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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Path Investments Plc | LSE:PATH | London | Ordinary Share | GB00BYQD5059 | ORD GBP0.001 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.27 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMPATH
RNS Number : 2224Q
Path Investments plc
04 June 2018
4 June 2018
Path Investments plc
("Path" or the "Company")
Annual Results for the year ended 31 December 2017
Path Investments plc (TIDM: PATH) is pleased to announce its audited results for the year ended 31 December 2017.
Highlights
-- Admission to the Standard List segment of the London Stock Exchange Official List concluded -- Current focus on the acquisition of conventional onshore producing European Gas assets
-- Conditional Farm-In Agreement signed 14 December 2017, which, subject to completion, will be the Company's first acquisition under its new stated strategy
-- Subsequent to year-end, a move to the AIM market is planned with an accompanying fund raising
For further information please contact:
Path Investments plc Christopher Theis Andy Yeo 020 3934 6632 Shard Capital (Broker and Financial Adviser) Simon Leathers Damon Heath 020 7186 9900 IFC Advisory (Financial PR & IR) Tim Metcalfe Heather Armstrong Miles Nolan 020 3934 6630
Chairman's Statement
The Company was successfully admitted to the Standard List segment of the Official List of the London Stock Exchange on the 30 March 2017 ("Admission").
Post Admission, the Directors immediately set about pro-actively reviewing a number of opportunities as they presented themselves. Those assets found to be of most interest at this time are within the European conventional onshore producing gas area. The Directors are aware of a number of such opportunities, at differing stages of transaction maturity, and have focused time and resources to advance one particular transaction at this time towards completion.
A Conditional Farm-In Agreement was signed with 5P Energy GmbH on 14 December 2017 for the acquisition of a 50% Participating interest in the producing Alfeld-Elze II Licence and gas field in Lower Saxony, Germany (the "Proposed Transaction"). Alfeld Elze II has been in production since 2015 from the re-entered H-WD Z2 vertical well. The re-drilling of a second well, the A-EZ Z4(2) well, was completed in February 2018 and subject to testing, final approvals and commissioning, production from A-EZ Z4(2) is anticipated to commence around mid-2018.
This acquisition fits with the Company's stated strategy: it allows rapid deployment of capital into an existing, producing asset, it is low risk with a proven measured reserve, and the field holds development potential to generate long term cash flow. To assist with this acquisition, and others that may follow, a fund raising and an accompanying move to the AIM market of the London Stock Exchange is planned. At this time, the Directors are focused on delivering an efficient financial structure for the Proposed Transaction.
In addition to seeking to deliver significant near-term increases in gas production from Alfeld-Elze II, the Directors intend to continue to build a low risk and, over time, diversified, oil and gas portfolio which has the ability to provide the Company's shareholders with a dividend stream as well as offering development potential.
Nigel Brent Fitzpatrick
Non -Executive Chairman
Operational Review
The Company was incorporated and registered in England and Wales on 2 June 2000 under the Companies Act 1985 as a public company limited by shares with the name Hallco 459 plc and with registered number 04006413. On 28 November 2000, the Company changed its name to The Niche Group PLC. On 20 February 2016, the Company changed its name to Path Investments Plc. It is domiciled and its principal place of business is in the United Kingdom and is subject to the City Code.
The strategy of the Company is to acquire interests in oil and gas production or near production assets with the objective of providing the Company's shareholders with access to a low risk and, over time, diversified oil and gas portfolio which can offer a dividend stream as well as offering development potential for capital growth. The Directors are looking to create a diversified portfolio of assets that is mindful of the maturity of asset developments, life of income stream and the potential for growth.
The Company was admitted to the Official List by way of a Standard Listing and to trading on the London Stock Exchange's Main Market for listed securities on 30 March 2017. At the time of listing accrued salaries, pensions and benefits in kind amounting to GBP940,905 were waived and the Company raised approximately GBP1.4 million before expenses through the subscription of new ordinary shares.
The Company has not traded over the past twelve months and no material level of interest income has been received to date. Over that period its expenses have related to pre-deal costs, professional and associated expenses related to the Standard Listing, placing, advisory and consultancy fees, along with general administration expenses.
The previous sustained period during which oil was priced at US$100 a barrel or more had seen companies in the sector raise their appetite for risk; not just in exploration activity but also by investing in high cost appraisal and development programmes. The subsequent fall in commodity prices has led to pressure on project commitments and cash flow shortages which have left many proven and producing projects starved of capital. This is particularly acute at the smaller end of the quoted sector where exploration exposure is much higher.
The Directors believe that attractive opportunities currently exist to acquire interests in energy assets, and in particular onshore European gas assets, which are profitable and have future development potential. In addition to the decreased costs at which interests in assets can be acquired in the current climate, new entrant advantages include ongoing reductions in project costs along with, in many cases, the benefits of significant historically incurred costs, existing infrastructure and technical understanding. Revenue generation from some of these assets can be either immediate or imminent.
The Company intends to focus on identifying acquisition opportunities which are, in the opinion of the Directors, underperforming, undeveloped and/or currently undervalued, and where the Directors believe that their expertise and experience, in conjunction with that of the incumbent management, can be deployed to facilitate growth and unlock inherent value.
On 15 December 2017 the Company announced that it had entered into a Conditional Farm-In Agreement with 5P Energy GmbH, under which Path will acquire a 50% Participating Interest in the Alfeld-Elze II License and field, subject to completion. Upon completion, this would be the Company's first acquisition under its new stated strategy. The Directors believe that admission to AIM, and the cancellation of its existing admission to the Standard Segment of the Main Market of the London Stock Exchange, will be appropriate at that time to assist with this acquisition and others that may follow.
Financial Review
Loss for the year
In the year ended 31 December 2017, the Company recorded a loss of GBP623,977 after deducting GBP400,346 in respect of share based payments. There was no income in the period.
