OTAQ Plc (OTAQ) OTAQ Plc: Final Results for 9 months to 31
December 2022 19-May-2023 / 07:00 GMT/BST
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19 May 2023
OTAQ plc
("OTAQ", or the "Company")
Final Results for 9 months to 31 December 2022
OTAQ plc (OTAQ.AQ), the innovative technology company targeting
the aquaculture, geotracking and offshore markets, announces its
audited results for the 9 month period to 31 December 2022.
Financial Highlights
2022 2021/22
Group (9 months) (12 months)
GBP'000 GBP'000
Revenue 2,561 4,292
Gross profit 794 2,027
Adjusted EBITDA* (258) (49)
Net cash / (debt) 758 (1,268)
Strategic and Operational Highlights
-- GBP2.3m of cash as at 31 December 2022 following the
successful equity fund raising in November 2022
-- New sales resource recruited in both the Aquaculture and
Offshore divisions
-- Commercialisation and near-commercialisation of key projects
in Aquaculture and Geotracking poised todeliver growth in 2023
*Adjusted EBITDA is earnings before income, tax, depreciation,
exceptional costs, impairment, share option charges and
amortisation
Commenting, Phil Newby, Chief Executive at OTAQ, said:
"OTAQ has ended the financial period with a strong balance sheet
following the November 2022 share issue and renewed optimism that
the Group will be successful. OTAQ is continuing to enhance its
portfolio of products in all divisions and is looking to penetrate
new markets through additional sales resource over the coming
year.
"Completing the commercialisation of our new products and
continuing the growth seen in the Offshore divisions gives the
directors confidence that the Group will return to profitable
growth."
Contacts:
OTAQ PLC 01524 748010
Adam Reynolds, Non-Executive Chairman
Phil Newby, Chief Executive Officer
Matt Enright, Chief Financial Officer
Dowgate Capital Limited (AQSE Corporate Advisor & Broker) 020 3903 7715
David Poutney / James Serjeant
Nicholas Chambers / Russell Cook
Walbrook PR Limited Tel: 020 7933 8780 or Otaq@walbrookpr.com
Tom Cooper / Nick Rome 0797 122 1972 or 07748 325 236
About OTAQ:
OTAQ is a highly innovative technology company targeting the
aquaculture, geotracking and offshore markets. It already has a
number of established products in its portfolio and is focused on
further developing its presence, customer base and cross selling
opportunities within core markets both organically and via
acquisition.
OTAQ's aquaculture products, which include a sonar device
(developed for Minnowtech LLC) to scan shrimp in ponds and water
quality monitoring, are focused on maximising welfare and
production yields. Additionally, the Company is developing a
potentially game changing live plankton analysis product for
finfish and shellfish farmers. It also continues to target
opportunities in the acoustic deterrent devices market via its
Sealfence product, which is used by salmon farmers, with global
opportunities in Chile, Australia, Canada and Norway.
The Company is also developing high accuracy location trackers
for specialist applications. Having already added clients within
safety and multiple participant sport/racing applications, the
Company is investigating wider market potential - including
opportunities in the seafood industry.
OTAQ's offshore product range includes OceanSense subsea leak
detection, Eagle IP camera systems, Lander seabed survey devices
and Subsea electrical connectors and penetrators. It is targeting a
number of growth opportunities in new territories and has a strong
client base including Expro, Amphenol and National Oilwell Varco.
The Company is also focused on the development of new products
through this division, with the aim of increased cross-deployment
of skills and technologies into the aquaculture arena.
CHAIRMAN'S STATEMENT FOR THE NINE-MONTH PERIODED 31 DECEMBER
2022
I'm pleased to present my first Chairman's Statement for the
nine-month period ended 31 December 2022.
The Group has spent the past nine-months working hard to develop
and expand its product portfolio in each of its core markets, being
Offshore, Aquaculture and Geotracking. Initial sales of some of
these new products have been made in this or the prior financial
period and the Group is now working hard to develop new markets and
commercial opportunities for these products. Where development of
key strategic products is not yet complete, efforts are being made
in the new year to complete this development where credible market
conditions prevail.
I am hopeful that 2023 will yield the benefit of our expanded
product portfolio and I will be able to present improved revenue
and profit performance for the year to 31 December 2023.
Strategy
The strategy of the business is to use the Group's customer base
in the Offshore and Aquaculture industries to allow it to sell our
new products developed by the Group's product development team.
Over time, the Group intends to have a full suite of complementary
and sophisticated products for use in the Aquaculture industry, be
that salmon or shrimp, as well as target niche markets in the
Offshore sector where the Group can continue to enjoy the success
historically seen. The Geotracking division will also make use of
the products developed for this division to target specific sectors
that the Group believe will benefit significantly from this
technology.
Offshore
The Offshore division, comprised of the previously separately
reported Connectors and Offshore divisions, has continued to
perform well and is expected to continue do so in 2023. The Group
now sees additional opportunities for this division in new
territories such as North America and other global markets. Sales
and marketing resource is being invested to help develop the
potential in this division and accelerate revenue growth.
Aquaculture
The Group has developed exciting new products for use in the
Aquaculture industry. As revenue from the company's historically
core product, Sealfence, has reduced, product development has been
pursued in collaboration with key strategic partners to permit
entry into the shrimp market, water quality monitoring sectors and
plankton analysis. Whilst not all of these products are yet fully
commercialised, the Group continues to believe in these
technologies and the huge market potential that is possible.
Geotracking
The Geotracking technology developed since 2020 has enjoyed some
commercial success. In the year to 31 March 2022, the Group
benefitted from a large contract award. Variants of the Geotracking
device remain in development consisting of tracking devices for use
in the railway industry and other similar sectors. Trials with
partners in the railway industry are ongoing with orders placed and
deliveries made. The potential for significant orders within this
division in 2023 exists and the Group is working hard to achieve
this.
Our Team
Despite the challenges the Group has faced over the past year, I
have been impressed since I joined with the passion and enthusiasm
that exists within the business. I am delighted to welcome Giles
Clifford to the Board and thank Malcolm Pye for his contribution
now he has left. I am confident the team will work diligently to
deliver the performance that the Board expects over the next twelve
months.
Adam Reynolds
Non-Executive Chairman
CHIEF EXECUTIVE'S REPORT FOR THE NINE-MONTH PERIODED 31 DECEMBER
2022
Review of the period
Despite the declining Revenue and increasing losses in the
period, the Group has taken steps to reposition itself during the
year to ensure the business can return to growth and profitability
without relying on its historically core product in the Aquaculture
division. The Offshore division has performed well in the
nine-month period with the Geotracking division not achieving
Revenue of significance but continuing to develop new markets and
products.
Development of the phytoplankton analysis product is continuing
with commercial launch being worked towards in 2023. Trial sites
with potential customers have been deployed and this has been
fruitful in enabling us to learn about this strategically important
market as well as allow Blue Lion Labs Ltd, in which we own 10% of
equity, to develop the software required as part of the
product.
Development of the shrimp sonar product in collaboration with
Minnowtech LLC, our 15% investment since February 2021, has
continued during the period. No sales of significance were made but
Minnowtech are continuing to finalise their end product and they
have now, post year-end, placed a one hundred unit quantity
order.
The Group achieved Revenue of GBP2.56m in the nine-month period
(2021/22: GBP4.29m) with this delivered by GBP1.62m in the Offshore
division (2021/22: GBP2.09m), GBP0.06m (2021/22: GBP0.76m) in the
Geotracking division and revenue of GBP0.88m (2021/ 22: GBP1.45m)
in the Aquaculture division. The Geotracking division in 2021/22
benefitted from the fulfilment of a significant sports tracking
contract as well as sonar sales to Minnowtech. Sonar sales in
future will be recorded as Aquaculture sales.
Sales to non-UK territories have increased from 46% of total
revenue in 2021/22 to 50% in 2022 as the Offshore division
continues to expand and become a more significant part of the
Group.
Revenue
Group revenue for the nine-month period ended 31 December 2022
was GBP2.56 million from GBP4.29 million in the twelve months to 31
March 2022. This revenue change is all organic.
With the changing mix of sales from Aquaculture to Offshore, the
Group sales mix is changing with UK revenue now representing only
50% of total revenue (2021/22: 54%). Chile represents 5% (2021/22:
8%) of total revenue with other European countries accounting for
14% (2021/22: 13%) of total revenue and the rest of the world for
31% (2021/22: 25%) of total revenue.
Profit
The statutory loss for the year of GBP2.30m (2021/22: GBP1.90m)
was impacted by the period being nine-months with Revenue being
GBP1.73m lower than the twelve-month prior period and Gross profit
being GBP1.23m lower accordingly. Gross profit of 31% (2021/22:
47%) was impacted by the high fixed costs in Cost of sales.
Administrative expenses changed to GBP3.10m (2021: GBP4.14) in line
with the nine-month period.
The GBP3.10m of administrative expenses was impacted by the
large exceptional charges and certain one-offs including a GBP0.06m
(2021/22: GBP0.31ml) impairment charge for the write-down of
Sealfence units returned from customers and a GBP0.33m (2021/22:
GBP0.57m) intangibles amortisation charge which included an
additional GBP0.15m impairment charge relating to development costs
not commercially viable.
The Group's exceptional charges in the year totalled GBP1.23m
(2021/22: GBP0.26m). These included costs regarding the end of the
Scottish Acoustic Deterrent Device market and costs that were
associated with legal fees for the new shares issued and listing on
the Aquis Stock Exchange in November 2022.
Dividends
The Board is not recommending a final dividend (2021/22:
GBPnil).
Trading environment
The North Sea and wider oil market in which the Offshore
division operates, and which impacts on demand for the Offshore
division, has remained buoyant during the period. Demand in this
division is expected to continue to be favourable in 2023 and will
be supported by additional sales resources and dedicated product
development support. The market for ADDs in Scotland is no longer
an area of focus although Scotland remains a key market for the
Group's new live plankton analysis system (LPAS) and water quality
monitoring product. The Chilean market has been subdued in the year
but progress is being made with the Chilean authorities around the
approval required to use ADDs and it is hoped when this is
concluded it will enable the Chilean market to grow.
Innovation
The Group has continued to invest in the development of new
products and improvement to existing products. Investment in
research and development, capitalised as development costs,
amounted to GBP0.36 million in the period to 31 December 2022
(2021/22: GBP0.59 million), equivalent to 14% of Group revenue
(2021/22: 14%). The aim of the Group's research and development
team is to deliver key projects such as LPAS, water quality
monitoring and Geotracking devices.
