
of loans 20,300,000 20,300 - -
On 16 May 2017 the company
issued 13,629,206 Ordinary
shares at par in satisfaction
of invoices 13,629,206 13,629 - -
At 31 December 2017 and
at 31 December 2018 195,943,802 195,943 22,014,596 8,783,824
The ordinary shares shall confer upon the holders the right to
receive dividends and other distributions and participate in the
income or profits of the company, provided that the Ordinary shares
shall not confer upon the holders the rights to receive dividends
paid, made or declared of the proceeds of the sale of assets held
by the Company at 10 October 2016 and included on the Company's
Balance Sheet as "Investments - Available for Sale" as at the date
of the General Meeting (the "Legacy Assets").
The deferred shares shall confer upon the holders the following
rights and shall be subject to the following restrictions,
notwithstanding any other provisions in these Articles:
Return of Capital
On return of assets on a winding up of the Company after the
holders of Ordinary shares have received the aggregate amount paid
up thereon plus GBP10,000,000 for each such share held by them,
there shall be a distribution to the holders of deferred shares an
amount equal to the nominal value of shares held and thereafter any
surplus held will be distributed to holders of ordinary shares.
Dividends
Holders of deferred shares have no rights to dividends or other
distributions or to participate in the income and profits of the
company, except that deferred shareholders have a right to receive
any dividends declared, made or paid out of the proceeds of the
sale of Legacy Assets.
Transfers
The company may acquire all or any of the deferred shares in
issue at any time for no consideration.
14. Reconciliation of operating loss to net cash outflow from Operating activities
2018 2017
GBP GBP
Operating loss (965,608) (585,533)
Decrease in debtors 6,758 81,722
Decrease in creditors within one year 893,270 (1,178,462)
Share based payment - 403,755
Convertible loan note interest (93,000) (38,500)
Net cash outflow from operating activities (158,580) (1,317,018)
15. CASH & CASH EQUIVALENTS
2018 2017
GBP GBP
Cash at bank and in hand 473 159,505
16. financial instruments
The Company's financial instruments comprise cash and cash
equivalents and various other items, such as available for sale
investments and trade receivables and payables, which arise
directly from its operations. It is, and has been throughout the
period under review, the Company's policy to ensure that there is
no trading in financial instruments. The main purpose of these
financial instruments is to finance the Company's operations.
Categories of Financial Instruments
2018 2017
GBP GBP
Financial Assets at amortised cost
Cash and cash equivalents 473 159,505
Trade and other receivables 2,220 8,978
2,693 168,483
Financial Liabilities at amortised
cost
Trade and other payables 889,451 182,183
Convertible loan notes 186,000 -
1,075,451 182,183
Net Financial Liabilities (1,072,758) (13,700)
Financial Assets and Liabilities
Financial assets and financial liabilities are recognised on the
Company's balance sheet when the Company becomes party to the
contractual provisions of the instrument.
Financial Risk Factors
The Company's activities expose it to liquidity risk. The
Company's overall risk management programme focuses on the
unpredictability of financial markets and seeks to minimise
potential adverse effects on the Company's financial
performance.
Liquidity Risk
The Company has to date financed its operations from cash
reserves funded from share issues. Management's objectives are now
to manage liquid assets in the short term through closely
monitoring costs.
The Company has no borrowing facilities that require repayment
and therefore has no interest rate risk exposure.
Fair Values of Financial Assets and Liabilities
The Directors consider that the fair value of the Company's
financial assets and liabilities are not considered to be
materially different from their book values.
17. Share options AND WARRANTS
The following share options have been granted by the Company and
are outstanding:
Date Number Granted Exercised Lapsed/ Number Weighted Expiry
of grant of ordinary during during waived of ordinary average date
shares year year during shares exercise
under option year under option price
at 1 January at 31 December
2017 2017
03/05/2011 750,000 - - (150,000) 600,000 GBP2.80 02/05/2021
03/05/2011 150,000 - - (150,000) - GBP2.80 02/05/2021
23/05/2013 1,375,000 - - (1,375,000) - 40p 23/05/2020
30/03/2017 - 32,500,000 - - 32,500,000 0.1p 29/03/2027
30/03/2017 - 28,375,000 - - 28,375,000 1p 29/03/2027
30/03/2017 - 12,312,500 - - 12,312,500 2p 29/03/2027
Total 2,275,000 73,187,500 - (1,675,000) 73,787,500 3p
------------ -------------- ----------- ---------- ------------ ---------------- ---------- -----------
Date Number Granted Exercised Lapsed/ Number Weighted Expiry
of grant of ordinary during during waived of ordinary average date
shares year year during shares exercise
under option year under option price
at 1 January at 31 December
2018 2018
03/05/2011 600,000 - - - 600,000 GBP2.80 02/05/2021
03/05/2011 - - - - - GBP2.80 02/05/2021
23/05/2013 - - - - - 40p 23/05/2020
30/03/2017 32,500,000 - - - 32,500,000 0.1p 29/03/2027
30/03/2017 28,375,000 - - - 28,375,000 1p 29/03/2027
30/03/2017 12,312,500 - - - 12,312,500 2p 29/03/2027
Total 73,787,500 - - - 73,787,500 3p
------------ -------------- -------- ---------- -------- ---------------- ---------- -----------
All options outstanding at the year-end are exercisable at that
date.
