Draganfly Investments Ltd Half-year Report (2873Z)

TIDMDRG

RNS Number : 2873Z

Draganfly Investments Ltd

13 December 2017

Registration number 89889

13 December 2017

Draganfly Investments Limited

Chairman's statement and interim results

for the period ended 31 October 2017

The Board of Draganfly, the AIM quoted investing company, are pleased to announce its interim results for the period ending 31 October 2017.

Copies of the interim results will be available to view and download from the Company's website (www.draganflyinvestments.com).

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014 of the European Parliament and of the Council.

For further information please contact:

For further information please contact:

   Luke Bryan                                                                  [phone] 
   Dennis Edmonds                                                           [phone] 

Tom Price

   Northland Capital Partners (Nominated Adviser)           [phone] 

Jon Belliss

   Beaufort Securities Limited (Broker)                             [phone] 

Interim Results for period from May 1st 2017 to October 31st 2017

Chairman's Statement

I am pleased to present the interim Financial Statements for Draganfly Investments Limited ("Draganfly", "Draganfly Investments" or the "Company" for the six months ended 31 October 2017.

I was very pleased to be able to announce the appointment of Adam Wooldridge as CEO in August 2017. Adam is a well regarded and highly experienced geologist and geophysicist and his appointment has greatly strengthened the Board's technical skills base. Adam is based in South Africa and, following his years of high level consulting, he brings a strong network of contacts within the African mining industry.

In recent months the Company has been actively assessing a number of possible mineral investment opportunities. The Board remains confident that the Company will either complete, or have entered into, a transaction that satisfies the AIM requirements set out in the Company's announcement dated 21 March 2017, by the deadline of 20 March 2018.

I look forward to providing Draganfly's shareholders with further updates as appropriate.

Luke Bryan

Chairman

Unaudited Statement of income and retained earnings

for the period ended 31 October 2017

 
                                         Continuing Operations 
                                        6 months       6 months 
                                       to 31/10/17    to 31/10/16 
                              Notes       GBP            GBP 
 Turnover                       2                -          7,296 
 Administrative expenses        3        (200,830)      (118,151) 
                                     -------------  ------------- 
 Operating (loss)                        (200,830)      (110,855) 
 
 Other interest receivable 
  and similar income                         2,420            383 
 
 (Loss) on ordinary 
  activities                             (198,410)      (110,472) 
                                     =============  ============= 
 
 There are no recognised gains or losses other than 
  those included in the profit and loss account. 
 
 
 Loss per share - 
  basic 
 Basic (in pence)                        0.13p              0.23p 
                                     -------------  ------------- 
 
 
 
 
 

Unaudited statement of financial position

as at 31 October 2017

 
                                        31/10/17                 31/10/16 
                         Notes     GBP          GBP         GBP          GBP 
 
 Fixed assets 
  Investments                                         -                   17,864 
 Current assets 
  Debtors                          13,063                    7,484 
  Loan receivable          4       60,000                   60,000 
 Cash at bank 
  and in hand                     287,719                  174,692 
                                ---------                --------- 
                                  360,782                  242,176 
 
 Creditors: amounts 
  falling due 
  within one year 
 Creditors                 5     (15,556)                 (50,244) 
 
 Net current                                    345,226                  191,932 
  assets 
 
  Net assets                                    345,226                  209,796 
                                           ------------             ------------ 
 
 Capital and 
  reserves 
 Called up share 
  capital                  6                          -                        - 
  Stated capital           7                  4,370,923                3,870,923 
 Retained loss                              (4,025,697)              (3,661,127) 
                                           ------------             ------------ 
 Equity shareholders' 
  funds                    7                    345,226                  209,796 
                                           ============             ============ 
 
 
 
 The financial statements on pages 2 to 8 were approved 
  and authorised for issue by the Board on 
  and signed on its behalf by T Edward G Bayman 
 