Current trading and prospects
There is cautious optimism that in the coming financial year the
Group can return to profitable growth due to the performance of the
Offshore division and the expected launch of the Group's strategic
new products such as LPAS. However, management and the Board will
continue to exercise firm controls on costs and cash whilst the
Group returns to profitability.
Phil Newby
Chief Executive
CHIEF FINANCIAL OFFICER'S REPORT FOR THE NINE-MONTH PERIODED 31
DECEMBER 2022
The strategy of the Group is to build a business of significance
within the aquaculture and offshore industries with the key
financing requirements being to ensure there is sufficient resource
to fund new product development and working capital as the Group
returns to growth.
The Group's Key Performance Indicators are aligned to revenue,
profits and ensuring sufficient cash flow to deliver future growth.
These three measures were below targets in the period to 31
December 2022 due to the withdrawal of Sealfence units from the
Scottish market. However, cash flow has been supplemented by the
issue of shares in November 2022 which aided cash balances by an
amount net of all relevant costs of GBP3.22m. In addition, the
Group carefully monitors loss time incidents and employee
absenteeism and turnover. Loss time incidents were zero (2021/22:
zero) for the year and employee absenteeism was in line with
historic levels although employee turnover increased.
Revenue
Group revenue changed to GBP2.56m from GBP4.29 million with
pro-rata growth in the Offshore division against decline in
Aquaculture and Geotracking.
Profits
The preferred measure of assessing profits for the Group is
explained below:
2022 2021/22
9 months 12 months
GBP'000 GBP'000
Operating loss (2,310) (2,114)
Share option charge - 20
Exceptional costs 1,230 257
Amortisation of intangible assets 326 572
Impairment of rental units 62 311
Right-of-use depreciation 130 164
Depreciation on property, plant and equipment 304 741
Adjusted EBITDA* (258) (49)
* Earnings before income, tax, depreciation, share option
charges, impairment, exceptional costs and amortisation.
Adjusted EBITDA declined to a loss of GBP0.26m from GBP0.05
million in 2021/22 with the corresponding EBITDA operating margin
declining from 1% EBITDA operating loss in the prior year to a 10%
EBITDA operating loss. This decline was driven by the decrease in
Gross profit in the period to GBP0.79m from GBP2.03m in the prior
year. The EBITDA decline also resulted from a decline in the gross
profit percentage from 47.2% to 31.0% due to the changing revenue
mix away from Sealfence rentals.
Operating losses increased to GBP2.31m from GBP2.11m with the
total comprehensive expense for the year increasing to
GBP2.30million (2021/22: GBP1.91 million). The statutory loss
before tax increased to GBP2.51 million compared to GBP2.16 million
in 2021/22.
Adjusted EBITDA
Adjusting items relate to expenditure which does not relate
directly to the core activities of the Group and is considered to
be one-off in nature or in relation to investing, restructuring or
financing activities. The total pre-tax adjusting items recorded in
the nine-month period to 31 December 2022 were GBP1.23m. These
relate to GBP0.23m of fees relating to the November 2022 issue of
equity, GBP0.12m relating to the write-off of amounts loaned to the
employee benefit trust due to the decline in the company's share
price, GBP0.34m of costs in association with Sealfence inventory
purchased in the period immediately written down, GBP0.49m
write-down of Aquaculture inventory associated with the Scottish
Sealfence rental market and GBP0.05m of sundry costs considered to
be one-off.
In addition to this, there were depreciation charges of GBP0.30
million (2021/22: GBP0.74m), intangible amortisation charges of
GBP0.33m (2021/22: GBP0.57m) and right-of-use depreciation charges
of GBP0.13m (2021/22: GBP0.16m). There was also an impairment
charge of GBP0.06m (2021/22: GBP0.31m) relating to Sealfence units
returned from customers following the end of rental agreements.
Other operating income
The grant income received in 2021/22 of GBP0.13m related to the
HMRC CBILs scheme.
.
Finance costs
Net finance costs totalled GBP0.20m (2021/22: GBP0.17m) and
related to the interest charge relating to deferred acquisition
payments made in the year associated with the terms of the
acquisition of Marine Sense Limited in 2018, Right of use asset
interest charges and predominantly interest costs relating to the
CBILs loan.
Taxation
As the Group remains in a statutory loss-making position, there
is no overall Group tax charge. The Group continues to benefit from
research and development tax credits which, along with a decrease
in deferred tax of GBP0.08m, accounts for the GBP0.22m (2021/22:
GBP0.25m) tax credit in the year.
Earnings and losses per share
Statutory basic losses per share were 5.0p (2021/22: loss 5.9p)
and statutory diluted losses per share totalled 5.0p (2021/22: loss
5.9p). These are calculated using the weighted average number of
shares in existence during the year.
Return on Capital
The Group intends to report on capital returns once sustained
profitability has been achieved. Whilst capital returns are
monitored currently, it is not a key performance or key results
measure given the Group's high revenue growth and current statutory
loss-making position.
Dividends
No dividends have been paid in the year (2021/22: GBPnil) and no
dividend is recommended. It is expected that all cash resources
will be retained by the Group.
Headcount
The Group's number of employees for 2022 stood at 43 (2021/22:
45). The change in staff numbers during the year was due to
efficiency measures undertaken.
Share capital and share options
The Group's issued share capital at 31 December 2022 totalled
127,824,881 Ordinary shares (2021/1: 37,716,250). During the year,
no share options were exercised with 108,631 (2021/22: 95,854)
shares issued as part of the employee Share Incentive Plan.
90,000,000 new shares were issued at a price of 4p as part of a
funding round held in November 2022. 6,272,729 new shares were
issued at a price of 22p as part of a funding round held in January
2022.
No share options were issued in the year (2021/22: 800,000) with
23,930,878 (2021/22: 2,130,900) share options and warrants in issue
at 31 December 2022. 700,000 (2021/22: 229,592) share options
lapsed in the year due to performance criteria not being met.
Warrants totalling 22,499,978 were issued in November 2022 with
22,819,978, included in the above figures, outstanding on 31
December 2022 (2021/22: 320,000).
Cashflow and net debt
This year's cash generated from operations totalled an outflow
of GBP0.88 million (2021/22: GBP1.77 million). Total capital
expenditure amounted to GBP0.61 million (2021/22: GBP1.23 million).
Year-end cash balances totalled GBP2.34 million compared to GBP1.01
million in 2021/22. The Group finished 2022 with net cash of
GBP0.76 million compared to GBP1.27 million of net debt at the end
of 2021/22 as reconciled below:
2022 2021/22
GBP'000 GBP'000
Cash and cash equivalents 2,337 1,008
Non-current lease liabilities (181) (255)
Current lease liabilities (172) (161)
Non-current financial liabilities (1,054) (1,392)
Current financial liabilities (447) (421)
Current deferred payment for acquisition - (213)
Income tax asset 275 166
Net cash / (debt) 758 (1,268)
The directors consider the income tax credit to be part of net
debt as the asset will be converted into cash and is not part of
normal working capital requirements as with other current
assets.
Assets and liabilities
Total current assets at 31 December 2022 were GBP4.24m compared
to total current assets of GBP4.11m at 31 March 2022. The key
change during the year relates to the increase in cash balances
following the November 2022 fund raising to GBP2.34m from GBP1.01m
and the decrease in trade and other receivables to GBP0.69m
(2021/22: GBP1.77m) due to the timing of prior year revenue being
weighted towards the last quarter of 2021/22. Inventories have
decreased to GBP0.94m from GBP1.18m with trade and other payables
decreasing to GBP0.50m from GBP1.24m with deferred income reducing
by GBP0.43m.
Total liabilities have decreased from GBP3.77m at 31 March 2022
to GBP2.36m at 31 December 2022 with this decrease driven by the
repayments due under the CBILs loan, reducing deferred income
balances and a reduction in deferred payments for acquisition.
Right-of-use lease liabilities at the end of the period amount to a
total liability of GBP0.35m (2021/22: GBP0.42m).
Despite the difficulties of the period, the Group's financial
position is improved over previous years due to the November 2022
fund raising. Nonetheless, the Group remains focussed on tight cost
control and cash management whilst revenue and EBITDA growth is
delivered to enable the Group to become cash flow positive.
Summary
The Group begins the new financial year with a strong balance
sheet, but where management and the Board will continue to exercise
firm controls on costs and cash. The Group's Offshore division is
trading well and there is optimism that this division and new
product launches can return the Group to an EBITDA-positive
position and improve the Group's cash performance.
Matt Enright
Chief Financial Officer consolidated Statement of comprehensive
income FOR the NINE-MONTH PERIOD ended 31 DECEMBER 2022
Note Nine-month period ended 31 December Year ended 31 March
2022 2022
GBP'000 GBP'000
Revenue 4 2,561 4,292
Cost of sales (1,767) (2,265)
Gross profit 794 2,027
Administrative expenses (3,104) (4,141)
Operating loss 5 (2,310) (2,114)
Other operating income 5 - 131
Finance income 7 1 -
Finance costs 7 (203) (172)
Loss before taxation (2,512) (2,155)
Taxation 8 217 251
Loss for the year (2,295) (1,904)
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Attributable to:
Equity shareholders of the Group (2,295) (1,904)
(2,295) (1,904)
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Other comprehensive income
Items that will be reclassified subsequently to profit
and loss:
Exchange differences on translation of foreign (-) (7)
operations
Total comprehensive expense for the year (2,295) (1,911)
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Attributable to:
Equity shareholders of the Group (2,295) (1,911)
(2,295) (1,911)
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As per note 9, the loss for the year arises from the Group's
continuing operations. Losses Per Share were 5.0p (2021 /22: loss
5.9p) and Diluted Losses Per Share were 5.0p (2021/22: loss
5.9p).
The accompanying notes on pages 36 to 66 form an integral part
of these consolidated financial statements. CONSOLIDATED Statement
of financial position as at 31 DECEMBER 2022
31 December 2022 31 March 2022
GBP'000 GBP'000
Note
ASSETS
Non-current assets
Property, plant and equipment 10 582 919
Right-of-use assets 11 364 434
Unlisted investments 13 511 511
Intangible assets 12 3,008 2,970
Total non-current assets 4,465 4,834
Current assets
Trade and other receivables 15 689 1,766
Income tax asset 16 275 155
Inventories 17 937 1,182
Cash and cash equivalents 18 2,337 1,008
Total current assets 4,238 4,111
Total assets 8,703 8,945
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EQUITY AND LIABILITIES
Equity
Share capital 19 1,278 5,657
Share premium 19 5,834 3,280
Deferred shares 19 5,286 -
Share option reserve 25 134 150
Merger relief reserve 20 9,154 9,154
Reverse acquisition reserve 20 (6,777) (6,777)
Other reserve 20 400 384
Revenue reserve 20 (8,963) (6,668)
Total equity 6,346 5,180
Non-current liabilities
Deferred tax 23 - 80
Financial liabilities 24 1,054 1,392
Lease liabilities 11 181 255
Total non-current liabilities 1,235 1,727
Current liabilities
Trade and other payables 22 503 1,243
Financial liabilities 24 447 421
Deferred payment for acquisition 21 - 213
Lease liabilities 11 172 161
Total current liabilities 1,122 2,038
Total liabilities 2,357 3,765
Total equity and liabilities 8,703 8,945
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The accompanying notes on pages 36 to 66 form an integral part
of these consolidated financial statements. The financial
statements were approved by the board of directors and authorised
for issue on 18th May 2023. The results of the parent company are
included on pages 67 to 71.
