TIDMAERO
RNS Number : 2713L
Strat Aero PLC
30 September 2016
Strat Aero plc / Index: AIM / TIDM: AERO / Sector: Support
Services
30 June 2016
Strat Aero plc ("Strat Aero", the "Company" or the "Group")
Half Yearly Report
Strat Aero Plc, the AIM quoted international aerospace company
focused on the Unmanned Aerial Vehicle ("UAV") sector, is pleased
to present its unaudited half yearly report for the six month
period ended 30 June 2016.
OVERVIEW
-- Secured first US Wind Turbine Inspection Contract - completed
initial service commitment successfully during April
-- Secured US$375,000 Proprietary Software Contract with
Readyjet, a leading service provider to the aviation sector - roll
out of contract successfully underway
-- Master franchise agreement executed with I-Coach in Hong Kong
-- Appointment of Iain McLure as CEO
-- Revenues from inspection, survey and consultancy services
remained below expectations due to slower than anticipated adoption
of UAV solutions by larger customers
-- Geocurve's pipeline revenue generation has been in line with
expectations set at the time of acquisition - improving billed
revenue and operating profitability remains a key priority
-- Revenues of US$410,740 during 2016 (2015: US$57,441)
generating a gross profit of US$293,941 (2015: US$30,334)
-- Net Loss of US$ 2,121,986 during 2016 (2015 US$ 1,311,117)
-- Cash balances at the period-end amounted to US$275,428 (2015: US$238,324)
-- AK Litigation commenced April
-- POST PERIOD EVENTS
-- Completion of the Acquisition of Geocurve
-- Second US Wind Turbine inspection contract awarded in August.
-- Grant of 'NQE' (National Qualified Entity )Status by the UK's
Civil Aviation Authority ('CAA') to Strat Aero
-- Master Franchise Agreement executed with the Limkokwing
University of Creative Technology ('LKW'), an international
technology university, to roll out UAV training services
-- Geocurve awarded a multi-year contract worth GBP2.5 million
over the entire duration of the contract to provide aerial
inspection and survey services for the Environment Agency's Thames
Estuary Asset Management 2100 (TEAM2100) programme
-- Settlement of AK litigation
CHAIRMAN'S STATEMENT
Strat Aero offers investors a robust strategy to capitalise of
the exceptional growth opportunities in the Unmanned Aerial Vehicle
('UAV') space. Our goal is to build a world class provider of UAV
services and solutions. It was with this in mind that during the
period the Board appointed Iain McLure, an operations specialist,
as CEO of the Group to apply his expertise to formulating an
executable business plan with identifiable targets, measures,
planning, financial processes and clear lines of accountability,
which together provide a roadmap for Strat Aero to realise its
objective. I am pleased to report much progress has been made in
the short period since Iain's appointment, and I am confident this
will soon be reflected in our financial performance.
We believe Strat Aero has all the key ingredients in place to
succeed as a UAV based services and solutions provider. We have
extensive operational UAV experience; we have the technology and
Data Analytics capability, particularly in the form of our
proprietary Digital Data Management ('DDM') system which provides
the foundation of data capture, processing and reporting back to
customers across all our main divisions; and we have a team of
experts, which includes a number of qualified civil engineers,
capable of making sense of all the data collated. All three
components, in our view, are vital to the value proposition we
offer to our end customers and sets us apart from our peers. Being
able to offer a superior value adding product is something that
sets Strat Aero apart from its competitors and presents us with an
opportunity we are keen to capitalise on.
Having established Strat Aero's key strengths, Iain and the team
set about identifying our end customers and target markets. Like
all emerging disruptive technologies, the pace at which the number
of new markets in which UAVs can displace decades old business
practices by enhancing functionality and driving efficiencies for
its customers shows no signs of letting up. For a company of our
size it is important to be aware of market developments, but not to
get distracted from delivering our core offering. With this in mind
one of management's priorities during the period has been to
sharpen the Company's focus on those areas of the UAV market where
our expertise, experience, contacts and technology provide us with
an excellent opportunity to establish Strat Aero as a leading
provider of UAV based services and solutions.
