TIDMCTEA
RNS Number : 8292U
Catenae Innovation PLC
30 March 2023
30 March 2023
Catenae Innovation PLC
("Catenae", the "Company" or the "Group")
Final Results
Catenae Innovation PLC (AIM: CTEA), the AIM quoted provider of
digital media and technology, announces its full year audited
results for the 15-month period ended 31 December 2022.
Financial overview
-- The Group made a net loss for the period of GBP523,497 (2021:
GBP1,246,948). Revenues for the period were GBP152,437 (2021:
GBP30,210).
-- The Group has a statement of financial position at the period
end showing net liabilities of GBP126,298 (2020: net assets
GBP381,926).
The auditors have made reference to going concern by way of a
material uncertainty within their audit report. The Directors are
confident that the Group will achieve its cash flow forecasts and,
taking into account the operating initiatives already in place and
the funding options available to the Company, have prepared the
accounts on a going concern basis. Nevertheless, the forecasts show
that the Group may have a low level of cash in twelve months' time
and may require further funding in the longer term to meet its
commitments as they fall due. These conditions and events indicate
the existence of material uncertainties that may cast significant
doubt upon the Group's ability to continue as a going concern and
the Group may therefore be unable to realise their assets and
discharge their liabilities in the ordinary course of business. The
auditor's opinion is not modified in respect of this matter. The
Independent Auditor's Report is set out in full below.
Operational overview
The Board continues to focus on organic growth, building on
existing customer relationships and attracting new clients, and
also on identifying and exploring strategic acquisitions to build
the Group and improve shareholder value.
Posting of Accounts
The Reports and Accounts of Catenae have been posted to
shareholders and are available on the Company's website
www.catenaeinnovation.com
This announcement contains inside information for the purposes
of the UK Market Abuse Regulation. The person who arranged for
release of this announcement on behalf of the Company was Guy
Meyer, Chief Executive Officer of the Company and the Directors of
the Company are responsible for the release of this
announcement.
For further information please contact:
+44 (0)191 580
Catenae Innovation PLC 8545
Guy Meyer, Chief Executive Officer
+44 (0)20 7213
Cairn Financial Advisers LLP (Nominated Adviser) 0880
Liam Murray / Jo Turner
+44 (0)20 7186
Shard Capital Partners LLP (Broker) 9952
Damon Heath
Notes to Editors:
About Catenae Innovation PLC
Catenae Innovation PLC is an AIM quoted provider of digital
media and technology services. Catenae uses the power of blockchain
to deliver solutions where its people-centric technology enables
trust and certainty allowing organisations to gain better control
over their operations, manage staff and safely welcome
customers.
www.catenaeinnovation.com
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed
to be, forward looking statements. Forward looking statements are
identi ed by their use of terms and phrases such as "believe",
"could", "should" "envisage", "estimate", "intend", "may", "plan",
"potentially", "expect", "will" or the negative of those,
variations or comparable expressions, including references to
assumptions. These forward-looking statements are not based on
historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of
operations, performance, future capital and other expenditures
(including the amount, nature and sources of funding thereof),
competitive advantages, business prospects and opportunities. Such
forward looking statements re ect the Directors' current beliefs
and assumptions and are based on information currently available to
the Directors.
Chairman's Statement
Business and performance review
The Company has focused on delivering its first substantial
contract with Saxavord Space Port and has continued to pursue other
potential business opportunities. The Board has also continued with
its robust approach to remedying the contractual issues that have
arisen with its subsidiary, Hyperneph Software Ltd.
Financial overview
The Group made a net loss for the period of GBP523,497 (2021:
GBP1,246,948). Revenues for the period were GBP152,437 (2021:
GBP30,210).
The Group has a statement of financial position at the
period-end showing net liabilities of GBP126,298 (2021: net assets
GBP381,926).
Share Issues
During the year Catenae issued new shares as a result of the
exercise of warrants as follows:
-- 2,954,545 0.4p warrants were exercised raising funds of GBP11,818; and
-- 863,636 0.4p warrants were exercised raising funds of GBP3,455.
No other shares were issued during the period.
Company strategy
The Board continues to focus on organic growth, building on
existing customer relationships and attracting new clients, and
also on identifying and exploring strategic acquisitions to build
the Group and improve shareholder value.
Operational KPIs
During the 15-month period, we refined the operational KPIs we
believe to be most relevant. These are:
-- number of customers;
-- number of repeat orders;
-- number of acquisition opportunities reviewed; and
-- bank balance.
Current Trading and Outlook
We continue to seek acquisition opportunities and since the
period end have had multiple discussions. We are also in
discussions with our existing customers for additional work.
I would like to thank the team at Catenae for their commitment
and tenacity in pursuing every opportunity to bring new business
into the Company.
Brian Thompson
Chairman
29 March 2023
Consolidated statement of comprehensive income for the period
ended 31 December 2022
Note 15 months 12 months
31 December 30 September
2022 2021
GBP GBP
Revenue 3 152,437 30,210
Cost of Sales (12,600) (14,400)
---------------------- -------------
Gross profit 139,837 15,810
Administrative expenses 5 (667,002) (939,027)
Impairment losses - (318,629)
Loss from operations (527,165) (1,241,846)
Net finance expense 7 - 10
---------------------- -------------
Loss before taxation (527,165) (1,241,836)
Taxation 9 3,668 (5,112)
---------------------- -------------
Loss from continuing operations (523,497) (1,246,948)
Total comprehensive loss for
the period (523,497) (1,246,948)
---------------------- -------------
Loss attributable to:
Owners of the parent (514,695) (1,257,149)
Non-controlling interest (8,802) 10,201
---------------------- -------------
(523,497) (1,246,948)
---------------------- -------------
Basic and diluted loss per
share (pence) 11 (0.18) (0.49)
Consolidated Statement of financial position at 31 December
2022
Note 31 December 30 September
2022 2021
GBP GBP
Non-current assets
Property, plant and equipment 12 5,431 6,828
Intangible assets 13 1 1
5,432 6,829
Current assets
Trade and other receivables 15 81,913 45,236
Cash and other equivalents 65,443 605,082
------------------------------- -----------------
147,356 650,318
Current liabilities
Trade and other payables 16 (279,086) (275,221)
Interest bearing loans 17 - -
------------------------------- -----------------
(279,086) (275,221)
Non current liabilities
Interest bearing loans 17 - -
------------------------------- -------------------
Total liabilities (279,086) (275,221)
------------------------------- -------------------
Net assets / (liabilities) (126,298) 381,926
------------------------------- -----------------
Capital and reserves
Ordinary share capital 19 570,078 562,441
Deferred share capital 19 3,159,130 3,159,130
Share premium account 19,665,457 19,657,821
Share reserve (83,333) (83,333)
Merger reserve 11,119,585 11,119,585
Capital redemption reserve 2,732,904 2,732,904
Retained Losses (37,292,835) (36,778,140)
Capital and reserves attributable
to the owners of Catenae Innovation
Plc (129,014) 370,408
------------------------------- -------------------
Non-controlling interest 2,716 11,518
------------------------------- -------------------
Total equity (126,298) 381,926
------------------------------- -------------------
The financial statements were approved by the Board and
authorised for issue on 29 March 2023
Brian Thompson
Chairman
Consolidated statement of cash flows for the period ended 31
December 2022
Cash flow from operating activities Note 15 months 12 months
31 December 30 September
2022 2021
GBP GBP
Loss for the period (523,497) (1,246,948)
Adjustments for:
Impairment of investment - 318,629
Net bank and other interest charges - (10)
Services settled by the issue of shares - 72,704
Depreciation 1,810 -
------------------------------------ -------------------
Net cash outflow before changes in working
capital (521,687) (855,625)
------------------------------------ -------------------
(Increase)/Decrease in trade and other
receivables (36,677) (24,633)
(Decrease) / Increase in trade and other
payables 3,865 (112,896)
------------------------------------ -------------------
Cash outflow from operations (554,499) (993,154)
------------------------------------------- -------------------
Interest received - 10
Interest paid - -
------------------------------------ -------------------
Net cash flows from operating activities (554,499) (993,144)
------------------------------------ -------------------
Investing activities
Investment in subsidiary - (217,500)
Purchase of property, plant and equipment (413)
------------------------------------ -------------------
Net cash flows from investing activities (413) (217,500)
------------------------------------ -------------------
Financing activities
Issue of ordinary share capital 15,273 1,119,683
Repayment of loan - (18,000)
New loans raised - -
------------------------------------ -------------------
Net cash flows from financing activities 15,273 1,101,683
------------------------------------ -------------------
Net (decrease) / increase in cash (539,639) (108,961)
Cash and cash equivalents at beginning
of period 605,082 714,043
------------------------------------ -------------------
Cash and cash equivalents at end
of period 65,443 605,082
------------------------------------ -------------------
During the prior year GBP72,704 of trade and other payables and
loans were converted into equity in non-cash transactions.