Signed on its behalf by M J Enright Company number: 11429299
............................. consolidated Statement of changes
in equity FOR THE NINE-MONTH PERIOD ended 31 DECEMBER 2022
Equity
Share Share Deferred Share Merger Reverse Other Revenue attributable to Total
capital premium shares option relief acquisition reserve reserve owners of the equity
reserve reserve reserve parent company
Note
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 April 4,614 2,897 - 473 9,154 (6,777) 136 (4,764) 5,733 5,733
2021
Loss for the year - - - - - - - (1,904) (1,904) (1,904)
Exchange
differences on - - - - - - (7) - (7) (7)
translating foreign
operations
Total comprehensive
expense for the - - - - - - (7) (1,904) (1,911) (1,911)
year
Issues of shares 955 383 - - - - - - 1,338 1,338
Transfer on
exercised and 88 - - (343) - - 255 - - -
cancelled options
Charge for share 25 - - - 20 - - - - 20 20
options
Balance at 31 March 5,657 3,280 - 150 9,154 (6,777) 384 (6,668) 5,180 5,180
2022
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Balance at 1 April 5,657 3,280 - 150 9,154 (6,777) 384 (6,668) 5,180 5,180
2022
Loss for the year - - - - - - - (2,295) (2,295) (2,295)
Exchange
differences on - - - - - - - - - -
translating foreign
operations
Total comprehensive
expense for the - - - - - - - (2,295) (2,295) (2,295)
year
Sub-division and
conversion of 19 (5,286) - 5,286 - - - - - - -
shares
Issues of shares 19 907 2,554 - - - - - - 3,461 3,461
Transfer on
exercised and 25 - - - (16) - - 16 - - -
cancelled options
Balance at 31 1,278 5,834 5,286 134 9,154 (6,777) 400 (8,963) 6,346 6,346
December 2022
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CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE NINE-MONTH PERIODED
31 DECEMBER 2022
31 December
Note 31 March 2022
2022
GBP'000 GBP'000
Cash flows from operating activities
Operating loss (2,310) (2,114)
Adjustments for non-cash/non-operating items:
Depreciation of property, plant and equipment 10 304 741
Impairment of property, plant and equipment 10 62 311
Loss on disposal of property, plant and equipment 10 6 -
Depreciation of right-of-use assets 11 130 164
Amortisation of intangible assets 12 181 277
Impairment of intangible assets 12 145 295
Gain on remeasurement of deferred consideration payable 21 - 40
Share option charge 25 - 20
(1,482) (266)
Changes in working capital:
Decrease / (increase) in inventories 245 (283)
Decrease / (increase) in trade and other receivables 1,077 (906)
Decrease in trade and other payables (740) (603)
Cash from operations (900) (2,058)
Taxation 17 289
Net cash from operating activities (883) (1,769)
Cash flows from investing activities
Purchases of tangible fixed assets 10 (35) (423)
Purchases of intangible assets 12 (364) (587)
Acquisition of unlisted equity securities 13 - (214)
Interest received 1 -
Deferred payment of acquisition 21 (213) -
Re-translation of foreign subsidiaries - (7)
Net cash used in investing activities (611) (1,231)
Cash flows from financing activities
Proceeds on issue of shares 3,611 1,408
Expenses of share issues (150) (70)
Repayment of loans (312) (187)
Principal element of lease payments (123) (181)
Interest paid (203) (82)
Net cash from financing activities 24 2,823 888
Net increase / (decrease) in cash and cash equivalents 1,329 (2,112)
Cash and cash equivalents at beginning of year 1,008 3,120
Cash and cash equivalents at end of year 2,337 1,008
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1. Reporting entity
OTAQ plc ("the Company") and its subsidiaries (together, "the
Group") develop, provide and support the technology for use in the
aquaculture industry and offshore oil & gas industries. The
principal activity of the Company is that of a holding company for
the Group as well as performing all administrative, corporate
finance, strategic and governance functions of the Group. The
Company is a public limited company, which is listed on the Aquis
Stock Exchange and domiciled in England and incorporated and
registered in England and Wales. The address of its registered
office is 8-3-4 Harpers Mill, South Road, White Cross, Lancaster,
England, LA1 4XF. The registered number of the Company is
11429299.
The principal accounting policies adopted by the Group and
Company are set out in note 2. 2. 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 unless otherwise stated. a.
Basis of preparation
The consolidated financial statements of OTAQ plc have been
prepared in accordance with International Financial Reporting
Standards in conformity with the requirements UK-adopted
International Accounting Standards applicable to companies
reporting under IFRS and the Companies Act 2006. The consolidated
financial statements have been prepared under the historical cost
convention, as modified for any financial assets which are stated
at fair value through profit or loss. The consolidated financial
statements of OTAQ plc are presented in pounds sterling, which is
the presentation currency for the consolidated financial
statements. The functional currency of each of the group entities
is Sterling apart from OTAQ Chile SpA which is the Chilean Peso.
Figures have been rounded to the nearest thousand.
The preparation of financial statements requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group's
accounting policies. The areas involving a higher degree of
judgement and complexity, or areas where assumptions and estimates
are significant to the consolidated financial statements are
disclosed in note 3.
The Group has taken advantage of the audit exemption for one of
its subsidiaries, OTAQ Aquaculture Limited (company number
SC498922) by virtue of s479A of the Companies Act 2006. The Group
has provided a parent guarantee to this subsidiary which has taken
advantage of the exemption from audit. The parent company has
applied FRS101 in its entity statements. b. Basis of
consolidation
The Group's financial statements consolidate the financial
information of OTAQ plc and the entities it controls (its
subsidiaries) drawn up to 31 December each year. In years prior to
31 December 2022, the financial statements were drawn up to 31
March each year. The year end date was amended on 16 December 2022
in order to algin with investor expectations. All business
combinations (except for the Hertsford Capital plc reverse takeover
on 31 March 2020 which used the merger accounting method) are
accounted for by applying the acquisition method as at the
acquisition date, which is the date on which control is transferred
to the Group.
The Group measures goodwill at the acquisition date as:
-- the fair value of the consideration transferred; plus
-- the recognised amount of any non-controlling interests in the
acquiree; plus
-- the fair value of the existing equity interest in the
acquiree; less
-- the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilitiesassumed.
Transaction costs related to the acquisition, other than those
associated with the issue of debt or equity securities, that the
Group incurs in connection with a business combination are expensed
as incurred.
All subsidiaries are entities in which the Group owns sufficient
share capital and has sufficient voting rights in order to govern
the financial and operating policies. The percentage holdings of
the Company in its subsidiaries is set out in note 14. The
subsidiaries have been fully consolidated from the date control
passed. All intra-group transactions, balances and unrealised gains
on transactions between Group companies are eliminated on
consolidation. The accounting policies of subsidiaries are amended
where necessary to ensure consistency with the policies adopted by
the Group. c. Foreign currency transactions
Transactions in foreign currencies are initially recorded in the
functional currency by applying the spot rate ruling at the date of
the transaction. Monetary assets and liabilities denominated in
foreign currencies are retranslated at the functional currency rate
of exchange ruling at the reporting date. All differences are taken
to the Consolidated statement of comprehensive income. d. Going
Concern
The Group is developing new products for its core markets in
Offshore and Aquaculture as well as the new Geotracking division.
The Group has invested heavily in the development and procurement
of these products and has achieved this through use of its cash
reserves as well as the funds received following the share issue in
November 2022. As at 31 December 2022, the Group had cash and cash
equivalents of GBP2,337,000. The directors have prepared and
reviewed the Group's funding requirements over the next two years
and are confident the Group has sufficient financial resources to
meet its financial commitments and strategic objectives.
The forecasts generated by the Group, which cover the period to
June 2024 and have been modelled for reductions in anticipated
revenue, demonstrate sufficient ongoing demand to satisfy
liabilities as they fall due. For these reasons the directors
continue to adopt the going concern basis in preparing Group's
financial statements e. Functional and presentational currency
The financial statements are presented in pounds sterling, which
is the Group's functional and presentation currency. All financial
information presented has been rounded to the nearest thousand. f.
Segmental reporting
An operating segment is a component of an entity that engages in
business activities from which it may earn revenues and incur
expenses, whose operating results are regularly reviewed by the
entity's chief operating decision maker to make decisions about
resources to be allocated to the segment and assess its
performance, and for which discrete financial information is
available. Segmental information is set out in note 4. g. Revenue
recognition
Revenue is measured at the fair value of the consideration
received or receivable and represents amounts receivable for goods
and services provided in the normal course of business, net of
sales related taxes.
Revenue related to sales of stock is recognised when goods are
dispatched and the title and control over a product have passed to
the customer, in accordance with agreed delivery terms.
Revenue under service contracts is recognised over the period in
which the performance obligation relating to the agreed contract
are satisfied. For rentals of the Group's assets, revenue is
recognised on a monthly basis based on the agreed rate and number
of days for which the asset is on hire to the customer. Some
contractual revenue is invoiced in advance and gives rise to a
contract liability which is recognised as deferred income. h.
Government grants
Government grants are recognised when it is reasonable to expect
that the grants will be received and that all related conditions
are met, usually on submission of a valid claim for payment.
Government grants of a revenue nature are deducted from
administrative expenses in the consolidated statement of
comprehensive income in line with the terms of the underlying grant
agreement. Government grants relating to capital expenditure are
deducted in arriving at the carrying amount of the asset.
Government grants relating specifically to Covid-19 support
measures have been disclosed as "other operating income". i.
Leases
The Group assesses whether a contract is or contains a lease, at
inception of the contract. The Group recognises a right-of-use
asset and a corresponding lease liability with respect to all lease
arrangements in which it is the lessee, except for short-term
leases (defined as leases with a lease term of 12 months or less)
and leases of low value assets (such as tablets and personal
computers, small items of office furniture and telephones). For
these leases, the Group recognises the lease payments as an
operating expense on a straight-line basis over the term of the
lease unless another systematic basis is more representative of the
time pattern in which economic benefits from the leased assets are
consumed. The lease liability is initially measured at the present
value of the lease payments that are not paid at the commencement
date, discounted by using the rate implicit in the lease. If this
rate cannot be readily determined, the lessee uses its incremental
borrowing rate.
