TIDMINSP
RNS Number : 8756X
Inspirit Energy Holdings PLC
23 December 2019
23 December 2019
Inspirit Energy Holdings Plc
("Inspirit" or "the Company")
ANNUAL REPORT AND ACCOUNTS FOR THE YEARED 30 JUNE 2019
NOTICE OF ANNNUAL GENERAL MEETING
Inspirit Energy Holdings Plc today announces its audited results
for the year ended 30 June 2019 (the "Accounts").
Copies of the Company's Annual Report and Accounts will be sent
to shareholders along with a Notice of AGM and will be available on
the Company's website www.inspirit-energy.com today.
The AGM will be held at 2(nd) Floor, 2 London Wall Buildings,
London EC2M 5PP at 11 am on 30 January 2020.
Further copies may be obtained directly from the Company's
Registered Office at Inspirit Energy Holdings plc, 2(nd) Floor, 2
London Wall Buildings, London EC2M 5PP. Extracts of the Accounts
are set out below.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
More information on Inspirit Energy can be seen at:
www.inspirit-energy.com
Inspirit Energy Holdings plc
John Gunn, Chairman and CEO +44 (0) 207 048 9400
Beaumont Cornish Limited
www.beaumontcornish.com
(Nominated Advisor)
Roland Cornish / James Biddle +44 (0) 207 628 3396
Global Investment Strategy UK
Ltd
(Broker)
Samantha Esqulant +44 (0) 207 048 9045
About Inspirit Energy Holdings Plc
Inspirit Energy Holdings plc, is developing and commercialising
a highly efficient micro combined heat and power (mCHP) boiler for
commercial applications. The boiler is specifically designed to
meet the challenge of a reduced carbon energy supply and is capable
of running on natural gas, LPG and Bio Fuels. The appliance
produces hot water (for tap water or central heating) and
electrical output simultaneously. The installation can be of single
or multiple configuration and its high operating efficiency
together with the off-set of electricity costs provides a very
attractive investment payback proposition.
Inspirit intends to explore opportunities to license out the
underlying technology and the Directors believe that, in some
instances, the patents owned by Inspirit may be also used in the
development of products other than a mCHP appliance. A prototype of
the appliance has been independently tested and shown to be capable
of simultaneous generation of up to 15kW thermal and up to 3kW
electrical output. Once development of the appliance has been
completed and commercialised, the Directors expect that the
appliance will initially be marketed in the UK and Europe and
eventually worldwide. Additional revenue streams may be possible
through product licensing, sales of warranties and further
development of the product.
Extracts of the Accounts
CHAIRMAN'S STATEMENT
FOR THE YEARED 30 June 2019
INTRODUCTION
This financial year, Inspirit Energy Holdings plc has maintained
its focus on the commercialisation of the Group's micro combined
heat and power ("mCHP") boilers and Sterling Engine applications in
other sectors.
COMMERCIALISATION AND PROGRESS
During the period, the Group continued to advance its microCHP
boiler (the "Charger") closer towards the goal of
commercialisation. To this end, improvements to the design of the
Group's Stirling engine technology, including simplification as
part of the process and meeting the challenges in new technology
development, sourcing cheaper materials and efficiency re-redesign,
resulted in further delays to the certification process. However,
the delays have brought about vast improvements and efficiencies
that has led the Charger to obtain peak electrical output in excess
of 6.4kW of electricity during a running cycle of 2,000 hours
against the unit's previous output of 3.0kW, whist maintaining 15kW
thermal output and a 20% reduction in the size of the appliance to
below 800mm.
As mentioned previously, the applicable market for our
technology is global, either as a boiler replacement product or as
an add-on to an existing commercial plant room. In the UK there are
in excess of 20 million gas boilers installed and more than 1.6
million new and replacement domestic gas boilers are installed each
year. This is in addition to almost 300,000 commercial boiler
installations each year. Europe as a whole has approximately 70
million boilers installed. These are the first markets to which our
technology is applicable.
The Group is also embarked upon multiple applications for the
Stirling technology and developed schematics for several sterling
engine applications including: Inspirit Marine, Inspirit Solar,
Inspirit Cooler and Inspirit Motor/ Generator. The Group are
looking at licensing the Stirling technology for these various
applications.
The drawdown facility that the company had with YA Global Master
SPV Limited lapsed during the year and the company has had an offer
of extending the facility. The director's will consider this next
year after successful outcome on their trial unit.
OUTLOOK
The operating board and I believe that the progress over the
last year has been very positive. Whilst we remain well positioned
in the microCHP boiler technology market, ongoing funding for the
development and commercialisation of our product remains a
challenge. Accordingly, we continue to manage our resources whilst
pushing forward with the product and expect this to continue in
2020.
With the continued growth demand for electric cars, the board
are currently setting up an automotive division to utilise the
sterling engine to provide a source of power to charge electric
motor cars. The Group will also focus on Marine and other
application of the sterling technology.
Inspirit Energy is at a pivotal point in its direction as an
R&D company and has identified different applications however,
at the same time, the Board continues to consider its options for
the future strategy and funding of its operating subsidiary and
will provide investors with an update when this review is
complete.
J Gunn
Chairman and Chief Executive Officer
23 December 2019
STRATEGIC REPORT
FOR THE YEARED 30 June 2019
The Directors present their Strategic Report on Inspirit Energy
Holdings plc (the "Company") and its subsidiary undertakings
(together the "Group") for the year ended 30 June 2019.
REVIEW OF THE BUSINESS
Inspirit Energy Limited (IEL) is currently pursuing the
development and commercialisation of a world-leading micro Combined
Heat and Power ("mCHP") boiler for use in commercial and
residential markets. The mCHP boiler is powered by natural gas and
designed to produce hot water (for domestic hot water or central
heating) and a simultaneous electrical output that can be used
locally or fed back into the National Grid.
Inspirit Energy's new "British Engineered" mCHP boiler is one of
the industry's most powerful and energy efficient mCHP appliances
for its size with simultaneous generation of up to 15 kilowatts of
thermal output and up to 6.4 kilowatts of electrical output. The
mCHP boiler has been designed to be low maintenance and can be
installed by a certified gas-safe tradesman. The appliance's
patented engine takes the waste heat from the boiler and converts
it efficiently into electricity, first supplying the property where
it is installed and then feeding surplus electricity into the
National Grid.
In addition to the above strategy, the Company has also been
working on the application of the Stirling engine technology in
difference sectors and these sectors including solar, renewable and
refrigeration and licensing this technology accordingly.
DEVELOPMENTS DURING THE YEAR
The Company embarked on multiple applications for the Stirling
technology and have developed schematics for the following
projects
-- Inspirit Marine - currently in discussion with a large
car/marine engine manufacturer to develop a unit for the shipping
industry with current output of 11.68kw.
-- Inspirit Solar - In-house design, incorporating the new development of our Stirling engine
-- Inspirit Cooler - Refrigeration system
-- Inspirit Motor/ Generator - designed in line with the
Inspirit Charger to start the unit and convert electrical output to
the grid.
BOARD CHANGES
None.
RESULTS AND DIVIDS
The Group made a loss after taxation of GBP239,000 (2018: loss
of GBP953,000) and Net assets were GBP1,459,000 (2018:
GBP1,698,000).
The Directors do not propose a dividend for the year to 30 June
2019 (2018: GBPnil).