Two high priority areas we have identified are Commercial UAS
Training & Education and Survey & Inspection Services. In
both cases Strat Aero already has an established platform in place
upon which we can build profitable businesses that generate
recurring revenue streams year after year without the need to
invest significant amounts of capital. Encouragingly, significant
progress has been made in both of these divisions during the first
half and post period end.
Commercial UAV Training & Education
Ensuring a UAV is operated safely is of paramount importance and
this need will only grow further as the number of UAVs flown, along
with their applications and uses, increases exponentially in the
years ahead. The need for pilots to be professionally trained and
accredited is clear. Given the expertise and experience of Strat
Aero's team of aviation specialists, specifically in teaching both
in the classroom and running proprietary digital-based training
platforms, Strat Aero is ideally placed to develop a professional
UAV career path and association for UAV pilots in both the
commercial and public sectors. Becoming a leading provider of
training solutions and accreditation services, promises to not only
provide Strat Aero with repeatable revenue opportunities but also
gives us access to a growing pool of pilots, all of whom have been
trained and accredited by the Company. The combination of this
resource with our training programmes will help us develop an
"ecosystem", which we believe will provide excellent purchasing and
partnership arrangements with UAV manufacturers.
What makes Strat Aero's training solutions stand out is that
they have been developed by leading experts from the UAV industry,
including the Head of Flight Training from one of the UK's leading
flight training schools; the Chief Instructor and Commander of
Standards & Evaluation for the Royal Air Force MQ-9 Reaper
fleet; as well as industry experts from the commercial and military
unmanned aviation sector who between them have several thousand
hours of UAV flight experience. In addition, unlike many other
training organisations, Strat Aero flies its own commercial UAV
fleet to deliver inspection and survey services to a blue chip
customer base. This allows real-world experience to be embedded
directly into our training materials. Furthermore, having already
developed our proprietary commercial UAV training application, we
can roll-out our offering via a capital light strategy, centred on
adopting a franchise model with suitable partners. We are already
doing this as demonstrated by the post period end signing of a
Master Franchise Agreement with the Limkokwing University of
Creative Technology ('LKW'), a leading international technology
university.
Under the terms of the agreement, Strat Aero's UAV training
solutions will be initially launched in LKW's prestigious Cyberjaya
campus outside Kuala Lumpur in Malaysia, before being rolled out to
other LKW campuses over the next two years, particularly in Africa.
Strat Aero will provide a complete set of training materials and
accreditation services as well as instruct LKW's trainers, enabling
LKW to deliver a comprehensive suite of UAV training products. In
addition to initial set up fees, Strat Aero will earn a percentage
of student fees charged by LKW. The first course is expected to be
held in 2016 and this will be followed by 15 - 20 courses per year
in 2017 and beyond. Strat Aero's training solutions, enable LKW to
provide a complete programme for students keen to embark on careers
as professional UAV operators incorporating an up-to-date
understanding of regulation and technology, as well as practical
flying skills. In addition, LKW will be able to integrate a UAV
module into many of their existing courses such as Urban Planning
& Design, Construction Management, Digital Film &
Television, Creative Multimedia and Events Management - industry
sectors that will increasingly take advantage of UAV
technology.
The post period tie-up with LKW follows a similar franchise
agreement we secured during the six months under review with Hong
Kong based I-Coach to roll-out our proprietary UAV Training
Programme in Hong Kong, The People's Republic of China, the
Taiwanese Republic of China and Macao. We are looking to secure
similar agreements with other potential partners in other targeted
regions.