Lease payments included in the measurement of the lease
liability comprise:
-- Fixed lease payments (including in-substance fixed payments),
less any lease incentives receivable;
-- Variable lease payments that depend on an index or rate,
initially measured using the index or rate atthe commencement
date;
-- The amount expected to be payable by the lessee under
residual value guarantees;
-- The exercise price of purchase options, if the lessee is
reasonably certain to exercise the options;
-- Payments of penalties for terminating the lease, if the lease
term reflects the exercise of an option toterminate the lease.
The lease liability is presented as a separate line in the
statement of financial position. The lease liability is
subsequently measured by increasing the carrying amount to reflect
interest on the lease liability (using the effective interest
method) and by reducing the carrying amount to reflect the lease
payments made.
The Group remeasures the lease liability (and makes a
corresponding adjustment to the related right-of-use asset)
whenever:
-- The lease term has changed or there is a significant event or
change in circumstances resulting in achange in the assessment of
exercise of a purchase option, in which case the lease liability is
remeasured bydiscounting the revised lease payments using a revised
discount rate;
-- The lease payments change due to changes in an index or rate
or a change in expected payment under aguaranteed residual value,
in which cases the lease liability is remeasured by discounting the
revised leasepayments using an unchanged discount rate (unless the
lease payments change is due to a change in a floatinginterest
rate, in which case a revised discount rate is used); and
-- A lease contract is modified and the lease modification is
not accounted for as a separate lease, inwhich case the lease
liability is remeasured based on the lease term of the modified
lease by discounting therevised lease payments using a revised
discount rate at the effective date of the modification.
The Group did not make any such adjustments during the periods
presented.
The right-of-use assets comprise the initial measurement of the
corresponding lease liability, lease payments made at or before the
commencement day, less any lease incentives received and any
initial direct costs. They are subsequently measured at cost less
accumulated depreciation and impairment losses.
Whenever the Group incurs an obligation for costs to dismantle
and remove a leased asset, restore the site on which it is located
or restore the underlying asset to the condition required by the
terms and conditions of the lease, a provision is recognised and
measured under IAS 37. To the extent that the costs relate to a
right-of-use asset, the costs are included in the related
right-of-use asset, unless those costs are incurred to produce
inventories.
Right-of-use assets are depreciated over the shorter period of
lease term and useful life of the underlying asset. If a lease
transfers ownership of the underlying asset or the cost of the
right-of-use asset reflects that the Group expects to exercise a
purchase option, the related right-of-use asset is depreciated over
the useful life of the underlying asset.
The depreciation starts at the commencement date of the lease.
The right-of-use assets are presented as a separate line in the
statement of financial position.
The Group applies IAS 36 to determine whether a right-of-use
asset is impaired and accounts for any identified impairment loss
as described in the 'Property, Plant and Equipment' policy.
Variable rents that do not depend on an index or rate are not
included in the measurement of the lease liability and the
right-of-use asset. The related payments are recognised as an
expense in the period in which the event or condition that triggers
those payments occurs and are included in 'Administrative expenses'
in profit or loss.
As a practical expedient, IFRS 16 permits a lessee not to
separate non-lease components, and instead account for any lease
and associated non-lease components as a single arrangement. The
Group has not used this practical expedient. j. Finance expense
Finance expense comprises interest expense on borrowings. All
borrowing costs are recognised using the effective interest method.
k. Income tax
Income tax expense comprises current and deferred tax. Income
tax expense is recognised in the consolidated statement of
comprehensive income except to the extent that it relates to items
recognised directly in equity or in other comprehensive income.
Current income tax assets and liabilities for the current and
prior periods are measured at the amount expected to be recovered
from or paid to, the tax authorities. The tax rates and tax laws
used to compute the amount are those that are enacted or
substantively enacted by the reporting date.
Deferred income tax is recognised on all temporary differences
arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements with the following
exceptions:
-- where the temporary difference arises from the initial
recognition of goodwill or of an asset orliability in a transaction
that is not a business combination, that at the time of the
transaction affects neitheraccounting nor taxable profit nor loss;
and
-- in respect of taxable temporary differences associated with
investments in subsidiaries where the timingof the reversal of the
temporary differences can be controlled and it is probable that the
temporary differenceswill not reverse in the foreseeable
future.
Deferred income tax assets and liabilities are measured on an
undiscounted basis using the tax rates and tax laws that have been
enacted or substantively enacted by the date and which are expected
to apply when the related deferred tax asset is realised, or the
deferred tax liability is settled.
Deferred income tax assets are recognised to the extent that it
is probable that future taxable profits will be available against
which differences can be utilised. An asset is not recognised to
the extent that the transfer or economic benefits in the future is
uncertain.
Amounts due under the HMRC Research and Development tax credit
scheme are accounted for based on the amount of qualifying
expenditure in the year and assuming 14.5% of the claim is paid in
cash once applicable losses and future profitability have been
reviewed. l. Property, plant and equipment
Property, plant and equipment assets are recognised initially at
cost. After initial recognition, these assets are carried at cost
less any accumulated depreciation and any accumulated impairment
losses. Cost comprises both the aggregate amount paid and the fair
value of any other consideration given to acquire the asset, and
includes costs directly attributable to making the asset capable of
operating as intended.
Depreciation is computed by allocating the depreciable amount of
an asset on a systematic basis over its useful life and is applied
separately to each identifiable component.
The following bases and rates are used to depreciate classes of
assets:
Systems for rental - straight line over 4 years
Plant and equipment - straight line over 2 to 5 years
Motor vehicles - straight line over 3 years
The carrying values of property, plant and equipment are
reviewed for impairment if events or changes in circumstances
indicate that the carrying value may not be recoverable and are
written down immediately to their recoverable amount. Useful lives
and residual values are reviewed annually and where adjustments are
required these are made prospectively.
All property, plant and equipment items are de-recognised on
disposal, or when no future economic benefits are expected to arise
from the continued use of the asset. Any gain or loss arising on
the de-recognition of the asset is included in the Consolidated
statement of comprehensive income in the period of de-recognition.
m. Intangible assets
Intangible assets acquired either as part of a business
combination or from contractual or other legal rights are
recognised separately from goodwill, provided they are separable
and their fair value can be measured reliably. This includes the
costs associated with acquiring and registering patents in respect
of intellectual property rights. Trademarks are assessed on
recognising fair value of assets acquired by calculating the future
net book value of expected cash flows.
Development costs are also charged to the statement of
comprehensive income in the year of expenditure, except when
individual projects satisfy the following criteria:
-- the project is clearly defined and related expenditure is
separately identifiable;
-- the project is technically feasible and commercially
viable;
-- current and future costs will be exceeded by future sales;
and
-- adequate resources exist for the project to be completed.
Where intangible assets recognised have finite lives, after
initial recognition their carrying value is amortised on a
straight-line basis over those lives. Development costs are
amortised once the project to which they relate is viewed to be
completed and capable of generating revenue. Once a project is
completed, any further costs are charged to the statement of
comprehensive income. The nature of those intangibles recognised
and their estimated useful lives are as follows:
Intellectual property licence - straight line over 4 years
Development costs - straight line over 6 years
Trademarks - straight line over 8 years
Goodwill is recognised when the purchase price of a business
exceeds the fair value of the assets acquired. Goodwill is subject
to annual impairment reviews. n. Impairment of assets
At each reporting date the Group reviews the carrying value of
its plant, equipment and intangible assets to determine whether
there is an indication that these assets have suffered an
impairment loss. If any such indication exists, or when annual
impairment testing for an asset is required, the Group makes an
assessment of the asset's recoverable amount.
An asset's recoverable amount is the higher of an asset's or
cash-generating unit's fair value less costs to sell and its value
in use and is determined for an individual asset, unless the asset
does not generate cash inflows that are largely independent of
those from other assets or groups of assets. Where the carrying
value of an asset exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset. In determining fair value less
costs of disposal, an appropriate valuation model is used, these
calculations corroborated by valuation multiples, or other
available fair value indicators. Impairment losses on continuing
operations are recognised in the Consolidated statement of
comprehensive income in those expense categories consistent with
the function of the impaired asset.
An assessment is made at each reporting date as to whether there
is any indication that previously recognised impairment losses may
no longer exist or may have decreased. If such indication exists,
the recoverable amount is estimated. A previously recognised
impairment loss is reversed only if there has been a change in the
assumptions used to determine the asset's recoverable amount since
the last impairment loss was recognised. If that is the case the
carrying amount of the asset is increased to its recoverable
amount. That increased amount cannot exceed the carrying amount
that would have been determined, net of depreciation, had no
impairment loss been recognised for the asset in prior years. Such
reversal is recognised in the Consolidated statement of
comprehensive income unless the asset is carried at re-valued
amount, in which case the reversal is treated as a valuation
increase.
After such a reversal the depreciation charge is adjusted in
future periods to allocate the asset's revised carrying amount,
less any residual value, on a systematic basis over its remaining
useful life. o. Inventories
Inventories are stated at the lower of cost and net realisable
value. Cost based on latest contractual prices includes all costs
incurred in bringing each product to its present location and
condition. Net realisable value is based on estimated selling price
less any further costs expected to be incurred to disposal.
Provision is made for slow-moving or obsolete items if they are
deemed to be no longer usable or sellable. p. Financial
instruments
A financial asset or financial liability is initially measured
at fair value. For an item not at fair value, adjustments to fair
value are made through profit and loss (FVTPL) including
transaction costs that are directly attributable to its acquisition
or issue. A trade receivable without a significant financing
component is initially measured at fair value and subsequently
measured at amortised cost.
Financial assets
On initial recognition, a financial asset is classified as
measured at: amortised cost; fair value through other comprehensive
income (FVOCI) - debt investment; FVOCI - equity investment; or
FVTPL. Financial assets are not reclassified subsequent to their
initial recognition unless the Group changes its business model for
managing financial assets, in which case all affected financial
assets are reclassified on the first day of the first reporting
period following the change in the business model.
The Group has only financial assets measured at amortised cost.
A financial asset is measured at amortised cost if it meets both of
the following conditions and is not designated as at FVTPL:
-- it is held within a business model whose objective is to hold
assets to collect contractual cash flows;
-- its contractual terms give rise on specified dates to cash
flows that are solely payments of principaland interest on the
principal amount outstanding.