Consolidated statement of changes in equity for the period ended
31 December 2022
Deferred
Share Share Shares Other Retained Non-controlling Total
Capital Premium / Shares Reserves Earnings interest Equity
to be
issued
GBP GBP GBP GBP GBP GBP GBP
========= ============ =========== ================= ============== ================ ===============
Balance at
30 Sept 2020 442,183 18,652,949 3,159,130 13,769,156 (35,520,991) - 502,427
========= ============ =========== ================= ============== ================ ===============
Loss for the
period - - - - (1,257,149) 10,201 (1,246,948)
Non-controlling
share of net
assets on
acquisition - - - - - 1,317 1,317
Share capital
issued 120,258 1,073,452 - - - - 1,193,710
Share issue
costs - (68,580) - - - - (68,580)
--------- ------------ ----------- ----------------- -------------- ---------------- ---------------
Balance at
30 Sept 2021 562,441 19,657,821 3,159,130 13,769,156 (36,778,140) 11,518 381,926
--------- ------------ ----------- ----------------- -------------- ---------------- ---------------
Loss for the
period - - - (514,695) (8,802) (523,497)
Non-controlling
share of net
assets on
acquisition - - - - - - -
Share capital
issued 7,637 7,636 - - - - 15,273
Share issue
costs - - - - - - -
========= ============ =========== ================= ============== ================ ===============
Balance at
31 Dec 2022 570,078 19,665,457 3,159,130 13,769,156 (37,292,835) 2,716 (126,298)
========= ============ =========== ================= ============== ================ ===============
The other reserves relate to the merger reserve, share reserve
and the capital redemption reserve
Company statement of financial position at 31 December 2022
Note 31 December 30 September
2022 2021
GBP GBP
Non-current assets
Intangible assets 1 1
Investments 14 - -
------------------------------- --------------
1 1
Current assets
Trade and other receivables 15 74,745 45,236
Cash and other equivalents 61,922 539,842
------------------------------- --------------
136,667 585,078
Current liabilities
Trade and other payables 16 (308,508) (226,659)
Interest bearing loans 17 - -
------------------------------- --------------
(308,508) (226,659)
Non current liabilities
Interest bearing loans 17 - -
------------------------------- --------------
Total liabilities (308,508) (226,659)
------------------------------- --------------
Net assets / (liabilities) (171,840) 358,420
------------------------------- --------------
Capital and reserves
Ordinary share capital 19 570,078 562,441
Deferred share capital 19 3,159,130 3,159,130
Share premium account 19,665,457 19,657,821
Share reserve (83,333) (83,333)
Merger reserve 11,119,585 11,119,585
Capital redemption reserve 2,732,904 2,732,904
Retained Losses (37,335,661) (36,790,128)
------------------------------- --------------
Shareholders' funds (171,840) 358,420
------------------------------- --------------
Catenae Innovation Plc has taken advantage of s408 of Companies
Act 2006 and has not included its own profit and loss account in
the financial statements. The Company's loss for the period after
tax was GBP545,533 (2021: GBP1,269,137).
The financial statements were approved by the Board and
authorised for issue on 29 March 2023.
Brian Thompson
Chairman
Company statement of cash flows for the period ended 31 December
2022
Cash flow from operating activities 15 months 12 months
31 December 30 September
2022 2021
GBP GBP
Loss for the period (545,533) (1,269,137)
Adjustments for:
Impairment of investment - 320,000
Net bank and other interest charges - (10)
Services settled by the issue of shares - 72,704
Issue of share options and warrants - -
charge
------------------------------- ---------------------
Net cash outflow before changes in working
capital (545,533) (876,443)
------------------------------- ---------------------
(Increase)/Decrease in trade and other
receivables (29,509) (24,633)
(Decrease) / Increase in trade and other
payables 81,849 (157,318)
------------------------------- ---------------------
Cash outflow from operations (493,193) (1,058,394)
------------------------------- ---------------------
Interest received - 10
Interest paid - -
------------------------------- ---------------------
Net cash flows from operating activities (493,193) (1,058,384)
------------------------------- ---------------------
Investing activities
Investment in subsidiary - (217,500)
------------------------------- ---------------------
Net cash flows from investing activities - (217,500)
------------------------------- ---------------------
Financing activities
Issue of ordinary share capital 15,273 1,119,683
Repayment of loan - (18,000)
New loans raised - -
Net cash flows from financing activities 15,273 1,101,683
------------------------------- ---------------------
Net (decrease) / increase in cash (477,920) (174,201)
Cash and cash equivalents at beginning
of period 539,842 714,043
------------------------------- ---------------------
Cash and cash equivalents at end
of period 61,922 539,842
------------------------------- ---------------------
During the prior period GBP72,704 of trade and other payables
and loans were converted into equity in non-cash transactions.
Company statement of changes in equity for the period ended 31
December 2022
Deferred
Share Share Premium Shares / Other Retained Total
Capital Shares to Reserves Earnings Equity
be issued
GBP GBP GBP GBP GBP GBP
========= =============== =========== ================= ============== ===============
Balance at 30 Sept
2020 442,183 18,652,949 3,159,130 13,769,156 (35,520,991) 502,427
========= =============== =========== ================= ============== ===============
Loss for the period - - - - (1,269,137) (1,269,137)
Capital Reduction - - - - - -
Share capital issued 120,258 1,073,452 - - - 1,193,710
Share issue costs - (68,580) - - - (68,580)
--------- --------------- ----------- ----------------- -------------- ---------------
Balance at 30 Sept
2021 562,441 19,657,821 3,159,130 13,769,156 (36,790,128) 358,420
--------- --------------- ----------- ----------------- -------------- ---------------
Loss for the period - - - (545,533) (545,533)
Capital Reduction - - - - - -
Share capital issued 7,637 7,636 - - - 15,273
Share issue costs
- - - - - -
========= =============== =========== ================= ============== ===============
Balance at 31 Dec
2022 570,078 19,665,457 3,159,130 13,769,156 (37,335,661) (171,840)
========= =============== =========== ================= ============== ===============
The other reserves relate to the merger reserve, share reserve
and the capital redemption reserve.
