TIDMMSYS
RNS Number : 8234Z
Microsaic Systems plc
16 January 2024
16 January 2024
Microsaic Systems plc
("Microsaic", "Microsaic Systems" or the "Company")
Interim Results for the six months ended 30 June 2023
Microsaic Systems plc (AIM: MSYS), the developer of
micro-electronic instruments and analytical solutions, is pleased
to announce its unaudited interim results for the six months ended
30 June 2023. The extensive research and development work behind
our novel ProteinID, PFAS (forever chemicals) and acrylamide
detection technologies has concluded with working test units
following the period end. Building on our transition from unit
(4500 MiD(R)) product mass spectrometer sales only to
customer-centric service solutions in science and engineering
services, the Company is now focusing on commercial testing, sales
and servicing of these exciting new technologies.
A copy of these interim results is being made available on the
Company's website at https://www.microsaic.com/investors/, and hard
copies will be sent to shareholders who have requested
communications in that format.
Highlights
-- Unaudited revenues of GBP139k: a decrease of 81% on H1 2022 (GBP735k)
-- EBITDA adjusted loss of GBP1,023k which is 55% higher than H1 2022 (GBP661k)
-- Total comprehensive loss of GBP1,079k an increase of 53% compared to H1 2022 (GBP705k)
-- Cash at 30 June 2023 was GBP587k (H1 2022: GBP2.56m)
-- An agreement was signed with a new global technology
distributor Avantor (via VWR International Ltd)
-- Orders for 8 Units received for manufacture in H2 2023
Post Period Events
-- Technical issues with the testing of key components from
suppliers holding up the manufacturing process are being resolved
with up to 10 units now in final test or being manufactured in H2
2023
-- Unit orders shipped in H2 (including one demonstration unit)
increased to 6 with sales revenue invoiced at GBP262k by year
end
-- July 2023: The DeepVerge plc announcement on 26 June 2023
about its dire financial position resulted in the outstanding debt
of circa GBP1.3m to the Company not being settled. As a result, the
Company's annual audited accounts could not be finalised and
trading on AIM was then temporarily suspended on 3 July pending
publication of the Company's annual audited accounts
-- September 2023: Gerry Brandon resigned as Executive Chairman
on 25 September and was replaced by Bob Moore who was previously a
non-executive director of the Company
-- October 2023: notice of redundancy was issued to all staff
and notice given to close the Woking premises before year end
-- December 2023: After private financing initiatives failed to
complete and after considering delisting from AIM and putting the
Company into administration the Board engaged Turner Pope
Investments to raise sufficient capital with the objective of
restoration of its shares to trading on AIM and make an asset
acquisition. A targeted acquisition saw the Company enter into an
Exclusivity Agreement with DeepVerge plc to acquire certain assets
of its Modern Water business. This is part of the Company's growth
strategy to offer a wider range of technologies and a more
comprehensive service by enhancing our equipment manufacturing and
supply capabilities.
-- January 2024: The Company announced it has executed an
Acquisition Agreement with DeepVerge plc and its subsidiary,
Innovenn UK Limited, to acquire certain assets comprising the
Modern Water business for a total consideration of GBP100,000
payable at completion. The Company also announced that Turner Pope
Investments has successfully secured conditional funding
commitments to raise gross proceeds of circa GBP2.1 million through
a placing of 169,000,000 New Ordinary Shares. Net proceeds of the
Placing (being GBP1.8 million) are to be deployed to satisfy the
acquisition and support the capital needs of the Company as
enlarged by the acquired Modern Water business which will be
restarted under Microsaic's ownership .
Outlook
-- The Board looks forward to the conclusion of commercial
testing of our novel ProteinID and PFAS detection technologies
during 2024 and increased production of our core 4500 MiD(R) units.
Assuming the refinancing of the Company and acquisition of Modern
Water technology and assets is completed, the Company intends to
deploy these acquired technologies together with our existing and
newly developed products in a growing worldwide market.
Bob Moore, Acting Executive Chairman of Microsaic Systems plc,
commented:
"2023 has been a very difficult year for the Company and a total
reset of the business has been required as a result. Nevertheless,
the research and development work by our talented technical team
and substantial investment over many years has resulted in novel
detection technologies that are now ready for commercial testing
and deployment into the market. We look forward to collaborating
with large original equipment manufacturers (OEMs) to realise the
potential of our products through their extensive sales and
marketing channels."