Cash flow
In March 2017, the Company issued 140 million additional Ordinary Shares for a subscription price of GBP0.01, raising GBP1.4 million before expenses in relation to its Listing on the Standard Segment of The London Stock Exchange.
Strategic Report
The directors present their strategic report on the company for the year ended 31 December 2017.
Principal Activities
Path Investments Plc is a public company incorporated under the Companies Act 1985 and domiciled in the United Kingdom. The objective of the Company is to acquire oil and gas production, or near production, assets which possess a lower risk profile than exploration or appraisal assets.
Business Review
The strategy of the Company is to acquire interests in oil and gas production or near production assets with the objective of providing the Company's shareholders with access to a low risk and, over time, diversified oil and gas portfolio which can offer a dividend stream as well as offering development potential for capital growth. In March 2017, in order to pursue this strategy, the company raised gross proceeds of GBP1.4 million through a placing of its shares and successful Admission to the Standard List segment of the Official List of The London Stock Exchange.
The requirements of the enhanced business review are contained in the Chairman's Statement and in the Operational and Financial Reviews.
Key performance indicators
The Company has not traded over the past twelve months and no material level of interest income has been received to date.
Position of the Company's business at the year-end
At the year-end, the Company's Statement of Financial Position shows net liabilities totalling GBP13,698.
The future plans of the Company
The Company is in the process of raising funds on listing on the Alternative Investment Market of the London Stock Exchange. The funds are to be used for the acquisition of a 50% participating interest in the producing Alfeld-Elze II Licence and Gas Field in Lower Saxony, Germany.
Employees
The Company's only employees are its two executive directors. There are no other employees.
Employee gender diversity
Hot Features
Premium
Male Female
Directors of the company 4 -
----- -------
Total number of employees 2 -
Principal risks and uncertainties
The Company is subject to various risks relating to investments, industry, business and financial conditions. The following risk factors, which are not exhaustive, are particularly relevant to the Company and its business activities:
Risk Mitigation
Due diligence on potential investments
Any due diligence by the Company The Company intends to conduct
in connection with a proposed such due diligence as it deems
investment may not reveal all reasonably practicable and appropriate
relevant considerations or liabilities, based on the facts and circumstances
which could have a material applicable to any potential
adverse effect on the Company's investment prior to entering
financial condition or results into any legally binding agreement
of operations. There can be in connection therewith to acquire
no assurance that the due diligence any assets. The objective of
undertaken with respect to a the due diligence process will
potential investment opportunity be to identify material issues
will reveal all relevant facts which might affect the decision
that may be necessary to evaluate to proceed with any one particular
such opportunity. The Company investment opportunity or the
may also make subjective judgements consideration payable for that
regarding the results of operations, investment.
financial condition and prospects
of a potential investment opportunity
which by their nature may subsequently
result in substantial impairment
charges or other losses.
Lack of control over investment
It is likely that, in many cases, The Company will seek the greatest
the Company will acquire an protection it can when negotiating
interest in an underlying asset the investment instrument. The
which does not confer upon it company considers contingency
the ability to control the underlying plans in the event of default
asset. Accordingly, the Company's or non-performance of partners
decision making authority may or material counterparties.
be limited. Such investments
may also involve the risk that
such other stakeholders may
become insolvent or unable or
unwilling to fund additional
investments in the underlying
asset.
Operational risk in sector
Activities in the oil and gas The Company will make use of
sectors can be dangerous and industry norm insurance arrangements
may be subject to interruption. as well as ensuring best operational
The assets in which the Company practices are strictly adhered
will make investments are subject to.
to the significant hazards and
risks inherent in the oil and
gas sector and countries in
which the underlying assets
are located. Disruption caused
by such risks could affect the
Company's performance, financial
condition and business prospects.
Lack of operational control
The Company will need to rely The Company will, through its
on third parties to operate membership of each respective
its assets and will not have asset's Operational Committee,
direct control over production have direct involvement in day
from its assets. Any failure to day decisions.
by an external contractor may
lead to delays or curtailment
of the production, transportation,
refining or delivery of oil
and gas and related products
and result in adverse effect
on the revenues to the Company.
Additional cost contribution
The Company may be required Whilst it is difficult to mitigate
to contribute to unexpected against unexpected costs, best
costs in the underlying assets operational practises and tight
in which it invests. budgetary control mitigate to
assist in the avoidance of such
events.
Investments that do not proceed
to completion
The Company expects to incur The Company will seek to minimise
certain third party costs associated such costs with reference to
with any investment opportunity its current financial resources
that may ultimately lead to
a completed transaction. The
greater the number of these
deals that do not reach completion,
the greater the impact of such
costs on the Company's performance,
financial condition and business
prospects.
Oil and gas market conditions
The Company's revenues, profitability The Company takes a conservative
and future growth are substantially approach to making investment
dependent on prevailing prices decisions and these decisions
of oil and natural gas and its are based upon a detailed assessment
ability to either enter into, of expected future oil and gas
realise or seek a return from prices. The methodologies used
its investments. Prices for to assess investments against
oil and natural gas are subject future energy prices are in
to large fluctuations in response line with best practice generally
to a number of factors including adopted in the oil and gas industry.
relatively minor changes in
the supply of, and demand for,
oil and natural gas, in addition
to other factors beyond the
control of the Company.
Foreign currency exposure
Investments in overseas assets The Company may seek to manage
will expose the Company to exchange its foreign exchange exposure
rate fluctuations. by active use of hedging and
derivative instruments.
Further funding for investments
The Company's investments or The Company will not enter into
future acquisitions, expansion, any binding agreement without
activity and/or business development assurance of requisite funding
will require additional capital, being in place. The company
whether from equity or debt is actively seeking to diversify
sources. There can be no guarantee its sources of funding to mitigate
that the necessary funds will against the risk of any single
be available on a timely basis, source becoming inaccessible.
on favourable terms, or at all,
or that such funds if raised,
would be sufficient.