Financial assets - Business model assessment
The Group makes an assessment of the objective of the business
model in which a financial asset is held at portfolio level because
this best reflects the way the business is managed and information
is provided to management. The information considered includes:
-- the stated policies and objectives for the portfolio and the
operation of those policies in practice.These include whether
management's strategy focuses on earning contractual interest
income, maintaining aparticular interest rate profile, matching the
duration of the financial assets to the duration of any
relatedliabilities or expected cash outflows or realising cash
flows through the sale of the assets;
-- how the performance of the portfolio is evaluated and
reported to the Company's management;
-- the risks that affect the performance of the business model
(and the financial assets held within thatbusiness model) and how
those risks are managed;
-- how managers of the business are compensated - e.g. whether
compensation is based on the fair value ofthe assets managed or the
contractual cash flows collected; and
-- the frequency, volume and timing of sales of financial assets
in prior periods, the reasons for suchsales and expectations about
future sales activity.
Financial assets: Assessment whether contractual cash flows are
solely payments of principal and interest
For the purposes of this assessment, 'principal' is defined as
the fair value of the financial asset on initial recognition.
'Interest' is defined as consideration for the time value of money
and for the credit risk associated with the principal amount
outstanding during a particular period of time and for other basic
lending risks and costs (e.g. liquidity risk and administrative
costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely
payments of principal and interest, the Group considers the
contractual terms of the instrument. This includes assessing
whether the financial asset contains a contractual term that could
change the timing or amount of contractual cash flows such that it
would not meet this condition. In making this assessment, the Group
considers:
-- contingent events that would change the amount or timing of
cash flows;
-- terms that may adjust the contractual coupon rate, including
variable-rate features;
-- prepayment and extension features; and
-- terms that limit the Group's claim to cash flows from
specified assets (e.g. non-recourse features).
Financial assets at amortised cost are subsequently measured
fair value. The amortised cost is reduced by impairment losses.
Interest income, foreign exchange gains and losses and impairment
are recognised in the income statement. Any gain or loss on
derecognition is recognised in the income statement.
Financial liabilities
Financial liabilities are classified according to the substance
of the contractual arrangements entered into. Financial
liabilities, including trade and other payables and bank loans are
initially recognised at transaction price unless the arrangement
constitutes a financing transaction, where the debt instrument is
measured at the present value of the future payments discounted at
a market rate of interest. Debt instruments are subsequently
carried at amortised cost, using the effective interest rate
method.
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities
if payment is due within one year or less. If not, they are
presented as non-current liabilities. Trade payables are recognised
initially at transaction price and subsequently measured at
amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the
company's obligations are discharged, cancelled, or they expire. q.
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and deposits
with maturities of three months or less from the date of
acquisition. Foreign balances are revalued with any gain or loss
adjusted. r. Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event and
it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. The expense
relating to any provision is presented in the consolidated
statement of comprehensive income, net of any expected
reimbursement, but only where recoverability of such reimbursement
is virtually certain.
Provisions are discounted using a current pre-tax rate that
reflects, where appropriate, the risk specific to the liability.
Where discounting is used, the increase in the provision due to the
passage of time is recognised as a finance cost. s. Share capital
and premium
Proceeds on issue of shares are included in shareholders'
equity, net of transaction costs. The carrying amount is not
re-measured in subsequent years. The proceeds of the issue of
shares up to the nominal ordinary share value of 15p are included
in share capital with the balance of the proceeds, net of relevant
transaction costs, included in the share premium t. Share option
reserve
The cost of issuing share options is calculated using the
Black-Scholes method and are included in the share option reserve
until the share options are exercised, lapsed or cancelled. u.
Unlisted Investments
Unlisted investments are stated at fair value with adjustments
made following annualised fair value reviews through impairment
charges. v. Defined contribution pension scheme
The Group operates a defined contribution pension scheme. The
assets of the scheme are held separately from those of the Group in
an independently administered fund. The amounts charged against
profits represent the contributions payable to the scheme in
respect of the accounting period. w. New and amended standards
adopted by the Group
The following new accounting standards, interpretations and
amendments to existing standards have been published and are
mandatory for the accounting period beginning on 1 April 2022.
. Amendments to IAS 16: Property, Plant and Equipment: Proceeds
before intended use.
. Amendments to IFRS 3: Reference to the Conceptual
Framework.
. Amendments to IAS 37: Onerous Contracts - Cost of Fulfilling a
Contract.
. Annual Improvements to IFRS Standards 2018 - 2020: Including
amendments to IFRS 9 Financial Instruments and IFRS 16 Lease.
The new and amended standards adopted by the Group in the year
have not resulted in any impact in the current financial
statements.
Standards which are in issue but not yet effective
At the date of authorisation of these financial statements, the
following standards and interpretations, which have not yet been
applied in these financial statements, were in issue but not yet
effective:
. Amendments to IAS 1: Presentation of Financial Statements
(Effective 1 January 2024) and Disclosure of Accounting Policies
(Effective 1 January 2023).
. Amendments to IAS 8: Definition of Accounting Estimates
(Effective 1 January 2023).
. Amendments to IAS 12: Deferred Tax related to Assets and
Liabilities arising from a Single Transaction (Effective 1 January
2023).
. Amendments to IFRS 16: Lease Liability in a Sale and Leaseback
(Effective 1 January 2024).
The Group does not consider that any other standards, amendments
or interpretations issued by the IASB, but not yet applicable, will
have a significant impact on the financial statements. 3. Use of
estimates and judgements
The preparation of financial statements requires management to
make estimates and judgements that affect the amounts reported for
assets and liabilities as at the reporting date and the amounts
reported for revenues and expenses during the year. The nature of
estimation means that actual amounts could differ from those
estimates. Estimates and judgements used in the preparation of the
financial statements are continually reviewed and revised as
necessary. While every effort is made to ensure that such estimates
and judgements are reasonable, by their nature they are uncertain
and, as such, changes in estimates and judgements may have a
material impact on the financial statements. The key sources of
judgement and estimation uncertainty that have a significant risk
of causing material adjustment to the carrying amount of assets and
liabilities within the next financial year are discussed below.
Taxation
Management judgement is required to determine the amount of tax
assets that can be recognised, based upon the likely timing and
level of future taxable profits together with an assessment of the
effect of future tax planning strategies. The carrying value of the
unrecognised deferred tax asset for tax losses and other timing
differences at 31 December 2022 was GBP995,000 (2021/22:
GBP595,000). The value of the deferred tax liability at the
period-end is nil (2021/22: GBP105,000. Further information is
included in notes 8 and 23.
Useful Economic Life of assets and impairment
Judgements are required as to the useful economic life of
systems for rental assets. Further information on all useful
economic lives of assets is included in notes 2 and 10.
Development costs
Management judgement is required to determine the appropriate
value of an asset as well as when an asset should be recognised.
The value of the recognised asset is written off over the useful
economic life of the asset. These judgements are based upon the
likely timing and level of future revenues. Development costs are
periodically and at least annually assessed for impairment and
costs are written-off if the project to which they relate is no
longer considered to be commercially viable. The value of the
development costs capitalised at 31 December 2022 was GBP1,538,000
(2021/22: GBP1,411,000). Further information is included in note
12.
Goodwill impairment
Judgements are required as to the useful economic life of
goodwill. These judgements are based upon the likely future
benefits that will be derived from the recognised goodwill. Further
information on all useful economic lives of assets is included in
notes 2 and 12. 4. Segmental information
The directors review segmental information at a revenue, gross
margin, salary and operating cost level but do not review the
balance sheet by segments.
A segment is a distinguishable component of the Group's
activities from which it may earn revenue and incur expenses, whose
operating results are regularly reviewed by the Group's chief
operational decision makers to make decisions about the allocation
of resources and assessment of performance and about which discrete
financial information is available. In identifying its operating
segments, management generally follows the Group's service line
which represent the main products and services provided by the
Group.
The directors believe that the Group operates in three primary
segments being the sale and supply of rental systems to the
Aquaculture industry, the manufacture, rental and sale of
underwater measurement devices, leak detection devices and
underwater communication devices in the Offshore market and the
manufacture and sale of Geotracking devices (GeoTracking).
All of the Group's revenue have been generated from continuing
operations, are from external customers and relates to
point-in-time revenue recognised when the product or service is
delivered.
31 December 31 March
2022 2022
GBP'000 GBP'000
Analysis of revenue
Amounts earned from Aquaculture rentals and sales 882 1,450
Amounts earned from Offshore rentals and sales 1,620 2,085
Amounts earned from Geotracking 59 757
2,561 4,292
??????? ???????
There are no material customers included within revenue
(2021/22, one: GBP725,000).
31 December 31 March
2022 2022
GBP'000 GBP'000
Analysis of gross profit
Amounts earned from Aquaculture rentals and sales (114) 590
Amounts earned from Offshore rentals and sales 880 1,094
Amounts earned from Geotracking 28 343
794 2,027
??????? ???????
The Group operates in six main geographic areas, although all
are managed in the UK. The Group's revenue per geographical segment
based on the customer's location is as follows:
31 December 31 March
2022 2022
GBP'000 GBP'000
Revenue
UK 1,290 2,302
Chile 137 326
Asia 293 361
Europe (excluding UK) 354 548
North America 403 462
Rest of the World 84 293
2,561 4,292
??????? ???????
The Group's assets are located in the UK and Chile and although
some of its tangible assets, in the form of systems for rental, are
located in Chile, all are owned by the company or its subsidiaries.
5. Operating loss
Operating loss is stated after charging/(crediting):
31 December 2022 31 March 2022
GBP'000 GBP'000
Depreciation of property, plant and equipment (see note 10) 304 741
Depreciation of right-of-use assets (see note 11) 130 164
Impairment of property, plant and equipment (see note 11) 62 311
Amortisation and impairment of intangible assets (see note 12) 326 572
Research and development costs 1 227
Exceptional costs 1,230 257
Government grants relating to Covid-19 (Other Operating Income) - (131)
Share-based payment charge (see note 25) - 20
Loss on disposal of assets 6 -
Net foreign exchange (gains) / losses (37) 1
Auditor remuneration
31 December 2022 31 March 2022
GBP'000 GBP'000
Audit services:
Fees payable to the Group's auditor for the audit of the Group and 22 35
Company annual accounts
Fees payable to the Group's auditor for the audit of the Company's 26 45
subsidiaries
48 80
??????? ???????
6. Staff costs and numbers
The average monthly number of employees (including executive
directors) for the continuing operations was:
31 December 2022 31 March 2022
No. No.
Directors 3 2
Administration 14 17
Engineering 8 9
Manufacturing 18 17
43 45
??????? ???????
