TIDMFAL
RNS Number : 4898A
Falcon Media House Limited
28 December 2017
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, WITHIN, INTO OR IN THE UNITED STATES, AUSTRALIA, CANADA
OR JAPAN
For Immediate Release
28.12 2017
Falcon Media House Limited
("Falcon" or the "Company")
Interim Results
Falcon, the international media group focused on the
over-the-top ('OTT') video streaming market, announces its interim
results for the 6-month period ending 30 September 2017.
Chairman's Statement
Since coming back to market in March 2017, Falcon has
demonstrated the potential of Quiptel's patented software
technology in securing three global partner agreements to deliver
OTT services in Africa and Asia. In May 2017, the first agreement
was signed with Verimatrix, a specialist in revenue security
solutions, to deliver the first secure OTT service in West Africa.
In July 2017, agreements were signed with Media Nucleus, a
well-established digital and broadcast technology products company,
and LaserNet Group, experts in digital and broadcast technologies,
to deliver OTT services to millions of users across Africa and
Asia. In June 2017, a MoU with TATA Communications (UK) Limited was
signed to collaborate on OTT services aimed at brands, content
creators, content catalogues and rights holders. The MoU with Tata
is in line with Falcon's strategy to establish Q-flow as the
leading enabling technology that powers the rapidly expanding OTT
streaming market. In June, Falcon launched a beta version of a
dedicated sports service together with The Eastern College Athletic
Conference ("ECAC").
As a result of these partner agreements, Falcon signed a
commercial licensing agreement with Africa Enterprise Media Group,
the media arm of LaserNet Group, to supply software technology and
brand assets for a direct-to-consumer OTT service in Africa. This
service is expected to receive significant number of subscribers
within the next years.
Following on the partnership agreement signed with MediaNucleus
and a follow up visit, we see a positive outlook in the market with
the Multiple System Operators (MSOs), who have a real need for an
OTT platform in the region and to extend beyond India as well. The
total MSO market in India is about 100 million subscribers, with a
further significant potential of tapping into the Indian mobile OTT
opportunity of 700 million subscribers.
This was validated through interviews with trade press which
resulted in positive follow ups and we look forward to announcing
wins in the next weeks.
The potential of the Company's technology to disrupt the
existing industry was further endorsed with the appointment of the
highly successful US tech and media guru, Diane McGrath, as the
Falcon Media House Chief Strategy Officer in June 2017.
As the technology focus tightens, the Falcon Board has taken the
opportunity to restructure the Company's interest in the Teevee
Makers division. Teevee Makers has become a Newco, totally
independent of the Falcon Media House group. As part of the new
set-up, Teevee Makers has assumed responsibility for the ECAC
service under a new commercial licensing agreement. The ECAC
service was launched in November 2017, with Quiptel as a technology
supplier. By moving to a licence and revenue sharing model, the
Company has reduced its financial exposure whilst maintaining
significant growth potential.
Going forward, Quiptel's technology and software patents will
now drive the Company's primary business focus. This strategic
refinement simplifies the Company's offering, where the Falcon
Board see significant potential to provide a clear path to market
for global brands, operators and rights-holders that are
under-served by existing providers.
We believe that sharpening our strategic focus on our
proprietary technology will benefit Falcon, its customers and
shareholders both in the short and long term. We recognise, as do
our customers, that the best returns for the Company, in the
fast-paced and dynamic video streaming market, will come from
accelerating the development of our core Quiptel technology, which
has already generated significant interest. The first signed deals
are a clear validation of our new technology strategy.
I would like to thank shareholders for their continued support
and the team for their dedication and help in ensuring Falcon's
success. We look forward to the future with confidence.