Credit & Counterparty risks
Any investment concluded by The Company considers the credit
the Company could underperform and counterparty risks of the
due to one or more of the partners different partners and customers
or counterparties (both suppliers in any investment it considers
and customers) to the project and where necessary seeks to
defaulting or not performing. transfer, insure or prepares
contingency plans in the event
of default or non-performance.
Regulatory Risks
In all EU markets where access The Company will invest in countries
to markets and to most of the with established and stable
logistical infrastructure are regulatory regimes and actively
regulated the Company is exposed monitors the regulatory policies
to changes in regulations that and regimes to anticipate and
could substantially alter the wherever possible mitigate the
economics of market access and impact of regulatory changes.
logistics. In turn, this could
alter the economics of investments
in hydrocarbons. Similarly,
all markets have regulated fiscal
regimes for hydrocarbons and
changes to these hydrocarbon
regimes could materially impact
the returns on investments.
The Strategic Report was approved by the board of directors and signed on its behalf by:
Christopher Theis
Chief Executive Officer
INDEPENT AUDITORS' REPORT TO THE SHAREHOLDERS OF PATH INVESTMENTS PLC FOR THE YEARED 31 DECEMBER 2017
Opinion
We have audited the financial statements of Path Investments Plc (the 'company') for the year ended 31 December 2017 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity, the Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
In our opinion, the financial statements:
-- give a true and fair view of the state of the company's affairs as at 31 December 2017 and of its loss for the period then ended;
-- have been properly prepared in accordance with IFRSs as adopted by the European Union; and
-- have been prepared in accordance with the requirements of the Companies Act 2006 and Article 4 of the IAS Regulation.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report.
We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw your attention to note 1.2 in the financial statements, which indicates that the Company has a net deficit on its balance sheet of GBP228,182 and would not be able to pay its creditors if so required. The Company is seeking to raise funds by a placing of ordinary shares at the time of its proposed admission to AIM, however, if the admission to AIM does not take place in a timely manner or the Company's creditors demand payment the Company would need to immediately raise additional funds. As stated in note 1.2, these events or conditions, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, are of most significance in our audit of the financial statements of the current period and would include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. For this audit we determined that there were no key audit matters applicable to the Company to communicate in our report.
Our application of materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we assessed materiality for the financial statements of the Company as follows:
Materiality GBP1,685
How we determined it 1% of gross assets
Rationale for benchmark We believe that gross assets is the
applied primary measure used by shareholders
in assessing the performance of the
entity, and is a generally accepted
auditing benchmark.
We agreed with the Directors that we would report to them misstatements identified during our audit above GBP84 as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
The were no misstatements identified during the course of our audit that individually, or in aggregate, were considered to be material in terms of their absolute monetary value or on qualitative grounds.
An overview of the scope of our audit
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Company, the accounting processes and controls, and the industry in which it operates.
Path Investments PLC is an oil and gas company which did not make any acquisitions during the year, and as such there were few transactions during the year.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors' remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
-- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
-- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-- the financial statements are not in agreement with the accounting records and returns; or -- certain disclosures of directors' remuneration specified by law are not made; or -- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement included within the directors' report, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Other matters which we are required to address
We were appointed by the Directors of the Company on 6 April 2017 to audit the financial statements for the period ending 31 December 2017. Our total uninterrupted period of engagement is 12 years, covering the periods ending 30 June 2005 to 31 December 2017.
The non-audit services prohibited by the FRC's Ethical Standard were not provided to the Company and we remain independent of the Company in conducting our audit.
Those non-audit services provided during the year are detailed in note 4 to the financial statements.
Our audit opinion is consistent with the additional report to the audit committee.
Use of our audit report
This report is made solely to the Company's members, as a body, in accordance with chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Gary Miller (Senior Statutory Auditor)
For and on behalf of H W Fisher & Company
Chartered Accountants
Statutory Auditor
Acre House
11/15 William Road
London
NW1 3ER
United Kingdom
Date: 4 June 2018
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARED 31 DECEMBER 2017
Year ended Year ended
31 December 31 December
Note 2017 2016
GBP GBP
Administrative expenses (585,533) (782,195)
-------------- --------------
Total administrative expenses (585,533) (782,195)
Operating loss 4 (585,533) (782,195)
Finance income 6 56 8
Finance cost 6 (38,500) (75,500)
Amounts written off investments 11 - (1,050,000)
Loss on ordinary activities before
taxation (623,977) (1,907,687)
Tax on loss on ordinary activities 8 - -
Loss for the year and total comprehensive
loss for year (623,977) (1,907,687)
============== ==============
Loss per share (pence)
- Basic & diluted 9 (0.42) (8.74)
All operating income and operating gains and losses relate to continuing activities.
The notes form an integral part of the financial statements.
STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31 DECEMBER 2017
Share Share Share Retained Total
Capital Premium based earnings
payments
reserve
GBP GBP GBP GBP GBP
As at 1 January
2016 8,578,088 24,134,750 715,752 (32,994,924) 433,666
Comprehensive income
Loss for the period - - - (1,907,687) (1,907,687)
Issue of share capital 227,750 - - - 227,750
As at 31 December
2016 8,805,838 24,134,750 715,752 (34,902,611) (1,246,271)
Comprehensive income
Loss for the period - - - (623,977) (623,977)
Issue of share capital 173,929 1,565,363 - - 1,739,292
Issue costs - (286,496) - - (286,496)
Lapsed or waived
share options - - (382,479) 382,479 -
Transfer to retained
reserves - - (333,273) 333,273 -
Share based payment - - - 403,752 403,752
As at 31 December
2017 8,979,767 25,413,617 - (34,407,084) (13,700)
The Share Capital represents the nominal value of the equity shares.
The Share Premium represents the amount subscribed for share capital, in excess of the nominal amount, less costs directly relating to the issue of shares.
The Share Based Payments reserve represents the fair value of the equity settled share options.
The Retained Earnings reserve represents the cumulative net gains and losses less distributions made.