KEY PERFORMANCE INDICATORS
The key performance indicators used by the Board to monitor the
performance of the Group, are set out below:
PLC S 30 June 30 June
2019 2018
------------------------------------ ------------ ------------
Net asset value GBP1,459,000 GBP1,698,000
Net asset value - fully diluted per
share 0.10p 0.15p
Closing share price 0.0275p 0.05p
Market capitalisation GBP390,722 GBP710,403
------------------------------------ ------------ ------------
KEY RISKS AND UNCERTAINTIES
Early stage product development carries a high level of risk and
uncertainty, although the rewards can be outstanding. At this
stage, there is a common risk associated with all pioneering
technologically advanced companies in their requirement to
continually invest in research and development. The Group has
already made significant investments in addressing opportunities in
the renewable energy sector.
Other risks and uncertainties within the Group are detailed in
principle 4 of the Corporate Governance Report.
GOING CONCERN RISK
The Group requires financing to fund its operations through to
revenue generation. There is the risk that the Group will not have
access to sufficient funds to achieve this. The Group seek to
mitigate through forecast preparation and monitoring.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The principal financial risk faced by the Group is liquidity
risk. The Group's financial instruments included borrowings and
cash which it used to finance its operations. At the year end,
borrowings did not include any borrowings supplied from the Group's
principal bank, Barclays Bank Plc. More information is given in
Note 3 to the Financial Statements. The Group has no significant
concentrations of credit risk.
CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are to safeguard
the Group's and Company's ability to continue its activities and
bring its products to market. Capital is defined based on the total
equity of the Company. The Company monitors its level of cash
resources available against future planned activities and may issue
new shares in order to raise further funds from time to time.
MANAGEMENT AND KEY PERSONNEL
The risk of high turnover of staff and other specialist staff
recruitment issues and this would have an impact on operation and
reputation. The Board provides recognition and support for well
performing existing employees and has Implemented and monitors
robust health and safety measures at the workplace.
TECHNOLOGY RISK
The Group's success is dependant on its technology and
management's ability to market it successfully. There is the risk
that the technology could become obsolete or a rival could develop
an improved alternative. Management seek to mitigate this by
constantly seeking to improve the product, closing watching its
competitors and employing skilled personnel.
ASSESSMENT OF BUSINESS RISK
The Board regularly reviews operating and strategic risks. The
Group's operating procedures include a system for reporting
financial and non-financial information to the Board including:
-- reports from management with a review of the business at each
Board meeting, focusing on any new decisions/risks arising;
-- reports on the performance of investments;
-- reports on selection criteria of new investments;
-- discussion with senior personnel; and
-- consideration of reports prepared by third parties.
Details of other financial risks and their management are given
in Note 3 to the financial statements.
ON BEHALF OF THE BOARD
N Jagatia
Director
23 December 2019
REPORT OF THE DIRECTORS
FOR THE YEARED 30 June 2019
The Directors present their annual report on the affairs of the
Group and Company, together with the audited financial statements
for the year ended 30 June 2019.
PRINCIPAL ACTIVITIES
The principal activity of the Group and Company is that of
development and commercialisation of the mCHP boiler and
application of the sterling technology in other sectors.
Details of the Group's principal activity can be found in the
Strategic Report.
DIRECTORS
The Directors who held office in the period up to the date of
approval of the Financial Statements and their beneficial interests
in the Company's issued share capital at the beginning and end of
the accounting year were:
Number of
Number of share options and
ordinary shares warrants
----------- ------------------------ --------------------
30 June 30 June 30 June 30 June
2019 2018 2019 2018
----------- ----------- ----------- --------- ---------
J Gunn 439,696,246 439,696,246 - -
N Jagatia 2,000,000 2,000,000 - -
A Samaha - - - -
INDEMNITY OF OFFICERS
The Company maintains appropriate insurance cover against legal
action brought against its Directors and officers.
RESEARCH AND DVELOPMENT
For details of the development activities undertaken in the
year, please refer to principle 1 of the Corporate Governance
Report.
BOARD OF DIRECTORS
The Board is responsible for strategy and performance, approval
of major capital projects and the framework of internal controls.
To enable the Board to discharge its duties, all Directors receive
appropriate and timely information. All Directors have access to
the advice and services of the Company Secretary, who is
responsible for ensuring the Board procedures are followed and that
applicable rules and regulations are complied with.
COMMUNICATIONS WITH SHAREHOLDERS
Communications with shareholders are given a high priority. In
addition to the publication of an annual report and an interim
report, there is regular dialogue with shareholders and analysts.
The Annual General Meeting is viewed as a forum for communicating
with shareholders, particularly private investors. Shareholders may
question the Executive Chairman and other members of the Board at
the Annual General Meeting.
INTERNAL CONTROL
The Directors acknowledge they are responsible for the Group's
system of internal control and for reviewing the effectiveness of
these systems. The risk management process and systems of internal
control are designed to manage rather than eliminate the risk of
the Group failing to achieve its strategic objectives. It should be
recognised that such systems can only provide reasonable and not
absolute assurance against material misstatement or loss. The Group
has well established procedures which are considered adequate given
the size of the business.
MATTERS COVERED IN THE STRATEGIC REPORT
The business review, results, review of KPI's and future
developments are included in the Strategic Report and Chairman's
Statement.
GOING CONCERN
As at 30 June 2019 the Group had a cash balance of GBP40,000
(2018: GBP45,000), net current liabilities of GBP304,000 (2018: net
current liabilities of GBP97,000) and net assets of GBP1,459,00,000
(2018: GBP1,698,000). The Group raises money for development,
capital projects and working capital purposes as and when required
and has raised GBP300,000 pre expenses post year end. The Group has
also successfully reduced its core spend during the year whilst
still managing to move its projects forward and is in negotiations
to renew its expired drawdown facility. There can be no assurance
that the Group's projects will become fully developed and reach
commercialisation nor that there will be sufficient cash resources
available to the Group to do so. Notwithstanding the loss and cash
outflows incurred in the year and the requirement for further funds
to become available, the Directors have a reasonable expectation
that the Group will be able to manage its funds to continue in
operational existence whilst moving its project towards
commercialisation. The Group therefore continues to adopt the going
concern basis in preparing the Annual Report and Financial
Statements. Further details on the Directors assumption and their
conclusion thereon are included in Note 2 to the financial
statements.
EVENTS AFTER THE REPORTING DATE
On 18 November 2019, the Company announced that it had raised
GBP300,000 through the placing of 249,999,998 ordinary shares of
0.001 pence each in the share capital of the Company at 0.12 pence
per Ordinary Share.
On 25 November 2019, the Company announced that it had received
conversion notices from the Convertible Loan Notes (CLN's) issued
on 4 May 2018. The Company issued 1,148,571,422 Ordinary Shares at
a price of 0.07p per Ordinary Share with an admission date of 29
November 2019. GBP41,000 CLN's remained outstanding at this
date.
On 5 December 2019, the Company announced that it had received
conversion notices from the Convertible Loan Notes (CLN's) issued
on 4 May 2018. The Company issued 54,000,002 Ordinary Shares at a
price of 0.07p per Ordinary Share with an admission date of 10
December 2019. GBP3,200 CLN's remained outstanding at this
date.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the directors
have prepared the group and parent company financial statements in
accordance with International Financial Reporting Standards
("IFRS") as adopted by the European Union ("EU"). Under company law
the directors must not approve the financial statements unless they
are satisfied that they give a true and fair view of the state of
affairs of the group and the parent company and of the profit or
loss of the group and the parent company for that period. In
preparing these financial statements, the directors are required
to:
-- select suitable accounting policies and then apply them consistently;
-- make judgments and accounting estimates that are reasonable and prudent;
-- state whether applicable IFRSs as adopted by the European
Union have been followed, subject to any material departures
disclosed and explained in the financial statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the group and the parent
company will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the group's and
company's transactions and disclose with reasonable accuracy at any
time the financial position of the group and the parent company and
enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the
assets of the group and the parent company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions. The Company is compliant
with AIM Rule 26 regarding the Company's website. See
www.inspirit-energy.com.
