TIDMQTI
RNS Number : 9426O
Qonnectis plc
07 July 2010
7 July 2010
Qonnectis plc
("Qonnectis" or the "Company")
Final results for the 18 month period ended 31 December 2009
CHAIRMAN'S STATEMENT
Introduction
Following the last report the Company has been faced with significant challenges
from both external and internal sources. The economic climate has created an
environment where customers delay orders and opportunities can suffer setbacks
from unexpected quarters. Qonnectis has not been immune from these adverse
pressures and spent the majority of the eighteen month period under review
seeking to strengthen its position. This has resulted in an opportunity for
Qonnectis to acquire American Leak Detection Holding Corp ("ALD") and such
acquisition will constitute a reverse takeover under the AIM Rules for
Companies.
The Qonnectis Group suffered a significant reduction in sales revenues due to
internal issues leading to a reduction in marketing activity and as customers
delayed orders due to the economic climate. The sales revenue of GBP55,282
(2008: GBP456,678) generated in the period is reflective of the loss of sales
staff in August 2008, followed by a reduction in cash resources which restricted
the recruitment of any further staff. Towards the end of the eighteen month
period this position changed and a new experienced sales manager was appointed.
In the first six months of the period the Company faced the loss of the founder
and Chief Executive Officer, Mike Tapia, who left the company in December 2008
due to ill health, after many years of dedication and hard work. The Chief
Executive role was filled by Guy Chant, from October 2008 through to March 2009.
The challenges for the management team had already been exacerbated by the
resignation of the key sales executive in August 2008.
Further senior management changes were seen in the second six months of the
period. On 12 January, I was appointed as Non-Executive Director and 31 March
2009 saw the departure of Richard Taylor as Chairman of the Board, a role into
which I stepped. Also in March 2009, Guy Chant stepped down as interim Chief
Executive Officer, remaining on the Board as Non-Executive Director until 8 June
2009. Barbara Spurrier took over the role of interim Chief Executive Director in
addition to continuing as Finance Director.
In April 2009, we focused our attention on raising funds to secure the future of
Qonnectis. This process became protracted and after several months, it was
considered appropriate to suspend trading in the shares of Qonnectis on AIM
pending clarification of the financial position of the company, which took place
at the end of July 2009.
During this review period, the opportunity to combine with ALD was explored
culminating in an initial agreement being reached to enter into the process for
an acquisition resulting in a reverse takeover. To help facilitate the process
an interim round of funding was initiated and subsequently completed on the 8
January 2010, injecting GBP395,000 (gross) of new cash into Qonnectis.
Outlook
The opportunity to combine with ALD will give Qonnectis the stability it needs
to develop its product portfolio, and offers the Company significant opportunity
by opening up channels to parts of the water market hitherto inaccessible. The
executive team has been strengthened by the appointment of an experienced sales
manager. The Board of Directors has been enhanced by the addition of Patrick
DeSouza and Stanford Berenbaum as non-executive directors, both of whom will
have a significant impact on the future of the business after completion of the
reverse takeover which was announced today.
Harry Offer
7 July 2010
FURTHER ENQUIRIES
+----------------------------------------------+---------------------+
| Qonnectis plc | |
+----------------------------------------------+---------------------+
| Harry Offer, Non-executive Chairman | Tel: 07887 753 341 |
+----------------------------------------------+---------------------+
| Barbara Spurrier, Interim CEO and Finance | Tel: 01223 421714 |
| Director | |
+----------------------------------------------+---------------------+
| | |
+----------------------------------------------+---------------------+
| Merchant John East Securities Limited | |
+----------------------------------------------+---------------------+
| David Worlidge/Bidhi Bhoma | Tel: 020 7628 2200 |
+----------------------------------------------+---------------------+
CONSOLIDATED INCOME STATEMENT FOR THE 18 MONTH PERIOD ENDED 31 DECEMBER 2009
+------------------------------------+------+-------------+-------------+
| | | 18 month | |
| | | period | 12 month |
| | | to 31 | period to |
| | | December | 30 June |
| |Note | 2009 | 2008 |
| | | GBP | GBP |
+------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------+------+-------------+-------------+
| Revenue | | 55,282 | 456,678 |
+------------------------------------+------+-------------+-------------+
| Costs of sales | | (36,473) | (220,071) |
+------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------+------+-------------+-------------+
| Gross Profit | | 18,809 | 236,607 |
+------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------+------+-------------+-------------+
| Other income | | 75,287 | 49,514 |
+------------------------------------+------+-------------+-------------+
| Exceptional item - convertible | | - | (250,000) |
| loan funding costs | | | |
+------------------------------------+------+-------------+-------------+