Notes to the consolidated financial statements for the period
ended 31 December 2022
The principal activity of the Group is the provision of
multimedia and technology solutions.
Catenae Innovation Plc is incorporated in the United Kingdom
with registration number 04689130. Catenae Innovation Plc is
domiciled in the United Kingdom and has its registered office at 27
Old Gloucester Street, London WC1N 2AX. The principal place of
business for the Company is 26-27 Lansdowne Terrace, Gosforth,
Newcastle Upon Tyne, NE3 1HP.
Catenae Innovation Plc is a public limited company, limited by
shares and its shares are quoted on the AIM market of the London
Stock Exchange.
Catenae Innovation Plc's financial statements are presented in
Pounds Sterling.
The Group has extended its period end to the 15 months ended 31
December 2022 in order to align with the calendar year. The
comparatives are for the 12 months ended 30 September 2021.
1. Principal accounting policies
The principal accounting policies applied in the preparation of
these consolidated financial statements are set out below. These
policies have been consistently applied to all the period presented
unless otherwise stated.
Statement of compliance
The financial statements have been prepared in accordance with
UK-adopted International Accounting Standards and with those parts
of the Companies Act 2006 applicable to companies reporting under
International Accounting Standards Board (IASB) and the
interpretations issued by the International Financial Reporting
Interpretations Committee (IFRIC). There was no impact of the
change in framework from the previous EU adopted International
Financial Reporting Standards to UK-adopted International
Accounting Standards.
Basis of preparation and consolidation
The Group financial statements consolidate those of the Company
and its subsidiaries (together referred to as the "Group"). The
Group and separate parent company financial statements have been
prepared under the historic cost convention, except for, where
applicable, the revaluation of financial assets and liabilities at
fair value through profit or loss.
The Group financial statements consolidate those of the Company
and of its subsidiary undertakings drawn up to 31 December 2022.
Subsidiaries are entities over which the Group has the power to
control the financial and operating policies so as to obtain
benefits from its activities. The Group obtains and exercises
control through voting rights.
Amounts reported in the financial statements of subsidiaries
have been adjusted where necessary to ensure consistency with the
accounting policies adopted by the Group. The trading results of
subsidiaries acquired or disposed of during the period are included
in the consolidated statement of comprehensive income from the
effective date of acquisition or up to the effective date of
disposal, as appropriate.
All intra-Group transactions, balances, income and expenditure
are eliminated on consolidation.
Going concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Chairman's statement and below. The financial
position of the Group, its cash flows, liquidity position and
borrowing facilities are described in the financial statements. In
addition, note 18 to the financial statements includes the Group's
objectives, policies and processes for managing its capital; its
financial risk management objectives; details of its financial
instruments; and exposures to credit risk and liquidity risk.
The net liability position as at 31 December 2022, being the
Group's financial period-end, was GBP126,297 and the Group made a
loss of GBP523,497 for the period. However, the Board has been able
to agree additional funding in the form of a convertible loan for
GBP250,000 from Sanderson Capital Partners Ltd. In addition, the
Directors have considered the potential revenue from the Group's
sales pipeline based on discussions with existing customers and
acquisition opportunities.
The Directors are confident that the Group will achieve its cash
flow forecasts and, taking into account the operating initiatives
already in place and the funding options available to the Company,
have prepared the accounts on a going concern basis. Nevertheless,
the forecasts show that the Group may have a low level of cash in
twelve months time and may require further funding in the longer
term to meet its commitments as they fall due. These conditions and
events indicate the existence of material uncertainties that may
cast significant doubt upon the Group's ability to continue as a
going concern and the Group may therefore be unable to realise
their assets and discharge their liabilities in the ordinary course
of business. These financial statements do not include the
adjustments that would result if the Group were unable to continue
as a going concern.
The auditors have made reference to going concern by way of a
material uncertainty within their audit report.
Revenue recognition
The Group provides software licencing and support services.
The weighting of these and pricing of these services (which
drives the revenue recognition) depends on the service level
required by the client, and on the commercial imperatives and
pricing sensitivities of the client.
The contractual performance obligations will typically be
embedded in an agreement with the client.
Where that agreement is detailed, the revenue recognition will
follow the allocation of fees and revenues against the completion
of the agreed performance milestones in the accounting period.
Where the agreement is not specific, the revenue recognition
will be in proportion to the completion of performance milestones
in the relevant accounting period against the internal costings
prepared in advance for each project.
(i) Software licencing contracts
Revenue from software licencing contracts is recognised when the
customer takes possession of and accepts the software licence
products which is the point in time when the customer has the
ability to direct the use of the product and obtain substantially
all of the benefits of the products.
(ii) Ongoing support and maintenance contracts
Revenue from ongoing support and maintenance contracts is
recognised over the contractual term when the customer
simultaneously receives and consumes the benefits provided by the
Group's performance, as the Group performs. The Group recognises
contract liabilities for any revenue not yet provided to the
customer as of the period end.
Research and development
Expenditure on research activities is recognised as an expense
in the period in which it is incurred. An internally generated
intangible asset arising from the Group's development activity is
recognised only if all the following conditions are met:
-- an asset is created that can be identified (such as a website);
-- it is probable that the asset created will generate future economic benefits: and,
-- the development cost of the asset can be measured reliably.
Internally-generated intangible assets are amortised on a
straight-line basis over their useful lives. Where no
internally-generated intangible asset can be recognised,
development expenditure is recognised as an expense in the period
in which it is incurred.
Intangible assets
Externally acquired intangible assets are initially recognised
at cost and subsequently amortised on a straight-line basis over
their estimated useful economic lives. The amortisation expense is
included within the other administrative expenses line of the
Statement of Comprehensive Income.
Intangible assets are recognised on business combinations if
they are separable from the acquired entity or give rise to other
contractual/legal rights.
Business combinations and goodwill
The Group accounts for business combinations using the
acquisition method when control is transferred to the Group. The
consideration transferred in a business combination is measured at
fair value, which is calculated as the sum of the acquisition-date
fair values of the assets transferred by the Group, liabilities
incurred by the Group to the former owners of the acquiree and the
equity interests issued by the Group in exchange for control of the
acquiree. Acquisition-related costs are recognised in the
consolidated statement of profit or loss as incurred. Any goodwill
that arises is tested annually for impairment. Any gain on a
bargain purchase is recognised in consolidated statement of profit
or loss immediately.
Property, plant and equipment
Plant, machinery, fixtures and fittings are stated at historical
cost less accumulated depreciation and accumulated impairment loss.
Depreciation is recognised so as to write off the cost or valuation
of assets less their residual values over their useful lives, using
the reducing balance method, on the following bases:
Plant and machinery - 20 per cent per annum
The estimated useful lives, residual values and depreciation
method are reviewed at the end of each reporting period, with the
effect of any changes in estimate accounted for on a prospective
basis.
Impairment of non-current assets
For the purposes of assessing impairment, assets are grouped
into separately identifiable cash-generating units. At the end of
each reporting period, the Group reviews the carrying amounts of
its non-current assets, to determine whether there is any
indication that those assets have suffered an impairment loss. If
any such indication exists the recoverable amount of the asset is
estimated in order to determine the extent of the impairment loss
(if any).
An impairment loss is recognised for the amount by which the
assets or cash-generating unit's carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of fair
value less costs to sell and value in use based on an internal
discounted cash flow evaluation.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and on demand
deposits.
Deferred taxation
Recognition of deferred tax assets is restricted to those
instances where it is probable that taxable profit will be
available against which the difference can be utilised.
