TIDMCTEA
CATENAE INNOVATION PLC
("Catenae" or the "Company")
Final Results
Catenae (AIM:CTEA), the AIM quoted provider of digital media and
technology announces its final results for the year ended 30 September
2018.
Key points
-- Creation of Blockchain Intellectual Property within Trust in Media for
copyright protection
-- Launch of Sequestrum -- a digital repository system utilising blockchain
-- Aston Villa successfully completed proof of concept exercise
-- Southend United Football Club sign agreement post year-end
-- Costs greatly reduced and five-fold revenue increase
The independent auditor's report for the year ended 30 September 2018
contains a material uncertainty paragraph in respect of going concern.
An extract taken from the text of the auditor's opinion is set out below
in part 1 of the notes to this announcement.
Anthony Sanders, Chief Executive and Chairman, commented:
"The past 12 months have seen a transformation within the business as
the revised strategic plan, which commenced in September 2017, has been
implemented. The new management structure is in place and the
streamlining of the business units has been completed resulting in a
drastic reduction in the cost base of the business. The management are
also pleased to see a five-fold increase in revenue year on year, the
vast majority of this as new products were rolled out in the second half
of the year. The Company is now firmly focussed on translating this
interest in the product set to sustainable revenues."
This announcement contains inside information for the purposes of
Article 7 of EU Regulation 596/2014. The person who arranged for release
of this announcement on behalf of the Company was Anthony Sanders (Chief
Executive Officer).
For further information:
Catenae Innovation Plc Tel: 020 7929 7826
Tony Sanders
Cairn Financial Advisers LLP, Nominated Adviser Tel: 020 7213 0880
Liam Murray / Jo Turner
Alexander David Securities Limited, Broker Tel: 020 7448 9820
David Scott / James Dewhurst
CHAIRMAN'S STATEMENT
Business Progression
The past 12 months have seen a transformation within the business as the
revised strategic plan, which commenced in September 2017, has been
implemented. This was formalised in March 2018 with the change of name
from Milestone Group Plc to Catenae Innovation Plc. The new management
structure is in place and the streamlining of the business units has
been completed with the inherent reduction in head count. This has
resulted in a drastic reduction in the cost base of the business; where
there were extra costs for these changes, these have been included
within the 2018 accounts.
As the new product areas discussed below have come on stream, one of the
key business metrics for the management team is the value of the
associated invoices. The management are pleased to see a five-fold
increase in revenue year on year (2018: GBP157,218, 2017: GBP24,040 on a
like for like basis), the vast majority of this as new products were
rolled out in the second half of the year.
In March 2018, the Company created a joint venture company, Trust in
Media, through the disposal of some shares in Oil Productions Ltd T/A
Relative and a rebranding of that entity. Catenae retain 50.5% of the
ownership. Trust in Media has since focused on offering technical
innovation within the media sector.
Since its formation, Trust in Media has created intellectual property in
respect of blockchain technology for use by its own clients as well as
licenced to Catenae, where it is embedded into Catenae's products. Trust
in Media has carried out a trial of the Digital Asset Registration
tracking technology that it developed. This has now been accepted to sit
within the operations of a service provider in the image-licensing
sector and is subject to commercial discussion post period. In addition,
Catenae has launched two new products, Sequestrum, the Company's first
blockchain application which is a universal digital asset repository and
tracking system utilising the Trust in Media intellectual property and
OnSite, a Management and Inspection application developed for the
construction sector. The revised products also introduce a revised
revenue model combining multi-year annuity contracts with per event
transactional revenues. Both Sequestrum and OnSite have been trialled in
successful pilot projects with potential clients; these are now subject
to commercial negotiation.
Sequestrum forms the basis of the Company's technical strategy. It has
been embedded within the legacy products, OnSide and OnGuard, and is
integral to OnSite. This development augments their compliance
capability of the products by offering the ability to store immutable
reports and proof of work functions to their legacy GDPR credentials.