Enquiries:
Microsaic Systems plc +44 (0) 20 3657 0050
Bob Moore, Acting Executive Chairman via TPI
Singer Capital Markets
(Nominated Adviser & Joint Broker)
Aubrey Powell / Angus Campbell / Oliver
Platts +44 (0)20 7496 3000
Turner Pope Investments (TPI) Limited
(Joint Broker)
Andy Thacker / James Pope +44 (0) 20 3657 0050
About Microsaic Systems
Microsaic has over 20 years' experience in microelectronics and
development of instrumentation. The Co mpany has an extensive and
innovative patent portfolio in industry-leading technology designed
and developed for "Industry 4.0" application serving markets in
diversified Industries, Human and Environmental Health. Microsaic's
very energy efficient micro system solutions have enabled
analytical detection and characterisation at the point-of-need,
whether within a mobile testing capability, conventional laboratory
setting, or within a bioprocessing facility for continuous
detection of data at multiple steps in the process workflow.
Microsaic's products and solutions are commercially available
through global markets via a network of regional and local
partners, targeting its core laboratory, manufacturing and
point-of-need applications.
Chairman's Statement
We would like to thank our existing shareholders and new
investors for the support they have shown for the refinancing of
the Company and its growth plans which include the acquisition of
the Modern Water business, both in early 2024.
We are delighted that the Company has been able to remain
solvent after a total reset and by retaining our admission to
trading on AIM the Company now has the necessary financing to
complete the acquisition and provide capital to invest in and
develop the enlarged business. The assets acquired are
complementary to the existing Microsaic business model. Using the
acquired assets we intend to restart the manufacture of the
MicroTox(R) bio-reagents for water testing in the near term. Post
acquisition we will seek positive cash generation from these new
activities and look to benefit from growth opportunities and
potential synergies over the longer term.
Microsaic's cost base has been dramatically reduced and we will
now operate a much leaner, more efficient outsourced manufacturing
and servicing model for our existing and acquired testing machine
technologies. 2024 will prove to be a busy year. The objective is
to reset and redesign the Company around a new and much more
efficient cost model based on the integration of the enlarged
business to optimise growth of sales, solutions and services income
to be generated by the combined entities.
STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
FOR THE SIX MONTHSED 30 JUNE 2023
6 months 6 months Year to 31
to 30 June to 30 June December
2023 2022 2022
Notes Unaudited Unaudited Audited
GBP GBP GBP
Revenue 4 139,404 734,914 1,567,697
Cost of sales 5 (145,494) (301,538) (618,330)
Gross profit (6,090) 433,376 949,367
Other operating income - - -
Research and development expenses (312,637) (219,491) (404,043)
Impairment of related party debt - - (1,130,169)
Other operating expenses (852,726) (914,819) (1,731,749)
Total operating expenses (1,165,363) (1,134,310) (3,265,961)
Loss from operations before share-based
payments (1,171,453) (700,394) (2,316,594)
Share-based payments 11 - (126,002) (234,749)
Loss from operations after share-based
payments (1,171,453) (826,936) (2,551,343)
Financial cost (873) (4,104) (7,013)
Finance income 12,592 7,083 23,423
Loss before tax (1,159,734) (823,957) (2,534,933)
Tax on loss on ordinary activities 81,207 119,246 246,224
Total comprehensive loss for the period (1,078,527) (704,711) (2,288,709)
Loss per share attributable to the equity
holders of
the Company
Basic and diluted loss per ordinary shares 6 (0.017)p (0.011)p (0.036)p
Note that the above revenues in the 6 months to 20 June 2023
include GBP65,826 to DeepVerge plc subsidiaries (1H 2022:
GBP546,718, FY22 GBP1,248,828). Although DeepVerge made payments to
cover the revenues in the period, on 26 June 2023, DeepVerge
announced that it would no longer be able to support its
subsidiaries and was anticipating a sale or liquidation of these
assets. The results above, subsequent performance in 2023 and
expectations or forecasts for 2024 and beyond therefore need to be
considered on the basis that no further payments and no further
revenues are expected to be received from DeepVerge.