Investments
Investments in subsidiaries, associates and joint ventures are
stated cost and reviewed for impairment if there are indicators
that the carrying value may not be recoverable. An impairment loss
is recognised to the extent that the carrying amount cannot be
recovered either by selling the asset or by continuing to hold the
asset and benefitting from the net present value of the future cash
flows of the investment. The Group has not elected to apply equity
method of accounting to investments in associates.
Equity
Equity comprises the following:
-- Share capital represents the nominal value of issued ordinary shares and deferred 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.
-- Shares to be issued reserve represents cash received for the
purchase of shares yet to be issued at the period end and for
creditors who have agreed to convert their debt to shares yet to be
issued at the period end.
-- Merger reserve represents the excess over nominal value of
the fair value of consideration received for equity shares issued
on acquisition of subsidiaries, net of expenses of the share
issue.
-- Share reserve represents shares held in treasury at nominal
value following the conclusion of the defaulting shares from
October 2016.
-- Capital redemption reserve represents the nominal value of shares repurchased by the Company.
-- Retained earnings represent retained profits and losses.
-- Non-controlling interest relates to the ownership interest
and accumulated comprehensive income of the minority shareholders
in the Group's subsidiaries.
Equity instruments
Equity instruments issued by the Company are recorded as the
proceeds received, net of direct costs.
Financial assets
On initial recognition, financial assets are classified as
either financial assets at fair value through the statement of
profit or loss, held-to-maturity investments, loans and receivables
financial assets, or available-for-sale financial assets, as
appropriate.
Loans and receivables
The Group classifies all its financial assets as trade and other
receivables. The classification depends on the purpose for which
the financial assets were acquired.
Trade receivables and other receivables that have fixed or
determinable payments that are not quoted in an active market are
classified as loans and receivables financial assets. Loans and
receivables financial assets are measured at amortised cost using
the effective interest method, less any impairment loss. Interest
income is recognised by applying the effective interest rate,
except for short-term receivables when the recognition of interest
would be immaterial.
For trade receivables and other receivables due in less than 12
months, the Group applies the simplified approach in calculating
Expected Credit Losses ("ECL's"), as permitted by IFRS 9.
Therefore, the Group does not track changes in credit risk, but
instead, recognises a loss allowance based on the financial asset's
lifetime ECL at each reporting date. For any other financial assets
carried at amortised cost (which are due in more than 12 months),
the ECL is based on the 12-month ECL. The 12-month ECL is the
proportion of lifetime ECLs that results from default events on a
financial instrument that are possible within 12 months after the
reporting date. However, when there has been a significant increase
in credit risk since origination, the allowance will be based on
the lifetime ECL. When determining whether the credit risk of a
financial asset has increased significantly since initial
recognition and when estimating ECLs, the Group considers
reasonable and supportable information that is relevant and
available without undue cost or effort. This includes both
quantitative and qualitative information and analysis, based on the
Group's historical experience and informed credit assessment
including forward-looking information.
Financial liabilities
Financial liabilities are recognised when, and only when, the
Group becomes a party to the contracts which give rise to them and
are classified as financial liabilities at fair value through the
profit and loss or loans and payables as appropriate. The Group's
loans and payable comprise trade and other payables.
When financial liabilities are recognised initially, they are
measured at fair value plus directly attributable transaction costs
and subsequently measured at amortised cost using the effective
interest method other than those categorised as fair value through
income statement.
Fair value through the income statement category comprises
financial liabilities that are either held for trading or are
designated to eliminate or significantly reduce a measurement or
recognition inconsistency that would otherwise arise. Derivatives
are also classified as held for trading unless they are designated
as hedges. There were no financial liabilities classified under
this category.
The Group determines the classification of its financial
liabilities at initial recognition and re-evaluate the designation
at each financial period end.
A financial liability is de-recognised when the obligation under
the liability is discharged, cancelled or expires.
When an existing financial liability is replaced by another from
the same party on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or
modification is treated as a de-recognition of the original
liability and the recognition of a new liability, and the
difference in the respective carrying amounts is recognised in the
income statement.
Share-based payments
When share options and warrants are awarded, the fair value of
the options and warrants at the date of grant is charged to the
statement of comprehensive income over the vesting period.
Non-market conditions are taken into account by adjusting the
number of equity instruments expected to vest at each end of
reporting period, so that, ultimately, the cumulative amount
recognised over the vesting period is based on the number of
options and warrants that eventually vest.
Market conditions are factored into the fair value of the
options and warrants granted. As long as all other vesting
conditions are satisfied, a charge is made irrespective of whether
the market vesting conditions are satisfied. The cumulative expense
is not adjusted for failure to achieve a market vesting
condition.
Where the terms and conditions of options and warrants are
modified before they vest, the increase in fair value of the
options and warrants, measured immediately before and after the
modification, is also charged to the statement of comprehensive
income over the remaining vesting period.
Where equity instruments are granted to persons other than
employees, the full cost of services provided is recognised as a
current liability and as a charge in the statement of comprehensive
income. When shares are issued to settle the obligation, the
liability is extinguished and the share issue is reflected in
equity as an issue of share capital.
Upon exercise of share options and warrants, the proceeds
received net of attributable transaction costs are credited to
share capital, and where appropriate share premium.
New and amended standards and interpretations adopted by the
Group
There were no new standards and interpretations to published
standards adopted during the period which have had a significant
impact on the Group's accounting policies.
New and amended standards and interpretations issued but not
effective for the financial period beginning 1 October 2021
At the date of authorisation of these financial statements, the
following standards and interpretations which have not been applied
in these financial statements were in issue but not yet
effective:
IFRS 17 "Insurance Contracts", effective date 1 January 2023
applies a model that combines a current balance sheet measurement
of insurance contracts with recognition of profit over the period
that services are provided.
IAS 37 "Onerous contracts", effective 1 January 2022 relates to
costs of fulfilling a contract.
The impact of the above standards on the financial statements is
expected to be insignificant. The effect of all other new and
amended standards and interpretations which are in issue but not
yet mandatorily effective is not expected to be material. The
Directors will continue to monitor the effect of this and should
the effect become material, more detailed notes will be
provided.
2. Critical accounting judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management
to make estimates and assumptions that affect the reported amounts
of revenues, expenses, assets and liabilities, and the disclosure
of contingent liabilities at the date of the financial statements.
If in the future such estimates and assumptions, which are based on
management's best judgement at the date of the financial
statements, deviate from the actual circumstances, the original
estimates and assumptions will be modified as appropriate in the
period in which the circumstances change.
Where necessary, the comparatives have been reclassified or
extended from the previously reported results to take into account
presentational changes.
Critical judgements and estimates in applying the Group's
accounting policies
In the process of applying the Group's accounting policies,
which are described in note 1, management has made the following
judgements and estimates that have the most significant effect on
the amounts recognised in the financial statements (apart from
those involving estimations, which are dealt with below).
Judgements
Going concern
Management have considered that the Group remains a going
concern. The going concern assumption is discussed further in note
1.
Estimates
There are not deemed to be any key sources of estimation of
uncertainty that have a significant risk of resulting in a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year.
3. Segment and revenue analysis
The accounting policy for identifying segments is based on the
internal management reporting information that is regularly
reviewed by the senior management team.
The Group has one reportable segment:
Catenae and Hyperneph Software Ltd -generates revenue from the
exploitation of intellectual property and licenses held.
The financials for this segment can be seen in the financial
statements in this document.
The Group derives revenue from the transfer of services over
time and at a point in time to customers all located in the UK.