The notes form an integral part of the financial statements.
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017
As at 31 As at 31
December December
2017 2016
GBP GBP
Note
ASSETS
Non-current assets
Property, plant and equipment 10 - -
Investments - available for 11 - -
sale
- -
Current assets
Trade and other receivables 12 8,978 90,700
Cash and cash equivalents 16 159,505 23,672
168,483 114,372
LIABILITIES
Current liabilities
Trade and other payables 13 (182,183) (1,360,643)
Net Current Liabilities (13,700) (1,246,271)
NET LIABILITIES (13,700) (1,246,271)
SHAREHOLDERS' EQUITY
Called up share capital 14 195,943 22,014
Deferred shares 14 8,783,824 8,783,824
Share premium account 25,413,617 24,134,750
Share based payments reserve - 715,752
Retained earnings (34,407,084) (34,902,611)
TOTAL EQUITY (13,700) (1,246,271)
The financial statements were approved by the board of directors and authorised for issue on 4 June 2018 and signed on its behalf by:
C Theis
Chief Executive Officer
The notes form an integral part of the financial statements.
STATEMENT OF CASH FLOWS FOR THE YEARED 31 DECEMBER 2017
Notes Year ended Year ended
31 December 31 December
2017 2016
GBP GBP
Cash flows from operating activities
Cash expended from operations 15 (1,317,018) (307,376)
Net cash outflow from operating
activities (1,317,018) (307,376)
Cash flows from investing activities
Interest received 56 8
Net cash generated from investing
activities 56 8
Cash flows from financing activities
Net proceeds from the issue of
ordinary shares 1,452,795 227,750
Net cash inflow from financing
activities 1,452,795 227,750
Net increase/(decrease) in cash
and cash equivalents 135,833 (79,618)
Cash and cash equivalents at beginning
of year 23,672 103,290
Cash and cash equivalents at end
of year 16 159,505 23,672
The notes form an integral part of the financial statements.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 31 DECEMBER 2017
1. ACCOUNTING POLICIES 1.1 Basis of preparation
Path Investments Plc is a public limited company incorporated in the United Kingdom, registered under company number 04006413. The address of the registered office is Aston House, Cornwall Avenue, London, N3 1LF. The principal activity of the Company is the investment in oil and gas development and production companies.
The financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the European Union ('IFRS') and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
The financial statements are presented in UK Sterling and all values are rounded to the nearest pound except where indicated otherwise.
The financial statements have been prepared under the historical cost convention or fair value where appropriate. The significant accounting policies adopted are described below.
The financial statements disclose information about the company only and not its group on the basis that its subsidiaries are dormant and have not traded (see note 21).
1.2 Going concern
The Directors have prepared the financial statements on a going concern basis. The Directors consider the use of the going concern assumption to be appropriate. At the latest reported date of 31 December 2017, the Company had cash and cash equivalents totalling GBP159,505 and since then has raised additional funds of GBP68,000 through the issue of convertible loans. As at 31 March 2018 the Company had cash equivalents totalling GBP11,939 and had a net deficit on its balance sheet of GBP228,182. The Company is therefore able to continue as a going concern only as a result of the support of its creditors. As announced, the Company is seeking to raise further funds by a placing of ordinary shares at the time of its proposed admission to AIM and conditional acquisition of a 50% participating interest in an onshore producing conventional gas field, the Alfeld-Elze II Licence and Gas Field in Germany. Should the placing and the admission to AIM not take place in a timely manner, or should the Company's creditors demand payment, the Directors will need to immediately raise additional funds in order to be able to continue as a going concern. The ability of the Company to raise additional funds is dependent upon investor appetite and if necessary the Directors' ability to obtain alternative sources of funding.
For the above detailed reasons the Directors believe there is a material uncertainty over the Company's status as a going concern. However, the Directors have a reasonable expectation that the Company will be able to raise sufficient funding to allow it to cover its working capital for a period of twelve months from the date of approval of the financial statements. It is for this reason they continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3 Financial instruments
The Company classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.
Financial instruments are recognised on the balance sheet at fair value when the Company becomes a party to the contractual provisions of the instrument.
Compound financial instruments issued by the Company comprise convertible loan notes that can be converted to share capital at the option of the holder, and the number of shares to be issued does not vary with changes in their fair value.
The liability component of the compound financial instrument is initially recognised at fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest rate method. The equity component of a compound financial instrument is not re-measured subsequent to initial recognition except on conversion or expiry.
1.4 Financial assets
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. Loans receivable are carried at amortised cost. The Directors assess at the end of each reporting period whether there is objective evidence that a financial asset is impaired. Any impairment shall be recognised in the Statement of Comprehensive Income.
Investments - available for sale
Investments are recognised and derecognised on a trade date where a purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned and are initially measured at cost, including transaction costs.
Unlisted investments are recorded at cost less impairment. Unlisted investments are instruments that do not have a quoted market price in an active market and their fair value cannot be measured reliably. The range of reasonable fair value estimates is significantly wide and the probabilities of the various estimates cannot be reasonably assessed as they relate to the underlying gas reserves in blocks which are currently being explored by a third party company.
Impairment
The Company assesses at each reporting date whether there is objective evidence that assets, financial assets or a group of financial assets are impaired. Assets are considered impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset and that the loss event has an impact on the estimated future cash flows of the asset that can be reliably measured.
1.5 Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities.
Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as interest bearing loans and borrowings in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the Income Statement. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.
Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited directly to equity.
1.6 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and at bank and other short-term deposits. They are stated at carrying value which is deemed to be fair value.
1.7 Property, plant and equipment
Property, plant and equipment are stated at cost on acquisition less accumulated depreciation and accumulated impairment losses.
