Catena : 12-Month 2020 Interim Report

CATENA GROUP PLC

INTERIM REPORT AND CONDENSED FINANCIAL

STATEMENTS

Twelve months ended 31 December 2020

31 March 2021

Chairman's Statement

Catena Group plc ("Catena" or the "Company"), the AIM listed holding company, is pleased to announce its interim results for the 12 months ended 31 December 2020.

Chairman's Statement and Chief Executive's Review

We are pleased to provide these interim results and update for the 12 month-period ended 31 December 2020. These results are being released in an interim format due to the Company's decision to change its accounting reference date from 31 December to 31 March. The Company will release audited results for the 15 months ending 31 March 2021 by 30 September 2021.

In January 2020, the Company announced its new strategic focus on artificial intelligence and machine learning. In the last year, significant progress has been made to implement this strategy, with an initial investment in Insight Capital Partners Limited ("Insight") in March 2020 and extensive progress toward the announced potential acquisition of Insight in the past months.

Also in this time, and as an indication of the investor support for the new strategy, Catena has completed two successful fundraises, raising £2.3 million to support its initial investment in Insight and for general working capital purposes.

As a result of the Covid-19 pandemic and the closure of schools for much of the year, trading has been severely impacted at the Group's school sport coaching subsidiary, Sport in Schools Limited ("SSL"). This has had an adverse impact on profitability and cash flow. However, SSL has taken aggressive action to reduce costs and utilise the various Government support schemes. Due to these efforts and that of a committed and industrious SSL team, the business is well positioned to recover as schools have re-opened and restrictions continue to be lifted. The directors would like to thank the SSL staff for their extraordinary work during these challenging times.

For the 12 months ended 31 December 2020 we are reporting a total comprehensive loss of £0.5 million (31 December 2019: loss £0.2 million). The directors are not recommending the payment of a dividend.

Balance Sheet and Fundraising

Despite operational challenges at the Group's Sport In Schools business, a combination of taking advantage of various Government Covid-19 initiatives together with two successful fundraises, has left the Group with a relatively strong balance sheet as at the period end. The Group had net current assets of £0.9 million (2019: £0.5 million) and cash of £1.0 million (2019: £0.6 million).

During the twelve-month period, Catena successfully conducted two fundraises. More recently in September 2020, Catena conducted an equity subscription raising gross proceeds of £0.8 million (priced at 50 pence per ordinary share), the proceeds being used for ongoing working capital purposes of the Group. Earlier in the year in March 2020, Catena raised £1.5 million comprising equity subscription raising gross proceeds of £1.0 million (priced at 25 pence per share) and £0.5 million of convertible loan notes, the proceeds being used to fund Catena's £1.5 million initial investment in Insight Capital Partners Limited ("Insight").

Post period end, in March 2021, a total of 1.5 million warrants, previously issued in 2018, were exercised resulting in additional proceeds to the Company of approximately £0.3 million and the issue of 1,500,000 new ordinary shares in the Company.

On 8 March 2021, the Company entered into a short-term shareholder loan with Insight to support the ongoing product development as work on the proposed acquisition of Insight continues (the "Loan"). The Loan provides a facility to Insight for up to £400,000, is unsecured and is repayable on demand at any time. The Loan may be drawn down by Insight in part or in full and attracts an interest rate of 3% above the Bank of England's Bank Rate. Interest is accrued daily and payable on the repayment date.

Insight Capital Partners Limited ("Insight")

In March 2020, Catena acquired a 9.1 per cent. interest in the issued share capital of Insight for £1.5 million cash. At the time of the investment, Catena was also granted an option to increase its shareholding in Insight

Chairman's Statement

to 30.9 per cent. of Insight's fully diluted ordinary share capital. This investment is recognised as a non- current investment measured at cost in the balance sheet.

In September 2020, the Company announced that it had begun discussions with respect to Catena potentially acquiring the balance of the issued share capital of Insight

Pantheon Leisure Plc ("Pantheon")

Catena holds 85.87% of the issued share capital of Pantheon which in turn owns 100% of The Elms Sport in Schools ("SSL"). Pantheon as a group made a small profit of £3k for the 12- month period ended 31 December 2020 (31 December 2019: loss £36k). Pantheon's results are consolidated into the group accounts of Catena.

Sports in Schools Limited ("SSL")

SSL turnover fell by 48% in the 12-month period to £0.9 million (2019: £1.7 million). The decrease is attributable to school closures in March 2020 brought on by the Covid-19 pandemic. As a result, the profit recognised in this 12- month period was £53k compared with £120k for the prior year.