STATEMENT OF FINANCIAL POSITION (UNAUDITED)
AS AT 30 JUNE 2023
30 June 30 June 31 December
2023 2022 2022
Notes Unaudited Unaudited Audited
GBP GBP GBP
ASSETS
Non-current assets
Intangible assets 60,546 66,637 69,160
Property, plant and equipment 286,609 296,342 380,272
Right of use assets 38,018 90,554 54,005
Total non-current assets 385,173 453,533 503,437
------------------------------- ------ ------------- ------------- -------------
Current assets
Inventories 283,771 255,346 274,045
Trade and other receivables 448,392 1,112,605 594,364
Corporation tax receivable 342,519 387,032 514,009
Cash and cash equivalents 587,024 2,562,741 1,241,480
Total current assets 1,661,706 4,317,724 2,623,898
TOTAL ASSETS 2,046,879 4,771,257 3,127,335
------------------------------- ------ ------------- ------------- -------------
EQUITY AND LIABILITIES
Equity
Share capital 1,731,413 1,731,413 1,731,413
Share premium 28,262,518 28,262,518 28,262,518
Share-based payment reserve 2,316,048 2,817,181 2,400,796
Retained losses (30,669,247) (28,616,601) (29,675,468)
Total Equity 1,640,732 4,194,511 2,719,259
------------------------------- ------ ------------- ------------- -------------
Current liabilities
Trade and other payables 218,984 379,382 236,445
Lease liability 17,929 73,699 52,918
Total current liabilities 236,913 453,081 289,363
------------------------------- ------ ------------- ------------- -------------
Non-current liabilities
Provision 9 148,649 105,045 115,385
Lease liability 20,584 18,620 3,328
Total non-current liabilities 169,233 123,665 118,713
------------------------------- ------ ------------- ------------- -------------
Total liabilities 406,146 576,746 408,076
------------------------------- ------ ------------- ------------- -------------
TOTAL EQUITY AND LIABILITIES 2,046,879 4,771,257 3,127,335
------------------------------- ------ ------------- ------------- -------------
STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
AS AT 30 JUNE 2023
Share
based
Share Share payment Retained Total
capital premium reserve Losses equity
GBP GBP GBP GBP GBP
At 1 January
2022 1,702,913 28,006,018 2,888,707 (28,024,418) 4,573,220
Total
comprehensive
loss for the
period - - - (704,711) (704,711)
Transactions
with owners
Shares issued 28,500 256,500 - - 285,000
Transfer in
respect of
lapsed share
options - - (112,528) 112,528 -
Share based
payments share
options - - 41,002 - 41,002
At 30 June 2022 1,731,413 28,262,518 2,817,181 (28,616,601) 4,194,511
----------------- ----------------- ------------------- ----------------------- ------------------------ ---------------------
At 1 July 2022 1,731,413 28,262,518 2,817,181 (28,616,601) 4,194,511
Total
comprehensive
loss for the
period - - - (1,583,998) (1,583,998)
Transactions
with owners
Transfer in
respect of
directors
warrants
exercised - - (300,075) 300,075 -
Transfer in
respect of
lapsed share
options - - (225,056) 225,056 -
Share based
payments-share
options - - 108,746 - 108,746
At 31 December
2022 1,731,413 28,262,518 2,400,796 (29,675,468) 2,719,259
----------------- ----------------- ------------------- ----------------------- ------------------------ ---------------------
At 1 January
2023 1,731,413 28,262,518 2,400,796 (29,675,468) 2,719,259
Total
comprehensive
loss for the
period - - - (1,078,527) (1,078,527)
Transactions
with owners
Transfer in
respect of
lapsed share
options - - (84,748) 84,748 -
Share based
payments share
options - - - - -
At 30 June 2023 1,731,413 28,262,518 2,316,048 (30,669,247) 1,640,732
----------------- ----------------- ------------------- ----------------------- ------------------------ ---------------------
STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHSED 30 JUNE 2023
6 months 6 months Year to 31
to 30 June to 30 June December
2023 2022 2022
Notes Unaudited Unaudited Audited
GBP GBP GBP
Cash flows from operating
activities
Cash absorbed by operations 12 (870,893) (997,506) (2,133,332)
Corporation tax received 252,697 - -
Net cash used in operating
activities (618,196) (997,506) (2,133,332)
--------------------------------- ------ ------------------------ --------------------- -------------------------
Cash flows from investing
activities
Purchases of intangible
assets (5,307) (6,331) (26,880)
Purchases of property,
plant and equipment (23,397) (65,019) (208,495)
Interest received 12,592 5,850 23,423
Net cash used in investing
activities (16,112) (65,500) (211,952)
--------------------------------- ------ ------------------------ --------------------- -------------------------
Cash flows from financing