| Impairment of goodwill | | (603,473) | (2,920,379) |
+------------------------------------+------+-------------+-------------+
| Administrative expenses | | (1,095,209) | (845,383) |
+------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------+------+-------------+-------------+
| Operating loss | | (1,604,586) | (3,729,641) |
+------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------+------+-------------+-------------+
| Finance income | 2 | 9,241 | 6,241 |
+------------------------------------+------+-------------+-------------+
| Finance cost | 2 | (2,007) | (26,198) |
+------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------+------+-------------+-------------+
| Loss for the period before tax | | (1,597,352) | (3,749,598) |
+------------------------------------+------+-------------+-------------+
| Corporation Tax | 3 | 55,093 | - |
+------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------+------+-------------+-------------+
| Loss for the period and total | | | |
| comprehensive loss for the period | | (1,542,259) | (3,749,598) |
+------------------------------------+------+-------------+-------------+
| Loss per share (basic and diluted) | 4 | (0.1p) | (1.49p) |
+------------------------------------+------+-------------+-------------+
The company has no other comprehensive income for the period.
The results reflected above relate to continuing operations.
As permitted by section 408 of the Companies Act 2006 a separate income
statement has not been presented for the company. The Company's loss for the
period was GBP339,924 (2008: GBP8,918,690).
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2009
+------------------------------------+------+--------------+--------------+
| | | 31 | 30 June |
| | | December | 2008 |
| |Note | 2009 | GBP |
| | | GBP | |
+------------------------------------+------+--------------+--------------+
| | | | |
+------------------------------------+------+--------------+--------------+
| Assets | | | |
+------------------------------------+------+--------------+--------------+
| Non-current assets | | | |
+------------------------------------+------+--------------+--------------+
| Intangible assets | | - | 603,473 |
+------------------------------------+------+--------------+--------------+
| Property, plant and equipment | 5 | 16,285 | 4,495 |
+------------------------------------+------+--------------+--------------+
| | | | |
+------------------------------------+------+--------------+--------------+
| | | 16,285 | 607,968 |
+------------------------------------+------+--------------+--------------+
| | | | |
+------------------------------------+------+--------------+--------------+
| Current assets | | | |
+------------------------------------+------+--------------+--------------+
| Inventories | | 33,689 | 30,137 |
+------------------------------------+------+--------------+--------------+
| Trade and other receivables | 6 | 65,815 | 93,327 |
+------------------------------------+------+--------------+--------------+
| Cash and cash equivalents | | 105,728 | 697,341 |
+------------------------------------+------+--------------+--------------+
| | | 205,232 | 820,805 |
+------------------------------------+------+--------------+--------------+
| | | | |
+------------------------------------+------+--------------+--------------+
| Total assets | | 221,517 | 1,428,773 |
+------------------------------------+------+--------------+--------------+
| | | | |
+------------------------------------+------+--------------+--------------+
| Equity and liabilities | | | |
+------------------------------------+------+--------------+--------------+
| Equity attributable to holders of | | | |
| the parent | | | |
+------------------------------------+------+--------------+--------------+
| Share capital | | 12,020,588 | 12,020,588 |
+------------------------------------+------+--------------+--------------+
| Share premium | | 1,600,717 | 1,600,717 |
+------------------------------------+------+--------------+--------------+
| Retained loss | | (13,910,510) | (12,368,251) |
+------------------------------------+------+--------------+--------------+
| | | | |
+------------------------------------+------+--------------+--------------+
| | | (289,205) | 1,253,054 |
+------------------------------------+------+--------------+--------------+
| | | | |
+------------------------------------+------+--------------+--------------+
| Current liabilities | | | |
+------------------------------------+------+--------------+--------------+
| Trade and other payables | | 347,833 | 169,719 |
+------------------------------------+------+--------------+--------------+
| Borrowings | | 162,889 | 6,000 |
+------------------------------------+------+--------------+--------------+
| | | 510,722 | 175,719 |
+------------------------------------+------+--------------+--------------+
| Total equity and liabilities | | 221,517 | 1,428,773 |
+------------------------------------+------+--------------+--------------+
CONSOLIDATED CASH FLOW STATEMENT FOR THE 18 MONTH PERIOD ENDED 31 DECEMER 2009
+------------------------------------+------+-------------+-------------+
| | | 18 month | |
| | | period | 12 month |
| | | to 31 | period to |
| | | December | 30 June |
| |Note | 2009 | 2008 |
| | | GBP | GBP |
+------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------+------+-------------+-------------+
| Cash flows from operating | | | |
| activities | | | |
+------------------------------------+------+-------------+-------------+