15 months 12 months
31 December 30 September
2022 2021
GBP GBP
Timing of revenue recognition:
At a point in time 152,437 30,210
Over time - -
---------------- -------------
Total revenue 152,437 30,210
---------------- -------------
4. Joint venture - Trust in Media Ltd
In March 2018, the Group formed a joint venture to create Trust
in Media Ltd. Catenae held 50.5% of the shares in Trust in Media
Ltd.
The company entered compulsory liquidation on 29 July 2020 when
the official receiver was appointed.
The official receiver completed the winding-up on 13 September
2021 without any claim on the Group and Trust in Media Ltd was
dissolved on 20 December 2021.
5. Administrative expenses
The following amounts are included within administrative expenses:
15 months 12 months
31 December 30 September
2022 2021
GBP GBP
Auditors' remuneration:
Fees payable to the Company's auditor:
For the audit of the Company's annual
accounts 14,000 14,000
For the audit of the Company's subsidiaries 3,000 6,000
Fees for taxation compliance services - -
Staff costs (note 6) 345,083 311,380
Depreciation 1,810 621
6. Directors and staff
Staff costs during the period, including Directors, were as
follows:
15 months 12 months
31 December 30 September
2022 2021
GBP GBP
Wages and salaries 311,707 283,789
Social security costs 29,733 25,279
Pension costs 3,643 2,312
---------------------- -------------
345,083 311,380
---------------------- -------------
The average number of staff of the Group during the period was
as follows:
15 months 12 months
31 December 30 September
2022 2021
no. no.
Sales, distribution and technology 1 2
Directors and administration 3 5
----------- -------------
4 7
----------- -------------
The amounts paid and accrued as a liability by the Company in
respect of the Directors, who are the key management personnel of
the Company was as follows:
15 months 12 months
31 December 30 September
2022 2021
GBP GBP
Edward Guy Meyer 132,000 139,000
Brian Thompson - 16,000
John Farthing 59,250 52,000
Total Directors emoluments 191,250 207,000
------------------------------ ----------------------
Employers national insurance, employers
pension and share option / warrant charges
for key management
personnel (including directors) 17,065 26,560
------------------------------ ----------------------
208,315 233,560
------------------------------ ----------------------
Details of the total amounts outstanding to the Directors at the
period end are detailed in note 16.
7. Net finance expenses
15 months 12 months
31 December 30 September
2022 2021
GBP GBP
Bank interest receivable - 10
- 10
---------------- -------------
8. Discontinued operations
There were no discontinued operations during the period.
9. Tax on loss
15 months 12 months
31 December 30 September
2022 2021
GBP GBP
Corporation tax charge on profits
for the period (3,668) 5,112
Total current tax charge (3,668) 5,112
---------------------- -------------
The reasons for the difference between the actual tax charge for
the period and the standard rate of corporation tax in the UK
applied to profits for the period are as follows:
2022 2021
GBP GBP
Loss before tax (527,165) (1,241,836)
-------------------------- --------------
Loss at the standard rate of corporation
tax in the UK of 19% (2020: 19%) (100,161) (235,949)
Effects of:
Expenses not deductible for tax purposes 681 186
Other adjustments - 67,194
Losses carried back (3,668) -
Unutilised tax losses and other deductions 99,480 173,681
-------------------------- --------------
Total tax charge in the period (3,668) 5,112
-------------------------- --------------
Deferred tax assets of approximately GBP2.9m (2021: GBP2.8m)
have not been recognised in the financial statements as there is
currently insufficient evidence to suggest that any deferred tax
asset would be recoverable. The Group has unutilised tax losses of
approximately GBP15.3m (2021: GBP14.8m) that would be available to
carry forward against future profits from the same activity,
subject to agreement by HM Revenue & Customs.
10. Dividend
No dividends have been paid or proposed in the period (2021:
GBPnil).
11. Loss per share
The calculation of the basic loss per share is based on the loss
attributable to ordinary shareholders divided by the weighted
average number of shares in issue during the period. The
calculation of diluted loss per share is based on the basic loss
per share, adjusted to allow for the issue of shares and the post
tax effect of dividends and interest, on the assumed conversion of
all other dilutive options and other potential ordinary shares.
There were 144,444 share options and 26,977,240 share warrants
outstanding at the period-end (2021: 164,444 and 70,022,695).
However, the figures for 2022 and 2021 have not been adjusted to
reflect conversion of these share options, as the effects would be
anti- dilutive.
31 December 2022 30 September 2021
Weighted Weighted
average Per share average Per share
Loss number amount Loss number amount
GBP of Pence GBP of Pence
shares shares
Basic and diluted
loss per share
attributable
to shareholders (514,695) 284,017,394 (0.18) (1,257,149) 258,490,041 (0.49)
12. Property, plant and equipment
Group Plant and machinery Total
GBP GBP
Cost
At 1 October 2020 - -
On acquisition of subsidiary 6,522 6,522
Additions 2,111 2,111
--------------------------------------- -------------------
At 30 September 2021 8,633 8,633
--------------------------------------- -------------------
Additions 413 413
At 31 December 2022 9,046 9,046
--------------------------------------- -------------------
Accumulated depreciation
At 1 October 2020 - -
On acquisition of subsidiary 1,184 1,184
Charge for the year 621 621
--------------------------------------- -------------------
At 1 October 2021 1,805 1,805
--------------------------------------- -------------------
Charge for the period 1,810 1,810
--------------------------------------- -------------------
At 31 December 2022 3,615 3,615
--------------------------------------- -------------------
Carrying amount
As at 30 September 2021 6,828 6,828
As at 31 December 2022 5,431 5,431
13. Intangible assets
Group Goodwill Total
GBP GBP
Cost
At 1 October 2020 1 1
Additions 318,629 318,629
------------------------------- -------------------
At 30 September 2021 and 31 December
2022 318,630 318,630
------------------------------- -------------------
Impairment
At 1 October 2020 - -
Impairment charge (318,629) (318,629)
------------------------------- -------------------
At 30 September 2021 and 31 December
2022 (318,629) (318,629)
------------------------------- -------------------
Carrying amount
As at 30 September 2021 and 31
December 2022 1 1
The Group assesses at each reporting date whether there is an
indication that an asset may be impaired. The assets have been
allocated for impairment testing purposes to the individual
businesses acquired which are also the cash--generating units
("CGU") identified. The recoverable amount of a CGU is determined
based on value in use calculations using cash flow projections
based on financial budgets approved by the Directors. The
projections are based on the assumption that the Company can
realise projected sales. A prudent approach has been applied with
no residual value being factored into these calculations. If the
projected sales do not materialise there is a risk that the total
value of the intangible assets shown above would be impaired.
Goodwill is assessed annually for impairment. At the period end
based on these assumptions there is an indication of impairment of
the full value of goodwill.
Dispute with the sellers of Hyperneph Software Limited
On 4 May 2021 the Company acquired a 51% interest in Hyperneph
Software Limited ("Hyperneph" or "Acquisition"). Tony Sanders is a
former director of the Company and a director and shareholder of
Hyperneph. The consideration for the Acquisition amounts to
GBP320,000, of which GBP270,000 will be satisfied in cash ("Cash
Consideration") and the balance of GBP50,000 will be satisfied by
way of the issue of new ordinary shares in the Company ("Equity
Consideration"). Hyperneph, incorporated on 24 February 2020, is a
software and application development consultancy, focusing on
digital transformation. The rationale for the acquisition is to
secure and enhance the Company's ability to deliver innovative
software-based solutions leveraging Catenae's existing capabilities
including task management, proof of work, digital wallets, identity
and digital certification capabilities, allowing Catenae to provide
a broader portfolio of product and service offerings to support
customers as they pursue new ways of working with people located
remotely in distributed operations. The Cash Consideration will be
satisfied from Catenae's existing cash resources. The Equity
Consideration was due to be satisfied by the issue of new ordinary
shares on or around 28 February 2022 at the volume weighted average
price of the Company's shares during the previous 10 trading
days.