activities
Proceeds from share issues - 200,000 200,000
Share issue costs - - -
Repayment of lease liabilities (20,148) (39,130) (78,112)
Net cash from/(used in)
financing activities (20,148) 160,870 121,888
--------------------------------- ------ ------------------------ --------------------- -------------------------
Net increase/(decrease)
in cash and cash equivalents (654,456) (902,136) (2,223,396)
Cash and cash equivalents
at beginning of the year 1,241,480 3,464,876 3,464,876
Cash and cash equivalents
at the end of the period 587,024 2,562,741 1,241,480
--------------------------------- ------ ------------------------ --------------------- -------------------------
NOTES TO THE INTERIM FINANCIAL INFORMATION (UNAUDITED)
1. Nature of Operations
Microsaic Systems plc (the "Company") is registered in England
and Wales. The Company's registered office is 1-7 Park Road,
Caterham, Surrey CR3 5TB, with effect from 11 January 2024. The
Company has no subsidiaries, so the financial information relates
to the Company only. Microsaic is a high technology company
developing compact, chip-based mass spectrometers that are designed
to improve the efficiency of pharmaceutical R&D.
2. Basis of preparation
The interim financial statements of the Company for the six
months ended 30 June 2023, which are unaudited, have been prepared
in accordance with the accounting policies set out in the annual
report and accounts for the year ended 31 December 2022, which were
prepared under International Financial Reporting Standards
("IFRS").
This report does not constitute statutory accounts as defined in
Section 434 of the Companies Act 2006 and has not been audited. The
financial information for the full preceding year is based on the
statutory accounts for the year ended 31 December 2022. Those
statutory accounts have been published and will shortly be filed
with the Registrar of Companies. The auditor's report on those
statutory accounts was unqualified.
As permitted, this interim report has been prepared in
accordance with the AIM Rules for Companies and not in accordance
with IAS 34 "Interim Financial Reporting" and therefore it is not
fully compliant with IFRS.
The interim financial statements are presented in pounds
sterling.
3. Critical accounting estimates and judgements
Accounting estimates and judgements are continually evaluated
and are based on past experience and other factors, including
expectations of future events that are believed to be reasonable
under the circumstances.
The Company makes estimates and assumptions concerning the
future. The resulting accounting estimates could, by definition,
differ from the actual outcome.
Estimates and adjustments that have a risk of causing a material
adjustment to the carrying amounts of assets and liabilities are
set out in the annual report and accounts for the year ended 31
December 2022, and no additional items have been identified.
4. Revenues
IFRS 15 provides a single, principles based, five-step model to
be applied to all contracts with customers. The five-step framework
includes:
Identify the contract(s) with a customer;
Identify the performance obligations in the contract; Determine
the transaction price;
Allocate the transaction price to the performance obligations in
the contract; and Recognise revenue when the entity satisfies a
performance obligation.
The Company recognises revenue from the following four
sources:
Sale of products;
Sale of consumables and spare parts; Product service and product
support; and Consultancy services.
All revenues and trade receivables arise from contracts with
customers. Revenue is measured based on the consideration which the
Company expects to be entitled in a contract with a customer and
excludes amounts collected on behalf of third parties. The sale of
products, consumables and spare
parts is recognised when the sole performance obligation is met
which is usually on delivery to the customer. For product service,
product support and consultancy services revenue, the performance
obligation is satisfied over the duration of the service period and
revenue is recognised in line with the satisfaction of the
performance obligation.
Sale of products
The Company sells compact mass spectrometers (Microsaic 4500
MiD(R)) mainly through OEMs and Distributors. A small proportion of
its sales are direct to the customer. Discounts are offered and
agreed as part of the contractual terms. Terms are generally Ex
Works so control passes when the customer collects the goods.
Payment terms are generally 30 days from the date of invoice.
