TIDMALM
RNS Number : 1294O
Allied Minds PLC
06 October 2021
6 October 2021
Allied Minds plc
Half-Yearly Report for the six months ended 30 June 2021
6 October 2021 -- Boston, MA - Allied Minds plc ("Allied Minds"
or the "Company" and together with its consolidated subsidiaries,
the "Group"), the IP commercialisation company focused on early
stage technology businesses, today announces its interim results
for the six months ended 30 June 2021.
Highlights
-- $44.9 million invested in portfolio companies, of which $43.9
million was raised from third-party investment during the six
months ended 30 June 2021
-- $4.0 million invested in portfolio companies post-period end,
of which $3.3 million was raised from third-party investment
-- Net cash and investments at 30 June 2021: $18.1 million
(FY20: $24.5 million), of which $17.7 million held at parent level
(FY20: $22.3 million)
-- Series B preferred share raise in OcuTerra Therapeutics has
led to the deconsolidation of this portfolio company following
Allied Minds shareholding reducing to below threshold for
control
-- Spin Memory is embarking on an Assignment for the Benefit of
Creditors in light of the challenges faced and the investment has
been reduced to a fair value of nil in the period
-- Share buyback programme launched in June 2021 to buy back up
to $3.0 million of the Group's shares to redistribute excess
capital for the benefit of shareholders
o As of 5 October 2021 a total of 2,537,712 shares had been
purchased at a cost of $0.7 million
-- BridgeComm :
o Commenced sales of its Optical Inter-Satellite Link terminals
- used in programs for space and ground applications with
commercial and US Government customers.
o Launched Managed Optical Communication Array technology which
allows for multi-domain capabilities to share large volumes of data
significantly faster with increased security. Sales expected to
commence during H2 2021.
-- Federated Wireless:
o Awarded multi-million-dollar contract from the US Department
of Defense as part of its 5G Smart Warehouse Initiative.
o Delivered innovative low cost, private wireless solution to
Carnegie Mellon University's Living Edge Lab, a world class
research organisation pioneering intelligent contact tracing
technology in school environments, in the global fight against
COVID-19, in partnership with AWS.
o Partnered with industry giants including AWS, Intel, Cisco,
JMA, as well as utilities-focused Anterix, to rapidly deploy
private network solutions across key verticals including federal,
public sector, education, maritime and robotics.
o Approval from US Federal Communications Commission and
National Telecommunications and Information Association to begin
commercial operations in US territories of American Samoa, Guam and
Puerto Rico.
OcuTerra:
o Closed $32.1 million Series B funding from new investors.
o Proceeds will be used to fund a Phase II clinical trial of its
OTT166 asset in diabetic retinopathy, as well as for other working
capital needs.
o Now funded for the immediate future.
-- Orbital Sidekick:
o Closed $16 million Series A funding led by Temasek - included
new investors Energy Innovation Capital and Syndicate 708 and
existing investors Allied Minds and 11.2 Capital.
o Launched most powerful satellite yet, Aurora, to collect and
analyse hyperspectral data, with a broad focus on
sustainability.
o Expanding satellite operations within existing partnerships
with Phillips 66 and iPIPE to provide better leak prevention and
monitoring for the energy sector - full commercialisation
anticipated during 2022.
-- Spark Insights:
o Due to the ongoing delay in securing financing, the company is
exploring options including a sale, disposal of assets, winding
down and/or similar avenues.
-- Spin Memory:
o Embarking on an Assignment for the Benefit of Creditors. In
light of the challenges securing new customers and the impact of
COVID-19, the decision has been made to liquidate.
Harry Rein, Chariman of Allied Minds, commented:
"In the first half of this financial year, the business has
continued to drive the strategic objectives of focusing on
supporting the existing portfolio companies and maximising value
within our portfolio of investments.
"A number of our portfolio companies have made significant
progress in the first half, including successful funding rounds,
development milestones, contract wins and partnerships with large
industry players.
"Our objectives from our Strategic Update at the start of the
year remain unchanged, with recent progress reaffirming that the
Group as a whole remains well-positioned to deliver venture
capital-like returns for shareholders upon exit within a reasonable
timeframe."
For more information, please contact:
Allied Minds plc c/o Instinctif Partners
Harry Rein
Instinctif Partners alliedminds@instinctif.com
Tim Linacre / Rozi Morris / Hannah
Campbell
About Allied Minds
Allied Minds plc is an IP commercialisation company focused on
early stage company development within the technology sector. With
origination relationships that span US federal laboratories,
universities, and leading US corporations, Allied Minds
historically created, and now operates and funds, a portfolio of
companies to generate long-term value for its investors and
stakeholders. Based in Boston, Allied Minds supports its businesses
with capital, management, expertise and shared services. For more
information, please visit www.alliedminds.com .
This 2021 half-yearly report release may contain statements that
are or may be forward-looking statements, including statements that
relate to the Company's future prospects, developments and
strategies. The forward-looking statements are based on current
expectations and are subject to known and unknown risks and
uncertainties that could cause actual results, performance and
achievements to differ materially from current expectations,
including, but not limited to, those risks and uncertainties
described in the risk management section of the strategic report
included in the 2020 Annual Report and Accounts. These
forward-looking statements are based on assumptions regarding the
present and future business strategies of the Company and the
environment in which it will operate in the future. Each
forward-looking statement speaks only as at the date of this
half-yearly report release. Except as required by law, regulatory
requirement, the Listing Rules and the Disclosure Guidance and
Transparency Rules, neither the Company nor any other party intends
to update or revise these forward-looking statements, whether as a
result of new information, future events or otherwise.
This announcement contains inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014.
Interim Management Report
Overview
Allied Minds is an IP commercialisation company primarily
focused on early stage company development within the technology
sector.
It has historically invested in companies at an early stage,
including seed investments to build companies based on a technical
breakthrough or invention. As such, investments have significant
upside potential, but also carry significant risk inherent in the
early stage model.
The Group and its associates is currently comprised of seven
portfolio companies based upon a broad range of underlying
innovative technologies ranging from semiconductors to wireless
connectivity to space-based imagery and analytics.
The ability of the Group's portfolio companies to raise funds
and continue achieving important technical and commercial
milestones while building upon key partnership relationships across
the portfolio signify the strength of the Group and its associates
and demonstrates that it remains on track as it works to execute on
maximising the value of its portfolio company interests and
delivering well-timed, risk-adjusted returns for its
shareholders.
Strategy
Allied Minds' strategy is focused on supporting its existing
portfolio companies and maximising monetisation opportunities for
portfolio company interests. The Board aims to monetise the Group's
ownership positions at the appropriate time, recognising the value
and benefit in achieving well-timed risk-adjusted returns for the
benefit of shareholders whilst at the same time ensuring that the
Group is being managed in as cost efficient manner as possible,
regularly reviewing the on going costs associated with being a
listed company.
In general, the Group holds its position in a portfolio company
for as long as it believes the risk and time-adjusted value of that
position is maximised by its continued ownership and effort. From
time to time, it engages in discussions with other companies
interested in the portfolio companies (or the Group's interest in
those companies), either in response to enquiries or as part of a
process the Group and board initiate. To the extent that Allied
Minds believes that a portfolio company's further growth and
development can best be supported by a different ownership
structure or if it otherwise believes it is in shareholders' best
interests, the Group may seek to sell some or all of its position
in the portfolio company. These sales may take the form of
privately negotiated sales of stock or assets, mergers and
acquisitions, public offerings of the portfolio company's
securities and, in the case of publicly traded portfolio companies,
sales of their securities in the open market.
The value of Allied Minds is dependent upon the value of its
existing portfolio companies and its ability to translate that
value into cash as effectively and efficiently as possible and to
deliver that cash, net of the Group's obligations and operating
cash needs, to its shareholders.
Upon the event of successful monetisation events from the sale
of portfolio companies or portfolio company interests, Allied Minds
anticipates distributing the net proceeds to its shareholders,
after due consideration of potential follow-on investment
opportunities within the existing portfolio and working capital
requirements.
Share Buyback Programme
The Board continually keeps it's capital position under review.
Following Spin Memory Inc.'s potential liquidation and based on the
anticipated future capital requirements of the Group's portfolio
companies, and also thanks in part to the Group's recent operating
cost reductions, the Board determined that the Group had excess
capital which could be distributed for the benefit of shareholders.
It believes that a share buyback is the most value accretive means
of distributing this capital.
In June 2021, the Board approved a new programme to buy back up
to $3.0 million of the Group's shares. Share purchases take place
in open market transactions and are made from time to time
depending on market conditions, share price, trading volume and
other factors. The Group entered into a non-discretionary
arrangement with Numis Securities Limited to manage the Buyback
Programme and repurchase the Group's shares on its behalf, and
within certain parameters.
The current Buyback Programme runs until to the release of these
interim results and future buybacks will be deterimined as
appropriate by the Board based on the prevailing capital
requirements for the Group's portfolio companies at any given time
along with the other above mentioned factors.
The Buyback Programme is in accordance with Allied Minds'
general authority to purchase a maximum of 24,218,799 Ordinary
Shares, granted by its shareholders at the Annual General Meeting
held on 12 May 2021 and the purpose is to reduce share capital.
Shares purchased under the Buyback Programme will be cancelled.
COVID-19
As Allied Minds navigates the uncertainties brought by the
coronavirus pandemic, we continue to closely monitor, assess, and
respond to the impacts of COVID-19 in order to ensure the continued
health, safety, and security of its workforce across its portfolio
companies. The Group has taken several actions to enable Allied
Minds and its portfolio companies to continue operating safely and
effectively, including implementing remote working environments,
using virtual meeting platforms, and reducing travel.
While COVID-19 has had varying degrees of commercial impact
across the portfolio in the past year, the actions and mitigation
put in place by the Group have enabled day-to-day operations to
continue effectively across the portfolio. As highlighted in this
report, while some companies have been impacted more than others,
overall, the achievements across the portfolio demonstrate that
these companies are continuing to make progress against their
respective commercial and strategic objectives even during this
pandemic. Allied Minds remains in close communication with all
customers, suppliers and partners to collaborate on how to best
support each other's needs in this new environment. Furthermore,
the Group continues to engage with each of its portfolio companies
to manage and mitigate against potential impacts on each company's
business, including assisting with employee support, cash
management and contingency planning.
While there is caution and vigilance around what the coming
months may bring, the Group continues to be optimistic and expects
to be able to navigate these uncertain times whilst delivering the
results of its stated strategy in the coming years.
Outlook
There has been substantial technical and commercial progress
from within some portfolio companies during this half, including
successful funding rounds, development milestones, contract wins
and industry partnerships. These companies' technologies help to
solve important global issues, from the digital divide to
sustainable energy, sight loss to remote connectivity.
The milestones achieved demonstrate examples of solving
difficult technical problems, developing innovative products and
services across a range of large potential markets, establishing
important partnerships to develop technology and go to market
channels, and the creation of shareholder value.
However, other portfolio companies have made less progress and
as previously reported, appropriate actions are being taken.
The Board of Allied Minds continually assess its portfolio of
investments and with a member of the Board sitting on or leading
the boards of all our material investments, the Board can ensure it
is optimally placed to take timely decisions based on up to date
information.
This approach has ensured that decisive actions are taken, even
if these are sometimes difficult such as the decision to liquidate
Spin Memory, and consider options to sell Spark Insights.
Although the remaining portfolio companies are mostly at a
relatively early stage in their lifecycle, the Board is positive
about their prospects and is increasingly confident of delivering
venture capital-like returns upon exit if the portfolio companies
continue to meet their planned technical and commercial goals.
Portfolio Company Valuation
Of the Company's seven active portfolio companies, two are
currently majority owned and/or controlled, and therefore fully
consolidated in the Company's consolidated financial statements
prepared in accordance with UK-adopted international financial
reporting standards.
Of the remaining five portfolio companies, the Company holds a
significant influencing minority stake in three of these companies,
a minority stake in one of these companies (OcuTerra Therapeuitics)
and a small position in the fifth (TouchBistro, Inc.) as a result
of the stock-for-stock sale of TableUp, Inc in 2020. For those
portfolio , where Allied Minds holds a significant influencing
minority stake, it is able to exercise significant influence over
the portfolio company by virtue of its large, albeit minority,
ownership stake in the portfolio company and its representation on
the board of directors. The investment in preferred stock in these
portfolio companies is accounted for under IFRS 9 and is classified
by the Company as an investment at fair value in the Company's
consolidated financial statements . Due to the equity-like
characteristics of the Company's common stockholdings in Spin
Memory and Federated Wireless, these two investments are accounted
for by the method of accounting under IAS 28. Accordingly, since
Allied Minds has significant influence through the voting
rights/potential voting rights held at Spin Memory and Federated
Wireless, it gives access to the returns associated with an
ownership interest in these associates.