Depreciation is provided on all property, plant and equipment categories at rates calculated to write off the cost, less estimated residual value on a straight line basis over their expected useful economic life. The depreciation rates are as follows:
Basis of depreciation
Office equipment 3 years straight line 1.8 New Standards and Interpretations
The IASB and IFRIC have issued the following standards and interpretations which are in issue but not in force at 31 December 2017:
Effective
date (period
beginning
on or after)
IFRS Share based payments - Amendments to 1 January
2 clarify the classification and measurement 2018
of share-based payment transactions
IFRS Business combinations - amendments resulting 1 January
3, IFRS from annual improvements 2015-2017 cycle 2019
11, IAS
12, IAS
23, IAS
28
IFRS Insurance contracts - Amendments regarding 1 January
4 the intergration of IFRS 4 and IFRS 9 2018
IFRS Financial instruments - incorporating 1 January
9 requirements for classification and measurement, 2018
impairment, general hedge accounting
and de-recognition.
IFRS Financial instruments - amendments regarding 1 January
9 prepayment features with negative compensation 2019
and modification of financial liabilities
IFRS Revenue from Contracts with Customers 1 January
15 - Clarifications to IFRS 15 2018
IFRS Leases - original issue 1 January
16 2019
IAS 19 Employee benefits -amendments regarding 1 January
plan amendments, curtailments or settlements 2019
IAS 28 Long-term interests in associates and 1 January
joint ventures 2019
IFRIC Foreign currency transactions and advance 1 January
22 consideration 2018
The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the financial statements other than in terms of presentation.
1.9 Share-based payments
The Company operates a number of equity-settled share-based compensation plans, under which the entity receives services from employees or suppliers as consideration for equity instruments (options) of the Company. The fair value of the employee or supplier services received in exchange for the grant of options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted:
-- including any market performance conditions;
-- excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales growth targets and remaining an employee of the entity over a specified time period); and
-- excluding the impact of any non-vesting conditions (for example, the requirement of employees to save).
Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-marketing vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity.
When the options are exercised, the Company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised.
1.10 Taxation
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantially enacted by the balance sheet date.
Deferred tax is recognised, using the liability method, in respect of temporary differences between the carrying amount of the Company's assets and liabilities and their tax base.
Deferred tax liabilities are offset against deferred tax assets. Any remaining deferred tax asset is recognised only when, on the basis of all available evidence, it can be regarded as probable that there will be suitable taxable profits, within the same jurisdiction, in the foreseeable future against which the deductible temporary difference can be utilised.
Deferred tax is determined using tax rates that are expected to apply in the periods in which the asset is realised or liability settled, based on tax rates and laws that have been enacted or substantially enacted by the balance sheet date.
Current and deferred tax are recognised in the income statement, except when the tax relates to items charged or credited directly in equity, in which case the tax is also recognised in equity.
1.11 Sources of estimation uncertainty
The preparation of financial statements requires the use of estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reporting amount of income and expenses during the period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.
Share based payments
The share-based payment charge is calculated using the Black-Scholes model which requires the estimation of share price volatility, expected life and the bid price discount.
2. SEGMENTAL REPORTING a. Primary segment - business
The Company has only one business segment, which is investing in oil and gas assets, either by way of equity or convertible loans primarily in the natural resources sector.
b. Secondary segment - geographical
The Company's loss for the period was derived wholly from activities undertaken in the United Kingdom.
The Company's net assets are located entirely in the United Kingdom.
3. EXPENSES BY NATURE
2017 2016
GBP GBP
Staff costs (620,838) 412,012
Share based payment 400,346 -
Other expenses 806,025 370,183
585,533 782,195
4. OPERATING LOSS
The operating loss is stated after charging:
2017 2016
GBP GBP
Auditors remuneration - audit services 24,000 24,000
Non- Audit Services
Reporting accountants services in
respect off the company's Standard 38,845 -
Listing
Services in relation to proposed
listing on the Alternative Investment
Market 47,700
Total non-audit fees 86,545
5. EMPLOYEES
Number of employees
The average monthly number of employees (including Directors) during the period was:
2017 2016
Number Number
Administration 4 3
2017 2016
GBP GBP
Employment costs
Wages and salaries (including benefits
in kind) (520,091) 375,262
Social security costs (56,008) 27,750
Pension costs (44,739) 9,000
(620,838) 412,012
Included in employment costs above is a waiver of accrued remuneration of GBP940,905 (2016: GBP275,850).
6. FINANCE INCOME AND COSTS
2017 2016
GBP GBP
Finance Income
Bank interest 56 8
56 8
Finance costs
Bank charges (1,000) -
Convertible loan note interest (37,500) (75,500)
Net finance cost (38,444) (75,492)
7. DIRECTORS' REMUNEREATION
2017 2016
GBP GBP
Aggregate emoluments (520,091) 375,262
Share based payment 400,346 -
Pension costs (44,739) 9,000
(164,484) 384,262
The Directors continued to work without payment of their remuneration until March 2017 when the Company was listed on the Standard Market and waived their accrued salaries and pension costs to that date totalling GBP940,904.
The highest paid Director received remuneration of GBP186,496 (2016: GBP117,263) including a gross bonus of GBP94,621 paid to C Theis in recognition of his efforts in assisting the company's listing on the Standard Market and associated fundraising.
During the period, retirement benefits accrued to no Directors (2016: 1).
8. TAXATION
No corporation tax charge arises in respect of the period due to the trading losses incurred. The Company has surplus management expenses available to carry forward and use against trading profits arising in future periods of GBP4,304,744 (2016: GBP4,319,873). In addition the Company has non-trading loan relationship debits to carry forward to offset against future non-trading loan relationship credits of GBP18,880,043 (2016: GBP18,880,318).
2017 2016
GBP GBP
Current tax charge - -
Loss on ordinary activities before
taxation (623,977) (1,907,687)
Loss on ordinary activities before
taxation multiplied by average effective
rate of corporation tax of 19% (2016:
20%) (118,556) (381,537)
Effects of:
Non-deductible expenses 131,856 242,085
Capital allowances in excess of depreciation - -
Depreciation in excess of capital
allowances - 282
Short term timing differences (178,771) 89,593
Other adjustments - -
Movement in tax losses 165,471 49,577
Current tax charge - -
A deferred tax asset of GBP873,494 (2016: GBP743,478) in respect of losses has not been recognised due to the uncertainty regarding the availability of future profits against which the losses of the Company could be offset.