The following warrants have been granted by the Company:
Date Number Granted Exercised Lapsed Number Weighted Exercise
of grant of warrants during during during of warrants average date
at year year year at 31 December exercise
1 January 2017 price
2017
30/03/2017 - 1,400,000 - - 1,400,000 1p 29/03/2019
Total - 1,400,000 - - 1,400,000 1p
------------ -------------- ---------- ---------- -------- ---------------- ---------- -----------
Date Number Granted Exercised Lapsed Number Weighted Exercise
of grant of warrants during during during of warrants average date
at year year year at 31 December exercise
1 January 2018 price
2018
30/03/2017 1,400,000 - - - 1,400,000 1p 29/03/2019
Total 1.400,000 - - - 1,400,000 1p
------------ ------------- -------- ---------- -------- ---------------- ---------- -----------
The warrants have subsequently lapsed not having been exercised
by the exercise date.
The fair value of equity settled share options and warrants
granted is estimated at the date of grant using a Black-Scholes
option pricing model, taking into account the terms and conditions
upon which the options were granted. The following table lists the
inputs to the model:
Options Options Warrants
--------------------- --- --------------------- ------------------ ---------
Date of grant 03 May 2011 30 Mar 2017 30 Mar
2017
Expected volatility 54% 33.9% 33.9%
Expected life 3.5 years 3 years 3 years
Risk-free interest 1.72% 0.18% 0.18%
rate
Expected dividend - - -
yield
Possibility of - - -
ceasing employment
before vesting
Fair value per - - -
option/warrant
0.014p 0.9p/0.243p/0.1p 0.243p
--------------------- --- --------------------- ------------------ ---------
The expense recognised by the Company for share based payments
during the year ended 31 December 2018 was GBPNil (2017:
GBP403,755).
The average volatility is used in determining the share based
payment expense to be recognised in the period. This was calculated
by reference to the standard deviation of the share price over the
preceding 12-month period.
Movement in the number of options and warrants outstanding and
their related weighted average exercise price are as follows:
At 31 December 2018 At 31 December 2017
Number of Weighted average Number of Weighted average
Options & exercise price per Options & exercise price per
Warrants share Warrants share
At 1 January 75,187,500 3p 2,275,000 135p
Granted - - 73,187,500 1p
Exercised - - - -
Expired or waived - - (1,675,000) 83p
------------------- ------------------------- ------------------------ ---------------- ------------------------
At 31 December 75,187,500 3p 75,187,500 3p
------------------- ------------------------- ------------------------ ---------------- ------------------------
The weighted average remaining contractual life of options as at
31 December 2018 was 8.2 years (2017: 9.2 years).
The warrants have subsequently lapsed not having been exercised
by the exercise date.
18. RELATED PARTY TRANSACTIONS
The following share options were held by the directors during
the year:
Director Date of Held at Lapsed Granted Held at Exercise
grant 1 January during during 31 December price
2018 the year the Year 2018
---------- ------------ ----------- ---------- ---------- ------------- ---------
C Theis 30/03/2017 20,000,000 - - 20,000,000 GBP0.001
C Theis 30/03/2017 16,000,000 - - 16,000,000 GBP0.01
C Theis 30/03/2017 6,500,000 - - 6,500,000 GBP0.02
A Yeo 30/03/2017 8,500,000 - - 8,500,000 GBP0.001
A Yeo 30/03/2017 6,500,000 - - 6,500,000 GBP0.01
A Yeo 30/03/2017 2,875,000 - - 2,875,000 GBP0.02
----------- ---------- ---------- -------------
60,375,000 - - 60,375,000
----------- ---------- ---------- -------------
As at 31 December 2018, included in other payables were the
following convertible loan notes issued to the Directors together
with accrued interest thereon.
Outstanding Convertible Interest Converted Repaid Outstanding
at 31 December loan notes accrued during during at 31 December
2017 issued during the year the 2018
during the year year
year
Director GBP GBP GBP GBP GBP GBP
C Theis* - 50,000 50,000 - - 100,000
A Yeo - 25,000 25,000 - - 50,000
N Fitzpatrick - 8,000 8,000 - - 16,000
T Corrado - - - - - -
----------------- ------------ ---------- ---------- -------- ----------------
Total - 83,000 83,000 - - 166,000
----------------- ------------ ---------- ---------- -------- ----------------
* these loan notes were issued to Networkguru Limited, a company
owned by Chris's Theis' son, who subscribed under the convertible
loan note instrument.
Included in other payables are loans of GBP2,067 made by each of
the Directors Andrew Yeo, Nigel Fitzpatrick and Chris Theis.
19. ultimate controlling party
The Company considers that there is no ultimate controlling
party.
20. INVESTMENT IN SUBSIDIARIES
As at 31 December 2018, the company held more that 20% of the
share capital in the following companies:
Subsidiary Undertaking Country of Class Shares Principal
Incorporation held Activity
Path (Germany) UK Ordinary 100% Dormant
Limited
This company was dissolved on 21 May 2019 having never traded.
21. SUBSEQUENT EVENTS
On 30 January 2019, the Company disposed of its 5% interest in
ARAR and Alpay Enerji AS for a consideration of GBP400,000
(together with the transfer by their major shareholder of 357,412
Ordinary Shares in the Company to be held in Treasury and 357,412
Deferred Shares for cancellation).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR EASKXALLNEFF
(END) Dow Jones Newswires
June 28, 2019 02:00 ET (06:00 GMT)
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