Allied Minds provides qualitative and quantitative disclosure in
relation to the commercial and financial progress of its portfolio
companies, and directional commentary on valuation. In addition,
where commercially possible, Allied Minds provides, for each
portfolio company: (i) the date of the last equity funding round,
(ii) the post-money valuation of such round, (iii) the named key
co-investors in such round, and (iv) the Company's issued and
outstanding ownership, and fully-diluted ownership, of such
portfolio company.
This information is set forth in the Portfolio Review and
Developments section below. The ownership interests are as of 3
September 2021. The fully-diluted percentages take into account
outstanding stock options granted to employees, directors and
advisors, current stock options available for grant pursuant to the
company's stock option plan, and outstanding warrants to purchase
common and preferred stock.
The post-money valuations disclosed for each entity below do not
represent IFRS 13 fair values but rather, are based on the
pre-money valuation set by the investors in the latest financing
round plus the total money raised in that round.
There can be no guarantee that the aforementioned post-money
valuations of the portfolio companies will be considered to be
correct in light of the future performance of the various
companies, or that the Company would be able to realise proceeds in
the amount of such valuations, or at all, in the event of a sale by
it of any of its portfolio companies or its ownership interest in
such portfolio companies.
Portfolio Review and Developments
----------
BridgeComm Inc. (BridgeComm) (consolidated subsidiary)
BridgeComm is developing high-speed optical wireless
communications to provide fast, secure, enterprise-grade broadband
services for space, terrestrial and 5G connectivity. BridgeComm's
newest technology is unique and IP protected which enables
one-to-many communications via optical wireless offering efficient
communication to satellites, planes and land-based networks
enabling 5G equivalent performance. The technology promises higher
throughput over longer distances with added security than what is
available today. The technology also has the ability to solve the
"last mile connectivity" challenge for 5G networks.
Its optical wireless solutions have particular applications in
the fast growing area of space and satellite communications,
enabling constellations companies to provide broadband more
effectively from space to fill gaps in broadband coverage in remote
areas and across developing countries lacking digital
infrastructure.
During the first half of the year, BridgeComm has developed and
commenced sales of its Optical Inter-Satellite Link terminals which
are being used in programs for space and ground applications with
commercial and US Government customers. In March 2021, it launched
its Managed Optical Communication Array technology which allows for
multi-domain capabilities to share large volumes of data
significantly faster with increased security. Sales of this
solution are expected to commence during H2 2021. In April 2021,
BridgeComm successfully demonstrated in-field high-speed optical
communications of speeds beyond 100GB per second which are key for
inter-satellite high speed data transfer and is the culmination of
its collaboration with Nokia.
BridgeComm will need to seek additional financing during 2022 to
further fund its next stage of development work. Allied Minds
currently has fully diluted ownership (ownership percentage
including currently issued shares and potential outstanding shares
to be issued) of 62.92% in BridgeComm.
On 9 July 2021, Allied Minds invested an additional $600,000 of
bridge financing to BridgeComm to further support operations. In
connection with this additional bridge financing the convertible
bridge invested by Boeing HorizonX and Allied Minds was increased
to $5.5 million in total. The bridge will convert into preference
shares in the next round of financing.
Holdings and valuation:
-- Date of Last Funding Round: September 2018
-- Post-Money Valuation: $38.0 million
-- Co-Investors: Boeing HorizonX Ventures (venture arm of Boeing Company)
-- Allied Minds' Issued and Outstanding Ownership: 81.15%
-- Allied Minds' Fully-Diluted Ownership: 62.92%
Federated Wireless Inc. (Federated) ( equity accounted
investment)
Federated is an industry leader in enterprise shared spectrum 5G
private wireless and has developed technology and products to
enable the revolutionary shared spectrum model in the US to further
enable wireless communications, adoption of the Internet-of-Things
("IoT") and edge computing. Federated also has the ability to
deploy private wireless networks through its
Connectivity-as-a-Service ("CaaS") offering. Federated partners
with industry giants including AWS (Amazon), Intel, Cisco, JMA, as
well as utilities-focused Anterix, to rapidly deploy private
network solutions across key verticals such as federal, public
sector, education, maritime and robotics.
CaaS is focused on enabling enterprise customers the ability to
build their own private networks in a low risk and low capital
expenditure manner. For the first time, enterprises will be able to
control their own network, bypassing traditional Internet Service
Providers, on the back of Federated's Spectrum Access System
("SAS"). These networks have the ability to be more powerful than
traditional WiFi while also providing more security, opening up a
new market for Federated. Contract wins in this space have included
the US Department of Defense and Carnegie Mellon University.
Since the Federal Communications Commission ("FCC") announced
the authorisation of the full commercial deployment of Federated's
SAS on 27 January 2020, Federated is now able to support its
customers as they deploy their new networks. A key feature of
Federated's SAS offering is that it is the only FCC authorised
company with a fully deployed Environmental Sensing Capability as
required by the FCC. This has allowed Federated to operate
unabated, providing a significant competitive advantage.
Federated's first customers to deploy are focused on the
Wireless Internet Service industry as well as Verizon's build out
of their network to add 3.5GHZ CBRS. This has led to Federated
realising its recurring revenue model for the first time since it
was granted authorisation. Federated expects more customers under
contract to begin to deploy soon who are looking to benefit by
adding access to 3.5GHz CBRS. This will further accelerate
Federated's valuable recurring revenue model into 2021. Federated
expects its revenue to grow by significant multiples in 2021
compared with 2020 when it was first able to initiate its services.
With more than 200 customers and growing across carriers, cable,
wireline, WISP and other segments, Federated has over 65k CBRS
nodes deployed, implementing a wide range of use cases including
fixed wireless, IoT automation, carrier offload, and operator
spectrum augmentation.
In April 2021, the US Federal Communications Commission (FCC) in
coordination with the National Telecommunications and Information
Association (NTIA) announced Federated Wireless' approval to begin
commercial operations in the remote US territories of American
Samoa, Guam, and Puerto Rico. Using the latest hardened
Environmental Sensing Capability (ESC) sensors, the Federated
Wireless team deployed an upgraded ESC network in Puerto Rico
within three months. This swift stand-up of a network led Federated
to secure commercial contracts from five of the top mobile
operators in the US territory. CBRS technology will provide more
people with access to high speed connectivity throughout the
region.
Federated has always been committed to eliminating the digital
divide. It took two major steps this year to help bring CBRS
technologies to more areas throughout the United States. First,
Federated announced the successful commercialisation of its Fixed
Wireless Planner. The state-of-the-art planning tool allows fixed
wireless companies to decrease their deployment costs by
visualising potential network configurations and identifying prime
areas for installation of fixed wireless devices. Secondly,
Federated entered into a partnership with Learning Alliance, a
leading organisation that trains veterans and civilians in wireless
trade skills. Learning Alliance will offer the Federated Certified
Professional Installer (CPI) course as a part of its trade
curriculum, growing the tower workforce and increasing the number
of people who can install CBRS-enabled devices.
Federated has long led the industry in development of shared
spectrum CBRS capabilities, taking a lead role in the formation of
the CBRS Alliance, being the first to market with leading
technology to facilitate widespread utilisation of this ubiquitous
resource. The company's partner ecosystem includes more than 40
device manufacturers and edge partners, all of whom have dedicated
rescoure to collaborate with Federated to advance the development
and proliferation of CBRS services. Federated's customer base
includes companies spanning the telecommunications, energy,
hospitality, education, retail, office space, municipal and
residential verticals, with use cases ranging from network
densification and mobile offload to Private LTE and Industrial
IoT.
Federated is led by President and CEO Iyad Tarazi and a team of
industry veterans who continue to pioneer new territory in the
commercialisation and expansion of shared spectrum.
On June 1st, Federated filed with the FCC that it has determined
the appropriate procedures for its Spectrum Exchange prototype. The
Spectrum Exchange product will allow for winners of Priority Access
Licenses (PALs) to lease spectrum that they own but are not using
to interested third parties, such as local governments, school
districts, independent wireless service providers and more. These
entities can use the additional spectrum to provide better quality
service to their communities or customer base, thus growing the
CBRS ecosystem.
Federated's products have won multiple awards this year
validating they are truly best-in-class. Most recently, the
Federated Wireless Spectrum Controller won a TMC Communications
Solutions Product of the Year award. This award is given to leading
products that perform over a multitude of different
telecommunications capabilities. Furthermore, Federated won a Gold
Telecommunications Stevie Award for its "Private Wireless
Simplified" product. Additionally, the company's landmark
deployment with the Department of Defense was recognised by
ChannelVision Magazine with a Visionary Spotlight Award.
The Board of Allied Minds is very encouraged by the progress
being made at Federated. It met its first half revenue expectation
and is on track to meet its growth ambitions in the coming
years.
Federated has sufficient cash to fund its growth into 2022.
Allied Minds currently owns 36.61% of Federated and expects that if
the company continues to achieve its planned key milestones, it
will be in a position to attract any future equity financing in an
upround. Holdings and valuation:
-- Date of Last Funding Round: September 2019 (second closing post-period end in April 2020)
-- Post-Money Valuation: $215.0 million
-- Co-Investors: American Tower (NYSE: AMT), GIC (Singapore's
sovereign wealth fund), Pennant Investors and SBA Communications
(NASDAQ: SBAC)
-- Allied Minds' Issued and Outstanding Ownership: 43.11%
-- Allied Minds' Fully-Diluted Ownership: 36.61%
OcuTerra Therapeutics, Inc. (common stock and prefered share
investment held at fair value)
OcuTerra Therapeutics, Inc. ('OcuTerra'), is a clinical stage
ophthalmology drug development company focused on treating diabetic
retinopathy earlier to preserve vision and avoid intravitreal
injections, OcuTerra's lead clinical asset, OTT166, is a topical
eye droplet treatment for diabetic retinopathy, a diabetes-related
eye disease that can lead to blindness if left untreated.
As of April 2021, OcuTerra Therapeutics was deconsolidated from
the Group's financial statements as a result of the first closing
of its Series B Preferred Stock financing round. On that date
Allied Minds' issued and outstanding ownership percentage dropped
from 62.67% to 27.58%. As at this date Allied Minds was able to
exercise significant influence over the entity by virtue of its
large, albeit minority, stake in the company and its representation
on the OcuTerra Therapeutics's board of directors. At this point
the common stock was equity accounted under IAS 28 and the
preferred shares holdings held at fair value through profit and
loss under IFRS 9.
On 21 June 2021, OcuTerra completed the third closing of the
same Series B financing and as a result, Allied Minds' ownership
dropped to 18.98% of the issued and outstanding shares. Since
Allied Minds' ownership dropped below 20% and it does not hold a
majority on its board of directors. Based on these factors
management have judged that Allied Minds cannot alone impact the
policy making processes of the company and given there are no other
material transaction between the investor and investee have
determined Allied Minds no longer has significant influence over
the investee and the investment does not meet the definition of an
associate under IAS 28 at this point. As such, Allied Minds' share
of common stock is accounted as an investment at fair value in
accordance with IFRS 9 for the period beyond 21 June 2021 and at 30
June 2021.
As of 3 September 2021, OcuTerra had closed its Series B funding
round at $32.1 million of external equity financing to fund Phase
II trials for OTT166, on the back of safety and preliminary
efficacy data from the Phase I/II trials. This resulted in a
post-money valuation of $49.5m. This funding is now sufficient for
OcuTerra Therapeutics' immediate needs.
OcuTerra's Board has been further strengthened with the
appointment of experienced biotech executive Brent Saunders as
Chairman and Robert Ruffolo, Ph.D, and Robin Steele as Directors in
May 2021.
Holdings and valuation:
-- Date of Last Funding Round: September 2021 (5(th) Closing of next preferred equity round)
-- Post-Money Valuation: $49.5 million
-- Co-Investors: Various third parties
-- Allied Minds' Issued and Outstanding Ownership: 17.7%
-- Allied Minds' Fully-Diluted Ownership: 12.8%
Orbital Sidekick Inc. (Orbital) (preference share investment
held at fair value)
Orbital is establishing a space-based infrastructure of
hyperspectral sensors to provide monitoring services and solutions
to the energy sector and beyond . It has a proprietary analytics
platform that allows it to take a proprietary "chemical
fingerprint" from space. Initially, Orbital is addressing the very
current and large concerns about the environment by focusing on
potential energy pipeline failures. By employing its technology, it
is able to detect and identify natural gas, oil leaks and other
failures much more rapidly than current monitoring techniques in a
more cost effective way and with the added benefit of helping to
minimise environmental damage.