Unaudited Statement of Cash flows

for the period ended 31 October 2017

 
                                      Period            Period 
                                   ended 31/10/17    ended 31/10/16 
                                        GBP               GBP 
 Cash flow from Operating 
  activities 
 Loss for the financial 
  year 
 Loss for the financial 
  year                                  (198,410)         (110,472) 
 Adjustments for: 
  (Gain) on investments                         -           (7,296) 
 (Increase) in debtors                    (5,710)           (5,821) 
 Increase / (decrease) 
  in general creditors                    (9,120)            31,202 
                                 ----------------  ---------------- 
 Net cash flow from operating 
  activities                            (213,240)          (92,387) 
                                 ----------------  ---------------- 
 
 Cash flow from financing 
  activities 
 
 Proceeds from issue 
  of share capital                        500,000           274,350 
 New short-term loan 
  advanced                                      -          (60,000) 
                                 ----------------  ---------------- 
 Net cash from financing 
  activities                              500,000           214,350 
                                 ----------------  ---------------- 
 
 Net increase in cash 
  and cash equivalents                    286,760           121,963 
 
 Cash and cash equivalents 
  at the beginning of 
  the period                                  959            52,729 
                                 ----------------  ---------------- 
 Closing cash balance                     287,719           174,692 
 
 

Notes to the interim statements

for the period ended 31 October 2017

   1          Accounting policies 

Basis of preparation

The financial statements are prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" (FRS 102).

Going concern basis of accounting

As at the period end date the company has sufficient liquid funds to manage its financial risks and to ensure it can meet its obligations as they fall due.

The directors have a reasonable expectation that the company has adequate resources to continue in

operational existence for a minimum period of at least 12 months from the date of approval of the financial statements. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements.

Financial instruments

The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments.

Financial assets and liabilities are recognised in the Statement of financial position when the company has become party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the financial asset is measured at the present value of the future receipts discounted at a market rate of interest.

Trade investments are equity investments over which the Company has no significant influence, joint control or control and are initially measured at transaction price. Transaction price includes transaction costs, except where trade investments are measured at fair value through profit or loss when transaction costs are expensed to profit or loss as incurred.

Trade investments in non-convertible and non-puttable preference shares or non-puttable ordinary shares are measured at fair value through profit or loss. The fair value of trade investments quoted on a recognised stock exchange is the quoted bid price.

Notes to the interim statements

for the period ended 31 October 2017

   1          Accounting policies (continued) 

Taxation

The company has been granted exempt company status within the meaning of Article 123A of the Income Tax (Jersey) Law 1961 (as amended). The effect of such special status is that the company is treated as a non-resident company for the purposes of Jersey tax laws and is therefore exempt from Jersey income tax on its profits arising outside Jersey and, by concession, on bank deposit interest arising in Jersey (and from any obligation to withhold Jersey income tax from any interest or dividend payments made by it). This status is renewable on an annual basis upon payment of a fee to the Comptroller of Income Tax in Jersey, and it is the company's intention to maintain this status.

Consequently, no provision for taxation, either current or deferred has been made in these financial statements.

   2          Turnover 

Turnover is derived from its principal activity and includes dividends received from investments. It also includes realised and unrealised profits and losses on investments.

   3          Administrative expenses 

The administrative expenses for the period are split between day-to-day administrative expenses totalling GBP76,776 and one-off expenses of GBP124,054. The one-off expenses relate to accrued administration and directors fees from prior years, which were triggered and paid during the period. This amount also includes fees relating to the issue of shares during the year such as placement fees, legal and consultancy fees and professional fees for analysing future opportunities of the company.

   4          Loan receivable 
 
                   31/10/2017   31/10/2016 
                       GBP          GBP 
 
 AltEnergis Plc        60,000       60,000 
 
                       60,000       60,000 
                  ===========  =========== 
 

The loan is an unsecured Sterling loan facility of a total principal amount not exceeding GBP60,000 bearing interest at the rate of 8% per annum and is repayable on the first anniversary of the date of the agreement, being 6th October 2017. The lender shall be entitled at any stage whilst the loan remains outstanding to convert all of the loan into ordinary shares in the capital of the borrower, such shares to equate to 2% of the entire issued share capital of the Borrower at the time by serving a conversion notice to the borrower. The directors have agreed informally to roll over the loan for a further 3 months.