Also post period end we were pleased to announce that the UK's
Civil Aviation Authority ('CAA'), one of the world's leading
National Aviation Authorities, has granted Strat Aero National
Qualified Entity ('NQE') status for training in the UK. This is an
important development in the commercialisation of Strat Aero's
training programmes as in order to apply for a UAV pilot's licence,
individuals need to show that they trained at an NQE certified
centre. The Board believes that the grant of NQE status is an
endorsement of the Company's training programmes and confirms the
quality of Strat Aero's suite of commercial teaching
courseware.
Survey & Inspection Services
Following last year's agreement to acquire Geocurve, a
specialist in the provision of UAV operated topographical surveys
and inspection services, Strat Aero has a readymade platform from
which to build a profitable UAV based inspection services business.
Geocurve not only has a blue chip client base including the UK's
Environment Agency, EDF Energy, Carillion, and the RSPB, but it has
also been a pioneer in the use of UAVs in the field of surveys and
inspections: Geocurve was one of the first companies to be
authorised by the CAA to fly UAVs in congested urban areas and
conduct surveys, inspections and various other projects in
previously prohibited areas; and successfully completed a
ground-breaking survey over the Norfolk Broads National Park using
UAVs.
With such an impressive track record and high standing in this
emerging sector, post period end we were delighted to complete the
acquisition of Geocurve and commence its full integration within
the Strat Aero Group. This will involve Geocurve sharing the same
reporting lines and management processes with all other business
units within the Group, which is expected to lower corporate costs,
and generate operational efficiencies as well as cross-selling
opportunities. In line with the Group's wider strategy, Geocurve
will look to secure longer term contracts with visible annualized
revenues from a broader customer base. Targeted areas include civil
engineering; land surveys and inspection services for quarries and
boundaries; flood defences; buildings; tunnels; energy assets
including oil and gas, water, solar, wind turbines, water towers;
wildlife habitat monitoring; insurance services; and cell
towers.
With this in mind, post period end we were delighted to announce
Geocurve had been awarded an additional contract to provide aerial
inspection and level survey services for the Environment Agency's
Thames Estuary Asset Management 2100 (TEAM2100) programme. This is
focused on refurbishing tidal flood defences to reduce the risk of
flooding to 1.25 million people and GBP200 billion worth of
property. The contract follows the successful completion of a
survey project on the Isle of Grain, where Geocurve combined
multiple UAV flights, land-based surveys and bathymetric surveys to
deliver a suite of video, orthomosaic photo, 3D model and survey
products. Depending on contract options and call-off timing, the
TEAM2100 programme could deliver in the region of GBP1m in revenue
to Strat Aero over the next 18 months, and GBP2.5m over the
duration of the whole programme. Aside from the potential revenues,
being a part of TEAM2100 alongside major engineering companies such
as CH2M, promises to raise the Group's profile within the
industry.
In tandem with progress made at our Commercial UAS Training
& Education and Survey & Inspection Services divisions, we
have also been successful in leveraging DDM's core functionality in
aviation management software, which is used in general aviation in
North America. Given Strat Aero's aviation heritage and DDM's
extensive data storage and analysis capability, the Company has
continued to actively market it as a customised enterprise resource
planning ('ERP') offering to the wider aviation industry. During
the period, we announced the award of a contract worth an estimated
US$378,000 over a five year period for DDM with ReadyJet, a leading
service provider to the aviation sector. Strat Aero has customised
DDM to meet ReadyJet's requirements, which include tracking
employees' time, calculating payroll, hosting and tracking required
training that has been developed by ReadyJet. DDM will also track
schedules, documents, employee titles and positions. With DDM
generating high gross margins of over 80%+, we are looking to
secure additional contracts for our software and discussions are
on-going with other potential customers operating outside the UAV
sector.
Our focus is on establishing long term contracts with repeatable
earnings across the Group. However our extensive experience in the
general aviation sector, including training and regulation, data
gathering and modelling, together with our active influence and
involvement in the industry, via professional trade associations
and participation in the legislative process and lobbying can also
be used profitably on a consultancy basis. In addition to providing
a source of income, offering bespoke services to individual
customers on both a regular and ad hoc basis, consultancy work also
provides scope for cross selling opportunities across all our
divisions.