Following its $16m Series A funding round in April 2021, Orbital
launched its newest and most powerful hyperspectral imaging
satellite, Aurora, in June 2021. It will serve OSK's customers in
the energy, mining, and defense sectors, including oil and gas
pipeline monitoring and methane mapping, clean energy resource
exploration, sustainable mining practices and wildfire risk
mitigation . This will also enable Orbital to realise revenue from
its first pilot programme participants from the oil and gas
pipeline industry - now converted into paying customers.
On 13 April 2021, Allied Minds announced that Orbital had closed
$16.0 million in a Series A Preferred financing round led by
Temasek, an investment company headquartered in Singapore.
The combined expected proceeds of $32.0 million raised from both
the Series A financing and the funds available from the US Air
Force's Tech Incubator's STRATFI programme, in which Orbital is
participating, are significant and will allow Orbital to focus on
scaling its business and growing its sales pipeline to rapidly
bring its products to market and enable the launch of additional
satellites to support its customers.
During the period, Orbital has also expanded satellite
operations within its partnerships with global energy leaders
Phillips 66 and iPIPE to provide better leak prevention and
monitoring for the energy sector. Full commercialisation for these
projects is expected during 2022.
Holdings and valuation:
-- Date of Last Funding Round: April 2021
-- Post-Money Valuation: $46.0 million
-- Co-Investors: Temasek, Energy Innovation Capital, Syndicate 708 and 11.2 Capital
-- Allied Minds' Issued and Outstanding Ownership in respect of preference shares: 26.34%
-- Allied Minds' Fully-Diluted Ownership: 24.11%
Spark Insights Inc. (Spark) (consolidated subsidiary)
Spark is an advanced analytics company developing predictive
analytics for the insurance industry through the use of artificial
intelligence, smart data, and remote sensing
Given the increasing prevalence of catastrophic events,
including hurricanes, floods, and wildfires, property insurers are
struggling to quantify the impact on their policies, both before
and after a catastrophic event occurs. Spark's insights leverage
unique data sets, including advances in satellite imagery and
weather data, combined with proprietary analytics to transform
critical workflows for these property insurers.
However, as reported at the full year results, as a result of
challenges posed by COVID-19, Spark has faced delays in fundraising
and is now in a difficult cash position. The ongoing delay in
securing financing has resulted in the company exploring options
including a sale, disposal of assets, winding down and/or similar
avenues.
As of 13 September 2021, Allied Minds had invested $172,250 of
bridge financing to support the operation of the company.
Holdings and valuation:
-- Date of Last Funding Round: April 2019
-- Post-Money Valuation: $3.2 million
-- Co-Investors: n/a
-- Allied Minds' Issued and Outstanding Ownership: 70.44%
-- Allied Minds' Fully-Diluted Ownership: 60.00%
Spin Memory Inc. (Spin) ( equity accounted investment)
As announced on 23 June 2021, Spin Memory, Inc. the provider of
magnetoresistive random access memory (MRAM), is embarking on an
Assignment for the Benefit of Creditors.
Allied Minds first invested $1.5m in Spin Memory in November
2007 and continued to provide funding in subsequent fundraising
rounds. Allied Minds' total investment in Spin Memory to date is
$50.5m. As indicated at the full year results in March, despite
shareholders providing operational and financial support, Spin
Memory faced significant liquidity issues. These were due to
challenges in securing new customers, alongside the impact of
COVID-19, which significantly delayed the required testing of its
development chip with ARM.
In light of these challenges and the significant quantum of
capital committed to Spin Memory to date the Board of Allied Minds
has concluded that it is no longer prepared to make any further
investment into Spin Memory and the Board of Spin Memory has taken
the decision to liquidate.
An Assignment for the Benefit of Creditors offers the business a
greater chance of liquidating its assets to pay creditors with any
additional proceeds being available to return to its
shareholders.
Allied Minds is a minority shareholder in Spin Memory with a
fully diluted holding of 34%. There can be no guarantee that Allied
Minds will receive any capital from the liquidation
proceedings.
TouchBistro, Inc. (acquirer of TableUp, Inc.) (common shares
investment held at fair value)
On 5 August 2020, TableUp was wholly acquired by TouchBistro,
Inc. in a stock-for-stock transaction. As a result of such
transaction, Allied Minds received common shares of
TouchBistro.
The Group made its initial investment in TableUp in April 2018.
TableUp is a provider of loyalty and marketing solutions for the
restaurant industry and is highly regarded for its proprietary
guest retention solution, which is used by more than 600
restaurants throughout the U.S and will enable TouchBistro to fully
integrate customer loyalty and guest marketing into its all-in-one
point-of-sale (POS) and restaurant management platform.
Risk Management
The principal risks and uncertainties surrounding Allied Minds
and its portfolio companies are set out in detail on pages 24 to 29
in the Risk Management section of the Strategic Report included in
the 2020 Annual Report and Accounts. Such risks and uncertainties
include those in connection with science and technology development
or commercialisation failures; lack of profitability; inherent
limitations on exclusive licenses with US universities and other
federally-funded research institutions; regulatory restrictions and
limitations; loss of key senior management risk; termination of
critical IP licenses; the Company being deemed to be an investment
company; inability to generate sufficient revenue, attract
investment or generate liquidity events; lack of capital; Brexit;
and COVID-19, all as further described in the 2020 Annual Report
and Accounts with the risk in respect of COVID-19 updated as
above.
There have not been any significant changes in the nature of the
risks set forth therein that will affect the next six months of the
financial year, therefore, such risks are applicable to the
remaining six months of the financial year. A copy of the 2020
Annual Report and Accounts is available on the Company's website at
http://www.alliedminds.com/investor/ .
Financial Review
Condensed Consolidated Statement of Comprehensive Income
For the six months ended: 30 June 2021 30 June 2020
$'000 $'000
----------------------------------------------------------------------- ------------- -----------------
Revenue 219 110
Cost of revenue (119) (97)
Selling, general and administrative expenses (6,344) (6,613)
Research and development expenses (1,514) (2,467)
Finance cost, net (3,733) (1,989)
(Loss)/gain on investments held at fair value (1,887) 3,110
Gain on deconsolidation of subsidiary 14,209 -
Share of net loss of associates accounted for using the equity method (2,362) (6,845)
Loss for the period (1,531) (14,791)
Other comprehensive loss, net of tax (206) (201)
------------- -----------------
Total comprehensive loss (1,737) (14,992)
============= =================
Revenue increased by $0.1 million, to $0.2 million for the six
months ended 30 June 2021 (HY20: $0.1 million), when compared to
the same period in the prior year. This increase is primarily
attributable to revenue from existing and new contracts in 2021 at
BridgeComm of $0.2 million. Cost of revenue at $0.1 million for the
six months ended 30 June 2021 (HY20: $0.1 million) was lower as a
percentage of revenue, when compared to the same period in the
prior year, mainly due to the nature of the revenue being
delivered.
Selling, general and administrative (SG&A) expenses
decreased by $ 0.3 million, to $6.3 million for the six months
ended 30 June 2021 (HY20: $6.6 million). This reduction was mainly
due to the deconsolidation of a subsidiary, OcuTerra, in the first
half of 2021.
Research and development (R&D) expenses decreased by $ 1.0
million, to $1.5 million for the six months ended 30 June 2021
(HY20: $2.5 million). The decrease was primarily due to the
deconsolidation of a subsidiary, OcuTerra, in the first half of
2021. The remainder of the decrease reflects the net effect from
R&D spend at the other subsidiaries.
Net finance cost increased by $1.7 million for the six months
ended 30 June 2021 to $3.7 million (HY20: finance cost of $2.0
million ). The increase in the net cost reflects the impact from
the deconsolidation of OcuTerra in the first half of 2021 of $7.7
million plus the increase of $0.3 million of a convertible note
payable due to the fair value adjustment at 30 June 2021. This
increase was offset, in part, by the $4.4 million decrease of the
subsidiary preferred shares liability balance at BridgeComm as a
result of IFRS 9 fair value accounting.
Other income increased to $10.0 million (HY20: other expense
$3.7 million) reflecting $14.2 million of gain on deconsolidation
of OcuTerra offset by $1.8 million in loss on investments held at
fair value and the Company's share of loss of $2.4 million from the
deconsolidated entities accounted under the equity method.
As a result of the above discussed factors, total comprehensive
loss for the year decreased by $13.3 million to $1.7 million for
the six months ended 30 June 2021 (HY20: comprehensive loss of
$15.0 million).
Condensed Consolidated Statement of Financial Position
As of the period ended: 30 June 2021 31 December 2020
$'000 $'000
------------------------------------ ------------- -----------------
Non-current assets 47,504 44,416
Current assets 23,868 32,584
------------- -----------------
Total assets 71,372 77,000
============= =================
Non-current liabilities 414 2,246
Current liabilities 11,986 16,468
Equity 58,972 58,286
Total liabilities and equity 71,372 77,000
============= =================
Significant performance-impacting events and business
developments reflected in the Group's financial position at the
half year end include:
Non-current assets increased by $3.1 million, to $47.5 million
at 30 June 2021 (FY20: $44.4 million), mainly due to an increase of
$3.9 million in investment in portfolio companies at fair
value.
o Investments at fair value increased to $45.5 million as of 30
June 2021 (FY20: 41.6 million). The increase reflects the
recognition of a $5.7 million investment as a result of the
deconsolidation of OcuTerra offset, in part, by a loss of $1.8
million of the fair value accounting for other investments held at
fair value.
o Right-of-use assets decreased to $0.4 million as of 30 June
2021 (FY20: $0.6 million) primarily related by amortisation of $0.2
million.
o Property and equipment decreased by $0.3 million to $1.3
million as of 30 June 2021 (FY20: $1.6 million), mainly reflecting
depreciation of $0.3 million.
Current assets decreased by $8.7 million, to $23.9 million as of
30 June 2021 (FY20: $ 32.6 million), mainly due to a reduction in
cash and cash equivalents of $ 6.4 million.
o Cash and cash equivalents decreased by $ 6.4 million to $18.1
million at 30 June 2021 from $24.5 million at 31 December 2020. The
decrease is mainly attributed to $6.3 million of net cash used in
operations, $14.2 million cash used in investing activities and
$14.1 million cash provided by financing activities.
o Trade and other receivables decreased by $ 0.7 million due to
a decrease in trade receivables of $0.3 million and a decrease in
prepaid expenses of $0.4 million as a result of deconsolidation of
OcuTerra in the first half of 2021.
o Other financial assets have decreased by $1.6 million to $0.7
million (FY2020: $2.3 million) primarily due to the conversion of
Orbital's convertible note of $1.5 million into preferred shares
upon the closing of the Series A funding.
Non-current liabilities decreased by $1.8 million, to $0.4
million as of 30 June 2021 (FY20: $2.2 million) mainly reflecting a
decrease of $0.6 million in lease liability and a reduction in
loans balance of $1.1 million at 30 June 2021.
Current liabilities decreased by $4.5 million, to $11.9 million
at 30 June 2021 (FY20: $16.4 million). The decrease mainly reflects
the combination of a fair value adjustment of $4.4 million in the
subsidiary preferred shares liability and a $0.9 million reduction
in trade and other payables. This combined decrease was offset, in
part, by an increase in both loans of $0.3 million and deferred
revenue of $0.5 million. The increase in loans primarily reflects
the receipt of PPP loans and an increase in fair market value of
existing convertible notes at half year.
Net equity increased by $0.7 million to $59.0 million at 30 June
2021 (FY20: $58.3 million) mainly reflecting the combination of
comprehensive loss for the period of $1.7 million and repurchase of
ordinary shares of $0.2 million offset by the effect of
deconsolidation of OcuTerra of $2.4 million and $0.2 million charge
due to equity-settled share based payments.
Condensed Consolidated Statement of Cash Flows
For the six months ended: 30 June 2021 30 June 2020
$'000 $'000
----------------------------------------------------- ------------- -------------
Net cash outflow from operating activities (6,286) (10,801)
Net cash outflow from investing activities (14,265) (7,094)
Net cash inflow/(outflow) from financing activities 14,120 (38,438)
Net decrease in cash and cash equivalents (6,431) (56,333)
Cash and cash equivalents at beginning of period 24,489 90,571
------------- -------------
Cash and cash equivalents at end of the period 18,058 34,238
============= =============
The Group's net cash outflow from operating activities of $6.3
million in the six months ended 30 June 2021 (HY20: $ 10.2 million)
was primarily due to the net operating losses for the period of
$1.5 million (HY20: loss of $14.8 million) and adjustments for
non-cash accounting entries such as depreciation, amortisation,
share of net loss of associate, gain on deconsolidation, loss on
investments held at fair value and share-based expenses of $9.2
million (HY20: $5.1 million). The operating cash outflow was offset
by a reduction in working capital and other finance costs of $4.4
million (HY20: $0.6 million).
