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15. SHARE CAPITAL

     Authorised share capital

On 13 July, 2020 the Company undertook a sub-division of its ordinary shares, which sub divided the 487,690,380 ordinary shares of 0.1p each into 487,690,380 ordinary shares of 0.01p each and 487,690,380 deferred shares of 0.09p each. The deferred shares of 0.09p each were consolidated into deferred shares of 0.9p each ranking pari passu as one class with the existing deferred shares of 0.9p each.

On 14 July 2020, 937,500,000 ordinary shares of 0.01p each were issued under a placing at 0.08p each (at a premium of 0.07p per share) to raise £750,000 before costs of £ 66,863.

In addition, on 14 July 2020, warrants to subscribe for ordinary shares of 0.01p were granted as follows:

(a) Subscribers to the placing were granted warrants to subscribe for up to 937,500,000 shares for a period of two years, exercisable at 0.2p per share;

(b) Peterhouse Capital Limited was granted warrants to subscribe for shares equivalent up to 3% of the issued ordinary share capital for time to time, exercisable for a period of two years, at 0.08p per share.

Following the consolidation of ordinary shares in December 2020, the warrants have been adjusted and comprise placee warrants to subscribe for up to 93,750,000 ordinary shares of 0.1p at 2p per share, and the warrants held by Peterhouse Capital Limited are exercisable at 0.8p per share.

In relation to the granting of these warrants to Peterhouse Capital Limited, these fall under the requirements of IFRS 9 Financial Instruments and as such are accounted for at fair value through profit or loss. At the grant date of these warrants these are valued using a Black Scholes model to determine the intrinsic value of the warrant and a liability is recognized for this amount with a corresponding expense through the income statement. The Directors’ have concluded that the intrinsic value of the warrant as at 31 March 2021 is not material to the results and subsequent movements in the share price have decreased this value further. As such no accounting entries have been made to these results.

Further on 14 July 2020, £ 600,000 of convertible loan notes were issued to Mr C C Johnson as part of arrangements to reorganize loans between him and the Group. The notes are repayable on 31 July 2022 and are convertible at any time into 300,000,000 ordinary shares of 0.01p at 0.2p per share. On conversion, warrants to subscribe for up to 300,000,000 ordinary shares will be granted to Mr C C Johnson exercisable for a period of two years from the date of grant at 0.2p per share. Following the consolidation of ordinary shares in December 2020, the loan notes have been adjusted and are convertible into 30,000,000 ordinary shares of 0.1p at 2p per share, with warrants to be granted to subscribe for up to 30,000,000 ordinary shares of 0.1p each at 2p per share.

The convertible loan notes have been accounted for as having both a debt and an equity element. This results in the creation of a loan note equity reserve at the point of issue. This loan note equity reserve is the difference between the loan note value received by the company of £ 600,000 and the fair value of a debt only instrument with a 10% imputed interest rate and a final settlement figure of £ 600,000 in July 2022. This 10% imputed interest rate of £ 33,058 (2020: nil), is managements’ best estimate as to the interest rate that would be expected from the market for an unsecured loan of £ 600,000 without a conversion element.

Ordinary shares entitle the holder to receive notice of and to attend or vote at any general meeting of the Company or to receive dividends or other distributions.

Deferred shares do not entitle the holder to receive notice of and to attend or vote at any general meeting of the Company or to receive dividends or other distributions. Upon winding up or dissolution of the Company the holders of deferred shares shall be entitled to receive an amount equal to the nominal amount paid up thereon, but only after holders of ordinary shares have received £ 100,000 per ordinary share. Holders of deferred shares are not entitled to any further rights of participation in the assets of the Company. The Company has the right to purchase the deferred shares in issue at any time for no consideration.

On 29 December 2020, for every ten of the 1,425,190,380 ordinary shares of 0.01p then in issue, were consolidated into one ordinary share of 0.1p resulting in there being 142,519,038 ordinary shares of 0.1p in issue.

Issued, allotted and fully paid

16. RELATED PARTY TRANSACTIONS

Mr C C Johnson held 18,681,580 ordinary 0.1p shares in the Group as at 31 March 2021 (2020: 186,815,803 ordinary 0.01p).