Gert Rieder
Executive Chairman
28.12 2017
Interim Management Report
Condensed Consolidated Statement of Financial Position
The condensed consolidated statement of financial position as at
30 September 2017 is set out below.
As at As at
30 September 31 March
2017 2017
Unaudited Audited
Note GBP'000 GBP'000
Assets
Current Assets
Cash and cash equivalents 6 1,486 3,232
Prepayments 7 47 105
Other receivables 7 131 60
Total Current Assets 1,664 3,397
Non-Current Assets
Financial Assets 9 31 29
Fixed Assets 8 16 16
Intangible Assets 10 7,042 9,137
Total Non-Current Assets 7,089 9,182
Total Assets 8,753 12,579
Condensed Consolidated Statement of Financial Position
(continued)
As at As at
30 September 31 March
2017 2017
Unaudited Unaudited
Note GBP'000 GBP'000
Equity and Liabilities
Capital and Reserves
Share Capital 5 791 791
Share Premium 5 13,889 13,889
Accumulated Deficit (7,975) (3,707)
Translation Reserve (345) (33)
Total Equity attributable
to Equity Holders 6,360 10,940
Current liabilities
Other Short-term Payables 11 134 748
Trade and other Payables 11 732 481
Accrued Expenses 11 77 50
Total Current Liabilities 943 1,279
Long-term Payables 11 - 360
Long-term Financial Liabilities 11 1,450 -
Total Non-Current Liabilities 1,450 360
Total equity and liabilities 8,753 12,579
As approved and authorised for issue by the Board of Directors
on 14 December 2017 and signed on its behalf by:
Gert Rieder
Executive Chairman
Condensed Consolidated Statement of Comprehensive Income
The condensed consolidated statement of comprehensive income for
the period from 1 April 2017 to 30 September 2017 is set out
below:
Period Period
ended ended
30 September 30 June
2017 2016*
Note GBP'000 GBP'000
Revenue 232 -
Personnel expenses 13 (843) (65)
Administrative expenses (1,105) (595)
Depreciation & Amortisation (534)
Impairment 10 (403) -
Operating loss (2,653) (660)
Finance cost 16 (74) (4)
Financial income, net (74) (4)
Extraordinary income 13 -
Non-operating income, net 13 -
Loss before income taxes (2,714) (664)
Income tax expense 17 - -
Loss after taxation (2,714) (664)
Loss for the period from
continued operations (2,714) (664)
Loss for the period from
discontinued operations 24 (1,554) -
Loss for the period (4,268) (664)
Other comprehensive income:
Items that may be reclassified
subsequently to profit or
loss:
Currency translation differences (312) -
Total comprehensive loss
attributable to owners of
the parent (4,580) (3,664)
Loss per share
Basic and diluted 18 (0.10) (0.06)
*30 June 2016 is the latest comparable interim
reporting period before a change in accounting
reference date 31 March.
Condensed Consolidated Statement of Changes in Equity
The condensed consolidated statement of changes in equity is set
out below:
Share Share Trans-lation Accu-mulated Total
capital Premium reserve deficit
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 January
2016 44 137 - (169) 12
Loss for the period - - - (3,538) (3,538)
Translation reserve - - (33) - (33)
Total comprehensive
loss - - (33) (3,538) (3,571)
Issue of Ordinary
Shares (net of
expenses) 510 8,547 - - 9,057
Issue of Preferred
Shares (net of
expenses) 237 5,205 - 5,442
As at 31 March
2017 791 13,889 (33) (3,707) 10,940
Loss for the period - - - (4,268) (4,268)
Translation reserve - - (312) - (312)
Total comprehensive
loss - - (312) (4,268) (4,580)
As at 30 September
2017 791 13,889 (345) (7,975) 6,360
Share capital comprises the Ordinary Shares and the Preferred
Shares issued by the Group. Please see Note 5 for further details.
At 11 August 2017 the Founder Share was redeemed for a for cash
consideration of GBP 8.00.
Share premium has been reduced by a total of GBP260,000 for
expenses in relation to the issue of Ordinary Shares on admission
of the Company to the London Stock Exchange's main market in 2016.
In the context of the Quiptel acquisition, issue of new shares, as
well as the respective re-admission, a further GBP351,000 of
expenses were charged against share premium.
