Accounts for the period ended 31 March 2016

RNS Number : 3820K

Levrett PLC

21 September 2016

 

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Levrett Plc

("Levrett" or "the Company")

Results for the period ended 31 March 2016

Levrett, a Company formed to acquire a target company with realisable or developed commercial technologies in the pharmaceutical and biotechnology sector, announces its results for period ended 31 March 2016.

Enquiries:
Levrett Plc Pascal Hughes, CEO	[phone]
Whitman Howard Limited Niall Baird / Nick Lovering	[phone]
Gable Communications Limited John Bick	[phone] [phone] [e-mail]

STRATEGIC REPORT

The Directors present their Strategic Report on the Company for the period ended 31 March 2016.

RESULTS

The Company made a loss after taxation of £350,420

REVIEW OF THE BUSINESS AND FUTURE DEVELOPMENTS

Levrett plc is an investing company and the directors intend to utilise the Company's cash resources in line with the investing policy in the pharmaceutical industry. Having identified a number of possible acquisition targets for Levrett, as announced to the market on the 16 September 2015, the Company has signed a non-binding letter of intent to acquire the entire issued share capital of Nuformix Limited, a UK incorporated company operating in the co-crystal technology sector, for new shares in the Company (the "Acquisition"). Nuformix has a number of exciting patents and IP which Levrett intends to commercialise.

Significant progress has been made on legal and financial due diligence and the documentation required for the Acquisition, which will constitute a Reverse Takeover under the Listing Rules since, inter alia, in substance it will result in a fundamental change in the business of Levrett.

KEY PERFORMANCE INDICATORS

The key performance indicators are set out below:

		2016
Gross financial assets - investments and cash		502,213
Net asset value - fully diluted per share		(0.0072)p
Closing share price		2.25p
		===========

KEY RISKS AND UNCERTAINTIES

Currently the principal risks relate to the completion of the Acquisition, and whether, if unsuccessful, the Company could find sufficient suitable investments to ensure compliance with the requirements of its continued listing on the standard market.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Details of the Company's financial risk management objectives and policies are set out in Note 14 to these financial statements.

GOING CONCERN

As disclosed in Note 2, after making enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future.  For this reason, they continue to adopt the going concern basis in preparing the financial statements.

On behalf of the Board

Pascal Hughes

CEO

21 September 2016

INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 31 MARCH 2016

		From incorporation to 31 March
			2016
	Note		£
Continuing operations:
Administrative expenses			(350,420)
			-------------------
LOSS FOR THE PERIOD BEFORE TAXATION			(350,420)
Taxation	7		-
LOSS FOR THE PERIOD AND TOTAL COMPREHENSIVE			-------------------
LOSS FOR THE PERIOD			(350,420)
			=========
LOSS PER SHARE - basic and diluted from continuing operations	13		(0.0058)p

LEVRETT PLC

STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 31 MARCH 2016

	Share	Share	Share option	Retained	Total
	Capital	Premium	Reserve	Losses	Equity
	£	£	£	£	£
Loss for the period and total	-	-	-	(350,420)	(350,420)
comprehensive loss
Shares issues	95,750	-	-	-	95,750
Share premium (net of expenses)		737,440	-	-	737,440
Grant of share options	-	-	19,570	-	19,570
	-----------------	-----------------	-----------------	-----------------	-----------------
Balance at 31 March 2016	95,750	737,440	19,570	(350,420)	502,340
	========	========	========	========	========

STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2016

			2016
		Note	£
CURRENT ASSETS
Trade and other receivables		8	42,578
Cash and cash equivalents		9	502,213
			-------------------
TOTAL ASSETS			544,791
			=========
CURRENT LIABILITIES
Trade and other payables		10	42,451
			-------------------
NET ASSETS			502,340
			=========
EQUITY
Share capital		11	95,750
Share premium account		11	737,440
Share option reserve			19,570
Retained earnings			(350,420)
			--------------------
TOTAL EQUITY			502,340
			==========

STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 31 MARCH 2016

			2016
CASH FLOWS FROM OPERATING ACTIVITIES		Note	£
Loss after taxation			(350,420)
Adjustments for:
Increase in trade and other receivables			(42,578)
Increase in trade and other payables			42,451
NET CASH OUTFLOW FROM OPERATING ACTIVITIES			------------------
			(350,547)
			------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issue of shares (net of costs)			852,760
			------------------
NET CASH INFLOW FROM FINANCING ACTIVITIES			852,760
			========
NET INCREASE IN CASH AND CASH			502,213
EQUIVALENTS
Cash and cash equivalents brought forward			-
			------------------
CASH AND CASH EQUIVALENTS CARRIED FORWARD		9	502,213
			========

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 MARCH 2016

1.         GENERAL INFORMATION

             Levrett plc is a public limited company incorporated in the United Kingdom. The Company's principal activities are described in the Directors' Report.

2.         ACCOUNTING POLICIES

             The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.  The financial statements have been prepared using the measurement bases specified by IFRS for each type of asset, liability, income and expense.  The measurement bases are more fully described in the accounting policies below.

             The financial statements are presented in pounds sterling (£) which is the functional currency of the company.

             An overview of standards, amendments and interpretations to IFRSs issued but not yet effective, and which have not been adopted early by the Company are presented below under 'Statement of Compliance'.

Going Concern

The directors have prepared cash flow forecasts through to 31 December 2017 which assumes no significant investment activity is undertaken unless sufficient funding is in place.  The expenses of the Company's continuing operations are minimal and the cash flow forecasts demonstrate that the Company is able to meet these liabilities as they fall due.  On this basis, the Directors have a reasonable expectation that the Company has adequate resources to continue operating for the foreseeable future.  For this reason, they continue to adopt the going concern basis in preparing the Company's financial statements.

Critical Accounting Estimates and Judgements

The preparation of financial statement in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting year.  These estimates and assumptions are based upon management's knowledge and experience of the amounts, events or actions.  Actual results may differ from such estimates.

The estimates and assumptions that may cause material adjustment to the carrying value of assets and liabilities relate to:

Share based payments

The calculation of the fair value of equity-settled share based awards and the resulting charge to the statement of comprehensive income requires assumptions to be made regarding future events and market conditions.  These assumptions include the future volatility of the Company's share price.  These assumptions are then applied to a recognised valuation model in order to calculate the fair value of the awards.

Statement of compliance

The financial statements comply with IFRS as adopted by the European Union.  At the date of authorisation of these financial statements the following Standards and Interpretations affecting the Company, which have not been applied in these financial statements, were in issue, but not yet effective.  The company does not plan to adopt these standards early.

·      IFRS 9 Financial Instruments

·      IFRS 15 Revenue from Contracts with Customers

·      IAS 16 and IAS 38 (amendments) Clarification of Acceptable Methods of Depreciation and Amortisation

·      IAS 27 (amendments) Equity Method in Separate Financial Statements

2.         ACCOUNTING POLICIES (continued)

Share based payments

All share based payments are accounted for in accordance with IFRS 2 - "Share-based payments".  The Company issued equity-settled share based payments in the form of share options to certain directors and employees.  Equity settled share based payments are measured at fair value at the date of grant.  The fair value determined at the grant date of equity-settled share based payments is expensed on a straight line basis over the vesting period, based on the Company's estimate of shares that will eventually vest.

Fair value is estimated using the Black-Scholes valuation model.  The expected life used in the model has been adjusted, on the basis of management's best estimate for the effects of non-transferability, exercise restrictions and behavioural considerations.  At each balance sheet date, the Company revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market based vesting conditions.  The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to retained earnings.

Taxation

Current taxation is the taxation currently payable on taxable profit for the year.

Deferred income taxes are calculated using the liability method on temporary differences.  Deferred tax is generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases.  However, deferred tax is not provided on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit.  Temporary differences include those associated with shares in subsidiaries and joint ventures and are only not recognised if the Company controls the reversal of the difference and it is not expected for the foreseeable future.  In addition, tax losses available to be carried forward as well as other income tax credits to the Company are assessed for recognition as deferred tax assets.