Financial Overview
During the period the Group recorded revenues of US$410,740
compared with US$57,441 for the six months to 30 June 2015. The
loss for the six months to 30 June 2016, before and after taxation,
was US$2,121,986 (Period to 30 June 2015: US$1,311,117). The loss
per share was 1.20 cents (2015: loss per share of 1.61 cents).
Administrative expenses amounted to US$2,387,675 (Period to 30 June
2015: US$1,308,232), a large portion of these costs continue to
comprise of wages and salaries, consultancy and professional fees
associated with a public company. In comparison with last year's
level of costs it should be noted that H1 2016 incorporates the
full impact of meeting Aero Kinetics' working capital commitments
and also the working capital commitments associated with
Geocurve.
Consolidated net assets at 30 June 2016 amounted to US$173,875
(30 June 2015: US$478,406). Cash balances at the period end
amounted to US$275,428 (30 June 2015: US$238,324).
During the period the Company raised US$1,415,765 net of costs
through the issue of new shares.
Post period end, Strat Aero settled the final balance payable to
the founders of Geocurve of GBP374,893 via the issue of 37,489,288
new ordinary shares in the Company on 18 July 2016 at 1p per
share.
On 1 September 2016 the Company issued 74,000,000 new ordinary
shares of 1p each at a price of 0.5p per share raising GBP370,000
pre expenses.
On 29 September 2016 in settlement of the Aero Kinetics
litigation, Strat Aero agreed to issue Mr. Smith 44,750,645 new
Ordinary Shares ("Settlement Shares"), representing approximately
11.75% of the Company's enlarged issued share capital. Strat Aero
has also made a cash payment to Mr. Smith of US$75,000. All debt
and loan obligations relating to the Company's acquisition of Aero
Kinetics are deemed to have either been satisfied or written
off.
It should be noted that admission to trading on AIM of the
Settlement Shares is expected to commence at 8:00 a.m. on or around
5 October 2016 (not 7.00 a.m. as noted in the Company's
announcement of 29 September 2016).
Outlook
The size and breadth of the opportunity presented by the fast
growing UAV industry is clear. While we expect that the Company
will require additional funding during the fourth quarter to
provide working capital and support continued growth, we have
always had the people with the right experience and expertise along
with the cutting edge technology to capitalise on the opportunities
available to us. Now thanks to the progress made during the first
half, we believe we have a robust strategy and platform in place to
harness our resources and in the process build a cash generative
and profitable business, one that generates real value for both its
customers and its shareholders. I look forward to providing further
updates on our progress in due course, as we look to deliver on our
vision to transform Strat Aero into a world class provider of UAV
based services and solutions.
Acknowledgments
On behalf of the Board, I would like to extend our thanks to our
business partners, customers, associates and valued shareholders
for their continued support throughout the period.