Condensed Consolidated Statement of Cash Flows
The condensed consolidated cash flow statement for the period
from 1 April 2017 to 30 September 2017 is set out below:
Period ended Period ended
30 September 30 June
2017 2016
Unaudited Unaudited
GBP'000 GBP'000
Cash flows from operating activities
Loss for the period before
taxation (4,268) (664)
Amortisation 614 -
Write-off / Impairment 1,518
Interest expenditure - -
Operating cash flows before
movements in working capital (2,136) (664)
Increase in prepayments
and other receivables (13) (180)
Increase in trade and other
payables 251 (64)
Decrease of other payables (420) -
Net cash used in operating
activities (2,318) (908)
Investment in Intangible (842) -
Assets
Net cash inflow from investing (842) -
activities
Issue of Shares - 3,763
Expenses in relation to
issue of shares - (150)
Advance on issue of convertible 1,450 -
notes
Net cash generated from
financing activities 1,450 3,613
Net (decrease)/increase
in cash and cash equivalents (1,710) 2,705
Cash and cash equivalents
at beginning of period 3,232 139
Foreign exchange differences (36) -
Cash and cash equivalents
at end of period 1,486 2,843
Notes to the Consolidated Interim Report
1. General information
Falcon Acquisitions Limited (the "Company") was incorporated to
acquire companies or businesses with a focus on opportunities in
the media and technology sectors.
On re-admission to the London Stock Exchange on 27 March 2017
the name of the Company was changed from Falcon Acquisitions
Limited to Falcon Media House Limited.
On that date the Group acquired control of the Quiptel Group and
Teevee Networks. Consequently, the Group has taken the decision to
first focus on its core technology and secondly to being an
integrated Over-The-Top ("OTT") business provider that wants to act
as a new distribution opportunity for content providers as well as
a provider of a technical platform, together with partners, for
third party operators to launch new OTT services. A result of the
decision to focus on the core technology first, the former
subsidiary Teevee Makers Inc. was sold to the management of the
same as a management buyout (MBO) transaction. In addition, the
efforts to launch an own B2C OTT platform under the brand of TeeVee
were stopped.
OTT platforms deliver audio and video content to customers
either over the open internet without a multiple-system operator or
via an internet enabled device - smart televisions with a broadband
connection, phones, tablets, and set top boxes.
As the accounting date of the acquired Quiptel Group is 31
March, the directors decided to change the accounting reference
date of the Company to this date to align with the operations of
Quiptel.
The Company was incorporated under the section II of the
Companies Law 2008 in Guernsey on 29 January 2015, and is limited
by shares and has registration number 59731.
The Company's registered office is located at 1 Le Marchant
Street, St Peter Port, Guernsey, GY1 4HP, Channel Islands.
All amounts in the financial statements, for both the current
and previous accounting periods, are presented in GBP'000.
2. BASIS OF PREPARATION
The interim condensed consolidated financial statements for the
period ended 30 September 2017 have been prepared in accordance
with IAS 34: 'Interim Financial Reporting'. They do not include all
the information required for a complete set of IFRS financial
statements. However, selected explanatory notes are included to
explain events and transactions that are significant to an
understanding of the changes in the group's financial position and
performance since the last annual consolidated financial statements
as at the year ended 31 March 2017.
The results for the period ended 30 September 2017 are unaudited
and do not constitute statutory accounts within the meaning of
Companies (Guernsey) Law 2008.
The unaudited consolidated financial statements for the period
ended 30 September 2017 have adopted accounting policies consistent
with those followed in the preparation of the Group's annual
consolidated financial statements for the year ended 31 March
2017.
The comparative financial information presented as at 31 March
has been derived from the audited financial statements for that
period. The auditor's report on those financial statements included
an emphasis of matter on going concern, without qualifying the
auditor's report.
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements requires the Group to
make estimates, judgments and assumptions that affect the reported
amounts of assets, liabilities, results and related disclosures.
Estimates and judgments are continually evaluated and are based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. Actual results may differ from these estimates under
different assumptions and conditions.
The estimates and judgments that have a significant impact on
the carrying amounts of assets and liabilities are addressed
below:
- Intangible Assets: the group holds several intangible assets
as further described in Notes 10. Management has assessed the
expected contribution to be generated from these intangible assets
and deemed that two adjustments were required to the carrying
values. The recoverable amounts of the assets have been determined
based on value in use calculations which require the use of
estimates and judgments. Management will reassess the valuations
and estimated useful lives on a regular basis.