Deferred tax liabilities are provided in full, with no discounting.  Deferred tax assets are recognised to the extent that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable income.  Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the statement of financial position date.  Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income statements, except where they relate to items that are charged or credited to equity in which case the related deferred tax is also charged or credited directly to equity,

Financial assets

The Company's financial assets comprise cash and cash equivalents.

Trade and other receivables

Trade and other receivables are recognised and carried at original invoice value less an allowance for any uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified.

Cash and Cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

             Financial liabilities

             The Company's financial liabilities comprise trade payables.  Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Company becomes a party to the contractual provisions of the instruments.

             Trade payables

             Trade payables are initially measured at fair value and are subsequently measured at amortised cost, using the effective interest rate method.

             Equity

             Equity comprises the following:

·      "Share capital" represents the nominal value of equity shares.

·      "Share premium" represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issue.

·      "Share option reserve" represents the fair value of options issued

·      "Retained losses" represents retained losses.

3.         SEGMENTAL INFORMATION

The Company is organised around business class and the results are reported to the Chief Operating Decision Maker according to this class.  There is one continuing class of business, being the investment in the pharmaceutical sector.

             Given that there is only one continuing class of business, operating within the UK no further segmental information has been provided.

4.	EXPENSES BY NATURE		2016
			£
	Operating rentals		34,000
	Wages and salaries		36,000
	Social security costs		3,673
	The average number of persons employed by the Company during the period was l.

5.	AUDITOR'S REMUNERATION		2016
			£
	During the period the Company obtained the following services from the Company's auditor:
	Fees payable to the Company's auditors for the audit of the Company's		10,000
	annual accounts
	Fees payable to the Company's auditors for other services:
	Other services pursuant to legislation		1,000
	Tax services		2,000
			-----------------
			13,000
			========

6.	DIRECTORS' REMUNERATION
	The company has one employee and the key management of the Company are the Directors.  The amounts paid to the Directors, is as follows:
				2016
	Director			£
	Pascal Hughes			18,000
	John Lidgey			8,000
	Anthony Reeves			8,000
				------------------
				34,000
				=========

7.	TAXATION			2016
				£
	Current tax on income for the period			-
				------------------

The tax on the Company's profit before tax differs from the theoretical amount that would arise using the weighted average rate applicable to profits of the consolidated entities as follows:

			2016
			£
	Factors affecting the tax charge
	Loss before tax		(350,420)
			------------------
	Profit/(loss) before tax multiplied by rate of corporation tax in the UK
	of  20%		(70,084)
	Deferred tax not recognised		70,084
			------------------
	Total tax		-
			=========

No deferred tax asset has been recognised as Directors cannot be certain that future profits will be sufficient for this asset to be realised.  As at 31 March 2016 the Company has tax losses carried forward of approximately £350,420      

Factors affecting future tax charges  

UK corporation tax rates are falling from the current rate of 20% to 19% for the financial year beginning 1 April 2017 and to 17% for the financial year beginning 1 April 2020.          

8.	TRADE AND OTHER RECEIVABLES		2016
			£
	VAT Debtor		42,578
			=========

The fair value of trade and other receivables is considered by the Directors not to be materially different to carrying amounts.

9.	CASH AND CASH EQUIVALENTS		2016
			£
	Cash at bank		502,213
			=========

The Directors consider that the carrying amount of cash and cash equivalent represents their fair value.

10.	TRADE AND OTHER PAYABLES		2016
			£
	Trade payables		36,342
	Accrued charges		6,109
			------------------
			42,451
			=========

The fair value of trade and other payables is considered by the Directors not to be materially different to carrying amounts.

11.	ISSUED SHARE CAPITAL	Number of	Nominal	Share
		Shares	Value	premium
	Issued and fully paid	No.	£	£
	At 31 March 2016:
	Ordinary shares of 0.001p each
	Issued on incorporation	50,000,000	50,000	-
	Issued on 17 December 2015	45,750,000	45,750	757,010
		------------------	-------------------	------------------
		95,750,000	95,750	757,010
		=========	=========	========

12.       SHARE OPTIONS AND WARRANTS         

             EQUITY-SETTLED SHARE OPTION SCHEME

             The company operates share-based payment arrangements to remunerate directors and key employees in the form of a share option scheme.  Equity-settled share-based payments are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant.  The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company's estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.