The Group had a net cash outflow from investing activities of
$14.3 million in the six months ended 30 June 2021 (HY20: net cash
outflow of $7.1 million). This outflow was predominately related to
the deconsolidation of OcuTerra totaling $13.3 million plus the
$1.0 million investment made in the Orbital Series A funding.
The Group's net cash inflow provided by financing activities of
$14.1 million in the six months ended 30 June 2021 (HY20: net cash
outflow $ 39.0 million) reflects, in part, proceeds from issuance
of preferred shares in subsidiaries of $14.6 million and the
receipt of $0.3 million of PPP loans . The increase was offset by
$0.6 million in lease payments and $0.2 million payments to
repurchase the company's own shares.
The Group's strategy is to manage its cash balance to focus
exclusively on supporting its existing portfolio companies, noting
any commitments are determined based on current facts and
commitments on a case by case basis and maximising monetisation
opportunities for such companies. To further minimise its exposure
to risks the Group does not maintain any material borrowings or
cash balances in foreign currency .
Condensed Consolidated Statement of Comprehensive Income
For the six months ended: Note 30 June 2021 30 June 2020
$'000 $'000
------------------------------------------------------------------------- ----- ------------- -------------
Revenue 2 219 110
Operating expenses:
Cost of revenue (119) (97)
Selling, general and administrative expenses (6,344) (6,613)
Research and development expenses (1,514) (2,467)
Operating loss (7,758) (9,067)
Other income:
(Loss)/gain on investments held at fair value 4,11 (1,887) 3,110
Gain on deconsolidation of subsidiary 14,209 -
------------- -------------
Other income 12,322 3,110
Finance income 27 248
Finance cost (153) (152)
Finance cost from IFRS 9 fair value accounting 9,11 (3,607) (2,085)
Finance cost, net (3,733) (1,989)
Share of net loss of associates accounted for using the equity method 4 (2,362) (6,845)
Loss before tax (1,531) (14,791)
Taxation - -
Loss for the period 3 (1,531) (14,791)
Other comprehensive loss:
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences (206) (201)
Other comprehensive loss, net of taxation (206) (201)
------------- -------------
Total comprehensive loss (1,737) (14,992)
------------- -------------
Income/(Loss) attributable to:
Equity holders of the parent 1,957 (13,493)
Non-controlling interests 7 (3,488) (1,298)
(1,531) (14,791)
------------- -------------
Total comprehensive income/(loss) attributable to:
Equity holders of the parent 1,751 (13,694)
Non-controlling interests 7 (3,488) (1,298)
(1,737) (14,992)
============= =============
Income/(Loss) per share $ $
Basic 5 0.01 (0.06)
------------- -------------
Diluted 5 0.01 (0.06)
------------- -------------
Condensed Consolidated Statement of Financial Position
As of the period ended: Note 30 June 2021 31 December 2020
$'000 $'000
---------------------------------------------- ----- ------------- ------------------------------
Non-current assets
Property and equipment 1,299 1,596
Investments at fair value 4 45,512 41,588
Right-of-use assets 8 479 651
Other financial assets 11 214 581
Total non-current assets 47,504 44,416
------------- ------------------------------
Current assets
Cash and cash equivalents 11 18,058 24,489
Trade and other receivables 11 5,088 5,816
Other financial assets 11 722 2,279
------------- ------------------------------
Total current assets 23,868 32,585
------------- ------------------------------
Total assets 71,372 77,000
============= ==============================
Equity
Share capital 3,767 3,767
Treasury shares (181) -
Translation reserve 1,137 1,343
Accumulated earnings 57,600 55,440
------------- ------------------------------
Equity attributable to owners of the Company 6 62,323 60,550
Non-controlling interests 7 (3,351) (2,264)
------------- ------------------------------
Total equity 58,972 58,286
------------- ------------------------------
Non-current liabilities
Lease liability 8 200 806
Other non-current liabilities 11 214 1,440
Total non-current liabilities 414 2,246
------------- ------------------------------
Current liabilities
Trade and other payables 11 1,142 2,101
Deferred revenue 4,152 3,697
Loans 11 3,495 3,149
Preferred shares 9 2,089 6,497
Lease liability 8 1,108 1,024
------------- ------------------------------
Total current liabilities 11,986 16,468
------------- ------------------------------
Total liabilities 12,400 18,714
Total equity and liabilities 71,372 77,000
============= ==============================
Condensed Consolidated Statement of Changes in Equity
Note Share capital Treasury shares
--------------------- -------------------- ------------ ------------ --------- ---------------- ---------
Accumulated Total
Amount Translation (Deficit)/ parent Non-controlling Total
$' Amount reserve Earnings equity interests equity
Shares 000 Shares $' 000 $' 000 $' 000 $' 000 $' 000 $' 000
------- ---------- -------- ------------ ------------ --------- ---------------- ---------
Balance at 31 December
2019 241,563,123 3,759 - 1,459 147,238 152,456 115 152,571
Total comprehensive
income/(loss) for
the period -
Loss from continuing
operations - - - - - (13,493) (13,493) (1,298) (14,791)
Foreign currency
translation - - - - (201) - (201) - (201)
------------ ------------ --------- ---------------- -----------
Total comprehensive
income/(loss) for
the period - - - - (201) (13,493) (13,694) (1,298) (14,992)
Issuance of ordinary
shares 5 554,984 7 - - - - 7 - 7
Gain arising from
change in
non-controlling
interest 7 - - - - - - - 6 6
Dividend payment 6 - - - - - (39,707) (39,707) - (39,707)
Equity-settled share
based payments 10 - - - - 579 579 80 659
------------ ------- ---------- -------- ------------ ------------ --------- ---------------- -----------
Balance at 30 June
2020 242,118,107 3,766 - - 1,258 94,617 99,641 (1,097) 98,544
------------ ------------ --------- ---------------- -----------
Total comprehensive
loss for the year
Loss from continuing
operations - - - - - (53,025) 55,440 (2,479) (55,504)
Foreign currency
translation - - - - (116) - (116) - (116)
------------ ------------ --------- ---------------- -----------
Total comprehensive
loss for the year (116) (53,025) (53,141) (2,479) (55,620)
Issuance of ordinary
shares 624,862 8 - - - - 8 - 8
Loss arising from
change in
non-controlling
interest - - - - - - - (18) (18)
Dividend payment - - - - - (39,707) (39,707) - (39,707)
Equity-settled share
based payments - - - - - 934 934 118 1,052
------------ ------- ---------- -------- ------------ ------------ --------- ---------------- -----------
Balance at 31 December
2020 242,187,985 3,767 - - 1,343 55,440 60,550 (2,264) 58,286
------------ ------- ---------- -------- ------------ ------------ --------- ---------------- -----------
Total comprehensive
income/(loss) for
the period
Loss from continuing
operations - - - - - 1,957 1,957 (3,488) (1,531)
Foreign currency
translation - - - - (206) - (206) - (206)
------------ ------------ --------- ---------------- -----------
Total comprehensive
income/(loss) for
the period - - - - (206) 1,957 1,751 (3,488) (1,737)
Issuance of ordinary
shares - - - - - - - - -
Loss arising from
change in
non-controlling
interest - - - - - - - (38) (38)
Repurchase of ordinary
shares - - (729,777) (181) - - (181) - (181)
Deconsolidation of
subsidiary - - - - - - - 2,421 2,421
Equity-settled share
based payments - - - - - 203 203 18 221
------------ ------- ---------- -------- ------------ ------------ --------- ---------------- -----------
Balance at 30 June
2021 242,187,985 3,767 (729,777) (181) 1,137 57,600 62,323 (3,351) 58,972
============ ======= ========== ======== ============ ============ ========= ================ ===========
Condensed Consolidated Statement of Cash Flows
For the six months ended: Note 30 June 2021 30 June 2020
$'000 $'000
---------------------------------------------------------------------------- ------- -------------- -------------
Cash flows from operating activities:
Loss for the period (1,531) (14,791)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation 495 413
Amortisation - 194
Share-based compensation expense 10 221 658
Loss/(gain) on investments held at fair value 4,11 1,887 (3,110)
Gain on deconsolidation of subsidiary (14,209) -
Share of net loss of associate 4 2,362 6,845
Changes in working capital:
Decrease in trade and other receivables 727 413
Decrease in other assets 347 81
Decrease in trade and other payables 148 (698)
Increase/(decrease) in other non-current liabilities (831) (1,945)
Increase in deferred revenue 455 190
Increase/(decrease) in other liabilities 242 (935)
Unrealised gain on foreign currency transactions (206) (201)
Other finance cost 9,11 3,607 2,085
Net cash used in operating activities (6,286) (10,801)
-------------- -------------
Cash flows from investing activities:
Purchases of property and equipment, net of disposals (27) (603)
Receipt of payment for finance sub-lease 8 78 364
Purchases of investments at fair value 4 (1,000) (6,855)
Cash derecognised upon loss of control over subsidiary (13,316) -
Net cash used in investing activities (14,265) (7,094)
-------------- -------------
Cash flows from financing activities:
Proceeds from issuance of convertible notes 11 _ 1,402
Receipt of PPP loan 257 429
Payment of lease liability 8 (565) (571)
Payments to repurchase ordinary shares 9 (181) _
Dividend payment 6 _ (39,705)
Proceeds from issuance of share capital 6 _ 7
Proceeds from issuance of preferred shares in subsidiaries 14,609 _
-------------- -------------
Net cash provided by/ (used in) financing activities 14,120 (38,438)
-------------- -------------
Net decrease in cash and cash equivalents (6,431) (56,333)
Cash and cash equivalents at beginning of period 24,489 90,571
-------------- -------------
Cash and cash equivalents at end of period 18,058 34,238
============== =============
Notes to the Condensed Consolidated Interim Financial
Statements
1. General information
a) Reporting entity
Allied Minds Group comprises of Allied Minds plc and its
subsidiaries ("Allied Minds", the "Group" or the "Company"). The
Company is publicly listed on the Main Market of the London Stock
Exchange ("LSE"). Allied Minds plc is engaged in the development of
various technologies for commercial applications. As of 30 June
2021, Allied Minds Group comprised of 4 legal subsidiaries, which
included 2 active portfolio companies that are currently majority
owned and controlled, and therefore fully consolidated in the
Company's consolidated financial statements prepared in accordance
with International Financial Reporting Standards as adopted by
Regulation (EC) No 1606/2002 (IFRS). Additionally, the Company
holds a minority stake in five other portfolio companies. For the
majority of the portfolio companies, Allied Minds is able to
exercise significant influence by virtue of its large, albeit
minority, ownership stake in the portfolio company and its
representation on the board of directors.
Certain portfolio companies have entered into agreements with
universities, scientists, and US federal research institutions to
develop and commercialise products. In exchange for licenses, time,
and expertise already provided, certain universities and/or
scientists received an equity ownership in such companies. The cash
contributed by Allied Minds is used to fund additional research and
to create a management structure and operations.
b) Basis of preparation
On 31 December 2020, IFRS as adopted by the European Union at
that date was brought into UK law and became UK-adopted
international accounting standards, with future changes being
subject to endorsement by the UK Endorsement Board. The Group
transitioned to UK-adopted international accounting standards in
its consolidated financial statements on 1 January 2021. There was
no impact or changes in accounting policies from the
transition.
This condensed consolidated interim financial report for the
half-year reporting period ended 30 June 2021 has been prepared in
accordance with the UK-adopted International Accounting Standard
34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
The interim report does not include all of the notes of the type
normally included in an annual financial report. Accordingly, this
report is to be read in conjunction with the annual report for the
year ended 31 December 2020, which has been prepared in accordance
with both "international accounting standards in conformity with
the requirements of the Companies Act 2006" and "international
financial reporting standards adopted pursuant to Regulation (EC)
No 1606/2002 as it applies in the European Union", and any public
announcements made by the Group during the interim reporting
period.
These condensed interim financial statements do not comprise
statutory accounts within the meaning of section 434 of the
Companies Act 2006. Statutory accounts for the year ended 31
December 2020 were approved by the board of directors on 29 March
2021 and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement
under section 498 of the Companies Act 2006.
Subsidiaries are fully consolidated from the date of
acquisition, being the date on which the Group obtains control and
continue to be consolidated until the date when such control
ceases. The financial information of the subsidiaries is prepared
for the same reporting period as the parent Company, using
consistent accounting policies. All intra-group balances,
transactions, unrealised gains and losses resulting from
intra-group transactions and dividends are eliminated in full.
Investments in associates are carried at cost less impairment
unless it is demonstrated that the Group exercises significant
influence over the entity and then it is equity accounted.
Non-controlling interests ("NCI") are measured at their
proportionate share of the acquiree's identifiable net assets at
the acquisition date. Changes in the Group's interest in a
subsidiary that do not result in a loss of control are accounted
for as equity transactions.