DISCLOSURE OF INFORMATION TO AUDITOR
In the case of each person who was a Director at the time this
report was approved:
-- so far as that director is aware there is no relevant audit
information of which the Company's auditor is unaware: and
-- that director has taken all steps that the director ought to
have taken as a director to make himself aware of any relevant
audit information and to establish that the Company's auditor is
aware of that information.
INDEPENT AUDITOR
A resolution that PKF Littlejohn LLP be re-appointed will be
proposed at the annual general meeting. PKF Littlejohn LLP have
indicated their willingness to continue in office.
ON BEHALF OF THE BOARD
N Jagatia
Director
23 December 2019
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 30 June 2019
2019 2018
Note GBP'000 GBP'000
---------------------------------- ----- ---------- --------
CONTINUING OPERATIONS:
Revenue - -
Administrative expenses (264) (545)
Impairment of development
asset 10 - (424)
OPERATING LOSS (264) (969)
Finance costs - (4)
LOSS BEFORE INCOME TAX (264) (973)
Income tax credit 8 25 20
---------------------------------- ----- ---------- --------
NET LOSS AND TOTAL COMPREHENSIVE
LOSS FOR THE YEAR ATTRIBUTABLE
TO THE OWNERS OF THE PARENT (239) (953)
---------------------------------- ----- ---------- --------
EARNINGS PER SHARE
- Basic and diluted earnings
per share 9 (0.017p) (0.07p)
----- ---------- --------
(attributable to owners
of the parent)
---------------------------------- ----- ---------- --------
STATEMENT OF FINANCIAL POSITION
FOR THE YEARED 30 June 2019
Company Number: 05075088 GROUP COMPANY
------------------ ----------------------
2019 2018 2019 2018
Note GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ----- -------- -------- --------- ---------
NON-CURRENT ASSETS
Intangible assets 10 2,570 2,401 - -
Property, plant and
equipment 11 38 45 - -
Investment in subsidiaries 12 - - 2,440 2,440
2,608 2,446 2,440 2,440
------------------------------ ----- -------- -------- --------- ---------
CURRENT ASSETS
Trade and other receivables 13 63 415 9 346
Cash and cash equivalents 14 40 45 38 41
------------------------------ ----- -------- -------- --------- ---------
103 460 47 387
------------------------------ ----- -------- -------- --------- ---------
TOTAL ASSETS 2,711 2,906 2,487 2,827
------------------------------ ----- -------- -------- --------- ---------
EQUITY ATTRIBUTABLE
TO OWNERS OF THE PARENT
Share capital 15 1,818 1,818 1,818 1,818
Share premium 15 8,185 8,185 8,185 8,185
Merger reserve 3,150 3,150 3,150 3,150
Share option reserve 16 3 3 3 3
Reverse acquisition
reserve (7,361) (7,361) - -
Retained losses (4,336) (4,097) (11,852) (11,428)
------------------------------ ----- -------- -------- --------- ---------
TOTAL EQUITY 1,459 1,698 1,304 1,728
------------------------------ ----- -------- -------- --------- ---------
NON-CURRENT LIABILITIES
Borrowings 18 845 845 845 845
------------------------------ ----- -------- -------- --------- ---------
845 845 845 845
------------------------------ ----- -------- -------- --------- ---------
CURRENT LIABILITIES
Trade and other payables 17 307 263 238 154
Borrowings 18 100 100 100 100
------------------------------ ----- -------- -------- --------- ---------
407 363 338 254
TOTAL LIABILITIES 1,252 1,208 1,183 1,099
------------------------------ ----- -------- -------- --------- ---------
TOTAL EQUITY AND LIABILITIES 2,711 2,906 2,487 2,827
------------------------------ ----- -------- -------- --------- ---------
The Company has elected to take the exemption under section 408
of the Companies Act 2006 not to present the Parent Company
Statement of Comprehensive Income.
The loss for the Parent Company for the year was GBP424,000
(2018: loss of GBP723,000).
These Financial Statements were approved by the Board of
Directors on 23 December 2019 and were signed on its behalf by
N Jagatia
Director
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 June 2019
Attributable to the owners of the parent
--------------------------------------------------------------------------------------
Share Share Share Merger Reverse Retained Total
capital premium option reserve acquisition losses Equity
reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------- --------- --------- --------- ------------- --------- --------------
BALANCE AT 30
June 2017 1,568 8,144 206 3,150 (7,361) (3,347) 2,360
------------------------- --------- --------- --------- --------- ------------- --------- --------------
Loss for the
year - - - - - (953) (953)
--------------
TOTAL COMPREHENSIVE
INCOME FOR THE
YEAR - - - - - (953) (953)
------------------------- --------- --------- --------- --------- ------------- --------- --------------
Share issues 250 41 - - - - 291
Share options
lapsed - - (203) - - 203 -
------------------------- --------- --------- --------- --------- ------------- --------- --------------
TRANSACTIONS
WITH OWNERS RECOGNISED
DIRECTLY IN EQUITY 250 41 (203) - - 203 291
------------------------- --------- --------- --------- --------- ------------- --------- --------------
BALANCE AT 30
June 2018 1,818 8,185 3 3,150 (7,361) (4,097) 1,698
------------------------- --------- --------- --------- --------- ------------- --------- --------------
Loss for the
year - - - - - (239) (239)
--------------
TOTAL COMPREHENSIVE
INCOME FOR THE
YEAR - - - - - (239) (239)
------------------------- --------- --------- --------- --------- ------------- --------- --------------
TRANSACTIONS - - - - - - -
WITH OWNERS RECOGNISED
DIRECTLY IN EQUITY
------------------------- --------- --------- --------- --------- ------------- --------- --------------
BALANCE AT 30
June 2019 1,818 8,185 3 3,150 (7,361) (4,336) 1,459
------------------------- --------- --------- --------- --------- ------------- --------- --------------
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 June 2019
Attributable to equity shareholders
---------------------------------------------------------------
Share Share Merger Share Retained Total
capital premium Reserve option losses Equity
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- --------- --------- --------- --------- --------- --------
BALANCE AT
30 June 2017 1,568 8,144 3,150 206 (10,908) 2,160
--------------------- --------- --------- --------- --------- --------- --------
Loss for the
year - - - - (723) (723)
---------
TOTAL COMPREHENSIVE
INCOME FOR
THE YEAR - - - - (723) (723)
--------------------- --------- --------- --------- --------- --------- --------
Share issues 250 50 - - - 300
Share issue
costs - (9) - - - (9)
Share options
lapsed in
the year - - - (203) 203 -
---------
TRANSACTIONS
WITH OWNERS
RECOGNISED
DIRECTLY IN
EQUITY 250 41 - (203) 203 291
--------------------- --------- --------- --------- --------- --------- --------
BALANCE AT
30 June 2018 1,818 8,185 3,150 3 (11,428) 1,728
--------------------- --------- --------- --------- --------- --------- --------
Loss for the
year - - - - (424) (424)
---------
TOTAL COMPREHENSIVE
INCOME FOR
THE YEAR - - - - (424) (424)
--------------------- --------- --------- --------- --------- --------- --------
TRANSACTIONS - - - - - -
WITH OWNERS
RECOGNISED
DIRECTLY IN
EQUITY
--------------------- --------- --------- --------- --------- --------- --------
BALANCE AT
30 June 2019 1,818 8,185 3,150 3 (11,852) 1,304
--------------------- --------- --------- --------- --------- --------- --------
STATEMENT OF CASH FLOWS
FOR THE YEARED 30 June 2019
GROUP COMPANY
------------------ ------ --------------------
2019 2018 2019 2018
Note GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ----- -------- -------- ------------ --------
CASH FLOWS FROM
OPERATING ACTIVITIES
Loss before tax (264) (973) (424) (723)
Depreciation 7 9 - -
Finance expense 4 - 4
Impairment of development 424 - -
costs
Interco loan provision - - 207 318
Tax credit 25 - - -
Decrease/(increase)
in trade and other
receivables 352 (241) 273 (224)
Increase/(decrease)
in trade and other
payables 44 (183) 85 (178)
NET CASH GENERATED
FROM / (USED IN)
OPERATING ACTIVITIES 164 (960) 141 (803)
CASH FLOWS FROM
INVESTING ACTIVITIES
Development costs (169) (157) - -
Increase in loan
to subsidiary - - (143) (318)
NET CASH (USED IN)/GENERATED
FROM INVESTING ACTIVITIES (169) (157) (143) (318)
------------------------------ ----- -------- -------- ------------ --------
CASH FLOWS FROM
FINANCING ACTIVITIES
Gross proceeds from
issue of shares - 300 - 300
Share issue costs - (9) - (9)
Gross proceeds from
new debt - 845 - 845
Finance costs paid - (4) - (4)
------------------------------ ----- -------- -------- ------------ --------
NET CASH GENERATED
FROM FINANCING ACTIVITIES - 1,132 - 1,132
------------------------------ ----- -------- -------- ------------ --------
NET (DECREASE)/INCREASE
IN CASH AND CASH
EQUIVALENTS (5) 15 (2) 11
Cash and cash equivalents
at the beginning
of the year 45 30 40 30
CASH AND CASH EQUIVALENTS
AT THE OF THE
YEAR 15 40 45 38 40
------------------------------ ----- -------- -------- ------------ --------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 June 2019
1 GENERAL INFORMATION
The principal activity of Inspirit Energy Holdings plc during
the period was that of developing and commercialising the
mCHP boiler and other applications of the sterling technology.