Staff costs for the Group during the year including executive
directors:
31 December 2022 31 March 2022
GBP'000 GBP'000
Wages and salaries 1,562 2,212
Social security costs 167 171
Other pension costs 42 56
1,771 2,439
??????? ???????
Directors' remuneration
Full details of the directors' remuneration, for current
directors, is provided in the Directors' Remuneration Report on
pages 21 to 23.
31 December 2022 31 March 2022
GBP'000 GBP'000
Directors' emoluments 329 624
Company contributions to defined contribution pension schemes 11 14
340 638
??????? ???????
The highest paid director received remuneration of GBP132,382
(2021/22: GBP390,219)
The Group operates a defined contribution pension scheme for all
qualifying employees. The assets of the scheme are held separately
from those of the Group in independently administered funds.
Retirement benefits are accruing to 3 directors (2021/22: 2).
The charge to the statement of comprehensive income in respect
of defined contribution schemes was GBP37,000 (2021/22: GBP56,000).
Contributions totalling GBP9,000 (2021/22: GBP8,000) were payable
to the fund at the year-end and are included in creditors. 7. Net
finance costs
31 December 2022 31 March 2022
GBP'000 GBP'000
Finance income
Bank interest received 1 -
Total finance income 1 -
Finance costs
Bank and loan interest payable (136) (156)
Unwinding of discount on deferred acquisition payment (62) (10)
Lease interest payable (5) (6)
Total finance costs (203) (172)
Net finance costs (202) (172)
??????? ??????? 8. Taxation
The tax credit is made up as follows:
31 December 2022 31 March 2022
GBP'000 GBP'000
Current income tax:
Adjustments in respect of prior year (18) (11)
Research and development income tax credit receivable (119) (144)
Total current income tax (137) (155)
Deferred tax expense:
Origination and reversal of temporary differences (80) (96)
Tax credit per statement of comprehensive income (217) (251)
??????? ???????
The tax charge differs from the standard rate of corporation tax
in the UK of 19% for the nine-month period ended 31 December 2022
(19% for the year ended 31 March 2022). The differences are
explained below:
31 December 2022 31 March 2022
GBP'000 GBP'000
Loss on ordinary activities before taxation (2,512) (2,155)
UK tax credit at standard rate of 19% (2021/22: 19%) (477) (409)
Effects of:
Fixed assets timing differences (80) (74)
Expenses not deductible for tax 77 95
Additional deduction for R&D expenditure (119) (144)
Adjustments in respect of prior year (18) (11)
Prior year losses utilised - 43
Deferred tax not recognised 400 249
Total taxation credit (217) (251)
??????? ???????
The Group has accumulated losses available to carry forward
against future trading profits. The estimated value of the deferred
tax asset measured at a standard rate of 19% (2021/22: 19%) is
GBP995,000 (2021: GBP595,000), of which GBPnil (2021: GBPnil) has
been recognised, as it is not certain that future taxable profits
will be available against which the unused tax losses can be
utilised.
The Group has not recognised a deferred tax liability in the
year as it is covered by accumulated losses (2021/22:
GBP80,000).
From 1 April 2023 the corporation tax rate will increase to 25%.
This was substantively enacted on 24 May 2021. The deferred tax
balance at 31 December 2022 has been calculated based on the rate
as at the balance sheet date of 25%. 9. Losses per share
Basic earnings or losses per share are calculated by dividing
the loss or profit after tax attributable to the equity holders of
the Group by the weighted average number of shares in issue during
the year.
Diluted earnings or losses per share are calculated by adjusting
the weighted average number of shares outstanding to assume
conversion of all potential dilutive shares, namely share options.
The calculation of earnings or losses per share is based on the
following losses and number of shares.
A reconciliation is set out below.
2022 2021/22
GBP'000 GBP'000
Loss for the year attributable to owners of the Group (2,459) (1,904)
Weighted average number of shares:
- Basic 49,659,304 32,535,945
- Diluted 94,036,802 34,024,147
Basic losses per share (pence) (5.0) (5.9)
Diluted losses per share (pence)* (5.0) (5.9)
Weighted average number of shares:
- Basic 49,659,304 32,535,945
- Diluted 94,036,802 34,024,147
Adjusted basic losses per share (pence) (5.0) (5.9)
Adjusted diluted losses per share (pence) (5.0) (5.9)
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. The Company
has share options that are dilutive potential ordinary shares.
*These shares are not considered dilutive because they decrease
the loss per share. 10. Property, plant and equipment
Systems for rental Plant and equipment Motor vehicles Total
GBP'000 GBP'000 GBP'000 GBP'000
COST
At 31 March 2021 2,588 361 86 3,035
Additions 370 52 1 423
At 31 March 2022 2,958 413 87 3,458
Additions 23 11 1 35
Disposals (348) (6) (9) (363)
At 31 December 2022 2,633 418 79 3,130
DEPRECIATION
At 31 March 2021 1,330 124 33 1,487
Depreciation charge for year 625 89 27 741
Impairment for year 311 - - 311
At 31 March 2022 2,266 213 60 2,539
Depreciation charge for year 218 71 15 304
Disposals (348) (3) (6) (357)
Impairment for year 62 - - 62
At 31 December 2022 2,198 281 69 2,548
NET BOOK VALUE
At 31 December 2022 435 137 10 582
??????? ??????? ??????? ???????
At 31 March 2022 692 200 27 919
??????? ??????? ??????? ???????
Depreciation charges in relation to Systems for rental are
included in Costs of sale. All other depreciation is included in
administrative expenses.
Impairment charges for the year relate to Sealfence rental
systems returned from customers. The impairment review performed
has been carried out on an individual asset basis, being the
smallest group of assets contributing to future economic benefits.
11. Leases
Right-of-use assets
Buildings and facilities Motor vehicles
Total
GBP'000 GBP'000 GBP'000
Cost
At 31 March 2021 511 134 645
Additions 33 43 76
Disposals (27) - (27)
At 31 March 2022 517 177 694
Additions 60 - 60
Disposals (52) - (52)
At 31 December 2022 525 177 702
Accumulated depreciation
At 31 March 2021 101 18 119
Charge for the year 123 41 164
Disposals (23) - (23)
At 31 March 2022 201 59 260
Charge for the year 96 34 130
Disposals (52) - (52)
At 31 December 2022 245 93 338
Carrying amount
At 31 December 2022 280 84 364
?????? ?????? ??????
At 31 March 2022 316 118 434
?????? ?????? ??????
The Group leases several assets including buildings and
facilities as well as motor vehicles acquired during the year. The
average lease term by asset is 3.5 years (2021/22: 2.8 years). This
term, excluding Motor Vehicles, include some extension rights,
which the Group is may or may not exercise.
Amounts recognised in profit and loss:
31 December 2022 31 March 2022
GBP'000 GBP'000
Depreciation expense on right-of-use assets 130 164
Interest expense (included in finance cost) 6 6
The total cash outflow for leases amount to GBP123,000 (2021/22:
GBP181,000).
Lease liabilities
Maturity analysis
A maturity analysis of lease liabilities based on undiscounted
gross cash flows is reported in the table below:
31 December 31 March
2022 2022
GBP'000 GBP'000
Year 1 180 168
Year 2 137 155
Year 3 53 92
Year 4 0 21
Interest costs (17) (20)
Total lease liabilities 353 416
??????? ???????
31 December 31 March
2022 2022
GBP'000 GBP'000
Due within one year 172 168
Due in over one year 181 248
Total lease liabilities 353 416
??????? ???????
The Group does not face a significant liquidity risk with regard
to its lease liabilities. All lease obligations are denominated in
pounds sterling. 12. Intangible assets
Goodwill Trademarks IP licence Development costs Total intangible assets
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 31 March 2021 1,059 515 428 1,427 3,429
Additions - - - 587 587
At 31 March 2022 1,059 515 428 2,014 4,016
Additions - - - 364 364
Disposals - - - (206) (206)
At 31 December 2022 1,059 515 428 2,172 4,174
Amortisation
At 31 March 2021 28 129 152 165 474
Charge for the year - 64 70 143 277
Impairments - - - 295 295
At 31 March 2022 28 193 222 603 1,046
Charge for the year - 48 41 92 181
Impairments - - - 145 145
Disposals - - - (206) (206)
At 31 December 2022 28 241 263 634 1,166
Net Book Value
At 31 December 2022 1,031 274 165 1,538 3,008
At 31 March 2022 1,031 322 206 1,411 2,970
?????? ?????? ?????? ?????? ???????
Goodwill relates to the acquisition of MarineSense Limited (now
part of the Offshore cash generating unit) of GBP611,000 and the
acquisition of Link Subsea Limited (now part of the Offshore cash
generating unit) of GBP420,000. Impairment calculations are
reviewed bi-annually to ensure goodwill is valued fairly.
Discounted cash flow modelling is undertaken based on forecast
future revenues and costs and the values compared to the value of
goodwill recognised with any required adjustments made accordingly.
The discounted cash flow modelling shows significant headroom in
the forecast future values of the business units relating to
Goodwill compared to the carrying values of Goodwill. Forecast
future values were assessed over five years with recoverable
amounts determined by considering value in use, no growth rates
were assumed and 8% was used as the modelling discount rates. For
these reasons, it is not considered reasonable that a reasonably
possible change in the key assumptions would result in the
recoverable amounts being less than the carrying amount of
Goodwill.
IP license costs mostly pertain to the intellectual property
acquired as a part the acquisition of assets and liabilities of ROS
Technology Limited, which took place in November 2020. The Group
elected to apply the optional concentration test, which resulted in
a conclusion that the acquisition is not a business combination on
the basis that substantially all of the fair value of the gross
assets acquired is concentrated in a group of similar identifiable
assets. Therefore, this acquisition was accounted as an asset
acquisition (i.e. outside the scope of IFRS 3). The remaining
useful life of this asset is 2.9 years (2021/22: 3.6 years).
Development costs primarily relate to the development of the
Group's new products which involve the utilisation internal salary
costs and purchase of external materials for the development of
prototypes. 13. Unlisted investments
31 December 2022 31 March 2022
GBP'000 GBP'000
Unlisted equity securities 511 297
Additions in the year - 214
511 511
??????? ???????
Unlisted equity securities pertain to 15% of ordinary share
capital of Minnowtech LLC and 10% of ordinary share capital of Blue
Lions Labs Ltd which are both held directly by OTAQ Group
Limited.
The directors consider that the carrying amount of unlisted
equity securities approximates to their fair value based on level 2
inputs for both investments which include indicative third-party
valuations of the investments and internal valuation models
provided by the investments themselves based on forecasts. Based on
this information, no impairment is required at the reporting date.