Graham Peck
Executive Chairman
Enquiries:
Strat Aero plc
Graham Peck (Chairman) Tel: +44 (0) 1293
804741
SP Angel Corporate Finance LLP Tel: +44 (0) 20 3470
0470
Nominated Adviser and Joint
Broker
Stuart Gledhill
Jeff Keating
Beaufort Securities Limited Tel: +44 (0) 20 7382
8300
Joint Broker
Elliot Hance
St Brides Partners Ltd Tel: +44 (0) 20 7236
1177
Financial PR
Susie Geliher
Frank Buhagiar
STRAT AERO PLC
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
For the six month period ended
30 June 2016
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended
30 30 31 December
June June 2015
2016 2015
Continuing operations Note US$ US$ US$
----------------------------------------- ---- ----------- ----------- -----------
Revenue 410,740 57,441 433,001
Cost of sales (116,799) (27,107) (87,254)
----------------------------------------- ---- ----------- ----------- -----------
Gross profit 293,941 30,334 345,747
Administration expenses (2,387,675) (1,308,232) (4,180,769)
(Loss)/Gain on foreign exchange (9) (30,307) 130
Impairment - - (2,028,235)
----------------------------------------- ---- ----------- ----------- -----------
Operating loss (2,093,743) (1,308,205) (5,863,127)
Finance costs (28,261) (2,912) (68,812)
Finance income 18 - 6
----------------------------------------- ---- ----------- ----------- -----------
Loss before income tax (2,121,986) (1,311,117) (5,931,933)
Income tax expense - - -
----------------------------------------- ---- ----------- ----------- -----------
Loss for the period attributable
to owners of the parent (2,121,986) (1,311,117) (5,931,933)
----------------------------------------- ---- ----------- ----------- -----------
Other Comprehensive Income
Items that may be subsequently
reclassified to profit or loss:
Currency translation difference 81,599 24,665 7,581
----------------------------------------- ---- ----------- ----------- -----------
Total comprehensive income for
the period attributable to owners
of the parent (2,040,387) (1,286,452) (5,924,352)
----------------------------------------- ---- ----------- ----------- -----------
Earnings per ordinary share attributable
to owners of the parent during
the period (expressed in cents
per share)
Basic and diluted 4 (1.20) (1.61) (6.31)
----------------------------------------- ---- ----------- ----------- -----------
STRAT AERO PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
As at 30 June 2016
Unaudited Unaudited Audited
30 30 31 December
June June 2015
2016 2015
Note US$ US$ US$
------------------------------ ---- ----------- ----------- -------------
Non-current assets
Intangible assets 2,186,513 771,799 2,230,833
Property, plant and equipment 276,757 189,606 372,142
------------------------------ ---- ----------- ----------- -------------
Total non-current assets 2,463,270 961,405 2,602,975
------------------------------ ---- ----------- ----------- -------------
Current Assets
Inventories 90,488 - 88,488
Trade and other receivables 221,505 308,767 462,814
Cash and cash equivalents 275,428 238,324 1,485,257
------------------------------ ---- ----------- ----------- -------------
Total current assets 587,421 547,091 2,036,559
------------------------------ ---- ----------- ----------- -------------
Total assets 3,050,691 1,508,496 4,639,534
------------------------------ ---- ----------- ----------- -------------
Equity attributable to owners
of the parent
Share capital 3 3,474,004 1,413,453 2,292,836
Share premium 6,406,012 2,474,327 6,171,415
Other reserves (497,059) (853,496) (574,010)
Translation reserve 45,681 (43,917) (35,918)
Retained loss (9,254,763) (2,511,961) (7,132,777)
------------------------------ ---- ----------- ----------- -------------
Total equity 173,875 478,406 721,546
------------------------------ ---- ----------- ----------- -------------
Current liabilities
Trade and other payables 1,271,097 579,352 1,956,798
Borrowings 406,497 - 390,000
------------------------------ ---- ----------- ----------- -------------
Total current liabilities 1,677,594 579,352 2,346,798
------------------------------ ---- ----------- ----------- -------------
Non-current liabilities
Other payables 90,600 - -
Borrowings 748,468 450,738 1,211,036
Deferred tax liabilities 360,154 - 360,154
------------------------------ ---- ----------- ----------- -------------
Total non-current liabilities 1,199,222 450,738 1,571,190
------------------------------ ---- ----------- ----------- -------------
TOTAL LIABILITIES 2,876,816 1,030,090 3,917,988
------------------------------ ---- ----------- ----------- -------------
TOTAL EQUITY AND LIABILTIES 3,050,691 1,508,496 4,639,534
------------------------------ ---- ----------- ----------- -------------
STRAT AERO PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six month period ended 30 June 2016
Attributable to owners of the parent
----------------------------------------------------------------------
Share Share Other Translation Retained
capital premium reserves reserve loss Total
US$ US$ US$ US$ US$ US$
----------------------- --------- --------- --------- ----------- ----------- -----------