9. LOSS PER SHARE
The calculation of the basic and diluted loss per share is based on the loss on ordinary activities after taxation of GBP623,977 (2016: GBP1,907,687) and on the weighted average number of ordinary shares of 149,164,700 (2016: 21,824,355) in issue. The basic and diluted loss per share is 0.42p (2016: 8.74p). As the Company is loss making, there was no dilutive effect from the share options or warrants.
In order to calculate the diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares according to IAS33. Dilutive potential ordinary shares include convertible loan notes and share options granted to Directors and consultants where the exercise price (adjusted according to IAS 33) is less than the average market price of the Company's ordinary shares during the period.
10. PROPERTY, PLANT AND EQUIPMENT
Office
equipment
Cost GBP
At 1 January 2017 4,233
At 31 December 2017 4,233
Accumulated depreciation
At 1 January 2017 4,233
Charge for the year -
At 31 December 2017 4,233
Net book value at 31 December -
2017
Net book value at 31 December -
2016
11. INVESTMENTS - AVAILABLE FOR SALE
Unlisted Total
Investments
GBP GBP
At 1 January 2016 1,050,000 1,050,000
Impairment (1,050,000) (1,050,000)
At 31 December 2016 - -
Additions
At 31 December 2017 - -
Unlisted investments are recorded at cost less impairment. Unlisted investments are instruments that do not have a quoted market price in an active market and their fair value cannot be measured reliably. The range of reasonable fair value estimates is significantly wide and the probabilities of the various estimates cannot be reasonably assessed as they relate to the underlying gas reserves in blocks which are currently being explored by a third party company.
The unlisted investments as at 31 December 2016 and 31 December 2017 comprised of a 5 per cent. interest each in ARAR and Alpay Enerji as at an aggregate cost of GBP8 million. In 2016, Mr. S. Faith Alpay, the majority owner of ARAR and Alpay Enerji AS, made an initial offer to the Company of GBP1,050,000 for its 5% interest in both companies payable in instalments. However, since the offer was received, progress towards a legal sale and purchase agreement had not occurred, and as the payment was by instalment over a period of time, the directors considered the likelihood of finding an alternative buyer to be low and accordingly impaired the asset to GBPnil in the year ended 31 December 2016.
12. TRADE AND OTHER RECEIVABLES
2017 2016
GBP GBP
Prepayments 8,978 90,700
8,978 90,700
13. TRADE AND OTHER PAYABLES
2017 2016
GBP GBP
Trade payables 38,711 140,740
Taxation and social security 8,542 -
Other payables - 151,000
Accruals and deferred income 134,930 1,068,903
182,183 1,360,643
Included in other payables at 31 December 2016 is GBP75,500 raised from the Directors in respect of Convertible Unsecured Loan Stock 2016 together with accrued interest thereon of GBP75,500.
Convertible Unsecured Loan Stock 2016
In October and December 2016, the Company raised GBP75,500 under the Convertible Unsecured Loan Stock 2016 instrument issued on 26 October 2016. In January and February 2017, the Company raised a further GBP37,500 under the instrument. From the total of GBP113,000, the following amounts were raised from the directors:
Director GBP
D Boylan 20,000
C Theis* 67,000
R Patel** 3,000
A Yeo 10,000
N Fitzpatrick*** 10,000
T Corrado 3,000
--------
Total 113,000
--------
* GBP57,000 from Chris Theis's Pension fund and GBP10,000 from Networkguru Limited, a company owned and controlled by Chris Theis' son
** Including GBP1,500 from Adler Shine LLP, a firm in which Rakesh Patel has an interest. *** From Ocean Park Developments Limited, a company controlled by N Fitzpatrick
At the option of the loan stockholder, on an Admission of the Company to AIM or other recognised investment exchange, the loan would either be convertible into shares at the price at which the placing associated with the listing occurs or would be repayable out of the placing proceeds together with 100% interest to compensate for the risk associated with the loan. On the Standard Listing of the Company in March 2017, the loans were either repaid or converted into shares. Directors loans of GBP198,000 (including related interest of GBP106,500) were converted into shares. In total GBP203,000 was converted into shares, and GBP23,000 was repaid of which GBP21,500 related to loans from Directors.
14. SHARE CAPITAL
Allotted, called up and fully
paid - Ordinary Shares
Ordinary Shares Ordinary Shares
of 0.1p each of 40p each
no GBP no GBP
At 1 January 2016 21,445,221 8,578,088
Share issues
On 23 March 2016 the company
issued 62,500 Ordinary shares
at par 62,500 25,000
On 4 April 2016 the company issued
69,375 Ordinary shares at par 69,375 27,750
On 10 May 2016 the company issued
400,000 Ordinary shares at par 400,000 160,000
On 20 May 2016 the company issued
25,000 Ordinary shares at par 25,000 10,000
On 2 June 2016 the company issued
12,500 Ordinary shares at par 12,500 5,000
22,014,596 8,805,838
In October 2016, the Company
passed an ordinary resolution
to subdivide the existing 22,014,596
Ordinary shares of 40 pence each
into 22,014,596 New Ordinary
shares of 0.1 pence and 22,014,596
Deferred shares of 39.9 pence.