When the Group loses control over a subsidiary, it derecongnises
the assets and liabilities of the subsidiary, and any related NCI
and other components of equity. Any resulting gain or loss is
recognised in profit or loss. Any interest retained in the former
subsidiary is measured at fair value when control is lost.
The financial information presented in these half-yearly results
has been prepared under the historical cost convention. The
reporting currency adopted by Allied Minds is US Dollar ('$') as
this is the functional currency of most of the entities in the
Group. In preparing these interim financial statements, management
has made judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets and liabilities, income and expense. Actual results may
differ from these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the consolidated
financial information included in the Group annual report and
accounts as at and for the year ended 31 December 2020.
The Directors have taken proactive cost management measures that
include reduction in expenses of the management function of the
head office at the Group level. They have also decided to focus
exclusively on supporting the 7 existing portfolio companies and
maximising monetisation opportunities for portfolio company
interests, and not to deploy any capital into new portfolio
companies. In the event of successful monetisation events from the
sale of portfolio companies or portfolio company interests, the
Directors anticipate distributing the net proceeds to shareholders,
after due consideration of potential follow-on investment
opportunities within the existing portfolio and working capital
requirements. The Directors expect this strategy to take at least
two years to be fully implemented, and as a matter of good
governance, will continue to keep this strategy under review at
appropriate intervals. They have prepared trading and cash flow
forecasts for the Group covering the period to 31 December 2023.
Reflecting this revised strategy, although the Group is currently
loss making and is likely to continue to be so, at least in the
short term, after making enquiries and considering the impact of
risks and opportunities on expected cash flows, and given the fact
that the Group has $18.1 million of available funds in the form of
cash and cash equivalents as at 30 June 2021, that any commitments
to subsidiary and investee companies are determined based on real
time facts and circumstances and on a case by case basis, the
Directors have a reasonable expectation that the Group has adequate
cash to continue in operational existence for a period of not less
than 12 months from the date of approval of the interim financial
statements. Furthermore, the directors have considered the timeline
of when it plans to dispose of, divest or reinvest in its portfolio
companies and there is no intention to cease trading or liquidate
the business for the period under the going concern review. For
this reason, they have adopted the going concern basis in preparing
these half-yearly results.
The Directors have also put in measures to mitigate against the
risks to the business due to the impact of COVID-19. Specifically,
these include closely monitoring the health, safety and security of
our workforce; complying with applicable regulatory requirements
and guidelines; implementing temporary travel restrictions; making
accommodations to allow our workforce to work remotely; and
remaining in close communication with all of our customers,
suppliers and partners to collaborate on how to best support each
other's needs in this new environment.
Despite all of this, any impact from COVID-19 will not affect
Allied Minds from a going concern perspective. In fact, the impact
of COVID-19 is adding cost savings during Q1 2021 and through Q2
2021 as a result of suspension of all travel for board meetings,
investor meetings and the 2021 Annual General Meeting. These
savings have a positive impact on Allied Minds as a going
concern.
The financial information contained in this half-yearly report
does not constitute full statutory accounts as defined in section
434 of the Companies Act 2006. The condensed consolidated financial
statements are not audited and the results for the six months ended
30 June 2021 are not necessarily indicative of results for future
operating periods.
Certain financial information has been extracted from the annual
report and accounts as at and for the period ended 31 December 2020
and has been included for comparative purposes in this half-yearly
report.
These interim financial statements are unaudited and were
approved by the Board of Directors and authorised for issue on 5
October 2021 and are available on the Company's website at
www.alliedminds.com under "Investors - Reports and
Presentations".
c) Accounting policies
Except as described below, the accounting policies applied by
the Group in these half-yearly results are the same as those which
formed the basis of the 2020 Annual Report and Accounts, with the
exception of the new standards the Group adopted as of 1 January
2021, included below.
The changes in accounting policies are also expected to be
reflected in the Group's consolidated financial statements as of
and for the year ending 31 December 2021.
Newly adopted standards
The following are amended or new standards and interpretations
that may impact the Group. The Group is finalising the required
disclosures, which includes an assessment of the impact of the new
guidance on our financial position and results of operations. The
adoption of the proposed changes is not expected to have a material
effect on the financial statements unless otherwise indicated:
Effective date New standards or amendments
1 January 2021 Amendments to IFRS 9, IAS 39 and IFRS 17: Interest Benchmark reform (phase 2)
------------------------------------------------------------------------------
1 April 2021 COVID-19-Related Rent Concessions beyond 30 June 2021 (IFRS 16 amendment)
------------------------------------------------------------------------------
Standards issued not yet effective
Other new standards and interpretations yet to be adopted, for
which the Company does not expect to have a material impact on its
financial statements include:
Effective date New standards or amendments
1 January 2022 Onerous contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)
-------------------------------------------------------------------------------------------
References to Conceptual Framework (Amendments to IFRS 3)
-------------------------------------------------------------------------------------------
Property, Plant and Equipment: Proceeds before Intended Use (amendments to IAS16
-------------------------------------------------------------------------------------------
Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and
IAS 41)
-------------------------------------------------------------------------------------------
1 January 2023 IFRS 17 Insurance Contracts
-------------------------------------------------------------------------------------------
2. Revenue
Revenue recorded in the statement of comprehensive loss consists
of the following:
30 June
For the period ended: 2021 30 June 2020
$'000 $'000
-------- -------------
Service revenue 219 110
Total revenue in consolidated statement
of income/(loss) 219 110
======== =============
Revenue is measured based on the consideration specified in a
contract with a customer. The Group recognises revenue when it
transfers control over a good or service to a customer. The Group
disaggregates contract revenue based on the transfer of control of
the underlying performance obligations and for both accounting
period the performance obligation has been satisfied over time for
all revenue.
3. Operating segments
a) Basis for segmentation
For management purposes, the Group's principal operations are
currently organised in three reportable segments:
(i) Early stage companies - subsidiary businesses that are in
the early stage of their lifecycle characterised by incubation,
research and development activities; and
(ii) Later stage companies - subsidiary businesses that have
substantially advanced with or completed their research and
development activities, are closer in their lifecycle to
commercialisation, and/or have a potential of realising material
return on investment through a future liquidity event;
(iii) Minority holdings companies reflect the activity related
to portfolio companies other than consolidated subsidiary
businesses where the Group has made a minority investment and does
not control or exercise joint control over the financial and
operating policies of those entities. This segment will only
include the results of entities which were deconsolidated during
the accounting period. As of 30 June 2021, this operating segment
includes OcuTerra Therapeutics, Inc. profit and loss for the period
up to deconsolidation on 27 April 2021.
The Group's chief operating decision maker ("CODM") reviews
internal management reports on these operating segments at least
quarterly in order to make decisions about resources to be
allocated to the segment and to assess its performance.
Other operations include the management function of the head
office at the parent level of Allied Minds.
b) Information about reportable segments
The following provides detailed information of the Group's
reportable segments:
For the six months ended: 30 June 2021
$'000
Early Later Minority
stage stage Other Consolidated
Stage Stage Holdings operations
------ ---------- --------- ------------------------- ---------------------
Statement of Comprehensive Loss
Revenue 250 _ 219 _ _ 219
Cost of
revenue _ (119) _ _ (119)
Selling, general and
administrative expenses (43) (1,337) (1,524) (3,440) (6,344)
Research and development
expenses (428) (966) (120) _ (1,514)
Other income _ _ _ 12,322 12,322
Finance income/(cost), net (6) 12,985 (11,060) (5,652) (3,733)
Share of net loss of associates
accounted for using the equity
method _ _ _ (2,362) (2,362)
--------- --------
(Loss) for the period (477) 10,782 (12,704) 868 (1,531)
Other comprehensive
income/(loss) _ _ _ (206) (206)
Total comprehensive
income/((loss) (477) 10,782 (12,704) 662 (1,737)
====== ========== ========= ======== =====================
Total comprehensive income
attributable to:
Equity holders of the parent 30 10,619 (9,560) 868 1,957
Non-controlling interests (507) 163 (3,144) _ (3,488)
Total comprehensive income (477) 10,782 (12,704) 867 (1,531)
====== ========== ========= ======== =====================
For the six months ended: 30 June 2020
$'000
Early Later Minority
stage stage Other Consolidated
Stage Stage Holdings operations
------ ----------- --------- ------------------------- ---------------------
Statement of Comprehensive Loss
Revenue 250 _ 110 _ _ 110
Cost of
revenue _ (97) _ _ (97)
Selling, general and
administrative expenses (233) (1,752) _ (4,628) (6,613)
Research and development
expenses (696) (1,771) _ _ (2,467)
Other income _ _ _ 3,110 3,110
Finance income/(cost), net (11) (6,515) _ 4,537 (1,989)
Share of net loss of associates
accounted for using the equity
method _ _ _ (6,845) (6,845)
--------- --------
(Loss) for the period (940) (10,025) _ (3,826) (14,791)
Other comprehensive
income/(loss) _ _ _ (201) (201)
Total comprehensive
income/((loss) (940) (10,025) _ (4,027) (14,992)
====== =========== ========= ======== =====================
Total comprehensive income
attributable to:
Equity holders of the parent 29 (9,696) _ (3,826) (13,493)
Non-controlling interests (969) (329) _ _ (1,298)
Total comprehensive income (940) (10,025) _ (3,826) (14,791)
====== =========== ========= ======== =====================
As of the period ended:
30 June 2021
$000
--------------------------------------------------
Early Later Other Consolidated
stage stage operations
--------- ---------- ------------ -------------
Statement of Financial
Position
Non-current assets 230 1,059 46,215 47,504
Current assets (22) 5,318 18,572 23,868
--------- ---------- ------------ -------------
Total assets 208 6,377 64,787 71,372
Non-current liabilities (179) - (235) (414)
Current liabilities (3,500) (14,520) 6,034 (11,986)
--------- ---------- ------------ -------------
Total liabilities (3,679) (14,520) 5,799 (12,400)
--------- ---------- ------------ -------------
Net assets/(liabilities) (3,471) (8,143) 70,586 58,972
--------- ---------- ------------ -------------
As of the period ended:
31 December 2020
$000
-------------------------------------------------
Early Later Other Consolidated
stage stage operations
--------- --------- ------------ -------------
Statement of Financial
Position
Non-current assets 320 1,288 42,808 44,416
Current assets 502 7,105 24,977 32,584
--------- --------- ------------ -------------
Total assets 822 8,393 67,785 77,000
Non-current liabilities (105) (1,380) (761) (2,246)
Current liabilities (3,756) (27,707) 14,995 (16,468)
--------- --------- ------------ -------------
Total liabilities (3,861) (29,087) 14,234 (18,714)
--------- --------- ------------ -------------
Net assets/(liabilities) (3,039) (20,694) 82,019 58,286
--------- --------- ------------ -------------
4. Investment in Associate
Group Subsidiaries, associates and investments
As of 30 June 2021, Allied Minds has seven portfolio companies,
including subsidiaries, associates and investments. As at the 30
June 2021 the investments in each of the companies and the
accounting treatment is summarized below:
Portfolio company Financial instruments Accounting treatment of
held financial instruments
Allied Minds LLC Ordinary shares Consolidated by the Group
in line with IFRS 10 and
following management assessment
of significant control.
Allied Minds Securities Ordinary shares Consolidated by the Group
Corp. in line with IFRS 10 and
following management assessment
of significant control.
BridgeComm, Inc. Ordinary share capital Consolidated by the Group
and preferred shares in line with IFRS 10 and
following management assessment
of significant control.
Preferred shares are eliminated
on consolidation between
Group companies, preferred
shares held by third parties
are fair valued through
profit and loss under
IFRS 9.
Spark Insights, Inc. Ordinary share capital Consolidated by the Group
and preferred shares in line with IFRS 10 and
following management assessment
of significant control.
Preferred shares are eliminated
on consolidation between
Group companies.
OcuTerra Therapeutics, Ordinary share capital The Group has a minority
Inc. and preferred shares stake in the investment
and does not have significant
influence over the company.
Therefore, the investment
in ordinary shares is
accounted for at fair
value through the profit
and loss under IFRS 9.
Preferred share holdings
are accounted for at fair
value through profit and
loss as investments held
by the Group.
Federated Wireless, Ordinary share capital The ordinary share capital
Inc. and preferred shares ownership means that the
Group has significant
influence but not control
over the entity. Therefore,
the investment in ordinary
shares is accounted for
by the equity method of
accounting under IAS 28.
Preferred share holdings
are accounted for at fair
value through profit and
loss as investments held
by the Group.
Spin Memory, Inc. Ordinary share capital The ordinary share capital
and preferred shares ownership means that the
Group has significant
influence but not control
over the entity. Therefore,
the investment in ordinary
shares is accounted for
by the equity method of
accounting under IAS 28.