These financial statements show the consolidated results
of the Group for the year ended 30 June 2019 together with
the comparative results for the year ended 30 June 2018.
Inspirit Energy Holdings plc is a company incorporated and
domiciled in England and Wales and quoted on the Alternative
Investment Market of the London Stock Exchange. The address
of its registered office is 2(nd) Floor, 2 London Wall Buildings,
London, EC2M 5PP, United Kingdom.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation
of these financial statements are set out below. These policies
have been consistently applied to all the periods presented,
unless otherwise stated.
BASIS OF PREPARATION
The financial statements have been prepared in accordance
with applicable International Financial Reporting Standards
("IFRS") and IFRS Interpretations Committee (IFRS IC) as
adopted and endorsed by the European Union ("EU") and with
the Companies Act 2006 applicable to companies reporting
under IFRS.
The financial statements have been prepared under the historical
cost convention and are presented in GBP Pound Sterling,
rounded to the nearest GBP1,000.
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 Group'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 4.
GOING CONCERN
The financial statements have been prepared on the going
concern basis. The mCHP boiler development project has not
yet reached commercialisation and as such the Group and Company
are not generating revenues. An operating loss and cash outflows
are expected in the 12 months subsequent to the date of these
financial statements and therefore the Group will need to
manage its cash resources appropriately. The drawdown facility
has expired and the Directors are in discussions about its
potential renewal.
Based on the board approved forecasts which includes consideration
of all relevant matters, the Directors have a reasonable
expectation that the Group and the Company has access to
adequate resources to continue in existence for the foreseeable
future and therefore they continue to adopt the going concern
basis of accounting in preparing these financial statements.
The forecasts include continued focus on cash management
and, if required, accruing Directors fees without seeking
to accelerate potential revenue streams as well as Director
guarantees over the settlement of certain liabilities and
deferral of their remuneration. There can be no assurance
that the Group's projects will ever be fully developed or
reach commercialisation.
BASIS OF CONSOLIDATION
Inspirit Energy Holdings plc, the legal parent, is domiciled
and incorporated in the United Kingdom.
The Group Financial Statements consolidate the Financial
Statements of Inspirit Energy Holdings plc and its subsidiary,
Inspirit Energy Limited, made up to 30 June 2019.
Subsidiaries are entities over which the Group has control.
The Group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through
its power over the entity. The Group obtains and exercises
control through voting rights. The existence and effect of
potential voting rights that are currently exercisable or
convertible are considered when assessing whether the company
controls another entity.
The cost of acquisition is measured as the fair value of
the assets acquired, equity instruments issued and liabilities
incurred or assumed at the date of exchange. Acquisition
related costs are expensed as incurred. Intercompany transactions,
balances and unrealised gains on transactions between Group
companies are eliminated. Profits and losses resulting from
inter-company transactions that are recognised in assets
are also eliminated. Accounting policies of subsidiaries
have been changed where necessary to ensure consistency with
the policies adopted by the Group.
Where necessary, adjustments are made to the financial statements
of subsidiaries to bring the accounting policies used into
line with those used by the Group.
STATEMENT OF COMPLIANCE
The following new standards and amendments to standards and
interpretations have been issued but are not yet effective
and not early adopted. None of these are expected to have
a significant effect on the financial statements of the Group
and Company: Effective for
periods beginning
on or after
IFRIC 23 Uncertainty over Income 1 January 2019
Tax Treatments
IFRS 10 Consolidated Sale or Contribution of 1 January 2019
Financial Statements Assets between an Investor
and IAS 28 (amendments) and its Associate or Joint
Venture
IFRS 16 Leases 1 January 2019
Annual Improvements 2015 - 2017 Cycle 1 January 2019
to IFRS Standards
SEGMENTAL REPORTING
Developing and commercialising the mCHP boiler and its related
technology is the only activity in which the Group is engaged
and is therefore considered as the only operating / reportable
segment. The Group currently only operates in the UK. The
financial information therefore of the single segment is
the same as that set out in the Group Statement of Comprehensive
Income, Group Statement of Financial Position.
CURRENT AND DEFERRED INCOME TAX
The tax credit for the period comprises current tax. Tax
is recognised in the Statement of Comprehensive Income, except
to the extent that it relates to items recognised directly
in equity. In this case the tax is also recognised directly
in other comprehensive income or directly in equity, respectively.
The current income tax credit is calculated on the basis
of the tax laws enacted or substantively enacted at the end
of the reporting period in the countries where the Company's
subsidiaries operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation
is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to
or recoverable from the tax authorities.
CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
New standards, amendments and interpretations adopted by
the Group and Company
The Group and Company have applied the following standards
and amendments for the first time for its annual reporting
period commencing 1 July 2018:
* IFRS 9 Financial Instruments;
* IFRS 15 Revenue from Contracts with Customers; and
* Annual improvements 2014-2016 cycle.
Impact of adoption of IFRS 9
The classification and measurement requirements of IFRS 9
have been adopted with effect from the date of initial application
on 1 July 2018. However, the adoption of IFRS 9 has had no
impact on the Group and Company.
FOREIGN CURRENCY TRANSLATION
a) FUNCTIONAL AND PRESENTATION CURRENCY
Items included in the Financial Statements of each of the
Group's entities are measured using the currency of the primary
economic environment in which the entity operates ("functional
currency").
The consolidated Financial Statements are presented in Pounds
Sterling (GBP), which is Group and Company's presentation
currency.
b) TRANSACTIONS AND BALANCES
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates
of the transactions, or valuation where items are remeasured.