| Loss from operations | | (1,604,586) | (3,729,641) |
+------------------------------------+------+-------------+-------------+
| Adjustments for: | | | |
+------------------------------------+------+-------------+-------------+
| Depreciation | | 10,735 | 4,352 |
+------------------------------------+------+-------------+-------------+
| Impairment losses | | 603,473 | 2,920,379 |
+------------------------------------+------+-------------+-------------+
| Funding costs - convertible loan | | - | 250,000 |
| funding costs | | | |
+------------------------------------+------+-------------+-------------+
| Corporation tax credit | | 55,093 | - |
+------------------------------------+------+-------------+-------------+
| Operating loss before working | | (935,285) | (554,910) |
| capital changes | | | |
+------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------+------+-------------+-------------+
| (Increase) in inventories | | (3,552) | (18,231) |
+------------------------------------+------+-------------+-------------+
| Decrease in trade and other | | 27,512 | 1,458 |
| receivables | | | |
+------------------------------------+------+-------------+-------------+
| Increase/(decrease) in trade and | | 178,114 | (144,568) |
| other payables | | | |
+------------------------------------+------+-------------+-------------+
| Net cash from operating activities | | (733,211) | (716,251) |
+------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------+------+-------------+-------------+
| Cash flows from investing | | | |
| activities | | | |
+------------------------------------+------+-------------+-------------+
| Purchase of property, plant and | | (22,525) | (164) |
| equipment | | | |
+------------------------------------+------+-------------+-------------+
| Interest received | | 9,241 | 6,241 |
+------------------------------------+------+-------------+-------------+
| Interest paid | | (2,007) | (26,198) |
+------------------------------------+------+-------------+-------------+
| Net cash used in investing | | (15,291) | (20,121) |
| activities | | | |
+------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------+------+-------------+-------------+
| Cash flows from financing | | | |
| activities | | | |
+------------------------------------+------+-------------+-------------+
| Proceeds from issue of share | | - | 1,675,667 |
| capital | | | |
+------------------------------------+------+-------------+-------------+
| Exceptional item - convertible | | - | (250,000) |
| loan funding costs | | | |
+------------------------------------+------+-------------+-------------+
| Proceeds from loan notes issued | | 72,889 | - |
+------------------------------------+------+-------------+-------------+
| Proceeds from loan notes due to be | | | |
| issued (restricted cash) | | 90,000 | - |
+------------------------------------+------+-------------+-------------+
| Repayment of borrowings | | (6,000) | (36,000) |
+------------------------------------+------+-------------+-------------+
| Net cash used in financing | | 156,889 | 1,389,667 |
| activities | | | |
+------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------+------+-------------+-------------+
| Net (decrease)/increase in cash | | (591,613) | 653,295 |
| and cash equivalents | | | |
+------------------------------------+------+-------------+-------------+
| Cash and cash equivalents at the | | 697,341 | 44,046 |
| beginning of period | | | |
+------------------------------------+------+-------------+-------------+
| Cash and cash equivalents at end | 7 | 105,728 | 697,341 |
| of period | | | |
+------------------------------------+------+-------------+-------------+
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE 18 MONTH PERIOD ENDED 31
DECEMBER 2009
+--------------------------+------------+-----------+--------------+-------------+
| | Share | Share | Retained | Total |
| | Capital | Premium | Loss | GBP |
| | GBP | GBP | GBP | |
+--------------------------+------------+-----------+--------------+-------------+
| | | | | |
+--------------------------+------------+-----------+--------------+-------------+
| Balance at 1 July 2007 | 10,270,588 | 1,675,050 | (8,618,653) | 3,326,985 |
+--------------------------+------------+-----------+--------------+-------------+
| Issue of share capital | 1,750,000 | - | - | 1,750,000 |
+--------------------------+------------+-----------+--------------+-------------+
| Costs of raising equity | - | (74,333) | - | (74,333) |
+--------------------------+------------+-----------+--------------+-------------+
| Total comprehensive loss | | | | |
| for the period | - | - | (3,749,598) | (3,749,598) |
+--------------------------+------------+-----------+--------------+-------------+
| Balance at 1 July 2008 | 12,020,588 | 1,600,717 | (12,368,251) | 1,253,054 |
+--------------------------+------------+-----------+--------------+-------------+
| Total comprehensive loss | | | | |
| for the period | - | - | (1,542,259) | (1,542,259) |
+--------------------------+------------+-----------+--------------+-------------+
| Balance at 31 December | 12,020,588 | 1,600,717 | (13,910,510) | (289,205) |
| 2009 | | | | |
+--------------------------+------------+-----------+--------------+-------------+
NOTES TO THE FINANCIAL STATMENTS FOR THE PERIOD ENDED 31 DECEMBER 2009
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below. These policies have been
consistently applied to all periods presented unless stated otherwise.