As at 31 December
2014 1,301,737 1,642,449 (856,384) (68,582) (1,200,844) 818,376
----------------------- --------- --------- --------- ----------- ----------- -----------
Loss for the period - - - - (1,311,117) (1,311,117)
Other comprehensive
income for the period
Currency translation
difference - - - 24,665 - 24,665
----------------------- --------- --------- --------- ----------- ----------- -----------
Total comprehensive
income for the period - - - 24,665 (1,311,117) (1,286,452)
----------------------- --------- --------- --------- ----------- ----------- -----------
Proceeds from shares
issued
(net of costs) 111,716 831,878 - - - 943,594
Share based payments - - 2,888 - - 2,888
----------------------- --------- --------- --------- ----------- ----------- -----------
Transactions with
owners, recognised
directly in equity 111,716 831,878 2,888 - - 946,482
----------------------- --------- --------- --------- ----------- ----------- -----------
As at 30 June 2015 1,413,453 2,474,327 (853,496) (43,917) (2,511,961) 478,406
----------------------- --------- --------- --------- ----------- ----------- -----------
As at 1 January 2016 2,292,836 6,171,415 (574,010) (35,918) (7,132,777) 721,546
----------------------- --------- --------- --------- ----------- ----------- -----------
Loss for the period - - - - (2,121,986) (2,121,986)
Other comprehensive
income for the period
Currency translation
difference - - - 81,599 - 81,599
----------------------- --------- --------- --------- ----------- ----------- -----------
Total comprehensive
income for the period - - - 81,599 (2,121,986) (2,040,387)
----------------------- --------- --------- --------- ----------- ----------- -----------
Proceeds from shares
issued
(net of costs) 1,181,168 234,597 - - - 1,415,765
Share based payments - - 76,951 - - 76,951
----------------------- --------- --------- --------- ----------- ----------- -----------
Transactions with
owners, recognised
directly in equity 1,181,168 234,597 76,591 - - 1,492,716
----------------------- --------- --------- --------- ----------- ----------- -----------
As at 30 June 2016 3,474,004 6,406,012 (497,059) 45,681 (9,254,763) 173,875
----------------------- --------- --------- --------- ----------- ----------- -----------
STRAT AERO PLC
CONSOLIDATED STATEMENT OF CASH FLOW
For the six month period ended 30 June
2016
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Note US$ US$ US$
------------------------------- ----- ----------- ----------- ------------
Cash Flows from Operating
Activities
Loss for the period before
tax (2,121,986) (1,311,117) (5,931,933)
Depreciation of property,
plant and equipment 82,134 23,452 83,860
Amortisation of intangible
assets 68,431 43,966 211,503
Share based payments 76,951 2,888 194,760
Impairments - - 2,028,235
Finance income (18) - (6)
Finance costs 28,261 2,912 68,812
Foreign exchange on operating
activities 200,018 23,891 173,467
Increase in inventories (2,000) - (88,488)
Decrease in trade and
other receivables 241,309 46,892 (139,144)
(Decrease)/Increase in
trade and other payables (595,101) 162,129 473,685
------------------------------- ----- ----------- ----------- ------------
Cash generated used in
operations (2,022,001) (1,004,987) (2,925,249)
Interest expense (28,261) (2,912) (68,812)
------------------------------- ----- ----------- ----------- ------------
Net cash used in operating
activities (2,050,262) (1,007,899) (2,994,061)
------------------------------- ----- ----------- ----------- ------------
Cash Flows used in Investing
Activities
Purchases of intangible
assets (24,111) (183,392) -
Purchases of property,
plant and equipment 13,251 (7,570) (64,471)
Purchase of subsidiaries
(net of cash acquired
in the Group) - - (970,177)
Interest income 18 - 6
Net cash used in investing
activities (10,842) (190,962) (1,034,642)
------------------------------- ----- ----------- ----------- ------------
Cash Flows from Financing
Activities
(Repayments of)/Net proceeds
from borrowings (446,071) 386,000 244,881
Issue of shares, net of
issue costs 1,415,765 943,594 5,165,927
------------------------------- ----- ----------- ----------- ------------
Net cash generated from
financing activities 969,694 1,329,594 5,410,808
------------------------------- ----- ----------- ----------- ------------
Net (decrease)/ increase
in cash and cash equivalents (1,091,410) 130,733 1,382,105
Exchange (losses)/gains (118,419) 774 (3,665)
Cash and cash equivalents
at beginning of period 1,485,257 106,817 106,817
------------------------------- ----- ----------- ----------- ------------
Cash and cash equivalents
at end of period 275,428 238,324 1,485,257
------------------------------- ----- ----------- ----------- ------------
NOTES TO THE INTERIM RESULTS:
1. General information and accounting policies
The principal activity of Strat Aero Plc ("the Company") and its
subsidiaries (together "the Group") is the development. marketing
and selling of Unmanned Arial Vehicle inspection services, training
programmes and software in the aviation industry.