Post period end the Company signed the first commercial agreement for
its blockchain technology in the form of its Sequestrum-enabled version
of OnGuard. This achieves revenue through a combined annuity licence and
transactional fee structure.
This period has seen the each of our existing clients renewing or
extending their annuity contracts, new customers signing up for pilot
projects and the development of products. The Board has now implemented
the new strategy for the business, ensuring that costs are greatly
reduced and that all product lines have a commercial focus.
In the meantime, with the advent of the new GDPR rules Catenae's Mobile
Business Solutions products are going from strength to strength. The
OnGuard product, targeted at companies with remote workforce, has seen
its existing contracts both renew and expand into providing additional
services. The OnSide product, which focuses on the sports coaching
industry, has also seen its existing contract being renewed with
Charlton Athletic, but has had increased interest from a number of
football clubs and has recently signed Southend United. Aston Villa also
completed a successful pilot within its community foundation. The
Company are also in discussion with other football clubs and have
recently commenced discussions within Premiership Rugby.
Working capital, fund raisings and other matters
During the year, the Company issued 299,833,335 new ordinary shares for
a total consideration of GBP509,500, of which GBP356,500 was received in
cash during the year and GBP153,000 was in exchange for goods and
services. Since the year-end, the Company has issued 500,000,000 new
ordinary shares for a total consideration of GBP600,000 of which
GBP25,000 cash was received in the current year (held within shares to
be issued reserve at the year-end), GBP167,245 was in exchange for goods
and services (agreed during the year and also held within shares to be
issued), GBP395,000 cash received post year-end and GBP12,755 was in
exchange for goods and services post year-end.
The Company continues to carefully manage its working capital position
and will need to raise further monies through subscriptions for new
shares in the short term while the efforts from last year bring about
the creation of new revenue lines. The Company remains firmly focused on
generating revenue through developing its activities. Protecting the
interest of the Company's shareholders is a priority and the Board's
strategy is to seek to raise funds on a basis that is fair to all.
Results for the year
The Company had a net loss for the year of GBP1,106,788 (2017:
GBP2,262,319), showing real improvement in the management of costs, and
revenues of GBP157,218 (2017: GBP28,795), of which GBPnil (2017:
GBP4,755) relates to discontinued operations. The Company has a
statement of financial position at the year-end showing net liabilities
of GBP891,929 (2017: GBP552,280).
These results are presented under European Union Adopted International
Financial Reporting Standards ("EU Adopted IFRS").
Conclusion
The Board saw the restructuring of the business as critical to
delivering the new business strategy and became the primary focus for
much of the year. The period saw the commencement of the recovery for
the business with the introduction of the new product set and the Board
are pleased to see that the revised products areas are attracting both
interest and revenues. The Company is now firmly focussed on translating
this interest in the product set to sustainable revenues.
Anthony Sanders
Chief Executive Officer and Chairman
28 December 2018
Statement of comprehensive income for the year ended 30 September 2018
2018 2017
GBP GBP
Revenue 157,218 24,040
Cost of sales - (1,964)
---------- ----------
Gross profit 157,218 22,076
Realised gain on disposal - 1
Administrative expenses (1,282,027) (2,266,777)
(1,282,027) (2,266,776)
---------- ----------
Loss from operations (1,124,809) (2,244,700)
Net finance expense (2,460) (1,486)
Loss before taxation (1,127,269) (2,246,186)
Taxation credit 20,481 -
---------- ----------
Loss from continuing operations (1,106,788) (2,246,186)
(Loss) from discontinued operations net of tax - (16,133)
Total comprehensive loss for the year (1,106,788) (2,262,319)
========== ==========