On 9 May 2022, Mr Alan Simpson and Mr Anthony Sanders issued
legal proceedings against the Company in the High Court. The
claimed sum was GBP49,875.00 (plus interest) along with specific
performance of various clauses of a Share Purchase Agreement and a
Shareholders Agreement both dated 1 May 2022. Those relate to the
issue of the GBP50,000 shares consideration and the payment of two
amounts of GBP20,000 relating to working capital. The action is
being defended by the Company which has brought a counterclaim for
breach of restrictive covenants and fiduciary duty. No date is
currently set for trial but the Claimants have issued a Summary
Judgment application which is yet to be listed by the Court.
14. Investments in subsidiaries
Company
Investments Total
GBP GBP
Cost
At 1 October 2020 - -
Additions 320,000 320,000
At 30 September 2021 and 31 December
2022 320,000 - 10 320,000
-------------------------- ----------------------
Impairment
At 1 October 2020 - -
Additions 320,000 320,000
--------------------------------- ----------------------
At 30 September and 31 December
2022 320,000 320,000
--------------------------------- ----------------------
Carrying amount
As at 30 September 2021 and 31 December - -
2022
The value of shares in investments are tested annually for
impairment.
Subsidiaries Registered Address Class of Total Number Percentage
as at 31 Dec Shares of Shares in held by Catenae
2022 issue at 31
Dec 2022
Synovate Global 35 New Broad Street, Ordinary Shares
Ltd London, EC2M 1NH of 0.1p 1 100%
====================== ================ ============== ==================
1007 London Road,
Hyperneph Software Leigh-On-Sea Ordinary Shares
Ltd SS9 3JY of 0.1p 2000 51%
====================== ================ ============== ==================
Synovate Global Ltd was dissolved on 7 June 2022.
15. Trade and other receivables
Group
31 December 30 September
2022 2021
GBP GBP
Trade receivables 65,234 11,010
Other receivables 16,679 34,226
--------------- ------------
81,913 45,236
--------------- ------------
Trade receivable days at the period-end were 154 days (2021: 133
days). No interest is charged on receivables within the agreed
credit terms. Thereafter, interest may be charged.
An allowance for impairment is made where there is an identified
event which, based on previous experience, is evidence of a
reduction in the recoverability of the outstanding amount. The
Group provides, in full, for any debts it believes have become non-
recoverable. The figures shown above are after deducting specific
provision for bad and doubtful debts of GBPnil (2021: GBPnil). No
amounts included within trade and other receivables are expected to
be recovered in more than one year (2021: GBPnil).
The maximum exposure to credit risk at the reporting date is the
carrying value of each class of receivable set out above. The
carrying value at the period-end for each class of assets is deemed
by the Directors to be the same as the fair value.
The ageing of trade receivables that have not been impaired
are:
31 December 30 September
2022 2021
GBP GBP
Due in less than 1 month 56,940 -
Due after more than 1 month 8,294 11,010
------------------- ------------
65,234 11,010
------------------- ------------
Company
31 December 30 September
2022 2021
GBP GBP
Trade receivables 61,734 11,010
Other receivables 13,011 34,226
----------------------------- ------------
74,745 45,236
----------------------------- ------------
16. Trade and other payables
Group
31 December 30 September
2022 2021
GBP GBP
Trade payables 42,783 86,193
Other payables 107,901 122,482
Taxation and social security 11,464 23,701
Accruals and contract liabilities 116,938 42,845
--------------------------- ----------------
279,086 275,221
--------------------------- ----------------
Included in accruals and deferred income are amounts of
GBP64,250 (2021: GBP6,500) relating to unpaid contingent
remuneration to the Directors in office at the period-end. This has
been accrued in accordance with the payments agreed between the
Group and Directors.
Included in contract liabilities there is GBP3,125 (2021:
GBP12,000), which relates to the residual proportion of annual fees
remaining at the period-end.
Company
31 December 30 September
2022 2021
GBP GBP
Trade payables 42,182 83,492
Other payables 144,473 105,102
Taxation and social security 6,097 1,470
Accruals and contract liabilities 115,756 - 36,595
---------------------------- ----------------
308,508 226,659
---------------------------- ----------------
Included in accruals and deferred income are amounts of
GBP64,250 (2021: GBP6,500) relating to unpaid contingent
remuneration to the Directors in office at the period-end. This has
been accrued in accordance with the payments agreed between the
Company and Directors.
Included in contract liabilities there is GBP3,125 (2021:
GBP6,250), which relates to the residual proportion of annual fees
remaining at the period-end.
17. Interest bearing loans and borrowings
Group and Company
31 December 30 September
2022 2021
GBP GBP
Loans due within one period - -
Loans due after one period - -
--------------------- ------------
- -
--------------------- ------------
The loan of GBP18,000 was a Bounce Back Loan and was due to be
repaid over 6 years with interest at 2.5% per year, with the
repayments and interest commencing 1 year after draw down. However,
the loan was repaid in full in May 2021 without any interest
accruing.
18. Financial instruments and risk management
Financial risk factors
The Group's financial instruments comprise cash, including
short-term deposits, trade and other receivables, short-term loan
financing and trade and other payables that arise directly from its
operations. The main risks arising from the Group's financial
instruments are liquidity risk, credit risk and interest rate risk.
The Board has reviewed and agreed policies for managing each of
these risks and they are summarised below. The Group has no
financial assets other than trade receivables and cash at bank. The
statement of financial position values for the financial assets and
liabilities are not materially different from their fair
values.
Liquidity risk
The Group seeks to manage financial risk to ensure sufficient
liquidity is available to meet foreseeable needs and to invest cash
assets safely and profitably. The Group policy is to ensure there
are sufficient cash reserves to meet liabilities during such
periods. These are incorporated into rolling twelve-month Group
cash flow forecasts, which are reviewed by the Board monthly.
Short-term flexibility is provided through the availability of
cash facilities. Long-term funding is secured through issues of
share capital and loans.
Credit risk
The Group's principal financial assets are bank balances, cash
and trade and other receivables. The Group's credit risk is
primarily attributable to its trade receivables. As far as
possible, the Group operates to ensure that the payment terms of
customers are matched to the Group's own contractual obligations on
development.
Currency risk
The Group does not operate in overseas markets and is not
subject to exposures on transactions undertaken during the period.
The Group's exposure to exchange rate fluctuations is therefore not
significant.
Capital risk management
The capital structure of the Group consists of a loan and the
shareholders' equity, comprising issued share capital and reserves.
The capital structure of the Group is reviewed on an on-going basis
with reference to the costs applicable to each element of capital,
future requirements of the Group, flexibility of capital to be
drawn down and availability of further capital should it be
required.
The Group had no loan liabilities at the period-end (2021:
GBPnil).