The consolidated financial statements of Qonnectis plc have been prepared in
accordance with International Financial Reporting Standards (IFRSs and IFRIC
Interpretations) issued by the International Accounting Standards Board, as
adopted by the European Union.
Going concern
The Group's business activities, together with factors likely to affect its
future development, performance and position are set out in the Directors'
report. As described in the directors' report, the current economic environment
is difficult and the Group has reported an operating loss for the period.
As explained in the Chairman's statement, the Group has agreed to undertake a
reverse takeover with American Leak Detection Inc. ("ALD"). The directors raised
GBP395,000 of interim funding in January 2010 to enable the Group to continue
trading until the transaction is completed.
In conjunction to the reverse takeover with ALD, the Company has received
commitments, conditional on the passing of certain Shareholder resolutions and
admission of its new ordinary share capital to trading on AIM, for additional
equity finance of approximately GBP657,000 which is sufficient to fund working
capital and expansion of the Group over the coming eighteen months. If these
conditions were not met then the Company may not have the financial resources to
continue as a going concern. However, the Board believes the risk of these
conditions not being met is remote and therefore no material uncertainty exists
that may cast significant doubt on the Company's ability to continue as a going
concern for the foreseeable future. Consequently the accounts are prepared on a
going concern basis.
2. FINANCE INCOME AND COSTS
+------------------------------------+------+----------+-----------+
| | | 18 month | |
| | | period | 12 month |
| | | to 31 | period to |
| | | December | 30 June |
| | | 2009 | 2008 |
| | | GBP | GBP |
+------------------------------------+------+----------+-----------+
| | | | |
+------------------------------------+------+----------+-----------+
| Interest expense | | | |
+------------------------------------+------+----------+-----------+
| Bank loan and overdraft borrowings | | (2,075) | (3,698) |
+------------------------------------+------+----------+-----------+
| Other interest payable | | - | (22,500) |
+------------------------------------+------+----------+-----------+
| Gain on foreign exchange | | 68 | - |
+------------------------------------+------+----------+-----------+
| Finance cost | | (2,007) | (26,198) |
+------------------------------------+------+----------+-----------+
| Interest income on short term bank | | 9,241 | 6,241 |
| deposits | | | |
+------------------------------------+------+----------+-----------+
| Finance income | | 9,241 | 6,241 |
+------------------------------------+------+----------+-----------+
| Net finance costs | | 7,234 | (19,957) |
+------------------------------------+------+----------+-----------+
3. INCOME TAX EXPENSE
+------------------------------------+------+-------------+-------------+
| | | 18 month | |
| | | period | 12 month |
| | | to 31 | period to |
| | | December | 30 June |
| | | 2009 | 2008 |
| | | GBP | GBP |
+------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------+------+-------------+-------------+
| (a) Analysis of charge in period | | | |
+------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------+------+-------------+-------------+
| Corporation tax | | (55,093) | - |
+------------------------------------+------+-------------+-------------+
| Total | | (55,093) | - |
+------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------+------+-------------+-------------+
| (b) Factors affecting tax charge | | | |
| for the period | | | |
+------------------------------------+------+-------------+-------------+
| Loss for the period before | | (1,597,352) | (3,749,598) |
| taxation | | | |
+------------------------------------+------+-------------+-------------+
| Loss on ordinary activities | | | |
| multiplied by rate of corporation | | (447,258) | (787,416) |
| tax in the UK 28% (2008: 221%) | | | |
+------------------------------------+------+-------------+-------------+
| | | | |
+------------------------------------+------+-------------+-------------+
| Adjustments for: | | | |
+------------------------------------+------+-------------+-------------+
| Expenses not tax deductable | | 62,863 | 46,446 |
+------------------------------------+------+-------------+-------------+
| Impairment of goodwill | | 168,972 | 613,280 |
+------------------------------------+------+-------------+-------------+
| Tax effect of unrecognised losses | | 215,423 | 126,759 |
| for deferred tax | | | |
+------------------------------------+------+-------------+-------------+
| Other | | (55,093) | 931 |
+------------------------------------+------+-------------+-------------+
| Total income tax credit | | (55,093) | - |
+------------------------------------+------+-------------+-------------+
The value of the unrecognised deferred tax asset for the period was GBP1,136,441
(2008: 912,843). A deferred tax asset has not been recognised in respect of
timing differences relating to carried forward tax losses, as there is
insufficient evidence that the asset will be recovered.