Sales of consumables and spare parts
The Company sells consumables and spare parts mainly through
OEMs and Distributors. Terms are generally Ex Works so control
passes when the customer collects the goods. Discounts are offered
and agreed as part of the contractual terms. Payment terms are
generally 30 days from the date of invoice.
Product service and product support revenue
Service and support to our OEMs and Distributors includes
training their sales and service teams and servicing the products
from time to time. Discounts are offered and agreed as part of the
contractual terms. Terms are Ex Works so control passes when the
customer receives the service. Payment terms are generally 30 days
from the date of invoice.
Usually, there is no obligation on the Company for returns,
refunds or similar arrangements. Also, the Company does not
manufacture specific items to a customer's specification and no
financing component is included in the terms with customers.
The Company provides assurance warranties which are 15 months
from the date of shipment for OEMs and Distributors. These
warranties confirm that the product complies with agreed-upon
specifications. The Company is looking to provide service
warranties in the future to direct customers in Europe, where the
revenue from such warranties will be recognised over the period of
the service agreement.
Consultancy services revenue
Consultancy services comprise science and engineering
consultancy, laboratory services and monitoring services. These
services are delivered over a period of time usually in accordance
with a master services agreement and/or statement of works with an
agreed outcome at the end of the project or project phase.
Consultancy services revenue is recognised by reference to the
stage of completion of the project or project phase at the balance
sheet date as follows:
-- Where there are defined project or project phase milestones,
the revenue is recognised in full on completion of the project or
project phase and on a time basis for the stage of completion where
the project or project phase is not completed at the balance sheet
date. The stage of completion is recognised as the proportion of
time spent on the project or project phase compared with the total
time anticipated to complete the project or project phase;
and/or
-- Where the project is defined with the client in terms of time
spent, the revenue is recognised on the basis of consulting time
spent on the project by the Company at the time-based rates agreed
with the client.
The geographical analysis of revenues (by location of shipment)
was as follows:
6 months 6 months Year to 31
to 30 June to 30 June December
2023 2022 2022
Unaudited Unaudited Audited
GBP GBP GBP
UK 11,251 634,200 1,354,872
USA 2,185 50,703 103,752
EU 71,636 29,610 67,646
China 54,332 12,122 30,631
ROW - 8,279 10,796
139,404 734,914 1,567,697
---------------------------- ------------------------ --------------------- --------------------
The product group analysis of revenues was as follows:
6 months 6 months Year to 31
to 30 June to 30 June December
2023 2022 2022
Unaudited Unaudited Audited
GBP GBP GBP
---------------------------- ------------------------ --------------------- --------------------
Product/Unit 47,087 165,011 206,915
Consumables and spares 13,596 67,586 137,397
Service and support income 78,721 502,317 1,223,385
139,404 734,914 1,567,697
---------------------------- ------------------------ --------------------- --------------------
Note that the above revenues in the 6 months to 20 June 2023
include GBP65,826 to DeepVerge subsidiaries (1H 2022: GBP546,718,
FY22 GBP1,248,828). However, on 26 June 2023, DeepVerge plc
announced that it would no longer be able to support its
subsidiaries and was anticipating a sale or liquidation of these
assets. The results above, subsequent performance in 2023 and
expectations or forecasts for 2024 and beyond therefore need to be
considered on the basis that no further payments and no further
revenues are expected to be received from DeepVerge.
5. Cost of sales
Cost of sales of products
The cost of sales of mass spectrometers and related equipment is
the bought in purchase cost of the product or the transfer value
from stock value if a unit has been previously written down.
Usually, the sale is made on an Ex-Works basis but if it were not
the cost of delivery to the customer is also included in cost of
sales.
Cost of sales of consumables and spare parts
The cost of sales of consumable and spare parts is the bought in
purchase cost of the consumable or spare part or the transfer value
from stock value if an item has been previously written down.
Usually, the sale is made on an Ex-Works basis but if it were not
the cost of delivery to the customer is also included in cost of
sales.
Cost of sales of product service and product support income
The cost of sales of service and support income is the
time-based apportionment of the employment costs of the relevant
staff spent on the delivery of the service and support income plus
any related costs of fulfilment such as travel expenses and any
externally incurred direct costs. For the purposes of cost of
sales, the employment costs are considered to be salaries, pensions
and employers national insurance but does not include share-based
payments nor any apportionment of training or overheads.