18. Financial instruments and risk management (continued)
Liability maturity analysis
Group
Repayable on demand Between 1 Between 6
or within 1 month month and months and
2022 6 months 1 year
GBP GBP GBP
Trade creditors 42,783 - -
Other creditors - - 119,365
Between 1 Between 6
Repayable on demand month and months and
2021 or within 1 month 6 months 1 year
GBP GBP GBP
Trade creditors 86,193 - -
Other creditors - - 146,183
Company
Repayable on demand Between 1 Between 6
or within 1 month month and months and
2022 6 months 1 year
GBP GBP GBP
Trade creditors 42,182 - -
Other creditors - - 150,570
Between 1 Between 6
Repayable on demand month and months and
2021 or within 1 month 6 months 1 year
GBP GBP GBP
Trade creditors 83,492 - -
Other creditors - - 106,572
Interest rate and liquidity risk
The Group's financial liabilities represented trade and other
payables at the period-end. No interest was payable on the balances
outstanding as at the period end. The Group's working capital
commitments are reviewed on an on-going basis with reference to the
dates when liabilities are to be repaid.
19. Share capital
31 December 30 September
2022 2021
GBP GBP
Allotted, called up and fully paid
285,038,925 (2021: 281,220,744) ordinary
shares of 0.2p
(2020: 0.2p) each 570,078 562,441
================================ ============
570,078 562,441
.
On 23 December 2019 the 3,223,601,700 ordinary shares of 0.1p
each were subdivided into 32,236,017 ordinary shares of 0.2p each
and 32,236,017 deferred shares of 9.8p each.
The aggregate nominal value of the deferred shares is
GBP3,159,130.
On 25 January 2022 the Company issued 3,818,181 ordinary shares
of 0.2p each for consideration of GBP15,273 in relation to the
exercise of warrants.
20. Share warrants
At 31 December 2022, the Company had the following equity
settled warrants in issue (the number of warrants and exercise
prices have been adjusted for the reorganisation of the Company's
shares into ordinary and deferred shares during a prior
period):
Shares
forfeited
Number of / expired Warrants
Date warrant warrants Warrants / waived outstanding
granted outstanding granted / exercised as at 31 Exercise
as at during during the Dec 2022 price
1 Oct 2021 the period period
Brian Thompson 31/01/2020 26,931,818 - (26,931,818) - 0.4p
Anthony
Daltrey 31/01/2020 5,000,000 - (5,000,000) - 0.4p
Misc. Warrants 05/03/2019 5,750,000 - (5,750,000) - 12.5p
31/01/2020 4,363,637 - (4,363,637) - 0.4p
20/04/2020 1,000,000 - (1,000,000) - 1.25p
27/01/2021 22,477,240 - - 22,477,240 3p
03/02/2021 2,500,000 - - 2,500,000 2p
08/04/2021 2,000,000 - - 2,000,000 2.5p
70,022,695 - (43,045,455) 26,977,240
--------------- ------------ ------------ -------------
There were no warrants issued in the period 1 October 2021 to 31
December 2022.
The fair value of the share warrants issued as share based
payments was estimated at the date of grant using the Monte-Carlo
model for those with the performance conditions and the Black
Scholes model for those without performance conditions, taking into
account the terms and conditions upon which they were granted. The
following tables list the inputs to the model used for the
valuations of share warrants outstanding relating to share based
payments.
Grant Date 3/2/2021
Final Date 3/2/2024
Exercise Price 2p
Share Price 2p
Expected Volatility 25%
Expected Dividend Yield n/a
Risk Free Rate 0.6%
Average Time to Vest immediate
21. Capital commitments
There were no capital commitments as of 31 December 2022 or 30
September 2021.
22. Share-based payment
On 13 December 2012, the Company granted to various individuals
options over a total of 7,695,000 ordinary shares of 0.1p each at a
price of 1.5 pence per share as disclosed in the announcement dated
14 December 2012. Half of the options vest once the closing mid-
market share price of the Company has been more than or equal to 2
pence for a period of 15 consecutive business days. The remainder
vest once the closing mid-market share price of the Company has
been more than or equal to 3 pence for a period of 15 consecutive
days. The options are exercisable on or following the first
anniversary of the date of issue and will lapse on the tenth
anniversary of the date of issue. Options issued to employees under
the EMI scheme lapse on cessation of employment. Since the issue
date all options have lapsed.
On 27 March 2015, the Company granted to the Directors and other
individuals options over a total of 85,787,000 ordinary shares of
0.1p each at a price of 1 penny per share as disclosed in the
announcement dated 22 December 2014. Half of the options vest once
the closing mid-market share price of the Company has been more
than or equal to 2 pence for a period of 15 consecutive business
days. The remainder vest once the closing mid- market share price
of the Company has been more than or equal to 3 pence for a period
of 15 consecutive days. The options are exercisable on or following
the first anniversary of the date of issue and will lapse on the
tenth anniversary of the
date of issue. Options issued to non-Director employees under
the EMI scheme lapse on cessation of employment. Since the issue
date the options have lapsed, other than those shown in the table
below.
On 23 August 2016, the Company granted to the Directors and
other individuals options over a total of 78,260,782 ordinary
shares of 0.1p each at a price of 0.1 pence per share as disclosed
in the announcement dated 23 August 2016. The options will lapse on
the tenth anniversary of the date of issue. On 23 August 2016, the
Company also granted to a Director options over a total of
3,333,334 ordinary shares of 0.1p each, half of the options at a
price of 1.25 pence per share and the remainder at 1.75 pence per
share. The options vest once the closing mid-market share price of
the Company has been more than 2.5 pence for a period of 5
consecutive business days. Since the issue date all options have
lapsed.
In a prior period the Company re-organised its share capital as
disclosed in Note 19. The above number of share options needs to be
divided by 100 and the above exercise prices multiplied by 100.
Details of the Options movements in the period are as
follows:
Number of Number of Options
Options held new options options held
at 1 October granted in forfeited at 30 Option
2021 the period in the period September price
2022
Tony Sanders 66,666 - - 66,666 10p
Kevin Everett 77,778 - - 77,778 10p
Others 20,000 - (20,000) - 150p
Total 164,444 - (20,000) 144,444
================= =============== ====================== ======================= ===============
22. Share-based payment (continued)
At 31 December 2022, no options were exercisable due to the
mid-market share price of the Company in the period (30 September
2021: nil). At this date, the weighted average contractual life of
the outstanding options was 2.25 years (30 September 2021: 0.1
years).
There were no share options exercised or granted during the
period 1 October 2021 to 31 December 2022 (2021: nil).
The fair value of the share options was estimated at the date of
the grant using either the Monte-Carlo model (where market
conditions existed) or the Black-Scholes model, taking into account
the terms and conditions upon which they were granted.
The following table lists the inputs to the model used for the
valuations of share options outstanding:
Options granted on 27 March 2015 expire 27
March 2025
Exercise price (pence) 1p 1p
Share price (pence) 0.65p 0.65p
Expected volatility (%) 85% 85%
Expected dividend yield n/a n/a
Risk free rate 0.41% 0.49%
Average time to vest (years) 2 years 2.3 years
The expected volatility was based on historic volatility and
reflects the assumption that the historical volatility is
indicative of future trends, which may not necessarily be the
actual outcome. No other features of the options were incorporated
into the measurement of fair value, and non-market conditions have
not been included in calculating the fair value. The total fair
value of the options granted in the period was GBPnil (2021:
GBPnil). The amount debited to the statement of comprehensive
income for share options was GBPnil (2021: GBPnil). The combined
total fair value of the options and warrants granted in the period
was GBPnil (2021: GBPnil) and the combined amount debited to the
statement of comprehensive income was GBPnil (2021: GBPnil).
23. Transactions with Directors and other related parties
Other transactions with Directors
As stated in note 16 to the accounts a total of GBP64,250 (2021:
GBP6,500) is due to certain Directors as unpaid remuneration.