The above subdivision also applies
to outstanding share options
and warrants in October 2016. 22,014,596 22,014 (22,014,596) (8,805,838)
At 31 December 2016 22,014,596 22,014 - -
On 30 March 2017 the company
issued 1,400,000 Ordinary shares
at par 140,000,000 140,000
On 16 May 2017 the company issued
20,300,000 Ordinary shares at
par on conversion of loans 20,300,000 20,300
On 16 May 2017 the company issued
13,629,206 Ordinary shares at
par in satisfaction of invoices 13,629,206 13,629
At 31 December 2017 195,943,802 195,943
The ordinary shares shall confer upon the holders the right to receive dividends and other distributions and participate in the income or profits of the company, provided that the Ordinary shares shall not confer upon the holders the rights to receive dividends paid, made or declared of the proceeds of the sale of assets held by the Company at 10 October 2016 and included on the Company's Balance Sheet as "Investments - Available for Sale" as at the date of the General Meeting (the "Legacy Assets").
The deferred shares shall confer upon the holders the following rights and shall be subject to the following restrictions, not withstanding any other provisions in these Articles:
Return of Capital
On return of assets on a winding up of the Company after the holders of Ordinary shares have received the aggregate amount paid up thereon plus GBP10,000,000 for each such share held by them, there shall be a distribution to the holders of deferred shares an amount equal to the nominal value of shares held and thereafter any surplus held will be distributed to holders of ordinary shares.
Dividends
Holders of deferred shares have no rights to dividends or other distributions or to participate in the income and profits of the company, except that deferred shareholders have a right to receive any dividends declared, made or paid out of the proceeds of the sale of Legacy Assets.
Transfers
The company may acquire all or any of the deferred shares in issue at any time for no consideration.
15 RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES
2017 2016
GBP GBP
Operating loss (585,533) (782,195)
(Increase)/decrease in debtors 81,722 (83,730)
Increase/(decrease) in creditors within
one year (1,178,462) 632,638
Depreciation - 1,411
Share based payment 403,755 -
Convertible loan note interest (38,500) (75,500)
Net cash outflow from operating activities (1,317,018) (307,376)
16. CASH & CASH EQUIVALENTS
2017 2016
GBP GBP
Cash at bank and in
hand 159,505 23,672
The fair value of cash and cash equivalents at 31 December
2017 was GBP159,505 (2016: GBP23,672).
17. FINANCIAL INSTRUMENTS
The Company's financial instruments comprise cash and cash equivalents and various other items, such as available for sale investments and trade receivables and payables, which arise directly from its operations. It is, and has been throughout the period under review, the Company's policy to ensure that there is no trading in financial instruments. The main purpose of these financial instruments is to finance the Company's operations.
Categories of Financial Instruments
2017 2016
GBP GBP
Financial Assets
Cash and cash equivalents 159,505 23,672
Trade and other receivables 8,978 90,700
168,483 114,372
Financial Liabilities
Trade and other payables 182,183 1,209,643
Convertible loan notes - 151,000
182,183 1,360,643
Net Fianancial Liabilities (13,700) (1,246,271)
Financial Assets and Liabilities
Financial assets and financial liabilities are recognised on the Company's balance sheet when the Company becomes party to the contractual provisions of the instrument.
Financial Risk Factors
The Company's activities expose it to liquidity risk. The Company's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company's financial performance.
Liquidity Risk
The Company has to date financed its operations from cash reserves funded from share issues. Management's objectives are now to manage liquid assets in the short term through closely monitoring costs.
The Company has no borrowing facilities that require repayment and therefore has no interest rate risk exposure.
Fair Values of Financial Assets and Liabilities
The Directors consider that the fair value of the Company's financial assets and liabilities are not considered to be materially different from their book values.
18. SHARE OPTIONS
The following share options have been granted by the Company and are outstanding:
Date Number Granted Exercised Lapsed Number Weighted Expiry
of grant of ordinary during during during of ordinary average date
shares year year year shares exercise
under option under option price
at 1 January at 31 December
2016 2016
03/05/2011 750,000 - - - 750,000 GBP2.80 02/05/2021
03/05/2011 150,000 - - - 150,000 GBP2.80 02/05/2021
23/05/2013 1,375,000 - - - 1,375,000 40p 23/05/2020
Total 2,275,000 - - - 2,275,000 GBP1.35
------------ -------------- -------- ---------- -------- ---------------- ---------- -----------
Date Number Granted Exercised Lapsed/ Number Weighted Expiry
of grant of ordinary during during waived of ordinary average date
shares year year during shares exercise
under option year under option price
at 1 January at 31 December
2017 2017
03/05/2011 750,000 - - (150,000) 600,000 GBP2.80 02/05/2021
03/05/2011 150,000 - - (150,000) - GBP2.80 02/05/2021
23/05/2013 1,375,000 - - (1,375,000) - 40p 23/05/2020
30/03/2017 - 32,500,000 - - 32,500,000 0.1p 29/03/2027
30/03/2017 - 28,375,000 - - 28,375,000 1p 29/03/2027
30/03/2017 - 12,312,500 - - 12,312,500 2p 29/03/2027
Total 2,275,000 73,187,500 - (1,675,000) 73,787,500 3p
------------ -------------- ----------- ---------- ------------ ---------------- ---------- -----------
All options outstanding at the year-end are exercisable at that date.
The following warrants have been granted by the Company:
Date Number Granted Exercised Lapsed Number Weighted Expiry
of grant of ordinary during during during of ordinary average date
shares year year year shares exercise
under option under option price
at 1 January at 31 December
2016 2016
21/11/2013 2,187,500 - (12,500) (2,175,000) - 40p 20/11/2016
10/05/2016 - 125,000 - (125,000) - 40p 20/11/2016
------------ -------------- -------- ---------- ------------ ---------------- ---------- -----------
Total 2,187,500 125,000 (12,500) (2,300,000) - -
------------ -------------- -------- ---------- ------------ ---------------- ---------- -----------
Date Number Granted Exercised Lapsed Number Weighted Exercise
of grant of ordinary during during during of ordinary average date
shares year year year shares exercise
under option under option price
at 1 January at 31 December
2017 2017
30/03/2017 - 1,400,000 - - 1,400,000 1p 29/03/2019
Total - 1,400,000 - - 1,400,000 1p
------------ --------------- ---------- ---------- -------- ---------------- ---------- -----------
The fair value of equity settled share options and warrants granted is estimated at the date of grant using a Black-Scholes option pricing model, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model:
Options Options Options Warrants
--------------------- ------------ ------------ ------------------ ---------
Date of grant 03 May 2011 23 May 2013 30 Mar 2017 30 Mar
2017
Expected volatility 54% 54% 33.9% 33.9%
Expected life 3.5 years 3.5 years 3 years 3 years
Risk-free interest 1.72% 0.55% 0.18% 0.18%
rate
Expected dividend - - - -
yield
Possibility of - - - -
ceasing employment
before vesting
Fair value per - - - -
option
0.014p 0.004p 0.9p/0.243p/0.1p 0.243p
--------------------- ------------ ------------ ------------------ ---------
The expense recognised by the Company for share based payments during the year ended 31 December 2017 was GBP403,755 (2016: GBPNil).