Basic and diluted loss per share (pence) (0.06) (0.20)
Statement of financial position at 30 September 2018
Company No: 04689130
2018 2017
GBP GBP
Non-current assets
Intangible assets 1 1
Investments 10 -
11 1
Current assets
Trade and other receivables 48,864 77,137
Cash and other equivalents 49,105 749,818
----------- -----------
97,969 826,955
Current liabilities
Trade and other payables (674,247) (1,086,209)
Interest bearing loans (315,662) (293,027)
(989,909) (1,379,236)
Net (liabilities) (891,929) (552,280)
=========== ===========
Capital and reserves
Share capital 2,078,601 1,778,768
Share premium account 16,999,644 17,954,376
Shares to be issued 187,245 -
Share reserve (83,333) (1,250,000)
Merger reserve 11,119,585 11,119,585
Capital redemption reserve 2,732,904 2,732,904
Retained losses (33,926,575) (32,887,913)
----------- -----------
Shareholders' funds (891,929) (552,280)
----------- -----------
Statement of cash flows for the year ended 30 September 2018
Cash flow from operating activities 2018 2017
GBP GBP
Loss for the year (1,106,788) (2,262,319)
Adjustments for:
Amortisation of intangible assets - -
Net bank and other interest charges 2,460 1,486
Services settled by the issue of shares 317,513 45,326
Issue of share options and warrants charge 68,126 68,581
---------- ------------
Net cash outflow before changes in working
capital (718,689 ) (2,146,926 )
---------- ------------
Decrease in trade and other receivables 28,272 74,362
(Decrease) / Increase in trade and other
payables (411,961) 25,810
---------- ------------
Cash outflow from operations (1,102,378) (2,046,754)
---------- ------------
Interest received 15 14
Interest paid (2,475) -
---------- ------------
Net cash flows from operating activities (1,104,838) (2,046,740)
---------- ------------
Investing activities
Investment in joint venture (10) -
---------- ------------
Net cash flows from investing activities (10 ) -
---------- ------------
Financing activities
Issue of ordinary share capital 381,500 2,516,220
Repayment of loan (375,090) (155,000)
New loans raised 397,725 312,500
Net cash flows from financing activities 404,135 2,673,720
---------- ------------
Net (decrease) / increase in cash (700,713) 626,980
Cash and cash equivalents at beginning of
year 749,818 122,838
---------- ------------
Cash and cash equivalents at end of year 49,105 749,818
---------- ------------
Statement of changes in equity for the year ended 30 September 2018
Share Shares to Other
Capital Share Premium be issued Reserves Retained Earnings Total Equity
GBP GBP GBP GBP GBP GBP
Balance at
30 Sept
2018 783,998 15,073,350 63,081 13,852,489 (30,694,175 ) (921,257 )
----------- ------------ --------- ------------ ------------- -----------
Loss for
the year - - - - (2,262,319) (2,262,319)
Share
capital )
issued 994,770 2,881,026 (63,081 (1,250,000) - 2,562,715
Share
options
charge - - - - 68,581 68,581
Balance at
30 Sept
2017 1,778,768 17,954,376 - 12,602,489 (32,887,913 ) (552,280 )
----------- ------------ --------- ------------ ------------- -----------
Loss for
the year - - - - (1,106,788) (1,106,788)
Conclusion
of
defaulting
shares
issue - (1,166,667 ) - 1,166,667 - -
Share issue
agreed in
advance - - 187,245 - - 187,245
Share
capital 299,833 211,935 - - - 511,768
issued
Share - - 68,126
options - - 68,126
charge
Balance at
30 Sept 2,078,601 16,999,644 187,245 13,769,156 (33,926,575 ) (891,929 )
2018
----------- ------------ --------- ------------ ------------- -----------
Notes to the financial information
1. Basis of preparation
Catenae Innovation Plc is a company registered and resident in England
and Wales.
The financial information set out in this announcement does not
constitute the Company's statutory accounts, as defined in Section 435
of the Companies Act 2006, for the years ended 30 September 2018 or 30
September 2017, but is derived from the 2018 Annual Report. Statutory
accounts for 2017 have been delivered to the Registrar of Companies and
those of 2018 will be delivered in due course.
The statement of comprehensive income, statement of financial position,
statement of cash flows, statement of changes in equity (above) and
associated notes are extracts from the financial statements and do not
constitute the Company's statutory accounts.