The Company is a public limited company, which is listed on the
London Stock Exchange: AIM and incorporated and domiciled in the
United Kingdom. Its registered office is: The Beehive, City Place,
Gatwick Airport, West Sussex, RH6 0PA.
This announcement is for the unaudited interim results for the
period ended 30 June 2016.
The Directors approved these unaudited interim results on 29
September 2016.
2. Basis of preparation
The condensed consolidated interim financial information (the
"Financial Information") has been prepared in accordance with the
requirements of the AIM Rules for Companies. As permitted, the
Company has chosen not to adopt IAS 34 "Interim Financial
Statements" in preparing this Financial Information. The Financial
Information should be read in conjunction with the annual financial
statements for the year ended 31 December 2015, which have been
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union. In the opinion
of the Directors the Financial Information for the period
represents fairly the financial position, results from operations
and cash flows for the period in conformity with generally accepted
accounting principles consistently applied.
The Financial Information set out above does not constitute
statutory accounts within the meaning of the Companies Act 2006.
The Financial Information has been prepared on a going concern
basis in accordance with the recognition and measurement criteria
of International Financial Reporting Standards (IFRS) as adopted by
the European Union. Statutory financial statements for the period
ended 31 December 2015 were approved by the Board of Directors on
30 June 2016 and subsequently delivered to the Registrar of
Companies and are also available on the Group's website:
www.strat-aero.com. The independent auditor's report on those
financial statements was unqualified, however drew attention to
going concern matters by way of emphasis of matter.
The 2016 Financial Information of the Group has not been audited
or reviewed.
The Financial Statements are presented in US Dollar rounded to
the nearest dollar.
Going concern basis
The Group has been actively managing the review of the going
concern position including the following material measures:
-- Development of key partner relationships in order to assist
Strat Aero to take advantage of new market opportunities.
-- Evaluating and developing revenue pipeline opportunities
-- Consideration of future fund raisings; and
-- Deferral of Directors remuneration
Based on our commercial review for 2016 and 2017 and the Group's
economic prospects the Directors have made the assessment, the
above measures provide sufficient working capital in order to cover
the period until the Group is able to earn operating positive cash
flows. In assessing whether the going concern assumption is
appropriate, the Directors have taken into account all available
information regarding the foreseeable future; in particular for the
period covering 12 months from the date of issue of the financial
information.
Risks and uncertainties
The Board continuously assesses and monitors the key risks
facing the business. The key risks that could affect the Group's
medium term performance and the factors that mitigate those risks
have not substantially changed from those set out in the Group's
2015 Annual Report and Financial Statements. The key financial
risks are liquidity risk and credit risk.
Critical accounting estimates and judgements
The preparation of Financial Information in conformity with IFRS
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the end of the reporting
period. It also requires management to exercise its judgement in
the process of applying the Group's Accounting Policies. The areas
involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the Financial
Information, are disclosed in Note 4 of the Group's 2015 Annual
Report and Financial Statements.