4. LOSS PER SHARE
+------------------------------------+------+---------------+-------------+
| | | 18 month | |
| | | period | 12 month |
| | | to 31 | period to |
| | | December | 30 June |
| | | 2009 | 2008 |
| | | GBP | GBP |
+------------------------------------+------+---------------+-------------+
| | | | |
+------------------------------------+------+---------------+-------------+
| Basic and diluted loss per share | | | |
+------------------------------------+------+---------------+-------------+
| Net loss for the period | | (1,542,259) | (3,749,598) |
+------------------------------------+------+---------------+-------------+
| Weighted average number of | | 1,615,373,072 | 251,073,776 |
| ordinary shares | | | |
+------------------------------------+------+---------------+-------------+
| Basic and diluted loss per share | | (0.1) | (1.49) |
| (pence) | | | |
+------------------------------------+------+---------------+-------------+
IAS 33 requires presentation of the diluted loss per share amount when a company
could be called upon to issue shares that would decrease net profit or increase
net loss per share. For the group an issue of shares would decrease the net loss
per share, therefore these shares are anti-dilutive as defined by IAS 33 and so
there is no difference between the basic and diluted earnings per share.
5. PROPERTY, PLANT AND EQUIPMENT
Group property, plant and equipment as at 31 December 2009
+--------------------------+-----------+-----------+-------------+-----------+
| | | Fixtures, | Development | |
| | Computer | fittings | tools and | |
| | equipment | and | equipment | Total |
| | GBP | equipment | GBP | GBP |
| | | GBP | | |
+--------------------------+-----------+-----------+-------------+-----------+
| | | | | |
+--------------------------+-----------+-----------+-------------+-----------+
| Period ended 30 June | | | | |
| 2008 | | | | |
+--------------------------+-----------+-----------+-------------+-----------+
| Cost | | | | |
| At 1 July 2007 | 103,133 | 4,841 | 15,693 | 123,667 |
+--------------------------+-----------+-----------+-------------+-----------+
| Additions | - | 164 | - | 164 |
+--------------------------+-----------+-----------+-------------+-----------+
| At 30 June 2008 | 103,133 | 5,005 | 15,693 | 123,831 |
+--------------------------+-----------+-----------+-------------+-----------+
| | | | | |
+--------------------------+-----------+-----------+-------------+-----------+
| Accumulated depreciation | | | | |
+--------------------------+-----------+-----------+-------------+-----------+
| At 1 July 2007 | (98,860) | (1,941) | (14,183) | (114,984) |
+--------------------------+-----------+-----------+-------------+-----------+
| Charge for the period | (2,447) | (1,227) | (678) | (4,352) |
+--------------------------+-----------+-----------+-------------+-----------+
| At 30 June 2008 | (101,307) | (3,168) | (14,861) | (119,336) |
+--------------------------+-----------+-----------+-------------+-----------+
| | | | | |
+--------------------------+-----------+-----------+-------------+-----------+
| Net book amount | | | | |
+--------------------------+-----------+-----------+-------------+-----------+
| At 30 June 2008 | 1,826 | 1,837 | 832 | 4,495 |
+--------------------------+-----------+-----------+-------------+-----------+
| | | | | |
+--------------------------+-----------+-----------+-------------+-----------+
| Period ended 31 December | | | | |
| 2009 | | | | |
+--------------------------+-----------+-----------+-------------+-----------+
| Cost | | | | |
+--------------------------+-----------+-----------+-------------+-----------+
| At 1 July 2008 | 103,133 | 5,005 | 15,693 | 123,831 |
+--------------------------+-----------+-----------+-------------+-----------+
| Additions | 5,127 | 518 | 16,880 | 22,525 |
+--------------------------+-----------+-----------+-------------+-----------+
| At 31 December 2009 | 108,260 | 5,523 | 32,573 | 146,356 |
+--------------------------+-----------+-----------+-------------+-----------+
| | | | | |
+--------------------------+-----------+-----------+-------------+-----------+
| Accumulated deprecation | | | | |
+--------------------------+-----------+-----------+-------------+-----------+
| 1 July 2008 | (101,307) | (3,168) | (14,861) | (119,336) |
+--------------------------+-----------+-----------+-------------+-----------+
| Charge for the period | (3,790) | (1,834) | (5,111) | (10,735) |
+--------------------------+-----------+-----------+-------------+-----------+
| At 31 December 2009 | (105,097) | (5,002) | (19,972) | (130,071) |