As previously set out in our 30 June 2020 Interim Results and 2019 Annual Report, SSL has taken aggressive action to reduce costs, claim under the Government job support schemes and secured further funds under the Coronavirus Business Interruption Loan Scheme (CBILS). These actions enabled the business to resume operations as schools re-opened in the autumn. As a result, revenue recovered at the end of 2020, although some activities, such as after-school clubs, were slow to resume, thus preventing a full return to pre-Covid- 19 revenue levels. The renewed school closures from the start of 2021 have continued to negatively affect revenue. However, the various government support schemes and earlier corporate actions have mitigated the financial exposure to the business.

With schools now re-opened and many activities continuing to return, albeit slowly, to pre-pandemic levels, the directors are hopeful that SSL revenue will soon recover.

Corporate governance code

In accordance with the AIM Rules regarding corporate governance our Interim Report and Company website reflect compliance with (and any departures from) the guidance set out in the QCA Corporate Governance Code.

Prospects and investment opportunities

As announced on 8 March 2021, Catena is at an advanced stage in the proposed acquisition of Insight Capital Partners Ltd ("Insight"), the data science and machine learning solutions company. The directors expect to publish an admission document shortly, which will include a circular to shareholders and notice of a general meeting to approve, among other things, the proposed acquisition of Insight. The directors are pleased with the progress made both on the acquisition as well as business and product development at Insight in preparation for the enlarged company following acquisition. Upon completion of the acquisition of Insight, and pending shareholder approval, the Company intends to change its name to Insig AI Plc in order to better represent the new operational focus of the enlarged group.

M Farnum- Schneider
Chief Executive and Interim Chairman	31 March 2021

Consolidated statement of comprehensive income for 12 months ended 31 December 2020

	Unaudited 6	Unaudited	Unaudited 6	Audited
	months -1 July	12 months	months -1 July	Year ended 31
	to 31 December	ended 31	to 31 December	December
	2020	December 2020	2019	2019
	£	£	£	£
Revenues from trading activity	433,603	883,133	739,839	1,683,272
Cost of revenues	(329,889)	(630,254)	(366,111)	(818,158)
	103,714	252,879	373,728	865,114
Administrative expenses	(551,399)	(1,186,620)	(557,237)	(1,051,971)
Other operating income
Coronavirus Job Retention Scheme		443,763
and local government grants	227,274	-

Operating loss from continuing activities

Finance income

Finance costs

Loss before taxation from continuing activities Taxation

Loss after taxation from continuing activities

Loss for the year from discontinued activities

Total comprehensive loss

Attributable to: Owners of the company Non- controlling interests

(220,411)	(489,978)	(183,509)	(186,857)
112	540	690	1,273
(1,283)	(2,193)	(2,566)	(2,566)
(221,582)	(491,631)	(185,385)	(188,150)
-	-	-	-
(221,582)	(491,631)	(185,385)	(188,150)
(749)	(2,904)	(17,565)	(30,058)
(222,331)	(494,535)	(202,950)	(218,208)
(225,849)	(494,942)	(189,106)	(213,197)
3,518	407	(13,844)	(5,011)
	(222,331)	(494,535)	(202,950)	(218,208)

Loss per share (basic and diluted)
Loss from continuing activities per		(0.0125)p		(0.0053)p
share	(0.0055)p	(0.0050)p
Loss from discontinued activities		(0.0001)p		(0.0010)p
per share	(0.0001)p	(0.0004)p
Total loss per share	(0.0056)p	(0.0126)p	(0.0054)p	(0.0063)p

Statement of financial position as at 31 December 2020

		Unaudited	Audited
		As at 31 December	As at 31 December
		2020	2019
Non- current assets	£	£
Unlisted investments (note 5)	1,500,000	-
Goodwill and patents	59,954	59,954
Property, plant and equipment	56,404	72,104
Total non-current assets	1,616,358	132,058
Current assets
Trade and other receivables	117,292	109,635
Cash and cash equivalents	1,032,065	636,779
Total current assets	1,149,357	746,414
Total assets	2,765,715	878,472
Current liabilities
Trade and other payables	223,615	267,162
Bank loan - (unsecured)	24,000	-
Lease commitments	8,333	8,333
Total current liabilities	255,948	275,495
Non-current liabilities		-
Bank loan (unsecured)	216,000
Borrowings (convertible unsecured loan notes)	500,000	-
Leasing obligations	40,619	49,294
Total non-current liabilities	756,619	49,294
Total liabilities	1,012,567	324,789
NET ASSETS
1,753,148	553,683
Equity
Share capital	2,464,664	2,408,664
Share premium	2,666,031	1,048,031
Merger reserve	325,584	325,584
Retained earnings	(3,639,664)	(3,164.722)
Equity attributable to owners of the company
1,816,615	617,557
Non-controlling interest	(63,467)	(63,874)
Total Equity		1,753,148	553,683