- Going Concern: The Group is loss making at 30 September 2017
but had net current assets of GBP721k. The Interim Report has been
prepared on the basis that the Group will continue as a going
concern. Under the going concern assumption, an entity is
ordinarily viewed as continuing in business for the foreseeable
future with neither the intention nor the necessity of liquidation,
ceasing trading or seeking protection from creditors pursuant to
laws or regulations. The assessment has been made based on the
Group's economic prospects which have been included in the
financial budget for the forthcoming twelve months and for managing
their working capital requirements. In assessing whether the going
concern assumption is appropriate, management takes into account
all available information for the foreseeable future, in particular
for the twelve months from the date of approval of the financial
statements. Should the company be unable to continue trading,
adjustments would have to be made to reduce the value of the assets
to their reasonable amounts, to provide for further liabilities
which might arise, and to classify fixed assets as current.
The nature of the business in which the Group operates creates a
degree of uncertainty as to the timing and value of new contracts.
The Group is in the stage of closing a number of contracts mainly
in Asia and Africa, which are expected to lead to revenue in the
coming months. As a result of the new strategy and the consequent
discontinuation of the Teevee Makers business and the Teevee
Networks business, the monthly cash burn could be reduced. Still
the Group will not be cash flow positive in the foreseeable
future.
The Group finances its current working capital through revenue
of existing and new clients as well as through the financing
received through the convertible note announced on 17 October 2017,
for which it had received an advance of GBP1,450k at the balance
sheet date.
As a consequence, the directors are confident that they will be
able to raise any additional funds required and/or manage the level
of expenditure for the foreseeable future.
Based on the above, the directors have formed a judgment that
the going concern basis should be adopted in preparing the
financial statements.
4. Business Segments
For the purpose of IFRS 8, the Chief Operating Decision Maker
"CODM" takes the form of the board of directors. The Directors are
of the opinion that after restructuring and refocusing of the group
there is just one business segment which is the development and
distribution of OTT streaming software.
5. SHARE CAPITAL
30 September 31 March
2017 2017
Number of Founder Shares - 1
Share Capital (GBP) - 0
Share Premium (GBP)* - 8
Number of Ordinary Shares 55,410,266 55,410,266
Share Capital (GBP) 554,103 554,103
Share Premium (GBP)* 8,683,543 8,683,543
Number of Preferred Shares 23,722,685 23,722,685
Share Capital (GBP) 237,227 237,227
Share Premium (GBP) 5,205,000 5,205,000
Total share capital (GBP) 14,679,873 14,679,881
*Note: including reduction of issue-related expenses
Ordinary Shares
Each Ordinary Share ranks pari passu for Voting Rights,
dividends and distributions and return of capital on winding
up.
Preferred Shares
Each Preferred Share ranks pari passu for dividends and
distributions and returns of capital on winding up. Preferred
shares entitle the holders to the same rights as Ordinary Shares,
with the difference that Preferred Shares do not have voting
rights. The Preferred Shares can be converted into Ordinary Shares
at the discretion of the holder and will automatically convert in
Ordinary Shares five years after the date of re-admission, which
was on 27 March 2017.
Movements in share capital
On 29 January 2015, the Company was incorporated with an issued
share capital of one hundred (100) Ordinary Shares of GBP0.01
each.
On 27 July 2015, an additional 4,375,000 Ordinary Shares were
issued at GBP0.08 per share to the sole shareholder, GSC SICAV plc
- GSC Global Fund, for a cash consideration of GBP350,000. As a
result, share capital of GBP43,750 and share premium of GBP306,250
were recognized.
On 16 September 2015, one Founder Share was issued to GSC SICAV
plc - GSC Global Fund, for cash consideration of GBP8.00. As a
result, share capital of GBP0.01 and share premium of GBP7.99 were
recognized. The Founder Share is a separate class of shares which
is non-voting and which gives the holder certain rights, including
the right to appoint up to three directors until immediately on the
occurrence of a Founder Share Conversion Event.
On 18 January 2016, the Company was admitted to trading at the
London Stock Exchange, at which point the Company issued 16 million
Ordinary Shares at GBP0.10 per Ordinary Share, raising a total of
GBP1.6 million, consisting of share capital of GBP160,000 and share
premium of GBP1,440,000.
On 21 April 2016, the Company issued 10,000,000 Ordinary Shares
at a price of GBP0.20 per Ordinary Share, raising GBP2 million,
consisting of share capital of GBP100,000 and share premium of
GBP1,900,000.