Foreign exchange gains and losses resulting from the settlement
of such transactions, and from the translation at year-end
exchange rates of monetary assets and liabilities denominated
in foreign currencies, are recognised the Statement of Comprehensive
Income.
Foreign exchange gains and losses relating to borrowings
and cash and cash equivalents are presented in the Statement
of Comprehensive Income within "Finance Income" or "Finance
Costs".
OPERATING LEASES
Leases in which a significant portion of the risks and rewards
of ownership are retained by the lessor are classified as
operating leases.
Payments made under operating leases are charged to the Statement
of Comprehensive Income on a straight-line basis over the
period of the lease.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at historical cost
less depreciation. Historical cost includes expenditure that
is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount
or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item
can be measured reliably. The carrying amount of the replaced
part is derecognised. All other repairs and maintenance are
charged to the Statement of Comprehensive Income during the
financial period in which they are incurred.
Depreciation is calculated to allocate the cost of each class
of asset to their residual values over their estimated useful
lives, as follows:
* Plant and Equipment - 15% reducing balance
* Fixtures and Fittings - 20% reducing balance
* Motor Vehicles - 5 years, straight line
The assets' residual values and useful lives are reviewed,
and adjusted if appropriate, at the end of each reporting
period.
An asset's carrying amount is written down immediately to
its recoverable amount if the asset's carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing
the proceeds with the carrying amount, and are recognised
within "Other (Losses)/Gains - Net" in the Statement of Comprehensive
Income.
INTANGIBLE ASSETS - DEVELOPMENT COSTS
Development costs relate to expenditure on the development
of the mCHP boiler technology.
Development costs incurred on the project are capitalised
when all the following conditions are satisfied:
* completion of the intangible asset is technically
feasible so that it will be available for use or sale
* the Group intends to complete the intangible asset
and use or sell it
* the Group has the ability to use or sell the
intangible asset
* the intangible asset will generate probable future
economic benefits
* there are adequate technical, financial and other
resources to complete the development and to use or
sell the intangible asset, and
* the expenditure attributable to the intangible asset
during its development can be measured reliably.
Directly attributable costs that are capitalised as part
of the product include any employee costs directly related
to the development of the asset and appropriate expenditure
which directly furthers the development of the project.
Other development expenditure that does not meet these criteria
is recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as
an asset in a subsequent period.
IMPAIRMENT OF NON-FINANCIAL ASSETS
Assets that have an indefinite useful life, are not subject
to amortisation and are tested annually for impairment. An
impairment loss 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 to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels
for which there are separately identifiable cash flows (cash-generating
units). Non-financial assets other than goodwill that suffered
an impairment are reviewed for possible reversal of the impairment
at each reporting date. See note 4 for more information on
the impairment assessment performed by management.
FINANCIAL ASSETS
a) CLASSIFICATION
The Group classifies its financial assets as loans and receivables.
The classification depends on the purpose for which the financial
assets were acquired. Management determines the classification
of its financial assets at initial recognition.
LOANS AND RECEIVABLES
Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted in
an active market. They are included in current assets, except
for maturities greater than 12 months after the Statement
of Financial Position date. These are classified as non-current
assets. The Group's loans and receivables comprise trade
and other receivables and cash and cash equivalents in the
Statement of Financial Position.
b) RECOGNITION AND MEASUREMENT
Financial assets are initially measured at fair value plus
transactions costs.
Loans and receivables are subsequently carried at amortised
cost using the effective interest method, except for short
term receivables.
c) IMPAIRMENT OF FINANCIAL ASSETS
The Group assesses at the end of each reporting period whether
there is objective evidence that a financial asset, or a
group of financial assets, is impaired. A financial asset,
or a group of financial assets, is impaired, and impairment
losses are incurred, only if there is objective evidence
of impairment as a result of one or more events that occurred
after the initial recognition of the asset (a "loss event"),
and that loss event (or events) has an impact on the estimated
future cash flows of the financial asset, or group of financial
assets, that can be reliably estimated.
The criteria that the Group uses to determine that there
is objective evidence of an impairment loss include:
* significant financial difficulty of the issuer or
obligor;
* a breach of contract, such as a default or
delinquency in interest or principal repayments;
* the disappearance of an active market for that
financial asset because of financial difficulties;
* observable data indicating that there is a measurable
decrease in the estimated future cash flows from a
portfolio of financial assets since the initial
recognition of those assets, although the decrease
cannot yet be identified with the individual
financial assets in the portfolio; or
* for assets classified as available-for-sale, a
significant or prolonged decline in the fair value of
the security below its cost.
ASSETS CARRIED AT AMORTISED COST
The amount of impairment is measured as the difference between
the asset's carrying amount and the present value of estimated
future cash flows (excluding future credit losses that have
not been incurred), discounted at the financial asset's original
effective interest rate. The asset's carrying amount is reduced,
and the loss is recognised in the Statement of Comprehensive
Income. As a practical expedient, the Group may measure impairment
on the basis of an instrument's fair value using an observable
market price.
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 the Statement of Comprehensive
Income.
CASH AND CASH EQUIVALENTS
In the consolidated Statement of Cash Flows, cash and cash
equivalents comprise cash in hand and deposits held at call
with bank
FINANCIAL LIABILITIES
Financial liabilities are obligations to pay cash or other
financial assets and are recognised when the Group becomes
a party to the contractual provisions of the instruments.
Financial liabilities are initially measured at fair value,
net of transactions costs. They are subsequently measured
at amortised cost using the effective interest method.
Financial liabilities are derecognised when the Group or
Company's contractual obligations expire, are cancelled or
are discharged.
SHAREHOLDERS' EQUITY
Equity comprises the following:
* "Share capital" represents the nominal value of
equity shares.
* "Share premium" represents the excess over nominal
value of the fair value of consideration received for
equity shares, net of expenses of the share issue.
* "Share option reserve" represents the cumulative cost
of share based payments.
* "Merger reserve" and "Reverse Acquisition reserve"
represents historical reserves formed upon previous
Business Combinations entered into by the Company
that fall outside the scope of IFRS 3.
* "Retained losses" represents retained losses.
BORROWINGS
Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are subsequently carried
at amortised cost; any difference between the proceeds (net
of transaction costs) and the redemption value is recognised
in the Statement of Comprehensive Income over the period
of the borrowings, using the effective interest method.
Borrowings are classified as current liabilities unless the
Group has an unconditional right to defer settlement of the
liability for at least 12 months after the end of the reporting
period.
BORROWINGS COSTS
Borrowing costs are recognised in profit or loss in the period
in which they are incurred.
SHARE BASED PAYMENTS
The Group operates equity-settled, share-based schemes, under
which it receives services from employees or third-party
suppliers as consideration for equity instruments (options
and warrants) of the Group. The Group may also issue warrants
to share subscribers as part of a share placing. The fair
value of the equity-settled share based payments is recognised
as an expense in the Statement of Comprehensive Income or
charged to equity depending on the nature of the service
provided or instrument issued. The total amount to be expensed
or charged 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 or sales growth targets, or remaining
an employee of the entity over a specified time
period); and
* including the impact of any non-vesting conditions
(for example, the requirement for employees to save).
In the case of warrants the amount charged to equity is determined
by reference to the fair value of the services received if
available. If the fair value of the services received is
not determinable, the warrants are valued by reference to
the fair value of the warrants granted as described previously.