+--------------------------+-----------+-----------+-------------+-----------+
| | | | | |
+--------------------------+-----------+-----------+-------------+-----------+
| Net book amount | | | | |
+--------------------------+-----------+-----------+-------------+-----------+
| At 31 December 2009 | 3,163 | 521 | 12,601 | 16,285 |
+--------------------------+-----------+-----------+-------------+-----------+
6. TRADE AND OTHER RECEIVEABLES
+------------------------------------+------+----------+-----------+
| | | 18 month | |
| | | period | 12 month |
| | | to 31 | period to |
| | | December | 30 June |
| | | 2009 | 2008 |
| | | GBP | GBP |
+------------------------------------+------+----------+-----------+
| | | | |
+------------------------------------+------+----------+-----------+
| Trade receivables | | 4,290 | 42,493 |
+------------------------------------+------+----------+-----------+
| Less: impairment of trade | | (4,155) | - |
| receivables | | | |
+------------------------------------+------+----------+-----------+
| Net trade receivables | | 135 | 42,493 |
+------------------------------------+------+----------+-----------+
| | | | |
+------------------------------------+------+----------+-----------+
| Prepayments | | 7,413 | 29,889 |
+------------------------------------+------+----------+-----------+
| Corporation tax | | 55,093 | - |
+------------------------------------+------+----------+-----------+
| Unpaid share capital | | 10 | 10 |
+------------------------------------+------+----------+-----------+
| Recoverable VAT | | 3,164 | 20,935 |
+------------------------------------+------+----------+-----------+
| | | 65,815 | 93,327 |
+------------------------------------+------+----------+-----------+
Trade receivables disclosed above are classified as loans and receivables and
are therefore measured at amortised cost.
The average credit period taken on sales of goods is 1 day (2008: 34 days). The
average credit period taken on sales of goods is skewed due the size of the
trade receivables at the period end. The actual credit period taken on this
balance is shown below as being between 90 and 120 days.
+------------------------------------+------+----------+-----------+
| Ageing of past due but not | | 18 month | |
| impaired receivables | | period | 12 month |
| | | to 31 | period to |
| | | December | 30 June |
| | | 2009 | 2008 |
| | | GBP | GBP |
+------------------------------------+------+----------+-----------+
| | | | |
+------------------------------------+------+----------+-----------+
| 30-60 days | | - | 33,534 |
+------------------------------------+------+----------+-----------+
| 60-90 days | | - | (15,581) |
+------------------------------------+------+----------+-----------+
| 90-120 days | | 135 | 7,191 |
+------------------------------------+------+----------+-----------+
| Total | | 135 | 25,144 |
+------------------------------------+------+----------+-----------+
| | | | |
+------------------------------------+------+----------+-----------+
| Movement in the allowance of | | 18 month | |
| doubtful debts | | period | 12 month |
| | | to 31 | period to |
| | | December | 30 June |
| | | 2009 | 2008 |
| | | GBP | GBP |
+------------------------------------+------+----------+-----------+
| | | | |
+------------------------------------+------+----------+-----------+
| Balance at the beginning of the | | - | - |
| period | | | |
+------------------------------------+------+----------+-----------+
| Amounts provided during the year | | (4,155) | - |
+------------------------------------+------+----------+-----------+
| Balance at the end of the period | | (4,155) | - |
+------------------------------------+------+----------+-----------+
| | | | |
+------------------------------------+------+----------+-----------+
| Ageing of impaired trade | | 18 month | |
| receivables | | period | 12 month |
| | | to 31 | period to |
| | | December | 30 June |
| | | 2009 | 2008 |
| | | GBP | GBP |
+------------------------------------+------+----------+-----------+
| | | | |
+------------------------------------+------+----------+-----------+
| 30-60 days | | - | - |
+------------------------------------+------+----------+-----------+
| 60-90 days | | - | - |
+------------------------------------+------+----------+-----------+
| 90-120 days | | (4,155) | - |
+------------------------------------+------+----------+-----------+
| Total | | (4,155) | - |
+------------------------------------+------+----------+-----------+
Directors consider that the carry amount of trade and other receivables is
approximately equal to their fair value.