On 17 June 2016, the Company issued a further 815,000 Ordinary
Shares at a price of GBP0.20 per Ordinary Share, raising
GBP163,000, consisting of share capital of GBP 8,150 and share
premium of GBP154,850.
On 27 March 2017, the Company issued 12,000,000 Ordinary Shares
at a price of GBP0.25 and 4,000,000 Preferred Shares at a price of
GBP0.25, raising a total of GBP 4 million, comprising share capital
of GBP160,000 and share premium of GBP3,840,000.
On the same date, 800,000 Ordinary Shares were issued at a price
of GBP0.25 pursuant to the Quiptel Management Incentive Plan,
comprising share capital of GBP8,000 and share premium of
GBP192,000 on acquisition of the Quiptel Group. These shares were
issued instead of settling the full liabilities of the Plan.
In conjunction with the acquisition of both the Quiptel Group as
well as Teevee Networks the Company issued a further 11,420,166
Ordinary Shares at a price of GBP0.35 and 19,722,685 Preferred
Shares at a price of GBP0.35. The Fair Value of both the Ordinary
as well as the Preferred Shares was determined at a value of
GBP0.22 per share in accordance with IFRS 3. Therefore, a rise in
share capital of GBP311,429 and share premium of GBP 6,851,427 was
recognized. These shares included shares issued to Nuovo Capital
and Digital Realm, as explained in Note 15.
At 11 August 2017, the Founder Share was redeemed for a for cash
consideration of GBP 8.00.
All shares have been fully paid up. At 30 September 2017, the
number of Ordinary Shares and Preferred Shares authorised for issue
was unlimited.
6. CASH AND CASH EQUIVALENTS
GBP'000 30 September 31 March
2017 2017
Cash at bank and in hand 1,486 3,232
Total cash and cash equivalents 1,486 3,232
7. PREPAYMENTS AND OTHER RECEIVABLES
GBP'000 30 September 31 March
2017 2017
Prepayments 47 105
Other receivables 131 60
Total prepayments and
other receivables 178 165
Other receivables mainly consist of an unpaid service invoice
with a major customer which was paid by the date of preparation of
this report.
8. FIXED ASSETS
GBP'000 Furniture Office Equipment Total
Cost
At 31 March 2017 2 14 16
Additions 5 8 13
At 30 September
2017 7 22 29
Accumulated depreciation
At 31 March 2017 - - -
Depreciation for
the period (3) (7) (10)
Foreign exchange (1) (2) (3)
At 30 September
2017 (4) (9) (13)
Net book value:
At 30 September
2017 3 13 16
9. FINANCIAL ASSETS
GBP'000 30 September 31 March
2017 2017
Rental Deposits 31 29
Total Financial Assets 31 29
10. INTANGIBLE ASSETS
GBP'000 Software Licenses Advertising Brands Goodwill Total
rights
Cost
At 31 March
2017 6,655 797 880 390 495 9,217
Additions 622 220 - - - 842
Disposals (694) (880) (73) - (1,647)
Foreign exchange (350) (19) - (3) - (372)
At 30 September
2017 6,927 304 - 314 495 8,040
Accumulated
amortisation
At 31 March
2017 - (80) - - - (80)
Amortisation
for the period (493) - - (31) - (524)
Impairment - (150) - (253) - (403)
Foreign exchange 13 (4) - - - 9
At 30 September
2017 (480) (234) - (284) - (998)
Carrying amount
at 30 September
2017 6,447 70 - 30 495 7,042
Software
The additions to the Software are due to current software
development by internal staff as well as external service
provider.
Licenses
With the sale of Teevee Makers the contract with Eastern College
Athletic Conference (ECAC) to televise and distribute ECAC games
and events was derecognized. The additions include a license for
GBP150k in Falcon to support the ECAC App which was neither sold
with TVMP nor is further needed in Falcon and therefore was
impaired at the date of the sale.
Brands
In accordance with the Board decision to focus on the OTT
software and not further invest in the Teevee brand, the brand
value was reduced to GBP30k.
Advertising rights
These advertisement rights were part of Teevee Makers and
therefore eliminated from the Group balance sheet.