Non-market vesting conditions are included in assumptions
about the number of options or warrants that are expected
to vest. The total expense or charge 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-market vesting conditions. It recognises the impact
of the revision to original estimates, if any, in the Statement
of
Comprehensive Income or equity as appropriate, with a corresponding
adjustment to a separate reserve in 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.
3 FINANCIAL RISK MANAGEMENT
The Group is exposed to a variety of financial risks which result
from both its operating and investing activities. The Group's risk
management is coordinated by the Board of Directors, and focuses
on actively securing the Group's short to medium term cash flows
by minimising the exposure to financial markets.
The main risks the Group is exposed to through its financial instruments
are market risk (including market price risk), credit risk and
liquidity risk.
MARKET PRICE RISK
The Group's exposure to market price risk mainly arises from potential
movements in the pricing of its products. The Group manages this
price risk within its long-term strategy to grow the business and
maximise shareholder return.
CREDIT RISK
The Group's financial instruments that are subject to credit risk
are cash and cash equivalents and loans and receivables. The credit
risk for cash and cash equivalents is considered negligible since
the counterparties are reputable financial institutions.
The Group's maximum exposure to credit risk is GBP103,000 (2018:
GBP460,000) comprising cash and cash equivalents and loans and
receivables.
LIQUIDITY RISK
Liquidity risk arises from the possibility that the Group might
encounter difficulty in settling its debts or otherwise meeting
its obligations related to financial liabilities. The Group manages
this risk through maintaining a positive cash balance and controlling
expenses and commitments. The Directors are confident that adequate
resources exist to finance current operations.
The following table summarises the maturity profile of the Group's
non-derivative financial liabilities with agreed repayment periods.
The table has been drawn up based on contractual undiscounted cash
flows based on the earliest repayment date on which the Group can
be required to pay. The table includes both interest and principal
cash flows. To the extent that the interest flows are floating
rate, the undiscounted amount is derived from the interest rate
curves at the balance sheet date:
Less Between Between
than 1 and 2 2 and Over Carrying
Group 1 year years 5 years 5 years Total value
At 30 June 2019 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- --------- --------- --------- --------- --------- ---------
Trade and other payables 307 - - - 307 307
Borrowings 100 845 - - 945 945
--------------------------------------------- --------- --------- --------- --------- --------- ---------
At 30 June 2018
-------------------------- --------- --------- --------- --------- --------- ---------
Trade and other payables 263 - - - 236 236
Borrowings 100 845 - - 945 945
--------------------------------------------- --------- --------- --------- --------- --------- ---------
CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are:
-- to safeguard the Group's ability to continue as a going
concern, so that it continues to provide returns and benefits for
shareholders;
-- to support the Group's growth; and
-- to provide capital for the purpose of strengthening the Group's risk management capability.
The Group actively and regularly reviews and manages its capital
structure to ensure an optimal capital structure and equity holder
returns, taking into consideration the future capital requirements
of the Group and capital efficiency, prevailing and projected
profitability, projected operating cash flows, projected capital
expenditures and projected strategic investment opportunities.
Management regards total equity as capital and reserves, for
capital management purposes.
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of Financial Statements in conformity with
IFRSs requires management to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenses. Estimates
and judgements are continually evaluated and are based on
historical experience and other factors including expectations
of future events that are believed to be reasonable under
the circumstances.
CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom
equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the
next financial year are discussed below.
IMPAIRMENT OF DEVELOPMENT COSTS AND INVESTMENT IN SUBSIDIARIES
The Group tests annually whether development costs and investments
in the subsidiaries, which have a carrying value of GBP2,570,000
and GBP2,440,000 respectively (2018: GBP2,401,000 and GBP2,440,000
respectively) have suffered any impairment in accordance with
the accounting policy as stated in Note 2.
When a review for impairment is conducted, the recoverable
amount is determined based on value in use calculations prepared
on the basis of management's assumptions and estimates. As
a result of their 2019 review management has concluded that
no impairment is required.
The value-in-use calculations require management to estimate
future cash flows expected to arise from the cash generating
unit, once commercial production is achieved, and apply a
suitable discount rate in order to calculate present value.
These calculations require the use of estimates. See Note
10 for further details
.Following other sources of products interest during the year,
management have focussed the value-in-use calculations on licensing
sales rather than product sales. This has been done as management
consider that the revenues are more near term in nature and note
that it uses the same core developed technology. Given the
product's nature, the core estimates have remained broadly
consistent with an increase in gross margin given the shift in
focus to licensing which is consider will provide a higher margin
than product sales.
5 DIRECTOR'S AND KEY MANAGEMENT PERSONNEL EMOLUMENTS
2019 2018
GBP'000 GBP'000
----------------------------------------------------- --------- -------
Aggregate emoluments 134 122
Social security costs - -
----------------------------------------------------- --------- -------
134 122
------------------------------------------------------------------------ --------- -------
Short Term Other Total Total
Name of director Benefits Benefits 2019 2018
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ------------ ----------- --------- -------
J Gunn 80 - 80 80
N Jagatia 30 - 30 28
A Samaha 12 - 12 2
S Gunn* 12 - 12 12
--------------------------------------------- ------------ ----------- --------- -------
134 - 134 122
--------------------------------------------- ------------ ----------- --------- -------
*Key Management Personnel
The number of Directors who contributed to pension schemes
during the year was nil (2018: nil).
6 EMPLOYEE INFORMATION
2019 2018
GBP'000 GBP'000
---------------------------------------- ----------------------- ----------------------
Wages and salaries 149 185
Social security costs 14 8
163 193
----------------------------------------------------------- ----------------------- ----------------------
In addition to the above a total of GBP148,000 (2018: GBP114,000)
wages and salaries for employees has been included in Development
costs.
Average number of persons employed (including executive directors):
2019 2018
Number Number
---------------------------------------- ----------------------- ----------------------
Office and management 3 6
----------------------------------------------------------- ----------------------- ----------------------
COMPENSATION OF KEY MANAGEMENT PERSONNEL
There are no key management personnel other than those disclosed
in Note 5.
7 LOSS FOR THE YEAR
Loss for the year is arrived at after charging:
2019 2018
GBP'000 GBP'000
------------------------------------------------ -------- --------
S Salaries and wages (Note 6) 163 193
A Audit and other fees 18 19
Operating lease rent 9 17
Depreciation 7 8
------------------------------------------------------------------- -------- --------
AUDITOR'S REMUNERATION
During the year the Group obtained the following services
from the Company's auditor:
2019 2018
GBP'000 GBP'000
------------------------------------------------ -------- --------
Fees payable to the Company's auditor for
the audit of the parent company and the Group
financial statements 18 19
8 Taxation
GROUP 2019 2018
GBP'000 GBP'000
Deferred tax - -
Current tax (25) (20)
--------------------------------- ------- -------
Total current tax / (credit) (25) (20)
--------------------------------- ------- -------
The tax on the Group's loss before tax differs from the theoretical
amount that would arise using the average rate applicable
to losses of the consolidated entities as follows:
2019 2018
GBP'000 GBP'000
------------------------------------------------------ -------- -------
Loss before tax from continuing operations (239) (953)
------------------------------------------------------ -------- -------
Loss before tax multiplied by rate of corporation
tax in the UK of 19% (2018: 19%) (45) (181)
Tax effects of:
Expenses not deductible for tax purposes 45 108
Unrelieved tax losses carried forward - 73
Research and development tax credit (25) (20)
------------------------------------------------------ -------- -------
Total tax (25) (20)
------------------------------------------------------ -------- -------
The Group has excess management expenses of approximately
GBP5,000,000 (2018: GBP4,800,000), capital losses of GBP150,000
(2018: GBP150,000) and non-trade financial losses of approximately
GBP119,000 (2018: GBP119,000) to carry forward against future
suitable taxable profits. No deferred tax asset has been provided
on any of these losses due to uncertainty over the timing of their
recovery.