7. CASH AND CASH EQUIVALENTS
+------------------------------------+------+----------+-----------+
| Group cash and cash equivalents as | | 18 month | |
| at 31 December 2009 | | period | 12 month |
| | | to 31 | period to |
| | | December | 30 June |
| | | 2009 | 2008 |
| | | GBP | GBP |
+------------------------------------+------+----------+-----------+
| | | | |
+------------------------------------+------+----------+-----------+
| Cash at bank and in hand | | 102,779 | 67,331 |
+------------------------------------+------+----------+-----------+
| Short term bank deposits | | 2,949 | 630,010 |
+------------------------------------+------+----------+-----------+
| | | 105,728 | 697,341 |
+------------------------------------+------+----------+-----------+
| | | | |
+------------------------------------+------+----------+-----------+
8. RELATED PARTY TRANSACTIONS
During the period the Group purchased financial services from Cambridge
Financial Partners LLP, a company of which Barbara Spurrier, a director of
Qonnectis plc is a partner. The cost of services provided to the Group during
the period was GBP162,872 (2008: GBPnil) and at the date of the statement of
financial position the balance owing to Cambridge Financial Partners LLP was
GBP83,823 (2008: GBPnil).
During the period the group entered into an agreement for the rent of storage
space from The Offer Group Limited. The chairman of Qonnectis plc, Harry Offer,
is also a director of this firm. Rent paid during the period to The Offer Group
Limited was GBP863 (2008: Nil) of which GBP575 (2008: Nil) was outstanding at
the period end.
The Group bought services from Barnes Kavelle Limited, a company in which Mr R M
Taylor (a former chairman and non-executive director of Qonnectis plc) is a
director. The cost of these services in the period of his directorship was
GBP546 (2008: GBP1,000).
Key management personnel
The key management personnel of the company are the directors. Details regarding
their remuneration received during the period are disclosed in the financial
statements for the 18 month period ended 31 December 2009.
9. EVENTS AFTER THE REPORTING PERIOD
On 8 January 2010 a fundraising was concluded which secured GBP395,000 through a
combination of debt and equity in contemplation of a proposed reverse takeover
by ALD.
The Loan Note from ALD referred to in note 20 above, totalling GBP72,889, was
partly repaid using some of the proceeds of the fundraising in January 2010.
GBP35,000 was repaid on the 28th January leaving a total owed to ALD of
GBP37,889.
An instrument dated 8 January 2010 between Qonnectis plc and ALD constituting
preferred convertible loan notes to be issued to ALD in respect of monies owed
by Qonnectis plc to ALD in the event that the Acquisition and Admission do not
occur by 30 April 2010 ranking in preference to all unsecured obligations of
Qonnectis plc secured by the debenture referred to below and carrying interest
on the principal amount outstanding at 18 per cent. per annum and convertible
into Ordinary Shares at par. The preferred convertible loan notes will be
repayable at twice the principal amount and outstanding interest at any time
within 3 business days of a written demand. If repayment is not made the note
holder may convert all or any of the notes and outstanding interest at any time
in to fully paid ordinary shares at par.
A debenture dated 8 January 2010 between Qonnectis and ALD pursuant to which
Qonnectis plc granted a fixed and floating charge over all its property, assets,
rights and revenues in favour of ALD as security for any obligations due by
Qonnectis plc to ALD pursuant to loan notes as set out above.
10. DIVIDEND
The directors are not proposing the payment of a dividend.
11. COPIES OF THE REPORT & ACCOUNTS
Copies of the Report and Accounts have been posted to shareholders, are
available from the Company's registered office, St John's Innovation Centre,
Cowley Road, Cambridge, Cambridgeshire CB4 0WS and are available from the
Company's website www.qonnectis.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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