11. TRADE AND OTHER PAYABLES
GBP'000 30 September 31 March
2017 2017
Current
Other Short-term Payables 134 748
Trade and other Payables 732 481
Accrued expenses 77 50
Total Current 943 1,279
Non-Current
Long-term financial liability 1,450 -
Long-term contractual
obligations - 360
Total Non-Current 1,450 360
Total trade and other
payables 2,393 1,639
The reduction on other Short-term payables are mainly related to
the payments of the Quiptel Management Incentive Plan.
Additionally, the short term as well as the long-term contractual
obligations related to the ECAC-contract (please refer to note 10)
were derecognized in relation with the sale of TVMP.
The long-term financial liability of GBP1,450k consists of
advanced payments that the group already received with regard to
the convertible note that was issued on 17 October 2017. For
details of this note please see Note 21.
As at 30 September 2017, the trade and other payables were
classified as financial liabilities measured at amortised cost. A
maturity analysis of the Group's trade payables due in less than
one year is as follows:
As at As at
30 September 31 March
2017 2017
GBP'000
0 to 3 months 732 481
3 to 6 months - -
6 months + - -
Total 732 481
12. OPERATING LEASE COMMITMENTS
The group leases office spaces under non-cancellable operating
lease agreements. The future aggregate minimum lease payments are
as follows:
GBP'000 30 September 31 March
2017 2017
Within 1 year 110 53
Between 1 year and 5 years - -
After 5 years - -
Total 110 53
13. EMPLOYEE BENEFITS AND EXPENSES
GBP'000 30 September 31 March
2017 2017
Wages and salaries 93 229
Work services provided
by contractors 582 29
Bonus paid to directors 45 80
Director Fees 38 38
Social insurance expense 50 25
Other personnel expenses 35 4
843 405
14. RELATED PARTY TRANSACTIONS
The following transactions were carried out with related
parties:
Key Management Compensation
The Key Management Personnel are introduced in the section
"Board of Directors and Senior Management" on pages 11 to 15 of the
Annual Report in March 2017.
Key Management Personnel are remunerated mainly as contractors.
The total compensation paid or payable to directors and key
management for employment services is shown below:
GBP'000 30 September 30 June
2017 2016
Salaries and other short-term 52 -
employee benefits
Director fees 38 8
Management Bonus 45 58
Termination benefits - -
Post-Employment benefits - -
Other long-term benefits - -
Share-based payments - -
Total 135 66
For payments to the contracting key management personnel please
refer to the next section.
Purchase of Services
GBP'000 30 September 30 June
2017 2016
Purchase of Services
- Entities controlled
by key personnel 674 44
Total 674 44
The amount also includes expenses of GBP69k that have been
reimbursed by the Group. Included in these figures are the payments
made to the Directors.
Year-end balances arising from services
GBP'000 30 September 30 June
2017 2016
Payables
- Entities controlled 273 -
by key personnel
Total 273 -
The payables to related parties arise from expenses or services
provided by key management personnel, are due immediately and bear
no interest.
15. SHARE BASED PAYMENTS
Share options have been granted to directors, employees and key
service providers. The exercise price of the granted options at GBP
0.25 is equal to the conditions of the capital raise in March 2017
when the options were granted. Options are conditional on being a
director, employee or consultant to the Group on the respective
Vesting Date.
The options are exercisable on the following vesting dates:
- 16(th) of March 2018: 33 % of the option shares
- 16(th) of March 2019: 66 % of the option shares
- 16(th) of March 2020: 100% of the option shares
The options have a contractual term of 5 years. The Group has no
legal or constructive obligation to repurchase or settle the
options in cash. Movements in share options are given below:
30 September 30 June 2016
2017
Average Options Average Options
exercise (thousands) exercise (thousands)
price price
in FMH in FMH
per share per share
option option
At 31 March 0.25 11,161 - -
Granted - - - -
Forfeited - - - -
Exercised - - - -
Expired - - - -
At 30 September 0.25 11,161 - -
----------------- ----------- ------------- ----------- -------------
Out of the 11,160,897 outstanding options (June 2016: 0), no
options are exercisable.