14. Subsidiaries of the Group
The principal subsidiaries of the Group at 31 December 2022 and
31 March 2022 are as follows:
% Held
Subsidiary undertakings Country of incorporation Principal activity Class of shares held
OTAQ Group Limited 1 England Manufacturing Ordinary 100% direct
OTAQ Aquaculture Limited2
Scotland Fish farm security Ordinary 100% indirect
OTAQ Chile SpA* 3 Chile Sales Ordinary 100% indirect
OTAQ Connectors Limited 1 England Dormant Ordinary 100% indirect
OTAQ Offshore Limited 2 Scotland Dormant Ordinary 100% indirect
OceanSense Limited2 Scotland Dormant Ordinary 100% indirect
OTAQ Australia PTY4 Australia Sales Ordinary 100% indirect
OTAQ Group UK Limited and OTAQ UK Limited were formally
dissolved on 27 July 2021.
*OTAQ Chile SpA has a year end date of 31 December in order to
comply with the requirements of the Chilean authorities.
1 Registered office address: 8-3-4 Harpers Mill, South Road,
White Cross, Lancaster, England, LA1 4XF
2 Registered office address: Crombie Lodge, Aberdeen Innovation
Park, Campus 2, Aberdeen, Scotland, AB22 8GU
3 Registered office address: Pacheco Altamarino 2875, Puerto
Montt, Chile
4 Registered office address: 12 Belar Avenue, Terrigal, New
South Wales 2260, Australia 15. Trade and other receivables
31 December 2022 31 March 2022
GBP'000 GBP'000
Current:
Trade receivables - gross claim value 377 1,467
Provision for impairment of trade receivables (9) (28)
Prepayments 125 142
Other 196 185
689 1,766
??????? ???????
Trade receivables are non-interest bearing and are generally due
and paid within 30 to 60 days. As trade receivables are short-term,
the simplified approach under IFRS 9 applies as the credit risk
exposure period is unlikely to have a significant change in
economic conditions. Trade and other receivables represent
financial assets and are considered for impairment on an expected
credit loss mode based on historic credit notes issued. Therefore,
there is a provision for impairment at the statement of financial
position date of GBP9,000 (2021/22: GBP28,000).
The age of net trade receivables is all within one year
(2021/22: one year except for GBP23,000 which is less than two
years) and the average gross debtor days calculated on a count back
basis were 52 days (2021/22: 78 days). 16. Income tax asset
31 December 2022 31 March 2022
GBP'000 GBP'000
Research and development tax credit receivable 275 155
275 155
??????? ??????? 17. Inventories
31 December 2022 31 March 2022
GBP'000 GBP'000
Stock 937 1,182
937 1,182
??????? ???????
The value of inventory provided for as at 31 December 2022 is
GBP558,000 (2021/22: GBP64,000). GBP967,000 of stock was expensed
in the year through cost of sales (2021/22: GBP1,010,000). 18. Cash
and cash equivalents
31 December 2022 31 March 2022
GBP'000 GBP'000
Cash at bank and in hand 2,337 1,008
2,337 1,008
Cash at banks earns interest at floating rates based on daily
bank deposit rates. An analysis of cash and cash equivalents by
denominated currency is given in note 28. 19. Share capital and
share premium
The called-up and fully paid share capital of the Company is as
follows:
31 December 31 March
2022 2022
GBP'000 GBP'000
Allotted, called-up and fully paid: 127,824,881 (2021/22: 37,716,250) Ordinary shares of 1,278 5,657
GBP0.01 each (2021/22: GBP0.15 each)
Movements in ordinary shares:
Shares Share capital Share premium Deferred Shares
Total
No GBP'000 GBP'000 GBP'000 GBP'000
At 31 March 2021 30,763,251 4,614 2,897 - 7,511
Shares issued to employees 95,854 14 14 - 28
Shares issued during the year 6,272,729 941 369 - 1,310
Exercise of share options 584,416 88 - - 88
At 31 March 2022 37,716,250 5,657 3,280 - 8,937
Shares issued to employees 108,631 7 4 - 11
Shares issued during the period 90,000,000 900 2,550 - 3,450
Shares sub-divided and converted - (5,286) - 5,286 -
At 31 December 2022 127,824,881 1,278 5,834 5,286 12,398
During the year 108,631 (2021/22: 95,854) ordinary shares were
issued at price ranges between 5p and 21p per share as part of the
all UK employee Share Incentive Plan.
On 9 November 2022, 90,000,000 ordinary shares were issued
following a General Meeting of the Company held on 7 November 2022
at a price of 4p per share. Contemporaneously, the existing
ordinary share capital consisting of 37,758,052 ordinary shares of
nominal value GBP0.15 each were sub-divided and each replaced with
one new ordinary share of GBP0.01 each and one deferred share of
GBP0.14. The new ordinary shares have the same rights as the
ordinary shares they replaced. The new deferred shares have no
economic rights.
On 11 January 2022, 6,272,729 ordinary shares were issued at a
price of 22p per share following a General Meeting of the Company
held on 10 January 2022. 20. Reserves
Share option reserve
The share option reserve arises from the requirement to value
share options in existence at the year end at fair value. Further
details of share options are included at note 25.
Share premium
The share premium account represents the amount received on the
issue of ordinary shares by the Company in excess of their nominal
value less applicable costs and is non-distributable.
Deferred shares
The deferred shares account represents the amount received on
the cancellation of 15p ordinary shares by the Company and the
creation of 1p ordinary shares and 14p deferred shares and is
non-distributable.
Merger relief reserve
The merger relief reserve arose on the Company's reverse
acquisition of OTAQ Group Limited on 31 March 2020 and relates to
the share premium on the 21,539,904 shares issued to acquire OTAQ
Group Limited.
Reverse acquisition reserve
The reverse acquisition reserve was created in accordance with
IFRS 3 'Business Combinations'. The reserve arises due to the
elimination of the Company's investment in OTAQ Group Limited.
Since the shareholders of OTAQ Group Limited became the majority
shareholders of the enlarged group, the acquisition is accounted
for as though there is a continuation of the legal subsidiary's
financial statements. In reverse acquisition accounting, the
business combination's costs are deemed to have been incurred by
the legal subsidiary.
Other reserve
Other reserve represents the value of the exercised or lapsed
share options which were exercised and the foreign exchange in
relation to the translation of subsidiaries reporting in foreign
currencies.
Revenue reserve
The revenue reserve accumulates the losses attributable to the
equity holders of the parent company. 21. Deferred payment for
acquisition
31 December 31 March
2022 2022
GBP'000 GBP'000
Current
Fair value of deferred cash consideration on the acquisition of OTAQ Offshore Limited - 213
(formerly MarineSense Limited)
- 213
??????? ???????
31 December 2022 31 March 2022
GBP'000 GBP'000
Deferred payment for acquisition movement
Opening balance 213 215
Unwinding of discount 62 10
Repayments (275) (52)
Revaluation of the deferred consideration - 40
Closing balance - 213
??????? ??????? 22. Trade and other payables
31 December 2022 31 March 2022
GBP'000 GBP'000
Current:
Trade payables 305 520
Accrued expenses 96 109
Deferred revenue 24 453
Other creditors 78 161
503 1,243
??????? ???????
Trade and other payables comprise amounts outstanding for trade
purchases and on-going costs. Trade payables and accruals
principally comprise amounts outstanding for trade purchases and
ongoing costs. The average credit period on purchases is 30 days
(2021/22: 30 days). No interest is paid on trade payables over 30
days.
The directors consider that the carrying amount of trade
payables approximates to their fair value. 23. Deferred tax
liability
31 December 2022 31 March 2022
GBP'000 GBP'000
Deferred tax liability
Deferred taxation on intangibles recognised at acquisition -
80
- 80
??????? ???????
From 1 April 2023 the corporation tax rate will increase to 25%.
This was substantively enacted on 24 May 2021. The deferred tax
balance at 31 December 2022 has been calculated based on the rate
as at the balance sheet date of 25%. 24. Borrowings
31 December 2022 31 March 2022
GBP'000 GBP'000
Interest bearing loans 1,501 1,813
1,501 1,813
??????? ???????
Analysis of loans and borrowings
Borrowings are classified based on the amounts that are expected
to be settled within the next 12 months and after more than 12
months from the reporting date, as follows:
31 December 2022 31 March 2022
GBP'000 GBP'000
Current liabilities 447 421
Non-current liabilities 1,054 1,392
1,501 1,813
??????? ???????
The terms and conditions of outstanding loans are as
follows:
31 December 2022 31 March 2022
Nominal interest rate Date of Face value Carrying Face value Carrying
maturity amount amount
GBP'000 GBP'000 GBP'000 GBP'000
The higher of 8% p.a. and the
CBILS loan monthly average Sterling Over 1 January
Night Index Average ("SONIA") 2026 1,501 1,501 1,813 1,813
plus 6.0%
Total interest-bearing liabilities 1,501 1,501 1,813 1,813
??????? ??????? ??????? ???????
Liabilities arising from financing activities
Lease liabilities CBILS
GBP'000 GBP'000
Balance at 1 April 2022 416 1,813
Cash flows
Repayment of borrowings - (312)
Lease payments (123) -
Non-cash changes* 60 -
Balance at 31 December 2022 353 1,501
*This balance includes GBP60,000 (2021/22: GBP76,000) of new
leases entered to in the year. The leases liabilities relate to
capital amounts only. 25. Share options
On 19 August 2021, the Company granted 550,000 of share options
to various key management personnel under the Enterprise Management
Incentive ("EMI") Share options. On 16 December 2021, the Company
granted 250,000 of share options to a new key management employee
under the Enterprise Management Incentive ("EMI") Share options.
Vesting conditions are detailed in the Remuneration Committee
report.
On 7 November 2022, the Company granted 22,499,978 warrants to
shareholders who participated in the new share issue of the same
date. The warrants entitle the holder to be issued with one share
for every warrant held at a price of 12p per share.
An option-holder has no voting or dividend rights in the Company
before the exercise of a share option.
Set out below are summaries of options granted under the
plan:
31 December 2022 31 March 2022
Weighted average exercise price per Number of Weighted average exercise price per Number of
share option options share option options
At 1 April GBP0.44 1,810,900 GBP0.27 1,824,908
- -
Granted during the GBP0.60 800,000
year
Exercised during the - - GBP0.01 (584,416)
year
Lapsed during the - - GBP0.01 (229,592)
year
Cancelled during the GBP0.58 (700,000) - -
year
At 31 December / 31 GBP0.14 1,110,900 GBP0.44 1,810,900
March
??????? ??????? ??????? ???????