Cost of sales of consultancy services revenue
The cost of sales of consultancy services (comprising science
and engineering consultancy, laboratory services and monitoring
services) is the time-based apportionment of the employment costs
of the relevant staff spent on the delivery of this revenue plus
any related costs of fulfilment such as travel expenses and any
externally-incurred direct costs. For the purposes of cost of
sales, the employment costs are considered to be salaries, pensions
and employers national insurance but does not include share-based
payments nor any apportionment of training or overheads.
6. Loss per share
6 months 6 months Year to 31
to 30 June to 30 June December
2023 2022 2022
Unaudited Unaudited Audited
Comprehensive loss attributable
to equity (1,078,527) (704,711) (2,288,709)
shareholders (GBP)
Weighted average number
of ordinary 0.01p
(2022: 0.01p) shares for
the purpose of basic 6,324,666,516 6,287,359,621 6,324,666,516
and diluted loss per share
Basic and diluted loss
per ordinary share (p) (0.017)p (0.011)p (0.036)p
--------------------------------- -------------- -------------- --------------
The basic loss per share has marginally increased when compared
with H1 2022. This was due to a 56% increase in the comprehensive
loss, arising mainly from the 81% reduction in revenues.
Potential ordinary shares are not treated as dilutive as the
Company is loss making, therefore the weighted average number of
ordinary shares for the purposes of the basic and diluted loss per
share are the same.
7. EBITDA Adjusted Loss
A key indicator of performance for the Company is Adjusted
EBITDA Loss (Loss of earnings before interest, tax, depreciation,
amortisation and other items such as share-based payments and
exceptional one-off expenditure). Detailed below is the Adjusted
EBITDA Loss for the period:
6 months 6 months Year to
to 30 June to 30 June 31-Dec
2023 2022 2022
Unaudited Unaudited Unaudited
GBP GBP GBP
Comprehensive loss for period (1,078,527) (704,711) (2,288,709)
Adjust for:
Tax on loss on ordinary activities (81,207) (119,246) (246,224)
Depreciation of property,
plant and equipment 95,250 74,364 178,102
Depreciation of right of
use assets 37,797 35,980 72,528
Amortisation of Intangibles 13,921 14,099 30,487
Net finance cost/(income) (10,176) (2,979) 16,410
Share-based payments (excluding
fee shares) - 41,002 234,749
EBITDA Adjusted Loss (1,022,942) (661,491) (2,002,657)
------------------------------------ ------------------- ----------- ------------
8. Employees and employment related costs
6 months 6 months Year to 31
to 30 June to 30 June December
2023 2022 2022
Unaudited Unaudited Audited
Staff Numbers
--------------------------------------- ----------- ----------- ----------
Directors 2 3 3
Other staff 21 19 19
--------------------------------------- ----------- ----------- ----------
Average Headcount 23 22 22
--------------------------------------- ----------- ----------- ----------
GBP GBP GBP
--------------------------------------- ----------- ----------- ----------
Employment costs (including Directors)
Wages and salaries 526,258 514,539 985,734
Social security costs 57,000 74,710 133,630
Termination payments 4,854 21,125 21,125
Pension costs 70,954 77,578 144,038
Employment related share-based
payments 21,277 82,943 234,749
--------------------------------------- ----------- ----------- ----------
680,343 770,895 1,519,276
--------------------------------------- ----------- ----------- ----------
9. Provisions
Dilapidations Warranties TOTAL
GBP GBP GBP
----------------------------------- -------------- ----------- --------
Balance at 1 January 2023 91,619 23,766 115,385
Provided for/(reduced) during the
period 25,907 7,357 33,264
Balance at 30 June 2023 117,526 31,123 148,649
----------------------------------- -------------- ----------- --------
The dilapidations provision has been updated for the estimated
impact of inflation.
10. Commitments
As at 30 June 2023, purchase commitments relating to purchase
orders placed on, and related contractual arrangements and
obligations, with our third-party manufacturers amounted to
GBP559,800 (31 December 2022: GBP651,944).