Share options outstanding at the end of the year have the
following expiry date and exercise prices:
exercise Share options
price in (thousands)
FMH per
share option
--------- ----------- --------------
Expiry 31 September 30 June
date - 2017 2016
Grant 16 March
--------- ----------- -------------- ------------- --------
2017-03 2022 0.25 11,161 -
--------- ----------- -------------- ------------- --------
11,161 -
The weighted average fair value of the options granted during
the period determined using a Black-Scholes valuation model was
1.06p per option. The significant inputs to the model were the
weighted average share price of GBP 0.16 between date of
readmission (March 27(th) 2017) and September 30(th) 2017, exercise
as shown above, volatility of 20%, expected option life of 5 years
and an annual risk-free interest rate of 1.5%. The volatility
measured at the standard deviation of continuously compounded share
returns is based on statistical analysis of the share price since
incorporation. There was no material charge made in the current
period.
16. FINANCE INCOME AND COST
GBP'000 30 September 30 June
2017 2016
Exchange differences - -
Interest income - -
---------------------- ------------- --------
Finance income - -
Exchange differences (38) -
Interest expense (23) -
Bank charges (7) -
Other finance costs (6) (4)
---------------------- ------------- --------
Finance costs (74) (4)
---------------------- ------------- --------
17. TAXATION
The Group is subject to income tax at a rate of nil in Guernsey
and around 15% in the US, as at 30 September 2017.
Deferred tax has not been provided as the applicable tax rate is
0%.
18. LOSS PER SHARE
The calculation for loss per Ordinary Share (basic and diluted)
for the relevant period is based on the loss after income tax
attributable to each equity Shareholder for the period from 1 April
2016 to 30 September 2017 as follows:
Loss attributable to equity shareholders
(GBP) (4,268,222)
------------
Weighted average number of ordinary
shares 42,801,234
------------
Loss per ordinary share (GBP) (0.10)
------------
Differentiated between continued and discontinued operations the
calculation is as follows:
Continued Discontinued
Operations Operations
------------ -------------
Loss attributable to equity
shareholders (GBP) (3,828,992) (439,230)
Weighted average number
of ordinary shares 42,801,234 42,801,234
------------ -------------
Loss per ordinary share
(GBP) (0.09) (0.01)
------------ -------------
Loss and diluted loss per Ordinary Share are calculated using
the weighted average number of Ordinary Shares in issue during the
period. There were no dilutive potential Ordinary Shares
outstanding during the period.
19. FINANCIAL INSTRUMENTS - RISK MANAGEMENT
The Group is exposed through its operations to foreign currency
risk, credit risk and liquidity risk and in common with all other
businesses, the Group is exposed to risks that arise from its use
of financial instruments. This note describes the Group's
objectives, policies and processes for managing those risks and the
methods used to measure them. Further quantitative information in
respect of these risks is presented throughout this Annual
Report.
Financial instruments
The financial instruments used by the Group, from which
financial instrument risk arises, are as follows:
measurement Amount in
GBP'000
Amortized
Cash and Cash Equivalents Cost 1,486
Amortized
Loans and receivables Cost 178
Amortized
Financial Assets Cost 31
Amortized
Other payables Cost (2,393)
The risk associated with the cash and cash equivalents is that
the Group's bank will enter financial distress and be unable to
repay the Group its cash on deposit. To mitigate this risk, cash
and cash equivalents are only lodged with independent financial
institutions designated with minimum rating "A".
The risk associated with loans and the financial assets is that
the counterparty will not be able to repay the outstanding interest
and debt.
The risk associated with the other payables and liabilities is
that the Group will not have sufficient funds to settle the
liability when it falls due. The Directors seek to maintain a cash
balance sufficient to meet expected requirements for a period of at
least 45 days.
Foreign currency risk is associated with all of the above
balances and results of assets and liabilities denominated in
foreign currency. The most relevant currency pair for the business
is USD / GBP. The directors are aware of this risk and seek to
enter into as little foreign currency risk as possible. The foreign
currency positions are regularly monitored by the CFO.
General objectives, policies and processes
The Directors have overall responsibility for the determination
of the Group's risk management objectives and policies. Further
details regarding these policies are set out below:
Credit risk
The Group's credit risk arises from cash and cash equivalents
with banks and financial institutions. For banks and financial
institutions, only independently rated parties with minimum rating
"A" are accepted.