Preferred share holdings
are accounted for at fair
value through profit and
loss as investments held
by the Group.
Orbital sidekick, Preferred shares No ordinary shares are
Inc. owned by Allied Minds
and the directors have
judged that the Group
does not have significant
influence over the entity
through is preferred share
holding.
Preferred share holdings
are accounted for at fair
value through profit and
loss as investments held
by the Group.
TouchBistro, Inc. Ordinary shares The Group has a minority
stake in the investment
and does not have significant
influence over the company.
Therefore, the investment
in ordinary shares is
accounted for at fair
value through the profit
and loss under IFRS 9.
At 30 June 2021, the Group had two associates, Spin Memory and
Federated Wireless, both of which are material to the Group, both
of which are equity accounted.
Spin Memory: As of 31 December 2020, Allied Minds' ownership
percentage went from 42.69% to 43.01% as a result of the entity's
latest financing round in July 2020. In accordance with IAS 28,
once the share of losses of an associate equals or exceeds its
"interest in the associate", the investor discontinues recognising
its share of further losses. Once Allied Minds' interest in Spin
Memory was reduced to zero no further adjustments were made to the
investment balance at 31 December 2020. As of 30 June 2021, Allied
Minds' ownership percentage remained at 43.01%.
On 23 June 2021, the Board of Spin Memory has taken the decision
to liquidate the company. Allied Minds first invested $1.5 million
in Spin Memory in November 2007 and continued to provide funding in
subsequent fundraising rounds. Allied Minds' total investment in
Spin Memory to date is $50.5 million. As indicated at the full year
results in March, despite shareholders providing operational and
financial support, Spin Memory faced significant liquidity issues.
These were due to challenges in securing new customers, alongside
the impact of COVID-19 which significantly delayed the required
testing of its development chip with ARM. In light of these
challenges and the significant quantum of capital committed to Spin
Memory to date, the Board of Allied Minds has concluded that it is
no longer prepared to make any further investment into Spin Memory.
As of 30 June 2021, the company has not completed the liquidation
process.
Ownership percentage
30 June 31 December
Location 2021 2020
---------- ----------- ----------------
Fremont,
Spin Memory, Inc. CA 43.01% 43.01%
30 June 31 December
2021 2020
$'000 $'000
----------- ------------
Group's interest in net assets _ _
of investee, beginning of period
Share of loss from continuing _ _
operations
----------- ------------
Carrying amount for equity accounted investees _ _
----------- ------------
Unrecognised share of losses for period
to 30 June _ (11,633)
----------- ------------
Unrecognised share of losses in associate (37,393) (37,393)
----------- ------------
Total outstanding (37,393) (37,393)
=========== ============
Federated Wireless : As of 31 December 2020, Allied Minds'
ownership percentage went from 42.57% to 43.11% and the investment
in Federated Wireless continues to be subject to the equity method
accounting. In accordance with IAS 28, the Company's investment was
adjusted by the share of profits and losses generated by Federated
Wireless subsequent to the date of deconsolidation. As a result,
Allied Minds recorded a share of loss of $6.8 million in the
Consolidated Statements of Comprehensive Income/ (Loss) that
reduced the investment in Federated to a zero balance.
As of 30 June 2021, Allied Minds' ownership percentage remained
at 43.11% and continues to be subject to the equity method
accounting and no further adjustments were made to the investment
balance at 30 June 2021. If Federated Wireless subsequently reports
profits, Allied Minds will resume recognising its share of those
profits only after its share of the profits equals the share of
losses not recognised.
Ownership percentage
Location 30 June 2021 31 December 2020
--------------- ------------- -----------------
Federated Wireless, Inc. Arlington, VA 43.11% 43.11%
30 June 2021 31 December 2020
$'000 $'000
------------- -----------------
Group's interest in net assets of
investee, beginning of period _ 6,845
Share of loss from continuing
operations _ (6,845)
------------- -----------------
Carrying amount for equity accounted investees _ _
----------------- -----------------
Unrecognised share of losses for period to 30 June (10,167) (9,562)
Unrecognised share of losses in associate (29,599) (19,432)
----------------- -----------------
Total outstanding (29,599) (19,432)
================= =================
Investments at fair value
The Group's investments at fair value represent securities of
portfolio companies where Allied Minds holds a minority stake in
those companies. These investments are initially measured at fair
value through profit or loss and are subsequently re-measured at
fair value at each reporting date.
As of April 2021, OcuTerra Therapeutics was deconsolidated from
the Group's financial statements as a result of the first closing
of its Series B Preferred Stock financing round. On that date
Allied Minds' issued and outstanding ownership percentage dropped
from 62.67% to 27.58%.
Consequently, since the Company no longer held a majority of the
voting rights in OcuTerra Therapeutics and did not hold a majority
on its board of directors, Allied Minds did not exercise effective
control over OcuTerra Therapeutics. However, even after the
transaction, Allied Minds was able to exercise significant
influence over the entity by virtue of its large, albeit minority,
stake in the company and its representation on the OcuTerra
Therapeutics's board of directors. As such, only the profits and
losses generated by OcuTerra Therapeutics through April 2021 were
included in the Group's Consolidated Statements of Comprehensive
Income/ (Loss). Upon the date of deconsolidation, Allied Minds
recognised an investment in OcuTerra Therapeutics related to its
common shares of $2.4 million. Preferred Stock and Series B
Preferred Stock (collectively the "OcuTerra Therapeutics Preferred
Stock") held by All ied Minds are not equity-like and therefore
these fall under the guidance of IFRS 9 and will be treated as a
financial asset held at fair value where all movements to the value
of Allied Minds' share in the preferred stock will be recorded
through the Consolidated Statements of Comprehensive Income/(Loss).
At the date of deconsolidation these were classified as an
investment at fair value of $3.3 million. The fair value of the
investment in associate at the date of deconsolidation was based on
the value implied from the third party funding round which lead to
the loss of control. This is a market based valuation approach.
On 21 June 2021, OcuTerra completed the third closing of the
same Series B financing and as a result, Allied Minds' ownership
dropped to 18.98% of the issued and outstanding shares. In
addition, Allied Minds has only 1 out 7 Board of Directors
representation and therefore it is limited in its participation in
operating and capital. Based on these factors management have
judged that Allied Minds cannot alone impact the policy making
processes of the company and given there are no other material
transaction between the investor and investee have determined,
Allied Minds no longer has significant influence over the investee
and the investment does not meet the definition of an associate
under IAS 28 at this point. As such, Allied Minds' share of common
stock is accounted as an investment at fair value in accordance
with IFRS 9 for the period beyond 21 June 2021.
Allied Minds' investment in common shares was adjusted by the
share of loss of $2.4 million generated by OcuTerra Therapeutics
for the period 27 April through 21 June 2021. This reduced the
investment in OcuTerra to a zero balance. At 21 June 2021, the
investment in OcuTerra's common shares was accounted as an
investment at fair value in accordance with IFRS 9 and the
investment in OcuTerra's common shares was subsequently measured at
$2.6 million from $nil at 21 June 2021. This resulted in a gain
through profit and loss in relation to the fair value of this
amount.
Allied Minds recognised $2.4 million as its share of loss from
OcuTerra Therapeutics through the Consolidated Statements of
Comprehensive Income/ (Loss) as follows:
Ownership percentage
31 December
Location 30 June 2021 2020
------------- --------------------------------- ------------
OcuTerra
Therapeutics, Inc. Cambridge, MA 18.98% 62.67%
31 December
21 June 2021 2020
$'000 $'000
--------------------------------------------------------------------- ------------
Group's interest in
net assets of
investee,
beginning of
period _ _
Addition in the
year 2,362 _
Share of loss from
continuing
operations (2,362) _
--------------------------------- ------------
Carrying amount for equity accounted
investees _ _
------------------------ ----------------
Unrecognised share of losses in
associate (1,406) _
------------------------ ----------------
Total outstanding (1,406) _
======================== ================
The company's investment at fair value in Federated Wireless has
changed from $28.5 million, as reported at 31 December 2020, to
$27.9 million at 30 June 2021.
The company's investment at fair value in Spin Memory has
changed from $4.8 million, as reported at 31 December 2020, to $nil
at 30 June 2021. The change was primarily due to the Board's
decision to liquidate the company.
On 6 April 2018, Allied Minds made an investment in Orbital
Sidekick, a company developing capabilities in aerial and
space-based hyperspectral imaging and analytics, initially for the
oil and gas industry. Allied Minds has significant influence over
financial and operating policies of the investee by virtue of its
large, albeit minority, stake in the company and its representation
on the entity's board of directors. Allied Minds only held shares
of preferred stock in Orbital Sidekick. The preferred shares held
by Allied Minds are not equity-like and therefore these fall under
the guidance of IFRS 9 and will be treated as a financial asset
held at fair value where all movements to the value of Allied
Minds' share in the preferred stock will be recorded through the
Consolidated Statements of Comprehensive Income/(Loss).
On 13 April 2021, Orbital Sidekick, Inc. ("OSK") completed the
closing of its $16 million Series A funding round led by Temasek,
an investment company headquartered in Singapore, with
participation from Energy Innovation Capital, Syndicate 708, and
existing investors Allied Minds and 11.2 Capital. Out of the total
financing capital raised, Allied Minds invested $2.5 million
(including the conversion of its SAFE of $1.5 million). As of 30
June 2021, Allied Minds' ownership of Orbital Sidekick's issued
share capital is 26.52% compared to 33.23% at 31 December 2020. As
of 30 June 2021, Allied Minds investment held at fair value related
to its Preferred Shares in Orbital Sidekick was valued at $8.0
million (31 December 2020: $5.5 million).
On 6 April 2018, Allied Minds made an investment in TableUp, a
software provider enabling end-to-end transparency through the
restaurant supply chain to enable more effective inventory and
operations management. On 5 August 2020, TableUp was acquired by
TouchBistro, Inc. ("TouchBistro"). The acquisition was structured
as a stock-for-stock transaction in which TouchBistro acquired 100%
of the shares of TableUp in exchange for the issuance of
TouchBistro common shares to the shareholders of TableUp. As such,
Allied Minds's investment in preferred stock, along with the
convertible note, was fully converted into common shares in
TouchBistro. A total of 2,542,662 common shares of TouchBistro was
paid to Allied Minds valued at $5.99 million at the time of the
transaction. As a result of the acquisition, Allied Minds'
ownership percentage was 1.52% at 31 December 2020. Allied Minds
does not have significant influence over the investee as it does
not hold 20% or more of the voting power of the investee as well as
it does not have any board representation. As such, the investment
does not meet the definition of an associate under IAS 28 Equity
Accounting ("IAS 28") and therefore, the common shares are
classified as an investment at fair value, under IFRS 9 Financial
Instruments ("IFRS 9"). At 30 June 2021, the fair value of Allied
Minds' investment in TouchBistro was measured at $3.1 million (31
December 2020: $2.8 million).
Those investments are presented in the below table:
(Loss)/gain
from IFRS
9 fair value 31 December
30 June 2021 Disposals accounting Additions 2020
$'000 $'000 $'000 $'000 $'000
------------------------ ------------- ---------- -------------- ---------- ------------
Federated Wireless,
Inc. 27,909 _ (623) _ 28,532
Spin Memory,
Inc. - _ (4,821) _ 4,821
Orbital Sidekick,
Inc. 7,993 _ 29 2,500 5,464
TouchBistro,
Inc. 3,051 _ 280 _ 2,771
OcuTerra Therapeutics,
Inc. 6,559 _ 3,248 3,311 _
Total investments
at fair value 45,512 _ (1,887) 5,811 41,588
============= ========== ============== ========== ============
The fair value gain in Occuterra includes $2.6 million in common
stock gain which was remeasured from a $nil balance at 21 June
2021, as from that date, the common stock was accounted as an
investment at fair value in accordance with IFRS 9.
Allocation Model Inputs
The following presents the quantitative information about the
significant unobservable inputs used in the fair value measurement
of the Group's financial assets:
As of the period ended: 30 June 2021 31 December 2020
-------------------------- ------------- -----------------
Volatility 28.1%-96.0% 38.8%-73.5%
Time to liquidity (years) 1.00 - 2.00 1.50 - 3.27
Risk-free rate 0.1% - 0.3% 0.10% - 0.2%
IPO/M&A/Sale Probability 0%/ 100%/ 0%/ 100%/ n/a
n/a
Sensitivity Analysis
The following summarises the sensitivity from the assumptions
made by the Company in respect to the unobservable inputs used in
the fair value measurement of the Group's financial assets:
As of the period ended: 30 June 2021 31 December 2020
$'000 $'000
----------------- --------------------
Input Sensitivity range Financial assets increase/(decrease)
------------------------- ------------------ ---------------------------------------
Enterprise Value -2% (760) (451)
+2% 503 613
Volatility -10% 1,045 602
+10% (952) (290)
Time to Liquidity -6 months 978 445
+6 months (691) (198)
Risk-Free Rate (1) -0.02%/-0.09% 978 445
0.11% /0.02% (691) (198)
(1) Risk-free rate is a function of the time to liquidity input assumption.