             The fair value of these warrants was determined using the Black-Scholes option pricing model and was 0.020438p per option.

             The significant inputs to the model in respect of the warrants granted in the period ending 31 March 2016 were as follows:

			2016
	Grant date shared price		4p
	Exercise share price		2p
	No. of share options		957,500
	Risk free rate		0.5%
	Expected volatility		30%
	Expected option life		2 years

The total share-based payment expense recognised against share premium for the period ended 31 March 2016 in respect of warrants granted was £19,570.

SHARE OPTIONS AND WARRANTS (continued)

The following table sets out the details of the warrants granted:

					Number of
					options at
			Issued in	Exercised	31 March	Exercise	Expiry
	Warrant holder		the year	in the year	2016	price	date
	EGR Broking Limited		957,500	-	957,500	2p	12/07/17
	Rampart Management Limited		12,000,000	-	12,000,000	4p	07/12/18
	Ambeson Limited		11,000,000	-	11,000,000	4p	07/12/18
	James Bligh		10,000,000	-	10,000,000	4p	07/12/18
	Pascal Hughes		5,000,000	-	5,000,000	4p	07/12/18
	OBB Trading Limited		3,000,000	-	3,000,000	4p	07/12/18
	Dielle Regan		2,500,000	-	2,500,000	4p	07/12/18
	Robert Regan		2,500,000	-	2,500,000	4p	07/12/18
	Jack Dibble		1,400,000	-	1,400,000	4p	07/12/18
	Fulcrum Management Services		1,000,000	-	1,000,000	4p	07/12/18
	Anthony Reeves		1,000,000	-	1,000,000	4p	07/12/18
	GB Trust Co Limited		600,000	-	600,000	4p	07/12/18
			--------------------	--------------------	--------------------
			50,957,500	-	50,957,500
			==========	==========	==========

As a result of the placing on the 7 December 2015, the company has created and issued a total of 50,000,000 warrants to the original founder shareholders. These warrants may be exercised at any time on or before 7 December 2018 and shall entitle the warrant holder to subscribe for one Ordinary share for each warrant at 4p.

13.          LOSS PER SHARE

The calculation of loss per ordinary share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year. 

						2016
						Loss		Weighted Average number of shares		Per shares amount pence
						£
	Basic and diluted earnings per share					(350,420)		60,090,214		(0.0058)p

14.       FINANCIAL INSTRUMENTS

                CAPITAL MANAGEMENT

                The Company's objectives when managing capital are:

·       to safeguard the Company's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders;

·       to support the Company's growth; and

·       to provide capital for the purpose of strengthening the Company's risk management capability.

The Company actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Company and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities.  Management regards total equity as capital and reserves, for capital management purposes.

                CREDIT RISK

The main credit risk relates to liquid funds held at banks.  The credit risk in respect of these bank balances is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.

                LIQUIDITY RISK

                The Company seeks to manage financial risk, to ensure sufficient liquidity is available to meet foreseeable needs.

                An analysis of trade and other payables is given in note 10.  These payables are payable within a year.

                CATEGORIES OF FINANCIAL INSTRUMENTS

The IAS 39 categories of financial asset included in the statement of financial position and the headings in which they are included are as follows:

			2016
			£
	Financial assets:
	Cash and bank balances		502,213
	Loans and receivables		42,578
	Financial liabilities at amortised cost:
	Trade and other payables		(42,451)
			=========

15.       RELATED PARTY TRANSACTIONS

During the period the Company was invoiced £18,000 for management services by Pascal Hughes, a director, £8,000 for management services by John Lidgey, a director, and £8,000 for management services by Anthony Reeves, (a director).

16.       POST PERIOD END EVENTS

             On 16 September 2016, the Company announced that it has signed a non-binding letter of intent to acquire the entire issued share capital of Nuformix Limited.

17.       ULTIMATE CONTROLLING PARTY

             The Directors do not consider there to be a single ultimate controlling party.

 

END

 

 

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