Mr J Dubois held 400,000 ordinary 0.1p shares in the Group as at 31 March 2021 (2020: 4,000,000 ordinary …0.01p.

Mr D C Stocks held no ordinary 0.1p shares in the Group as at 31 March 2021 (2020: 80,330,532 ordinary 0.01p). He sold his entire shareholding during the year.

Mr N Lott held 50,000 ordinary 0.1p shares in the Group as at 31 March 2021 (2020: 500,000 ordinary 0.01p).

Mr P Treadaway held 19,733,466 ordinary 0.1p shares in the Group as at 31 March 2021 (2020: 106,484,658 ordinary 0.01p).

Mr G Thorneycroft held 600,000 ordinary 0.1p shares in the Group as at 31 March 2021 (2020: nil).

Further details relating to share option and warrants can be found under note 17.

The following working capital loans have been provided by the Directors:  

 

For the purpose of preparing the consolidated financial statement of the Group, share capital represents the nominal value of the issued share capital of 0.1p per share (2020: 0.1p per share). Share premium represents the excess over nominal value of the fair value consideration received for equity shares net of expenses plus deferred shares of 0.9p after issued share capital of 1p.

Mr Johnson’s Loan bore interest during the year at 5% (2020: 5% pa), but he has chosen to forego the interest in both years with the exception of the first £ 500,000 in this year only, (2020: exception £ nil). Mr Johnson received £ 25,000 interest (2020: nil). Mr Johnson is no longer a Director , but he served as a Director for part of the previous year and remains a shareholder. Mr Dubois’s Loan, which is from his Pension Fund of which he is the sole beneficiary, was at 12% pa interest (2020: 12% pa).

Mrs S Johnson, wife of Mr C C Johnson provided a Loan of £380,000 (2020: £ 380,000) which bore interest of 5% pa, (2020: 5% pa), to Selmat, a subsidiary of the Group. This has been included within Mr C C Johnson’s loan balance above.

During the year rents were paid of £7,692 (2020: £10,000) to the Combe Bank Homes Pension Scheme which owns the freehold offices at Chequers Barn. Mr C C Johnson is a Trustee and Beneficiary of that Pension Scheme.

Prior to Mr P Treadaway’s appointment as a Director, charges of nil (2020: £70,108) were paid to him in relation to consultancy services. Mr P Treadaway now takes remuneration as shown in note 4.

During the year payments were made to Mr D Stocks of nil (2020: £68,936) and to Mr N Lott of £9,998 (2020: £ 4,994) for consultancy services.

17. SHARE OPTIONS AND WARRANTS

Share options or warrants as at the year end are as follows (2020:nil)

On 14 July 2020 warrants to subscribe for ordinary shares of 0.01p were granted as follows:

(a) Subscribers to the placing effected in July 2020 were granted warrants to subscribe for up to 937,500,000 shares for a period of two years, exercisable at 0.2p per share;

(b) Peterhouse Capital Limited was granted warrants to subscribe for shares equivalent up to 3% of the issued ordinary share capital from time to time, exercisable for a period of two years, at 0.08p per share.

Following the consolidation of ordinary shares in December 2020, the warrants have been adjusted and comprise placee warrants to subscribe for up to 93,750,000 ordinary shares of 0.1p at 2p per share, and the warrants held by Peterhouse Capital Limited are exercisable at 0.8p per share.

Further on 14 July 2020 £ 600,000 of convertible loan notes were issued to Mr C C Johnson as part of arrangements to reorganize loans between him and the Group. The notes are repayable on 31 July 2022 and are convertible at any time into 300,000,000 ordinary shares of 0.01p at 0.2p per share. On conversion warrants to subscribe for up to 300,000,000 ordinary shares will be granted to Mr C C Johnson exercisable for a period of two years from the date of grant at 0.2p per share. Following the consolidation of ordinary shares in December 2020, the loan notes have been adjusted and are convertible into 30,000,000 ordinary shares of 0.1p at 2p per share, with warrants to be granted to subscribe for up to 30,000,000 ordinary shares of 0.1p each at 2p per share.

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