Valuation methodology
The fair value is derived using the option pricing model
("OPM"), the Probability-Weighted Expected Return Method ("PWERM")
or a hybrid of the two.
The key inputs into these valuation models include the equity
value of the portfolio company , the term of the instrument, risk
free rate and volatility.
The valuation methodologies utilised for determining the equity
value include market approach, income approach or cost approach or
hybrid of these approaches. Other methodologies such as asset based
and cash in are also utilised where deemed appropriate. It is noted
that in the current year none of the equity values were determined
using the income approach.
Other valuation approaches
In certain cases, the value of a portfolio company is determined
using a market instead of income- based approach.
Where there has been a third party funding round in the year
this has been used as the implied value of the portfolio company or
comparable guideline public companies or comparable transactions ,
adjusted for indexation where this is deemed to be appropriate.
Whilst the Board considers the methodologies and assumptions
adopted in the valuation are supportable, reasonable and robust,
because of the inherent uncertainty of valuation, those estimated
values may differ significantly from the values that would have
been used had a ready market for the investment existed and the
differences could be significant.
PWERM and OPM
The principal methods the Group applies for allocation of value
are the PWERM, the OPM as well as a hybrid of the two. These models
take assumptions such as the equity values, term of the
instruments, risk free rate and volatility to determine the fair
value of each share class.
The PWERM estimates the value of equity securities based on an
analysis of various discrete future outcomes, such as an IPO,
merger or sale, dissolution, or continued operation as a private
enterprise until a later exit date. The equity value today is based
on the probability-weighted present values of expected future
investment returns, considering each of the possible outcomes
available to the enterprise, as well as the rights of each security
class. The key judgement relates to probability weighting of the
scenarios.
The OPM treats common stock or derivatives thereof as call
options on the enterprise's value or overall equity value. The
value of a security is based on the optionality over and above the
value securities that are senior in the capital structure (e.g.
preferred stock), considering the dilutive effects of subordinate
securities. In the OPM, the exercise price is based on a comparison
with the overall equity value rather than per-share value.
5. Earnings per share
The calculation of basic and diluted earnings per share has been
calculated by dividing the income for the period attributable to
ordinary shareholders of $2.0 million (HY20: loss of $13.5
million), by the weighted average number of ordinary shares
outstanding of 242,163,396 (HY20: 241,646,422) during the six-month
period ended 30 June 2021:
(Loss)/Income attributable to ordinary shareholders:
For the six months ended: 30 June 2021 30 June 2020
Basic Diluted Basic Diluted
$'000 $'000 $'000 $'000
------ -------- --------- ---------
Income/(loss) for the year attributed
to the owners of the Company 1,957 1,957 (13,493) (13,493)
Income/(loss) for the year attributed
to the ordinary shareholders 1,957 1,957 (13,493) (13,493)
====== ======== ========= =========
Weighted average number of ordinary shares:
For the six months
ended: 30 June 2021 30 June 2020
-------------------------- -------------------------------------------------------
Basic Diluted Basic Diluted
------------ ------------ --------------------------- --------------------------
Issued ordinary
shares 242,163,396 242,163,396 241,563,123 241,563,123
Effect of RSUs
issued _ _ 83,299 83,299
Weighted average
ordinary shares 242,163,396 242,163,396 241,646,422 241,646,422
============ ============ =========================== ==========================
Income per share:
For the six months ended: 30 June 2021 30 June 2020
Basic Diluted Basic Diluted
$ $ $ $
------ -------- ------- --------
Income/(loss) per share 0.01 0.01 (0.06) (0.06)
------ -------- ------- --------
Awards granted under the LTIP (as defined below) are subject to
vesting requirements that are either based on performance
conditions and continued services or time conditions only. Per IAS
33, only awards that are subject to performance criteria are
considered contingently issuable and therefore represent the only
class of potentially dilutive ordinary shares. Based upon
information available at the end of the reporting period, no
portion of these performance-based awards under the LTIP has
vested. Consequently, there are no potentially dilutive shares
outstanding at the period end.
6. Share capital, share premium and reserves
The table below explains the composition of share capital:
As of the period ended: 30 June 2021 31 December 2020
$'000 $'000
--------------------------------------------------------- ------------- -----------------
Equity
Share capital, GBP0.01 par value, issued and fully paid
242,187,985 and 242,187,985 , respectively 3,767 3,767
Treasury shares (181) _
Translation reserve 1,137 1,343
Accumulated earnings 57,600 55,440
Equity attributable to owners of the Company 62,323 60,550
Non-controlling interests (3,351) (2,264)
------------- -----------------
Total equity 58,972 58,286
============= =================
ALM's Board of Directors (the "Board") has approved a new
programme to buy back up to $3.0 million of the Group's shares
("Buyback Programme"). Share purchases will take place in open
market transactions and may be made from time to time depending on
market conditions, share price, trading volume and other factors.
The Buyback Programme will run from the 23 June 2021 to 15 October
2021 or, if earlier, the date of the announcement of the Group's
interim results for the six months ending 30 June 2021. Purchases
may continue during any closed period to which the Group is subject
during the above-mentioned period. The Buyback Programme is in
accordance with Allied Minds' general authority to purchase a
maximum of 24,218,799 Ordinary Shares, granted by its shareholders
at the Annual General Meeting held on 12 May 2021 and the purpose
is to reduce share capital. Shares purchased under the Buyback
Programme will be cancelled upon the programme completing. As of 30
June 2021, the company has repurchased 730,000 of its own
shares.
7. Non-controlling interests
The following summarises the changes in the non-controlling
ownership interest in subsidiaries by reportable segment,
calculated on the basis of percentage ownership of non-controlling
interest in voting stock on an as converted basis, excluding
liability classified preferred shares:
Early stage Later stage Consolidated
$'000 $'000 $'000
------------ ------------ -------------
Non-controlling interest as of 31 December 2020 (3,441) 1,177 (2,264)
Share of comprehensive loss (507) (2,981) (3,488)
Effect of change in Company's ownership interest _ (38) (38)
Equity-settled share based payments _ 18 18
Deconsolidation of subsidiary _ 2,421 2,421
Non-controlling interest as of 30 June 2021 (3,948) 597 (3,351)
============ ============ =============
8. Leases
Right of use asset
Right of use assets
$000s
--------------------
Balance at 1 January 2021 651
Depreciation (172)
--------------------
Balance at 30 June 2021 479
--------------------
Lease liability
Total lease
liability
$000s
------------
Balance at 1 January
2021 1,830
Cash paid (565)
Interest expense 43
Balance at 30 June
2021 1,308
------------
Amounts were arrived at using the contractual minimal lease
payments, present valued using the applicable incremental borrowing
rate of 5.50%.
During 2019, the Group relocated its corporate headquarters and
as a result it sub-leased the office space that has been presented
as part of a right-of-use asset. As the sub-lease is for all of the
remaining useful economic life of the right-of-use asset, the
sub-lease is classified as a finance lease.
9. Preferred shares
At 30 June 2021, BridgeComm Inc. had outstanding preferred
shares which were classified as subsidiary preferred shares in
current liabilities in accordance with IFRS 9 as BridgeComm has a
contractual obligation to deliver cash or other assets to the
holders under certain future liquidity events, and/or a requirement
to deliver an uncertain number of common shares upon conversion.
The preferred shares do not contain mandatory dividend rights. The
preferred shares are convertible into common stock of the
subsidiary at the option of the holder and are mandatorily
convertible into common stock of the subsidiary upon a qualified
public offering at or above certain value and gross proceeds
specified in the agreements or upon the vote of the holders of a
majority of the subsidiary preferred shares. Under certain
scenarios the number of common stock shares receivable on
conversion will change. The Group has elected not to bifurcate the
variable conversion feature as a derivative liability, but account
for the entire instrument at fair value through the income
statement.
The preferred shares are entitled to a vote with holders of
common stock on an as converted basis. The holders of the preferred
shares are entitled to a liquidation preference amount in the event
of a liquidation or a deemed liquidation event of the respective
subsidiary. The Group recognises the subsidiary preferred shares
balance upon the receipt of cash financing, and records the change
in its fair value for the respective reporting period through
profit and loss. Preferred shares are not allocated shares of the
subsidiary losses.
As of April 2021, OcuTerra Therapeutics was deconsolidated from
the Group's financial statements as a result of the first closing
of its Series B Preferred Stock financing round and Allied Minds'
issued and outstanding ownership percentage dropped from 62.67% to
27.58%. On that date, OcuTerra has issued $14.1 million in Series B
Preferred Shares to its third party investors. In addition, as a
result of the round OcuTerra's Series A Preferred Shares and
Special Stock went up in value by $7.7 million.
The following summarises the subsidiary preferred shares
balance:
Finance
(income)/cost
from IFRS
As of the period 30 June 9 fair 31 December
ended: 2021 value accounting 2020
$'000 Disposals $'000 Additions $'000
BridgeComm 2,089 _ (4,408) _ 6,497
OcuTerra Therapeutics _ (21,841) 7,704 14,137 _
---------- ----------
Total subsidiary
preferred shares 2,089 (21,841) 3,296 14,137 6,497
======== ========== ====================== ========== ============
The redemption is conditional on occurrence of uncertain future
events beyond the control of the Group. The amount that would be
payable in case of such events is as follows:
As of the period ended: 30 June 2021 31 December 2020
$'000 $'000
------------------------------ ------------- -----------------
BridgeComm 2,100 6,500
Total liquidation preference 2,100 6,500
============= =================
Valuation methodology
The fair value is derived using the option pricing model
("OPM"), the Probability-Weighted Expected Return Method ("PWERM")
or a hybrid of the two.
The key inputs into these valuation models include the equity
value of the subsidiary, the term of the instrument, risk free rate
and volatility.
The valuation methodologies utilised for determining the equity
value include the market approach, income approach or cost approach
or hybrid of these approaches. Other methodologies such as asset
based are also utilised where deemed appropriate. It is noted that
in the current year none of the equity values were determined using
the income approach.
Where there has been a third party funding round in the year
this has been used as the implied value of the portfolio company or
comparable guideline public companies or comparable transactions,
adjusted for indexation where this is deemed to be appropriate.
Whilst the Board considers the methodologies and assumptions
adopted in the valuation are supportable, reasonable and robust,
because of the inherent uncertainty of valuation, those estimated
values may differ significantly from the values that would have
been used had a ready market for the investment existed and the
differences could be significant.
PWERM and OPM
The principal methods the Group applies for allocation of value
are the PWERM, the OPM as well as a hybrid of the two. These models
take assumptions such as the equity values, term of the
instruments, risk free rate and volatility to determine the fair
value of each share class.
The PWERM estimates the value of equity securities based on an
analysis of various discrete future outcomes, such as an IPO,
merger or sale, dissolution, or continued operation as a private
enterprise until a later exit date. The equity value today is based
on the probability-weighted present values of expected future
investment returns, considering each of the possible outcomes
available to the enterprise, as well as the rights of each security
class. The key judgement relates to probability weighting of the
scenarios.
The OPM treats common stock or derivatives thereof as call
options on the enterprise's value or overall equity value. The
value of a security is based on the optionality over and above the
value securities that are senior in the capital structure (e.g.
preferred stock), considering the dilutive effects of subordinate
securities. In the OPM, the exercise price is based on a comparison
with the overall equity value rather than per-share value.
Allocation model inputs
The following presents the quantitative information about the
significant unobservable inputs used in the fair value measurement
of the Group's subsidiary preferred shares liability:
As of : 31 December
30 June 2021 2020
Volatility 73.6% 53.6%
Time to Liquidity (years) 2.00 2.00
Risk-Free Rate 0.30% 0.10%
Discount for lack of
marketability 20% 20%
The change in fair value of the subsidiary preferred shares is
recorded in Finance cost from IFRS 9 fair value accounting in the
consolidated statement of comprehensive loss.
Sensitivity Analysis
The following summarises the sensitivity from the assumptions
made by the Company in respect to the unobservable inputs used in
the fair value measurement of the Group's financial
liabilities:
OPM Measurement Date
------------------- --------------------------------------------------------
As of: 30 June 2021 31 December 2020
$'000 $'000
------------- -----------------
Input Sensitivity range
------------------- ------------------ ---------------
Enterprise Value -2% (38) (112)
+2% 38 114
Volatility -10% 38 266
+10% (76) (264)
Time to Liquidity -6 months 38 117
+6 months (38) (112)
Risk-Free Rate -0.09 / -0.02 38 117
0.11 / 0.02 (38) (112)
The change in fair value of the subsidiary preferred shares is
recorded in Finance cost, net in the consolidated statement of
comprehensive loss.