Payments (to)
Related Party relationship Transaction / from related Balance owing
amount parties /
owed
2022 2021 2022 2021 2022 2021
GBP GBP GBP GBP GBP GBP
Sales/(Purchases) from
companies in which
Directors or their
immediate family have
a significant controlling
interest 18,058 17,800 18,058 17,800 - -
Amounts lent to the
Group by the Directors
or companies in which
Directors or their
immediate family have
a significant controlling - - - - - -
interest
Amounts lent to joint
venture companies - - - - - -
All amounts owing to related parties are payable on demand with
no interest accruing.
24. Retirement benefit schemes
During the period, GBP3,643 was paid to a retirement benefit
scheme on behalf of Directors (2021:
GBP1,207).
25. Operating lease rental commitments
At 31 December 2022 and 30 September 2021, the Group had no
commitments under operating leases.
26. Notes supporting the cash flow statement
Cash and cash equivalents for the purposes of the cash flow
statement comprises:
31 December 30 September
2022 2021
GBP GBP
Cash available on demand 65,443 605,082
----------------------------- ------------
65,443 605,082
----------------------------- ------------
27. Events after the reporting period
There were no significant events after 31 December 2022.
Independent Auditor Report INDEPENT AUDITOR'S REPORT TO THE
MEMBERS OF CATENAE INNOVATION PLC
Opinion
We have audited the financial statements of Catenae Innovation
Plc for the period ended 31 December 2022 which comprise the
Consolidated Statement of Comprehensive Income, the Consolidated
Statement of Financial Position, the Consolidated Statement of
Changes in Equity, the Consolidated Statement of Cash Flows,
Company Statement of Financial Position, Company Statement of
Changes in Equity, Company Statement of Cash Flows and the related
notes, including a summary of significant accounting policies. The
financial reporting framework that has been applied in their
preparation is applicable law and UK adopted International
Accounting Standards, and as regards to the parent company
financial statements, as applied in accordance with the provisions
of the Companies Act 2006.
In our opinion:
-- the financial statements give a true and fair view of the
state of the group and company's affairs as at 31 December 2022 and
of the group's loss for the period then ended;
-- the group and company financial statements have been properly
prepared in accordance with UK adopted International Accounting
Standards; and
-- the financial statements 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 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 relating to going concern
We draw attention to note 1 in the financial statements, which
indicates that the group is loss making and has net liabilities. As
stated in note 1, these events or conditions, along with the other
matters as set forth in note1, 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.
In auditing the financial statements, we have concluded that the
directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors assessment of the entity's ability to
continue to adopt the going concern basis of accounting
included:
-- Reviewing the cash flow forecasts prepared by management for
the period up to March 2024, providing challenge to key assumptions
and reviewing for reasonableness;
-- A comparison of actual results for the period to past budgets
to assess the forecasting ability/accuracy of management;
-- Reviewing post-period end RNS announcements and held
discussions with management on expenditure plans; and
-- Assessing the adequacy of going concern disclosures within the financial statements.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Key audit matters
We identified the key audit matters described below as that
which were the most significant in the audit of the financial
statements of the current period. Key audit matters include the
most significant assessed risks of material misstatement, including
those risks that had the greatest effect on our overall audit
strategy, the allocation of resources in the audit and the
direction of the efforts of the audit team.
In addressing this matter, we have performed the procedures
below which were designed to address the matter in the context of
the financial statements as a whole and in forming our opinion
thereon. Consequently, we do not provide a separate opinion on this
individual matter.
How the matter was addressed in the
Key audit matter & audit and key observations arising with
description of risk respect to that risk
Going concern We evaluated management's assessment
about going concern and challenged the
The company has used judgement made by management, as described
going concern basis in note 1.
of preparation in its
accounting policies. As part of our procedures we:
However, there is significant
judgement * Reviewed the company's environment, controls and
required as to whether management's assessment of the company's ability to
the company can continue continue as a going concern
to operate as a going
concern.
* reviewed the cashflow forecasts and assumptions made
and the data sources
Based on our procedures we concluded
that the going concern basis of preparation
is appropriate, subject to an emphasis
of matter. (See also Conclusions relating
to going concern above)
-----------------------------------------------------------------
Dispute involving subsidiary Our work in this area included but was
not limited to:
The parent company has * Reviewing the sale and purchase agreement for
acquired Hyperneph investments purchased during the prior period;
Software Limited in
the prior period and
is in dispute with the
sellers. There is a * Reviewing the legal case documentation and
risk that the dispute correspondence and considering whether any provisions
may not have been correctly or contingent liabilities are required and whether
accounted for or disclosed. the nature and financial effect has been adequately
disclosed.
-----------------------------------------------------------------
Materiality
The materiality for the financial statements as a whole was set
at GBP16,675. This has been determined with reference to the
benchmark of the group's gross expenses, which we consider to be an
appropriate measure based on the activities of the group during the
period. Materiality represents 2.5% of total expenditure as
presented on the face of the Statement of comprehensive income.
An overview of the scope of our audit
We tailored the scope of our audit to ensure that we were able
to give our audit opinion on the financial statements of Catenae
Innovation Plc taking into account the nature of the company's
activities, the company's risk profile, the accounting processes
and controls, and the environment in which the company
operates.
We designed our audit to ensure that we obtain sufficient and
appropriate audit evidence in respect of:
-- The significant transactions and balances;
-- Other items, which, irrespective of size, are perceived as
carrying a significant level of audit risk whether through
susceptibility to fraud, or other reasons;
-- The appropriateness of the going concern assumption used in
the preparation of the financial statements.
Other information
The other information comprises the information included in the
Report and Financial Statements, 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.
Opinion on other matters prescribed by 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 period 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
where 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 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 directors' responsibilities
statement, 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.
We also obtain sufficient appropriate audit evidence regarding
the financial information of the business activities within the
group to express an opinion on the financial statements. We are
responsible for the direction, supervision and performance of the
audit. We remain solely responsible for our audit opinion.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
-- We obtained an understanding of the group and parent company
and the sector in which they operate to identify laws and
regulations that could reasonably be expected to have a direct
effect on the financial statements. We obtained our understanding
in this regard through discussions with management, industry
research and the application of cumulative audit knowledge and
experience of the sector.
-- We determined the principal laws and regulations relevant to
the group and company in this regard to be those arising from:
o AIM rules;
o Companies Act 2006;
o Employment Law;
o Anti-Bribery Money Laundering Regulations; and
o QCA compliance
-- We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by
the group and company with those laws and regulations. These
procedures included, but were not limited to:
o review of legal and professional fees to understand the nature
of the costs and the existence of any noncompliance with laws and
regulations;
o discussion with management regarding potential non-compliance;
and
o review of minutes of meetings of those charged with governance
and RNS
-- We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to
the non-rebuttable presumption of a risk of fraud arising from
management override of controls, the potential for management bias
was identified in relation to the going concern of the group and
company and as noted above, we addressed this by challenging the
assumptions and judgements made by management when auditing that
significant accounting estimate.
-- As in all of our audits, we addressed the risk of fraud
arising from management override of controls by performing audit
procedures which included, but were not limited to: the testing of
journals; reviewing accounting estimates for evidence of bias; and
evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or
non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and
transactions reflected in the financial statements, as we will be
less likely to become aware of instances of non-compliance. The
risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
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.
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.
Mohammed Haque
Senior Statutory Auditor
For and on behalf of
MAH, Chartered Accountants
Statutory Auditors
154 Bishopsgate
London
EC2M 4LN
Date: 29 March 2023
This information is provided by RNS, the news service of the
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END
FR URSSROKUOOAR
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March 30, 2023 10:56 ET (14:56 GMT)
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