Notes to the interim statements

for the period ended 31 October 2017

   5          Creditors: amounts falling due within one year 
 
                    31/10/2017   31/10/2016 
                        GBP          GBP 
 
 Other creditors        15,556       50,244 
 
                        15,556       50,244 
                   ===========  =========== 
 
   6        Share capital 
 
                                         31/10/17      31/10/16 
                                          Number        number 
 Authorised 
  equity 
 Ordinary shares of no par value        242,500,000   142,500,000 
                                       ============  ============ 
 
 Allotted, called up and fully paid 
  equity 
 Ordinary shares of no par value        169,356,437    69,356,450 
                                       ============  ============ 
 
 

On 22(nd) May 2017 the company authorised, issued and allotted 100,000,000 new ordinary shares of no par value at a subscription price of 0.50 pence per ordinary share raising GBP500,000.

   7        Equity reserves 

Reserves of the company represent the following:

Retained Loss

Cumulative profit and loss net of distribution to owners

Stated capital

Consideration received for shares issued above their nominal value

   8          Earnings per share 

Basic earnings per share is calculated on the basis of the (loss) for the period of GBP198,410 and 157,399,915 shares being the weighted average number of shares in issue during the trading period and is stated in pence.

Notes to the interim statements

for the period ended 31 October 2017

   9          Administration and directors fees 

With effect from 1 April 2015, it was agreed with Pentera Trust Company Limited that the annual administration fees would be reduced to GBP10,000. It was agreed that the reduction in fees would be valid until there is a trigger event, such as a transaction having been undertaken, or Pentera Trust Company Limited ceasing to act as administrators and providing directors for Draganfly Investments Limited. Following such trigger event Pentera Trust Company Limited will reserve the right to charge fees for the period from 1 January 2015, on a time spent basis subject to additional independent director approval.

With effect from 1 April 2015, it was agreed with Dennis Edmonds to amend and defer his future remuneration. The deferral would be up until there is a trigger event, such as a transaction having been undertaken and until such triggering event the Company would not accrue costs in relation to his services. At the time of a triggering event a fee will be payable to Dennis Edmonds representing a reduced GBP25,000 per annum remuneration, calculated from 1 April 2015 onwards.

On 8 May 2017 GBP500,000 was raised through a share subscription which represented a trigger event. Upon the trigger event Pentera Trust Company Limited was paid contingent fees of GBP40,000 for the period from 1 January 2015, and contingent directors' fees totalling GBP26,667 were also paid to Dennis Edmonds.

Pentera Trust Company Limited has agreed to carry forward GBP30,000 of additional fees which are payable only on the occurrence of a further trigger event, being a further fundraise or a corporate transaction. Dennis Edmonds has also agreed that the remaining GBP27,500 owing to him in director's fees will become payable on the occurrence of a further trigger event and will be used either to settle part of the exercise price on share options granted to him, or he will waive repayment of the money.

   10        Option agreements 

On 31 May 2017, the Company granted Luke Bryan an option to acquire 5,000,000 shares in the Company at 0.5p each. In addition, Dennis Edmonds was granted an option to acquire 8,000,000 shares at 0.5p each. Both of these grants of options are exercisable between 1 June 2018 and 31 May 2023. Dennis Edmonds has agreed that he will either utilise the GBP27,500 owing to him in director's fees to exercise part of the options granted to him, or waive repayment of the money. Accordingly, the company will not have to pay these fees to him in cash.

   11        Dividends 

No dividends have been paid or proposed.

This information is provided by RNS

The company news service from the London Stock Exchange

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December 13, 2017 12:07 ET (17:07 GMT)