10. Share-based payments
The share-based payments for the period were $ 0.2 million
(HY20: $0.7 million) comprising of charges related to the LTIP and
the other subsidiary plans. The primary changes affecting the half
year period were related to the following:
a) UK Long Term Incentive Plan
Under the UK Long Term Incentive Plan ("LTIP"), awards of
Ordinary Shares may be made to employees, officers and directors,
and other individuals providing services to the Company and its
subsidiaries. Awards may be granted in the form of share options,
share appreciation rights, restricted or unrestricted share awards,
performance share awards, restricted share units, phantom-share
awards and other share-based awards. Vesting is subject to the
achievement of certain performance conditions and continued
services of the participant.
Awards have been granted under the LTIP based on the following
vesting criteria:
-- awards subject to performance conditions based on the
Company's total shareholder return ("TSR") performance or relative
total shareholder return (rTSR) performance over a defined of
time;
-- awards subject to performance conditions based on a basket of
shareholder value metrics ("SVM"). Performance is assessed on these
measures on a scorecard basis over a defined period of time;
-- awards that vest 100 per cent after a period of time subject
to continued service condition only.
On 10 June 2019, the Board has determined to retire the long
term incentive plan (LTIP) scheme for executive directors,
management and other employees. New annual LTIP awards planned for
issuance in May 2019 subsequent to the release of annual results,
were cancelled and no future awards will be made to executive
directors, management and other employees. Historic awards will
remain outstanding and eligible to vest in accordance with their
terms. A significant majority of the outstanding awards are subject
to relative total shareholder return (TSR) performance; however, at
the current share price, the performance criteria of these awards
will not be met and therefore, no shares are expected to be issued
under such awards.
No shares were issued in respect of historic awards under the
LTIP during the six months ended 30 June 2021 when compared to 30
June 2020 of a total of 386,998 Ordinary Shares. A summary of stock
option activity under the UK LTIP for the six months ended 30 June
2021 and 2020, respectively, is shown below:
For the six months
ended: 30 June 2021 30 June 2020
------------------------ ---------------------------------------- ---------------------------------------
TSR SVM Time TSR SVM Time
-------- -------------- -------------- -------- -------------- -------------
Number of shares
granted at maximum
('000) _ _ _ _ _ 387
Weighted average
fair value per
share (GBP) _ _ _ _ _ 0.36
Fair value measurement Monte Market Market Monte Market Market
basis Carlo value value Carlo value value
of ordinary of ordinary of ordinary of ordinary
share share share share
The share grants that vest upon the occurrence of a market
condition (i.e. the TSR performance) and service condition were
adjusted to current market price at the date of the grant to
reflect the effect of the market condition on the non-vested
shares' value. The Company used a Monte Carlo simulation analysis
utilising a Geometric Brownian Motion process with 50,000
simulations to value those shares. The model takes into account
share price volatilities, risk-free rate and other covariance of
comparable UK public companies and other market data to predict
distribution of relative share performance. This is applied to the
reward criteria to arrive at expected value of the TSR awards.
The share grants that vest only upon the occurrence of a
non-market performance condition (i.e. the SVM grants) and service
condition or upon passage of time were valued at the fair value of
the shares on the date of the grants. The number of instruments
included in the measurement of the transaction amount is
subsequently adjusted so that, ultimately, the amount of recognised
share-based expense is based on the number of instruments that
eventually vest. None of the outstanding awards under the LTIP as
of 30 June 2021 are subject to SVM vesting.
The accounting charge does not necessarily represent the
intended value of share-based payments made to recipients, which
are determined by the Remuneration Committee according to
established criteria. The share-based payment charge for the period
related to the UK LTIP was $0.2 million (HY20: $0.6 million).
During the six-month period ended 30 June 2021, no units have
vested under the LTIP and respectively no equivalent number of
common stock shares were issued to current and former employees and
directors of the Group in exchange for a settlement price of
GBP0.01 per share.
b) U.S. Stock Option/Stock Issuance Plan
The US Stock Option/Stock Issuance Plan (the "US Stock Plan")
was originally adopted by Allied Minds, Inc. (now Allied Minds,
LLC) in 2008. The US Stock Plan provides for the grant of share
option awards, restricted share awards, and other awards to acquire
common stock of Allied Minds, Inc. (now Allied Minds, LLC). All
stock options granted to employees under this plan are equity
settled, for a ten-year term. Pursuant to the Company's IPO in
2014, Allied Minds plc adopted and assumed the rights and
obligations of Allied Minds, Inc. under this plan except that the
obligation to issue Common Stock is replaced with an obligation to
issue ordinary shares to satisfy awards granted under the US Stock
Plan. As of 19 June 2014, the maximum number of options reserved
under the plan were issued and outstanding and as a result of the
Company's IPO in 2014, all issued and outstanding options vested on
19 June 2014. The Company does not intend to make any further
grants under the US Stock Plan.
No new stock option grants were awarded in the half-year 2021
and 2020 under the Allied Minds 2008 Plan. A summary of stock
option activity in the US Stock Plan is presented in the following
table:
For the six months ended: 30 June 2021 30 June 2020
-------------------------------- ------------------------------- -----------------------------
Number of Weighted average Number of Weighted average
options exercise price options exercise price
----------- ------------------ ---------- -----------------
Outstanding as of 1 January - - 230,000 $ 2.49
Exercised during the period - - - -
Forfeited during the period - - (230,000) $ 2.49
Outstanding as of period end - - - -
----------- ------------------- ---------- -----------------
Exercisable at period end - - - -
Intrinsic value of exercisable $ nil $ nil
For the six months ended 30 June 2021, no options were exercised
(HY20: nil ) resulting in $ nil (HY20: $ nil ) additional share
premium for the period.
11. Financial Instruments and Related Disclosures
The following table shows the carrying amounts and fair values
of financial assets and financial liabilities, including their
levels in the fair value hierarchy:
As of 30 June: 2021
$'000
----------------------------- --------- --------------------------------
Carrying Fair value
--------------------------------
Level Level Level
Amount 1 2 3 Total
--------- ------ ------ ------- -------
Financial assets designated
as fair value through
profit or loss
Investments at fair
value 45,512 - - 45,512 45,512
Loans and receivables
Cash and cash equivalents 18,058
Trade and other
receivables 5,088
Security and other
deposits 935
--------- ------ ------ ------- -------
Total 69,593 - - 45,512 45,512
========= ====== ====== ======= =======
Financial liabilities
designated as fair
value through profit
or loss
Subsidiary preferred
shares 2,089 - - 2,089 2,089
Convertible notes 3,450 - 3,450 - 3,450
Financial liabilities
measured at amortised
cost
Trade and other
payables 1,403
Lease liability 1,308
Total 8,250 - 3,450 2,089 5,539
As of 31 December: 2020
$'000
Carrying Fair value
Level Level Level
Amount 1 2 3 Total
Financial assets designated
as fair value through
profit or loss
Investments at fair
value 41,588 - - 41,588 41,588
Convertible note receivable 1,500 - 1,500 - 1,500
Loans and receivables
Cash and cash equivalents 24,489
Trade and other receivables 5,816
Security and other
deposits 1,360
Total 74,753 - 1,500 41,588 43,088
Financial liabilities
designated as fair value
through profit or loss
Convertible notes 4,406 - 4,406 - 4,406
Subsidiary preferred
shares 6,497 - - 6,497 6,497
Financial liabilities
measured at amortised
cost
Trade and other payables 2,285
Lease liability 1,830
Total 15,018 - 4,406 6,497 10,903
(1) On 5 August 2020, TableUp has been acquired by TouchBistro,
Inc. ("TouchBistro"). As a result of the acquisition, the entire
instrument was converted into common shares during the year to 31
December 2020.
The fair value of financial instruments that are not traded is
determined by using valuation techniques that maximise the use of
observable market data where it is available and rely as little as
possible on entity specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument
is included in Level 2. Where the inputs for determining the fair
value of financial instruments are not based on observable market
data, the instrument is included in Level 3.
Cash and cash equivalents, trade receivables, and trade payables
are carried at cost, which approximates fair value because of their
short-term nature.
The convertible note movement in the period from $4.4 million at
31 December 2020 to $3.5 million at 30 June 2021 consisted of the
conversion of a $1.4 million OcuTerra convertible note into Series
B shares offset, in part, by the fair value movement of $0.3
million of the BridgeComm convertible note during the period.
12. Related party transactions
a) Key management personnel compensation
For the six months ended: 30 June 2021 30 June 2020
$'000 $'000
-------------
Short-term employee benefits 837 271
Share-based payments - 112
Total 837 383
Compensation of the Group's key management personnel includes
salaries, health care and other non-cash benefits. Share-based
payments are subject to vesting terms over future periods.
b) Key management personnel transactions
For the six months ended: 30 June 2021 30 June 2020
$'000 $'000
Non-executive Directors' fees 173 173
Non-executive Directors' share-based payments - 5
Total 173 178
Executive management and Directors of the Company control 0.6 %
(FY20: 0.6 %) of the voting shares of the Company as of 30 June
2021.
13. Taxation
No current income tax expense was recorded for the period ended
30 June 2021 and 2020 due to continuing operating losses.
Furthermore, deferred tax assets have not been recognised in
respect of tax losses carried forward, research and development
credits and other timing differences, due to history of operating
losses and no convincing evidence that future taxable profit will
be available against which the Group can use the benefits
therefrom, as well as due to potential permanent restrictions under
Internal Revenue Code Section 382 rules. No deferred tax liability
is recognised in respect of fair value gains as at 30 June 2021
given the current availability of tax losses within the group,
which would be sufficient to extinguish any capital gain
assessed.
14. Subsequent events
The Company has evaluated subsequent events through 5 October
2021, which is the date the Condensed Consolidated Interim
Financial Statements are available to be issued.
On 9 July 2021, BridgeComm issued $600,000 in convertible notes
to Allied Minds, following the issuance of $1,500,000 in
convertible notes to Boeing HorizonX Ventures in 2020.
On 3 September 2021, OcuTerra completed the fifth closing of the
same Series B financing round raising external capital totaling
$32.1 million. As a result, Allied Minds' ownership was 17.7% of
the issued and outstanding shares.
Statement of Directors' Responsibilities
The Directors confirm to the best of their knowledge that:
a) the Condensed Consolidated Interim Financial Statements have
been prepared in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting"and give a
true and fair view of the assets, liabilities, financial position
and profit or loss of the Group as required by the FCA's Disclosure
Guidance and Transparency Rules (4.2.4R); and
b) the Interim Management Report includes a fair review of the
information required by the FCA's Disclosure Guidance and
Transparency Rules (4.2.7R and 4.2.8R).
The Directors of Allied Minds plc and their functions are listed
below.
By order of the Board
Harry Rein,
Non-Executive Chairman
5 October 2021
COMPANY information
Company Registration Number
08998697
Registered Office
Beaufort House
51 New North Road
Exeter EX4 4EP
United Kingdom
Website
www.alliedminds.com
Board of Directors
Harry Rein (Non-Executive Chairman)
Bruce Failing (Senior Independent Director)
Mark Lerdal (Independent Non-Executive Director)
INDEPENT REVIEW REPORT TO ALLIED MINDS PLC
Introduction
We have been engaged by Allied Minds plc ('the Company') to
review the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2021 which
comprises the Condensed Consolidated Statement of Comprehensive
Income, Condensed Consolidated Statement of Financial Position,
Condensed Consolidated Statement of Changes in Equity and Condensed
Consolidated Statement of Cash Flows; and associated notes.
We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of and
has been approved by the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 1(b), the annual financial statements of
the group will be prepared in accordance with UK adopted
international accounting standards. The condensed set of financial
statements included in this interim financial report has been
prepared in accordance with UK adopted International Accounting
Standard 34, "Interim Financial Reporting".
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity", issued by the Financial Reporting Council for use
in the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2021 is not prepared, in all material respects, in accordance
with UK adopted International Accounting Standard 34 and the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
Use of our report
Our report has been prepared in accordance with the terms of our
engagement to assist the Company in meeting its responsibilities in
respect of half-yearly financial reporting in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority and for no other purpose. No person is
entitled to rely on this report unless such a person is a person
entitled to rely upon this report by virtue of and for the purpose
of our terms of engagement or has been expressly authorised to do
so by our prior written consent. Save as above, we do not accept
responsibility for this report to any other person or for any other
purpose and we hereby expressly disclaim any and all such
liability.
BDO LLP
Chartered Accountants
London, United Kingdom
5 October 2021
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
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