9 EARNINGS PER SHARE
Earnings per ordinary share has been calculated by dividing
the loss attributable to equity holders of the Company by
the weighted average number of shares in issue during the
year. The calculations of both basic and diluted earnings
per share for the year are based upon the loss for the year
of GBP239,000 (2018: GBP953,000). The weighted number of
equity shares in issue during the year was 1,420,806,859
(2018: 1,359,376,947).
In accordance with IAS 33, basic and diluted earnings per
share are identical as the effect of the exercise of share
options and warrants would be to decrease the loss per share
and therefore deemed anti-dilutive. Details of share options
and warrants that could potentially dilute earnings per
share in future periods are set out in Note 16.
10 INTANGIBLE ASSETS
GROUP Development Total
Costs
GBP'000 GBP'000
At 30 June 2017 2,668 2,668
Additions 157 157
Impairment (424) (424)
At 30 June 2018 2,401 2,401
Additions 169 169
At 30 June 2019 2,570 2,570
------------------ --- ------------- --------
No amortisation has been recognised on development costs to date
as the assets are still in the development stage and the related
products are not yet ready for sale. As such, the value-in-use
calculations to support the carrying value of development costs is
directly reliant on the availability of future capital funding in
order to achieve product accreditation and enter into commercial
production.
The recoverable amount of the above cash generating unit has
been determined based on value-in-use calculations and includes
revenue from sterling application in marine and waste recycling
activities . The value-in-use calculations use cash flow
projections based on financial budgets approved by Management
covering a six-year period. They key estimates in the value-in-use
calculation are:
Growth rate - Nonlinear: year on year increase based on director
estimations
Discount rate - 30%
Gross margin average - 37%
The calculations are not sensitive to probable changes in the
key assumptions.
11 PROPERTY, PLANT AND EQUIPMENT
GROUP Plant and Equipment Fixtures Motor Vehicles
and fittings Total
COST GBP'000 GBP'000 GBP'000 GBP'000
------------------- --------------------- --------------- ---------------- ---------
As 30 June 2017 81 15 1 97
Additions - - - -
------------------- --------------------- --------------- ---------------- ---------
As 30 June 2018 81 15 1 97
Additions - - - -
As at 30 June
2019 81 15 1 97
DEPRECIATION
------------------- --------------------- --------------- ---------------- ---------
As at 30 June
2017 34 9 1 34
Charge for year 7 1 - 8
--------------------------------------- --------------------- --------------- ---------------- ---------
As at 30 June
2018 41 10 1 52
Charge for year 6 1 - 7
As at 30 June
2019 47 11 1 59
NET BOOK VALUE
------------------- --------------------- --------------- ---------------- ---------
As at 30 June
2019 34 4 - 38
As at 30 June
2018 40 5 - 45
--------------------------------------- --------------------- --------------- ---------------- ---------
No Property, Plant and Equipment is held in the parent
company.
12 INVESTMENT IN SUBSIDIARIES
COMPANY 2019 2018
SHARES IN GROUP UNDERTAKINGS: GBP'000 GBP'000
----------------------------------------------- ------- -------
At 1 July 2,440 2,440
Increase in loan to subsidiary 207 318
Provision against the loan balance outstanding (207) (318)
------------------------------------------------------------------- ------- -------
2,440 2,440
------------------------------------------------------------------- ------- -------
Included in the above is an amount of GBP2,885,000 (2018:
GBP2,742,000) relating to the amount due to the Company by its
subsidiary Inspirit Energy Limited. A provision of GBP2,885,000
(2018: GBP2,742,000) has been set against this loan balance
outstanding.
Investments in Group undertakings are recorded at cost, which is
the fair value of the consideration paid.
Details of Subsidiary Undertakings are as follows:
Proportion
Registered of share capital Nature of
Name of subsidiary Registered address capital held business
-------------------- ------------------- --------------- ----------------- -------------------
Inspirit Energy c/o Niren Blake Ordinary shares 100% Product development
Limited** Llp 2nd Floor, GBP15,230
Company No.07160673 Solar House,
915 High Road,
London, England,
N12 8QJ
Somemore Limited Global Investment Ordinary shares 100% Dormant
Company No.07152291 Strategy Uk GBP1
Ltd, 2(nd) Floor,
London Wall
Buildings, London,
EC2M 5PP
Inspirit Energy 2nd Floor 2 Ordinary shares 100% Dormant
Consultancy Limited London Wall GBP100
Company no 11190342 Buildings, London
Wall, London,
United Kingdom,
EC2M 5PP
-------------------- ------------------- --------------- ----------------- -------------------
*** Inspirit Energy Limited ( Co No 07160673) company is
entitled and has taken exemption under section 479a of the
Companies Act 2006. No members of Inspirit Energy Limited have
required the company to obtain an audit of its accounts for the
year in question in accordance with section 476 of the Companies
Act 2006
13 TRADE AND OTHER RECEIVABLES
GROUP COMPANY
2019 2018 2019 2018
GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ------- ------- ------- -------
Corporation tax* 46 58 - -
VAT recoverable 6 7 3 5
Other receivables 5 340 - 335
Prepayments and accrued
income 6 10 6 6
-------------------------------------------- ------- ------- ------- -------
63 415 9 346
-------------------------------------------- ------- ------- ------- -------
*The Corporation tax repayable relates to the R&D tax claim
receivable from HMRC.
The Directors consider that the carrying amount of receivables
is approximately equal to their fair value and under IFRS 9 that
they are held at amortised cost)
.
14 CASH AND CASH EQUIVALENTS
GROUP COMPANY
2019 2018 2019 2018
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ------- ------- ------- -------
Cash and cash equivalents 40 45 38 41
---------------------------------------------- ------- ------- ------- -------
The Directors consider the carrying amount of cash and cash
equivalents approximates to their fair value.
All of the Group and Company's cash and cash equivalents are
held with institutions with an AA credit rating.
15 SHARE CAPITAL AND SHARE PREMIUM
Number Number Ordinary Deferred New Deferred Share Total
of ordinary of deferred shares shares B shares premium
shares shares
GBP GBP GBP GBP GBP
---------------- -------------- ------------ ------------ --------- ------------- ----------- -----------
At 30 June
2017 1,170,806,859 400,932 1,170,807 396,923 - 11,295,421 12,863,151
--------------------- -------------- ------------ ------------ --------- ------------- ----------- -----------
Issue of
new shares 250,000,000 - 250,000 - - 50,000 300,000
Capital
Reorganisation - - (1,406,599) - 1,406,599 - -
Issue costs - - - - - (9,765) (9,765)
------------ --------- ------------- ----------- -----------
At 30 June
2018 1,420,806,859 400,932 14,208 396,923 1,406,599 11,335,656 13,153,386
--------------------- -------------- ------------ --------- ------------- ----------- -----------
At 30 June
2019 1,420,806,859 400,932 14,208 396,923 1,406,599 11,335,656 13,153,386
--------------------- -------------- ------------ ------------ --------- ------------- ----------- -----------
Both the Deferred shares and the New Deferred B shares have no
voting rights.
On 6 June 2018, the Company announced that members, at a General
meeting on the same day, had approved the completion of a Capital
Reorganisation which comprised the sub-division of shares whereby
each existing Ordinary Share of 0.1 pence each in the capital of
the Company was sub-divided into 1 New Ordinary Shares of 0.001
pence each and 1 Deferred B Share of 0.099 pence each. This
resulted in 1,420,806,859 New Ordinary Shares and 1,420,806,859
Deferred B Shares in issue.