Accounting Policies
The same accounting policies, presentation and methods of
computation have been followed in this Financial Information as
were applied in the preparation of the Group's Annual Financial
Statements for the period ended 31 December 2015.
3. Share capital
On 17 March 2016 the Company issued 4,575,209 new ordinary
shares of 1p each as consideration for the conversion of US$390,000
of convertible loan notes.
On 12 April 2016 the Company issued 35,555,556 new ordinary
shares of 1p each at a price of 1.125p per share raising
GBP400,000. On the same date the Company issued 8,000,000 warrants
exercisable for three years from the date of grant at an exercise
price of 1.125p.
On 20 April 2016 the Company issued 24,000,000 new ordinary
shares of 1p each and committed to issue a further 18,422,222 new
ordinary shares of 1p each following approval by shareholders at a
general meeting of the Company, raising in aggregate GBP477,250 at
a price of 1.125p per share. On the same date the Company issued
4,242,222 warrants exercisable for three years from the date of
grant at an exercise price of 1.125p.
On 12 May 2016, following approval from shareholders at a
general meeting of the Company, the Company issued the 18,422,222
new ordinary shares of 1p each in connection with the placing on 20
April 2016.
4. Earnings per share
Basic earnings per share has been calculated by dividing the
loss attributable to equity holders of the Company after taxation
by the weighted average number of shares in issue during the
period. There is no difference between the basic and diluted
learnings per share as the effect on the exercise of options and
warrants would be to decrease the earnings per share.
6 months 6 months Year ended
ended ended 31 December
30 June 30 June 2015
2016 2015
US$ US$ US$
Basic and Diluted
----------------------------------- ------------ ------------ -------------
Loss after taxation (1,997,554) (1,311,117) (5,931,933)
----------------------------------- ------------ ------------ -------------
Weighted average number of shares 177,139,686 81,506,191 93,993,888
----------------------------------- ------------ ------------ -------------
Earnings per share (cents) (1.20) (1.61) (6.31)
----------------------------------- ------------ ------------ -------------
5. Dividends
No dividend has been declared or paid by the Company during the
6 months ended 30 June 2016 (2015: nil).
6. Events after the reporting date
Following the completion of the acquisition of Geocurve Limited
the final balance payable to the founders of Geocurve of GBP374,893
was settled via the issue of a total of 37,489,288 new ordinary
shares in the Company on 18 July 2016 at 1p per share
("Consideration Shares") with 18,744,644 Consideration Shares being
issued to each of the founders Gary Nel and Perran Bonner.
On 1 September 2016 the Company issued 74,000,000 new ordinary
shares of 1p each at a price of 0.5p per share raising
GBP370,000.
On 29 September 2016 the Company settled of the litigation and
claims arising from its dispute with Mr W. Hulsey Smith, the Chief
Executive Officer of Aero Kinetics Holdings LLC ("Aero Kinetics").
Under the terms of the settlement, Strat Aero disclaims any
allegations of fraud against Mr. Smith and will issue Mr. Smith
44,750,645 new Ordinary Shares ("Settlement Shares"), representing
approximately 11.75% of the Company's enlarged issued share
capital. Strat Aero has also made a cash payment to Mr. Smith of
US$75,000.
As a result of the settlement, both Strat Aero and Mr Smith are
released from all current and future claims relating to the
Company's acquisition of Aero Kinetics and all debt and loan
obligations relating to the Company's acquisition of Aero Kinetics
are deemed to have either been satisfied or written off. Both
parties have agreed to dismiss all pending litigation between them
which is subject to certain procedural formalities.
7. Approval of the interim financial information
The condensed Financial Information were approved by the Board
of Directors on 29 September 2016.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLMLTMBITBPF
(END) Dow Jones Newswires
September 30, 2016 02:01 ET (06:01 GMT)
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