Liquidity risk
The Directors' objectives when managing capital are to safeguard
the Company's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. At the date of this financial information, the
Company had been financed from equity. In the future, the capital
structure of the Company is expected to consist of convertible
notes and equity attributable to equity holders of the Company. As
a result of later than expected revenue inflows the Company does
currently not have the liquidity needed to execute its business
plan for the next 12 months and this has resulted in a requirement
for additional working capital financing. The Directors are
therefore in discussions with certain existing shareholders to
provide short term working capital finance to bridge the group's
working capital requirements.
20. CAPITAL RISK MANAGEMENT
The Directors' objectives when managing capital are to safeguard
the Group's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce
the cost of capital. At the date of these Annual Report, the Group
has been financed by equity. In the future, the capital structure
of the Group is expected to consist of borrowings and equity
attributable to equity holders of the Group, comprising issued
share capital and reserves.
21. SUBSEQUENT EVENTS
Subsequent to the period end the following events occurred:
On 17 October 2017, the Company announced the securing of an
additional funding via a convertible loan note whose aggregate
principal amount of is GBP10 million, of which GBP3.4 million has
been issued as of that date. On 1 December 2017 the Group further
announced that the convertible note will be closed at the GBP3.4
million.
On 19 October 2017 the Company announced the appointment of Mr.
Edgar Wallner and Mr. Dirk Wiedmann as new non-executive directors
to the board with immediate effect.
22. GROUP STRUCTURE AND ACQUISITIONS
The Company had the following active subsidiaries as of 30
September 2017:
Name Country Nature Proportion Portion
of incorporation of business of ordinary of ordinary
and place shares shares
of business held directly held by
by parent the group
(%) (%)
Teevee Networks Media content
Ltd. UK company 100 100
Orbital Multi British
Media Holdings Virgin Holding
Ltd Islands company 100 100
Quiptel Hong
Kong Ltd Hong Kong OTT operations - 100
IT research
Quiptel Shenzhen and development
Co. Ltd China center - 100
Quiptel UK IT Sales
Ltd UK and operations - 100
23. ULTIMATE CONTROLLING PARTY
As at 30 September 2017, no single entity owned more than 50% of
the issued share capital. Therefore the Company does not have an
ultimate controlling party.
24. DECONSOLIDATION OF TEEVEE MAKERS
The pre-tax loss recognised on the disposal of Teevee Makers was
GBP1,554k as per 19 September 2017.
The date of signing the sale and purchase agreement was the 19
September 2017, which was also the date of the loss of control. As
the loss of control happened on 19 September 2017, the figures as
of this date have been used for the deconsolidation.
The assets and liabilities related to Teevee Makers that have
been disposed of have been presented at Fair Value.
GBP'000 19 September 2017
Operating cash flows (415)
Investing cash flows -
Financing cash flows
from parent 295
Total cash flows (120)
---------------------- ------------------
Assets of Teevee Makers
GBP'000 19 September
2017
------------------ -------------
Financial Assets 7
Intangibles 1,647
Trade and other
receivables 135
Cash and cash
equivalents 16
------------------- -------------
Total 1,805
------------------- -------------
Liabilities of Teevee Makers
GBP'000 19 September
2017
------------------------ -------------
Short-term payables (210)
Long-term liabilities* (2,507)
Total (2,717)
------------------------- -------------
* Thereof liability to holding company: GBP2,157k
Analysis of the result of Teevee Makers:
GBP'000 19 September
2017
----------------- -------------
Revenue -
Expenses (439)
------------------ -------------
Loss before tax (439)
Tax -
------------------ -------------
Loss after tax (439)
------------------ -------------
Analysis of the result of discontinued operations:
GBP'000 19 September
2017
---------------------------------- -------------
Loss of deconsolidation (1,115)
Loss before tax in Teevee Makers (439)
----------------------------------- -------------
Loss before tax of discontinued
operations (1,554)
Tax -
----------------------------------- -------------
Loss after tax of discontinued
operations (1,554)
----------------------------------- -------------
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
**ENDS**
For more information please contact:
Falcon Media House Gert Rieder info@falconmediahouse.com
Limited
Nuovo Capital LLP Anthony Rowland
(Financial Adviser Simon Leathers
and Joint Broker)
Shard Capital Partners
LLP
======================= ================ ==========================
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKFDDNBDDFBB
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December 28, 2017 10:30 ET (15:30 GMT)
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