11. Share-based payments
The share-based payments charge comprises 6 months 6 months Year to
to 30 June to 30 June 31 December
2023 2022 2022
Unaudited Unaudited Audited
GBP GBP GBP
Directors' fees settled in shares - 41,941 85,000
Share options granted - 41,002 149,749
Employment related share-based payments - 82,943 234,749
Brokers' fees settled in shares - 43,059 -
- 126,002 234,749
-------------------------------------------------------------------- -------------------- ----------------------
There were no Directors' fees settled in shares in the 6 month
period to 30 June 2023.
12. Cash absorbed by operations
Year to
6 months 6 months 31
to 30
June to 30 June December
2023 2022 2022
Unaudited Unaudited Audited
GBP GBP GBP
Total comprehensive loss for the
year (1,078,527) (704,711) (2,288,709)
Adjustments for:
Amortisation of intangible
assets 13,921 14,099 30,487
Depreciation of right of use
assets 37,797 35,980 72,528
Depreciation of property, plant
and equipment 95,250 74,364 178,102
Transfer of property, plant and
equipment to
cost of goods - - (44,192)
Profit on disposal of right of
use
assets - - 1,638
Increase/(Decrease) in provision
for dilapidation 25,907 8,199 (415)
Increase/(Decrease) in provision
for warranty 7,357 (3,114) 15,840
Increase/(Decrease) in provision
for expected
credit losses - 4,755 1,127,416
Share-based payments (inclusive
of fees settled in shares) - 126,002 234,749
Increase/(Decrease) in inventory
provision 15,652 (14,033) (28,152)
Tax on loss on ordinary
activities (81,207) (119,246) (246,224)
Interest on lease liability 2,416 4,104 7,013
Interest received (12,592) (5,850) (23,423)
--------------------------------- ----------------------------- --------------------------- -----------------------
Cash absorbed by operations
before
movements in working capital (974,026) (579,451) (963,342)
Movements in working capital:
(Increase)/Decrease in
inventories (25,378) 42,587 38,008
(Increase)/Decrease in trade and
other receivables 145,972 (485,413) (1,089,832)
Increase/(Decrease) in trade and
other payables (17,461) 24,771 (118,166)
Cash absorbed by operations (870,893) (997,506) (2,133,332)
--------------------------------- ----------------------------- --------------------------- -----------------------
13. Related party transactions
During the period, Microsaic and DeepVerge plc ("DeepVerge") had
two directors in common: Gerard Brandon and Nigel Burton. Gerard
Brandon was Executive Chairman of Microsaic and CEO of DeepVerge
until his resignation on 25 September 2023.
In the six months ended 30 June 2023, revenue from DeepVerge
subsidiaries totalled GBP65,826 to (1H 2022: GBP546,718, FY22
GBP1,248,828). However, on 26 June 2023, DeepVerge plc announced
that it would no longer be able to support its subsidiaries and was
anticipating a sale or liquidation of these assets. The results
above, subsequent performance in 2023 and expectations or forecasts
for 2024 and beyond therefore need to be considered on the basis
that no further payments and no further revenues are expected to be
received from DeepVerge.
At 31 December 2022, GBP1,511,198 (2021: GBP247,412) inclusive
of VAT was owed by DeepVerge to Microsaic relating to the supply of
goods and services recognised as revenues for the year ended 31
December 2022. The Company had expected to receive material
payments from DeepVerge beginning in December 2022, but in the
absence of these and given the increasing levels of overdue
payments from DeepVerge, the Company sought to reach a formal
agreement with DeepVerge, as first announced in the RNS dated 18
April 2023. However, given the circumstances of DeepVerge's
financial position, it was not possible to obtain written agreement
although DeepVerge made initial payments in line with the
informally agreed plan - hence the outstanding balance reduced from
GBP1.5m to approximately GBP1.4m gross in early 2023.
On 26 June 2023 DeepVerge issued an RNS casting significant
doubt on its ability to settle this debt. In preparing the accounts
to 31 December 2022, given that it was the opinion of the directors
that the conditions leading to this were in existence at 31
December 2022, a provision for expected credit losses of
GBP1,130,169 (2021: GBP0) was recognised against this debt in the
accounts to 31 December 2022. This represented the amount of
outstanding debt at 26 June 2023, less recoverable VAT. No further
provisions were made in relation to DeepVerge in the six months
ended 30 June 2023.
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END
IR SFFSIMELSESF
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