260,900 share options are vested (2021/22: 260,900) and can be
exercised
Set out below are summaries of warrants granted:
31 December 2022 31 March 2022
Weighted average exercise price per Number of Weighted average exercise price per Number
warrant warrants warrant of
warrants
At 1 April GBP0.50 320,000 GBP0.50 320,000
GBP0.12 22,499,978
Granted during the - -
year
At 31 December / 31 GBP0.13 22,819,978 GBP0.50 320,000
March
??????? ??????? ??????? ???????
The remaining weighted average contractual life of the share
options and warrants at 31 December 2022 is 2.43 years 1.82 years
respectively with the weighted average exercise price being GBP0.14
(2021/22: GBP0.52). The weighted average share price on the date of
exercise of share options exercised during the year to 31 March
2022 was GBP0.36 and no options were exercised in the period to 31
December 2022.
Fair value of options and warrants granted
The estimated average fair value of 22,499,978 (2021/22: 800,000
options) warrants granted during the year was GBPnil (2021/22:
GBP0.08). The fair value at grant date is determined using an
adjusted form of the Black-Scholes model which includes a Monte
Carlo simulation model that takes into account the exercise price,
the term of the option, the share price at grant date and expected
price volatility of the underlying share, based on OTAQ plc
historical share price history, and the risk-free interest rate for
the term of the option.
The model inputs were: ? share prices at grant date of GBP0.04
(2021/22: GBP0.23 to GBP0.42); ? exercise prices of GBP0.12
(2021/22: GBP0.595 to GBP0.600); ? expected volatility of 82%
(2021/22: 50% to 58%); ? expected dividend rate of 0% (2021/22:
0%); ? contractual life of 2 years (2021/22: 0 to 3 years); and ? a
risk-free interest rate of 3% (2021/22: 1%).
The total reserve and share-based payment expense recognised in
the statement of comprehensive income for the period ended 31
December 2022 in respect of these options granted was GBPnil
(2021/22: GBP20,000). 26. Commitments and contingencies
Capital commitments
The Group is committed to the following capital expenditure
contracted in the current financial year:
31 December 2022 31 March 2022
GBP'000 GBP'000
- 411
??????? ???????
The prior year capital commitment related to a purchase order
placed for Sealfence systems.
Contingencies
There were no contingent liabilities at 31 December 2022 and 31
March 2022. 27. Financial instruments
Financial assets Demand and less than 3 From 3 to 12 From 12 months to 2 From 2 to 5 More than 5 Total
months months years years years
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Trade and other 1,624 - - - - 1,624
receivables
Cash and cash 1,008 - - - - 1,008
equivalents
31 March 2022 2,632 - - - - 2,632
Trade and other 573 - - - - 573
receivables
Cash and cash 2,337 - - - - 2,337
equivalents
31 December 2022 2,910 - - - - 2,910
Financial Demand and less than 3 From 3 to 12 From 12 months to 2 From 2 to 5 More than 5 Total
liabilities months months years years years
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Trade and other 790 441 12 1,243
payables
Loans 102 319 456 936 1,813
Leases 39 123 147 107 416
31 March 2022 931 883 615 1,043 - 3,472
Trade and other 479 - 24 - - 503
payables
Loans 108 339 484 570 1,501
Leases 42 131 130 50 353
31 December 2022 629 470 638 620 - 2,357
The maturity gap analysis on the Group's financial assets and
liabilities is as follows:
Liquidity gap Demand and less than 3 From 3 to 12 From 12 months to 2 From 2 to 5 More than 5 Total
months months years years years
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 31 March 2022 1,701 (883) (615) (1,043) - (840)
As at 31 December 2,281 (470) (638) (620) - 553
2022
28. Financial risk management
The Group's activities expose it to a variety of financial
risks: interest rate risk, liquidity risk, market risk, currency
risk and credit risk. Risk management is carried out by the board
of directors. The Group uses financial instruments to provide
flexibility regarding its working capital requirements and to
enable it to manage specific financial risks to which it is
exposed.
The Group finances its operations through a mixture of equity
finance, cash, loans and liquid resources and various items such as
trade debtors and trade creditors which arise directly from the
Group's operations. a. Interest rate risk
Interest rate risk is the risk that the fair value of future
cash flows associated with the instrument will fluctuate due to
changes in market interest rates.
Interest bearing assets including cash and cash equivalents are
considered to be short-term liquid assets. It is the Group's policy
to settle trade payables within the credit terms allowed and the
Group does therefore not incur interest on overdue balances.
The Group has external borrowings linked to SONIA but capped
until SONIA exceeds 2%; the Group is now therefore exposed to
interest rate risk with SONIA at 3.69% at 31 December 2022. The
Group is able to place surplus cash reserves on short-term deposit
to help offset the SONIA increase risk. The principal impact to the
Group is the result of interest-bearing loans and cash including
cash equivalent balances held as set out below:
31 December 2022 31 March 2022
Fixed rate Floating rate Total Fixed rate Floating rate Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash at bank and in hand - 2,337 2,337 - 1,008 1,008
Interest bearing loans - (1,501) (1,501) (1,813) - (1,813)
Total - 836 836 (1,813) 1,008 (805)
???? ????? ???? ???? ????? ???? b. Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulties in meeting obligations associated with financial
liabilities. Liquidity risk arises from the repayment demands of
the Group's lenders.
The Group manages all of its external bank relations centrally.
Any material change to the Group's principal banking facility
requires approval by the board. The cash requirements of the Group
are forecasted by the board annually. The Group is dependent on any
external borrowings through it's CBILs facility.
At the reporting date the Group was cash positive.
The following tables set out the maturity profile of the Group's
non-derivative financial liabilities, based on undiscounted
contractual cash outflows, as at the following dates:
31 December 2022 31 March 2022
GBP'000 GBP'000
Trade and other payables
Less than 2 months 479 629
Other financial liabilities
Less than 2 months - 224
3 months - 1 year 13 732
1 - 5 years 1,841 1,647
Total 2,333 3,232
??????? ??????? c. Capital risk management
The Group reviews its forecast capital requirements on a
half-yearly basis to ensure that entities in the Group will be able
to continue as a going concern while maximising the return to
stakeholders. It is the current strategy of the Group to finance
its activities from existing equity and reserves as well as
additional financing where appropriate and by the issue of new
equity as required.
The capital structure of the Group consists of equity
attributable to equity holders, comprising issued share capital,
share premium, other reserves and retained earnings as disclosed in
notes 19 to 20 and the statement of changes in equity. Total equity
attributable to the equity holders of the parent company was
GBP6,270,000 at 31 December 2022 (31 March 2022: GBP5,180,000). The
Group is not subject to externally imposed capital requirements. d.
Credit risk management
Credit risk is the risk that a counterparty to a financial
instrument will fail to discharge an obligation or commitment that
it has entered into with the Group and the risk that any debtors of
the Group may default on amounts due to the Group. The Group's
principal financial assets are trade receivables, other debtors and
cash equivalents. The Group has a policy of only dealing with
credit worthy counterparties which is assessed through credit
checks and trade references. The Group had GBP377,000 of trade
receivables at the period end (2021/22: GBP1,439,000). The Group's
exposure to credit risk is influenced mainly by the individual
characteristics of each customer or counterparty. However,
management also considers the factors that may influence the credit
risk of its customer or counterparty base, including the default
risk associated with the industry and country in which the customer
or counterparty operates. Receivable balances are monitored on an
ongoing basis with the result that the Group's exposure to bad
debts is not significant. All trade receivables are ultimately
overseen by the director responsible for finance and are managed on
a day-to-day basis by the finance team. Credit limits are set as
deemed appropriate for the customer. The maximum exposure to credit
risk in relation to cash and cash equivalents is the carrying value
at the statement of financial position date. e. Currency risk
The Group has limited exposure to currency risk on sales and
purchases that are denominated in a currency other than the
respective functional currency of the Group. The risk is in respect
of United States Dollars, Euros and Chilean Pesos. Transactions
outside these currencies are limited.
The Group may use forward exchange contracts as an economic
hedge against currency risk, where cash flow can be judged with
reasonable certainty. Foreign exchange swaps and options may be
used to hedge foreign currency receipts in the event that the
timing of the receipt is less certain. There were no open forward
contracts as at 31 December 2022 or at 31 March 2022 and the Group
did not enter into any such contracts during 2022 nor 2021.
The summary quantitative data about the Group's exposure to
currency risk is as follows:
31 December 2022 31 March 2022
GBP CLP USD EUR Total GBP CLP USD AUD EUR Total
GBP'000 GBP'000 GBP000 GBP000 GBP'000 GBP'000 GBP'000 GBP000 GBP000 GBP000 GBP'000
Cash at bank and in hand 2,279 58 - - 2,337 904 67 37 - - 1,008
Trade receivables 261 16 89 11 377 1,294 54 74 - 17 1,439
Trade payables (281) (16) (8) - (305) (410) (21) (1) (88) - (520)
Total 2,259 58 81 11 2,409 1,788 100 110 (88) 17 1,927
??? ??? ???? ??? ??? ??? ??? ???? ??? ??? ???
f. Sensitivity analysis to movement in exchange rates
Given the immaterial asset balances in foreign currency, the
exposure to a change in exchange rate is negligible. g. Offsetting
financial assets and financial liabilities
The Group has not presented any of its financial assets and
financial liabilities on a net basis and no master netting
arrangements are in place. 29. Related party transactions
Transactions with directors and companies controlled by
directors
The following transactions with directors and companies
controlled by directors of the Company were recorded, including
VAT, during the year:
31 December 31 March
2022 2022
GBP'000 GBP'000
Charges incurred during the year by OTAQ Group Limited:
Falanx Cyber Defence Limited - a company controlled by a director who resigned during the
year
For goods and services provided 3 5
There were no outstanding balances between the Group and related
parties at 31 December 2022 or 31 March 2022.
Balances and transactions between the Company and its
subsidiaries are eliminated on consolidation and are not disclosed
in this Note. There are no differences between directors and the
key management personnel as they are considered to be the same.
-----------------------------------------------------------------------------------------------------------------------
Dissemination of a Regulatory Announcement that contains inside
information in accordance with the Market Abuse Regulation (MAR),
transmitted by EQS Group. The issuer is solely responsible for the
content of this announcement.
-----------------------------------------------------------------------------------------------------------------------
ISIN: GB00BK6JQ137
Category Code: FR
TIDM: OTAQ
LEI Code: 213800CZGMYB5XTUXJ52
OAM Categories: 1.1. Annual financial and audit reports
Sequence No.: 244812
EQS News ID: 1636639
End of Announcement EQS News Service
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