16 SHARE BASED PAYMENTS
Share options and warrants can be granted to selected Directors
and third-party service providers.
There have been no options issued in the year and no share
based payment charge has been recognised.
Share options and warrants outstanding at the end of the
year have the following expiry dates and exercisable prices:
Weighted Average Weighted Average
Exercise Price Options and Exercise Price Options and
2019 warrants 2018 warrants
At 1 July 0.0488 1,500,000 0.0067 10,783,364
Granted - - - -
Exercised - - - -
Lapsed - - 0.0090 (9,283,364)
At 30 June 0.0488 1,500,000 0.0488 1,500,000
---------------------------------- ---------------- -------------- ----------------- -----------------
Exercise price
in GBP per Number of options Number of options
Grant date Expiry date share and warrants and warrants
2019 2018
25 April
26 April 2011 2021 0.0488 1,500,000 1,500,000
0.0488 1,500,000 1,500,000
---------------------------------- ---------------- -------------- ----------------- -----------------
17 TRADE AND OTHER PAYABLES
GROUP COMPANY
2019 2018 2019 2018
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- --------------------- ------- ------- -------
Trade payables 50 58 8 29
Other payables 85 152 85 86
Social security and other
taxes 25 31 - 18
Accrued expenses 147 22 145 21
----------------------------------------------- --------------------- ------- ------- -------
307 263 238 154
----------------------------------------------- --------------------- ------- ------- -------
The Directors consider that the carrying amount of trade and
other payables approximates to their fair value.
18 BORROWINGS
GROUP COMPANY
2019 2018 2019 2018
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ -------- -------- -------- --------
Current
Drawdown facility (see Note
1 below) 100 100 100 100
Total current borrowings 100 100 100 100
-------------------------------------------------- -------- -------- -------- ----------
Non-current
Convertible loan notes (Note
2 below) 845 845 845 845
-------------------------------------------------- -------- -------- -------- ----------
Total non-current borrowings 845 845 845 845
-------------------------------------------------- -------- -------- -------- ----------
Total borrowings 945 945 945 945
-------------------------------------------------- -------- -------- -------- ----------
Note 1
The Drawdown facility relates to the facility entered into
during 2017 with YA Global Master SPV Limited. The facility is
unsecured and carries an implied interest rate of 10 per cent per
annum, repayable in 12 equal monthly instalments and has now
lapsed. The directors are seeking to renew.
On 30 April 2015, the Company issued warrants to subscribe for
9,283,364 new ordinary shares as part of the unsecured $3,000,000
Debt facility arrangement with YA Global Master SPV Limited ("YA
Global"). The issue of the warrants was triggered following the
drawdown of the initial Tranche 1, being $400,000, under the terms
of the agreement. The terms of the issue of warrants are governed
by the Debt Facility agreement, which specify that for every
tranche drawn down, the Company is required to issue 25% of the
value of the drawdown based on the interbank rate at the nearest
possible date and using the average Volume Weighted Average Price
("VWAP") of the Company for the five trading days immediately prior
the date of the agreement. Based on those terms, were the Company
to drawdown the remaining $2,600,000 they would be required to
issue further warrants to subscribe for an estimated total of
99,622,448 new ordinary shares. The Directors do not expect to use
the remaining facility in the foreseeable future. On 25 April 2018,
YA Global entered into an agreement for Convertible Loan Notes
("CLNs) which converted GBP100k of the existing drawdown into CLNs
(see note 2).
Note 2
In May 2018, the Company raised GBP530,000 in cash from private
investors through the issue of Convertible Loan Notes and converted
existing debt due to Related Parties (as further detailed below)
and other third-party debt valued at GBP315,000 into the CLNs. The
principal amount of the CLNs are convertible at the higher of
either 0.07p per Ordinary Share of 0.1p each (the "Ordinary Shares"
or "Existing Ordinary Shares" and subject to the Capital
Reorganisation as set out below) or a discount of 25 per cent. to
the previous trading day's closing market share price. The CLNs are
interest free, convertible at the Company's option and, in the
ordinary course, only are repayable by the Company in Ordinary
Shares following a conversion notice. Any Ordinary Shares issued on
conversion of the CLNs will rank pari passu with existing Ordinary
Shares. Conversion of the CLNs is subject to a restriction that no
conversion shall take place in circumstances where as a result of
the conversion the Noteholder or any party deemed to be acting in
concert with such Noteholder, as defined in the Takeover Code,
would own more than 29.9% of the issued share capital of the
Company or otherwise trigger a requirement for the Noteholder to
make a general offer for the Company pursuant to Rule 9 of the
Takeover Code. The CLNs will not be admitted to trading on AIM or
any other exchange.
Majority of the CLN's were converted on 29 November 2019 and 3rd
December 2019. As at the date of the approval of these Financial
Statements the value of CLN's that remain outstanding is
GBP3,200.
19 FINANCIAL INSTRUMENTS BY CATEGORY
2019 2018
GBP'000 GBP'000
--------------------------------------------------------------- ------- -------
FINANCIAL ASSETS - LOANS AND RECEIVABLES:
--------------------------------------------------------------- ------- -------
Trade and other receivables (excluding prepayments,
VAT and corporation tax) 5 340
Cash and cash equivalents 40 45
----------------------------------------------------------------------------------- ------- -------
FINANCIAL LIABILITIES AT AMORTISED COST:
--------------------------------------------------------------- ------- -------
Trade and other payables 282 232
Borrowings 945 945
----------------------------------------------------------------------------------- ------- -------
The table providing an analysis of the maturity of the non-derivative
financial liabilities has been included in Note 3.
20 ULTIMATE CONTROLLING PARTY
At the date of signing this report the Directors do not
consider there to be one single ultimate controlling party.
21 RELATED PARTY TRANSACTIONS
See note 6 for details of director's remuneration in the year.
During the year, NKJ Associates Ltd, a company in which N
Jagatia is a Director, charged consultancy fees of GBP30,000
(2018: GBP28,000). The amount owed to NKJ Associates Ltd at
year end is GBP32,000 (2018: GBP4,000).
22 EVENTS AFTER THE REPORTING DATE
On 18 November 2019, the Company announced that it had raised
GBP300,000 through the placing of 249,999,998 ordinary shares
of 0.001 pence each in the share capital of the Company at
0.12 pence per Ordinary Share.
On 25 November 2019, the Company announced that it had received
conversion notices from the Convertible Loan Notes (CLN'S)
issued on 4 May 2018. The Company issued 1,148,571,422 Ordinary
Shares at a price of 0.07p per Ordinary Share with an admission
date of 29 November 2019. GBP41,000 CLN's remained outstanding
at this date.
On 5 December 2019, the Company announced that it had received
conversion notices from the Convertible Loan Notes (CLN's)
issued on 4 May 2018. The Company issued 54,000,002 Ordinary
Shares at a price of 0.07p per Ordinary Share with an admission
date of 10 December 2019. GBP3,200 CLN's remained outstanding
at this date.
These results are audited, however the information does not
constitute statutory accounts as defined under section 434 of the
Companies Act 2006. The consolidated statement of financial
position at 30 June 2019 and the consolidated income statement,
consolidated statement of comprehensive income, consolidated
statement of changes in equity and the consolidated cash flow
statement for the year then ended have been extracted from the
Group's 2019 statutory financial statements. Their report was
unqualified and contained no statement under sections 498(2) or (3)
of the Companies Act 2006.
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 CKNDNQBDDDBB
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December 23, 2019 09:35 ET (14:35 GMT)
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