Statutory accounts for the year to 30 September 2017 and 30 September
2018 have been reported on by the Independent Auditors.
The financial statements have been prepared and approved by the
Directors in accordance with International Financial Reporting Standards
as adopted by the EU ("EU Adopted IFRSs").
The Independent Auditor's Report on the Annual Report and Financial
Statements for 2017 and for 2018 was unqualified, but did draw attention
to matters by way of emphasis relating to the basis of preparation,
which is reproduced below and was substantively similar for both years.
In forming the Auditor's opinion on the financial statements, which is
not modified, the Auditor's have considered the adequacy of the
disclosure made in note 1 to the financial statements concerning the
Company's ability to continue as a going concern. "The going concern
status of the company is dependent upon the management of the timing of
settlement of its liabilities and the raising of further funds in the
immediate to short term and thereafter on the forecast profitability of
key projects which have recently commenced and for which the degree of
success cannot yet be reliably demonstrated.
Forecasts prepared by management indicate that if they are unable to
manage the company's liabilities as planned or the external fundraising
does not occur in the immediate term and, subsequently, the future
projects do not prove as profitable as forecast the company would have
an immediate requirement to seek alternative sources of funding. As
stated in note 1, these conditions indicate that a material uncertainty
exists which casts significant doubt on the company's ability to
continue as a going concern."
The basis of preparation is reproduced below.
Going concern
The Company'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
Company, its cash flows, liquidity position and borrowing facilities are
described in the financial statements. In addition, note 16 to the
financial statements includes the Company'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 30 September 2018, being the Company's
financial year-end, was GBP891,929 (2017: GBP552,280). Subsequent to the
reporting date, the Board has been able to agree funding in the form of
further share issues raising GBP524,945 in cash and clearing GBP75,055
worth of creditors through share issue. The funding received to date
will go part way to cover year-end liabilities, and the Company will be
dependent upon future funding and revenues to meet the remaining
obligations, as discussed below.
The Company continues to be reliant upon its continuing ability to
manage the timing of settlement both of its current liabilities and
future liabilities as they arise. There is also a need for successful
on-going equity fundraises and / or loans in the immediate to short term
thereafter, while sales plans and projections come into effect,
especially in relation to revenues generated from existing and new
products. The Board has prepared forecasts to reflect the revenues
expected to be generated by the Company. The Company is fully focused on
ensuring that sales plans are followed to ensure that the business
becomes self-sustaining in the near future.
The Directors have concluded that the need to generate future funds from
further fundraising and from trading activities to satisfy the
settlement of its on-going and future liabilities represents a material
uncertainty, which may cast significant doubt upon the Company's ability
to continue as a going concern. Nevertheless, after making enquiries and
considering this uncertainty and the measures that can be taken to
mitigate the uncertainty, the Directors have a reasonable expectation
that the Company will have adequate resources to continue in existence
for the foreseeable future. For these reasons they continue to adopt the
going concern basis in preparing the annual report and accounts. The
financial statements do not include any adjustments that would result if
the Company was unable to continue as a going concern.
2. 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 year. 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 162,191,116 share options and 432,764,797 share warrants
outstanding at the year-end (2017: 163,213,116 and 248,431,460). However,
the figures for 2018 and 2017 have not been adjusted to reflect
conversion of these share options, as the effects would be
anti-dilutive.
2018 2017
Weighted Weighted
Per Per
average share average share
Loss number of amount Loss number of amount
GBP shares Pence GBP shares Pence
Basic and
diluted loss
per share
attributable
to
shareholders (1,106,788) 1,905,297,999 (0.06) (2,262,319) 1,115,347,198 (0.20)
3. Posting of Accounts
The Reports and Accounts of Catenae Innovation Plc, including the Notice
of Annual General Meeting will be posted to shareholders shortly.
A further announcement will be made by the Company at such time.
(END) Dow Jones Newswires
December 31, 2018 02:00 ET (07:00 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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