The average volatility is used in determining the share based payment expense to be recognised in the period. This was calculated by reference to the standard deviation of the share price over the preceding 12-month period.
Movement in the number of options and warrants outstanding and their related weighted average exercise price are as follows:
At 31 December 2017 At 31 December 2016
Number Weighted average Number of Options & Weighted average
of exercise price per Warrants exercise price per
Options share (pence) share (pence)
&
Warrants
At 1 January 2,275,000 135p 4,462,500 88p
Granted 74,587,500 1p 125,000 40p
Exercised - - (12,500) 40p
Expired or waived (1,675,000) 83p (2,300,000) 40p
------------------- ----------------------- ---------------------- ---------------------- ----------------------
At 31 December 75,187,500 3p 2,275,000 135p
------------------- ----------------------- ---------------------- ---------------------- ----------------------
The weighted average remaining contractual life of options as at 31 December 2017 was 9.2 years (2016: 3.8 years).
19. RELATED PARTY TRANSACTIONS
During the year Adler Shine LLP, a firm in which R Patel is a partner and who was a director until May, invoiced the Company GBP47,984 (2016: GBP96) for assisting in the Standard Listing of the Company, provision of bookkeeping and accountancy services, and provision of payroll and auto-enrolment pension services. The above transactions were on a commercial arm's length basis.
R. Patel charged the Company GBP7,500 for work done in assisting in the Standard Listing of the Company
During the year, the director C. Theis charged the Company GBP7,500 for assisting in the Standard Listing of the Company.
During the year the following shares were issued at par to directors:
Director Shares issued --------------- -------------- C Theis 11,400,000 A Yeo 4,500,000 N Fitzpatrick 2,000,000 T Corrado 600,000
The following share options were held by the directors during the year:
Director Date of Held at Lapsed Granted Held at Exercise
grant 1 January during during 31 December price
2017 the year the Year 2017
---------- ------------ ----------- ------------ ----------- ------------- ---------
D Boylan 23/05/2013 250,000 (250,000) - - GBP0.40
D Boylan 03/05/2011 150,000 (150,000) - - GBP2.80
C Theis 23/05/2013 875,000 (875,000) - - GBP0.40
D Boylan 30/03/2017 - - 3,000,000 3,000,000 GBP0.001
D Boylan 30/03/2017 - - 5,125,000 5,125,000 GBP0.01
D Boylan 30/03/2017 - - 2,562,000 2,562,000 GBP0.02
C Theis 30/03/2017 - - 20,000,000 20,000,000 GBP0.001
C Theis 30/03/2017 - - 16,000,000 16,000,000 GBP0.01
C Theis 30/03/2017 - - 6,500,000 6,500,000 GBP0.02
A Yeo 30/03/2017 - - 8,500,000 8,500,000 GBP0.001
A Yeo 30/03/2017 - - 6,500,000 6,500,000 GBP0.01
A Yeo 30/03/2017 - - 2,875,000 2,875,000 GBP0.02
----------- ------------ ----------- -------------
1,047,500 (1,047,500) 71,062,000 71,062,000
----------- ------------ ----------- -------------
20. ULTIMATE CONTROLLING PARTY
The Company considers that there is no ultimate controlling party.
21. INVESTMENT IN SUBSIDIARIES
As at 31 December 2017 the company held more that 20% of the share capital in the following companies:
Subsidiary Undertaking Country Class Shares Principal
of Incorporation held Activity
Path (Germany) Limited UK Ordinary 100% Dormant
22. CONTINGENT FINANCIAL COMMITMENTS
On 14 December 2017 the Company entered into a conditional farm-in agreement with 5P Energy GmbH for the acquisition of a 50% participating interest in the producing Alfred-Elze II Licence and gas field. Under the terms of this farm-in agreement the Company has the following conditional commitments:
- EUR5m payable on completion of the agreement which is conditional upon the Company's admission to trading on AIM - EUR2m payable on the declaration of commercial production from the Z4 well.
The Company has also committed to cover certain costs associated with the project up to a maximum of EUR10m for the drilling, logging, testing and completion of one or more new wells and if agreed, the acquisition of 3D seismic over the field, plus 50% of Z4 costs incurred on or after 1 January 2018. Additional cash payments may become payable if certain milestones are successfully met following completion.
23. SUBSEQUENT EVENTS
On 3 April 2018 the Company constituted an instrument to issue GBP150,000 nominal convertible unsecured loan stock 2018. On admission of the Company to AIM or other recognised investment exchange, the convertible loan notes are, at the option of the loan note holder, either convertible into shares at the price at which the placing associated with the listing occurs or will be repayable out of the placing proceeds together with 100% interest to compensate for the risk associated with the loan. If the listing does not occur before 31 July 2018 the loan note holder may convert the loan together with interest into fully paid Ordinary Shares in the Company at the nominal value of an Ordinary Share.
Subsequently the Company raised GBP68,000 under this instrument. The following amounts were raised from the Directors:
Director Amount GBP ---------- ----------- C Theis 25,000 A Yeo 25,000 Total 50,000
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
FR FIMJTMBMMBIP
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