Principal accounting polices

While the financial information included in this final results announcement has been prepared in accordance with the recognized and measurement criteria of International Financial Reporting Standards (IFRS), this announcement does not itself contain sufficient information to comply with IFRSs. 

The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 December 2019, or year ended 31 December 2018, but is derived from those accounts. Statutory accounts for 2018 have been delivered to the Registrar of Companies and those for 2019 will be delivered following the Company's annual general meeting.

The auditor has reported on those accounts. The audit report on the group accounts was one of a disclaimer of opinion on the basis that, as a result of the sale of the US operations and the proposed sale of the Australian operations, it has not been possible to obtain access to the underlying books and records of these operations sufficient to perform an audit in accordance with International Standards on Auditing (UK) (ISAs (UK)).  As such, a limitation of scope has been placed on the auditor with regard to the results of the US and Australian operations for the year ended 31 December 2018 and statement of financial position of the Australian operations as at that date. The limitation in scope is such that the auditor is unable to form an opinion on the affairs of the Australian operations as at 31 December 2018 and on the loss for the year from the discontinued operations and the loss recognised on the measurement to fair value less costs to sell the discontinued operations of both the US and the Australian businesses.

The auditor has reported separately on the parent company financial statements of Hawkwing Plc for the year ended 31 December 2019.  The auditor's report on those accounts was unqualified and drew attention to a material uncertainty related to going concern without qualifying the report and did not contain a statement under section 498(2) and (3) of the Companies Act 2006.

The material uncertainty per their report (to be published shortly) is reproduced below:

Material uncertainty related to Going Concern

We draw attention to the 'Going concern' section of the accounting policies on page 32 of the financial statements which states that the Company has sold the US and Australian operations and terminated the trading activities of its UK operations. Since the sale of the Australian operations, the Company became an 'AIM Rule 15 cash shell' and as no acquisition was made within the allotted time, the Company's shares were suspended on 6 March 2020.

In order to continue in operation for a period of at least 12 months from the date of this report, additional funding will be required and, as set out on page 32, the directors believe that such funding will be obtained. As stated in the accounting policies, these 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.

Going concern

The Company's group sold its US businesses on 28 December 2018 and the Australian business was sold on 5 September 2019. The Company also disposed of its UK subsidiary investment in December 2019, the activities of which had already been discontinued. Consequently, the Company became an AIM Cash Shell under AIM Rule 15. The board intends to seek a business that can be reversed into.  The Company has 18 months from the date of the sale of the Australian business to complete a reverse takeover, during which period the board intends to keep costs to a minimum in order to preserve cash. If it is not possible to complete a reverse takeover or should additional funds not be obtained to sustain the Company during the foreseeable future, the going concern position of the Company would be at risk.

COVID-19 may impact the Company's ability to complete an acquisition. The Directors will continue, on an on-going basis, to review the Company's options including raising additional funding.

The requirement for the Company to obtain additional funding and to complete a reverse takeover give rise to a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern.  The Directors believe that the actions required to maintain the going concern position of the Company will be achieved and therefore the Directors have a reasonable expectation that the Company will continue in operational existence for the foreseeable future. As a result, the Board continues to adopt the going concern basis of accounting in preparing the financial statements.

Basis of non-consolidation

The Company had disposed of all subsidiary undertakings at 31 December 2019, and consequently there is no requirement to prepare consolidated financial statements. These financial statements therefore present the financial position and financial performance of the Company as a single entity.

Principal accounting polices (continued)

1.   Segmental analysis

The Company's single reportable segment is that of its activities as an investment holding company. This activity takes place wholly in the United Kingdom.

2.  Loss per share attributable to ordinary shareholders

The loss attributable to ordinary shareholders and weighted average number of ordinary shares for calculating diluted earnings per ordinary share are identical to those used for basic loss per ordinary share as at 31 December 2018 and 31 December 2019. All share options formerly in issue had expired.

The calculation of loss per share is based on the following data:

There were no shares with a dilutive, or potentially dilutive, impact (2018: nil).

3.  Operating loss

     The following are included in operating loss for the year:

The exceptional and acquisition related income/(costs) relate to:

* The arrangement costs represent fees paid by the Company in respect of the borrowing arrangements of its former subsidiary undertakings.

** Legal and professional costs in 2019 were incurred in relation to the disposal of the Company's subsidiary undertakings (see note 8 for further details). In 2018 the legal and professional costs related to advice on the sale of the US business.

*** Exceptional staff costs relate to the advance payment of an employment contract notice period. This amount is included within the staff costs figure of $532k disclosed above.

     **** The (impairment reversal)/impairment on intercompany loans relates to amounts owed by former subsidiary undertakings written off prior to disposal.

4.  Tax

The charge for the year can be reconciled to the income statement as follows:

The Company has tax losses carried forward of $272,417 (2018: $33,131) in respect of which no deferred tax asset has been recognised due to uncertainty of the Company's expected future profitability.

5.  Notes of Cash flow Statement

Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets is approximately equal to their fair value.

The Company's net cash has moved as follows during the year:        
 

6.  Annual report and accounts

The Company will shortly be publishing its annual report and accounts including a notice of AGM. These will be made available on the Company's investor relations website at www.hawkwing.co.  The AGM is to be held at 2-6 Boundary Row, London SE1 8HP at 10 a.m. on 29 June 2020.

COVID-19 arrangements

Further to UK Government instructions at the time of writing, the Company's AGM will be held "behind closed doors" and shareholders must not attend the meeting in person. The Government's compulsory measures to help combat the Covid-19 pandemic prohibit, amongst other things, public gatherings of more than two people and as such attendance at the AGM by shareholders is no longer lawful.

The AGM will be convened with the minimum necessary quorum of two shareholders (which will be facilitated by the Company) and will be held at 2-6 Boundary Row, London SE1 8HP. This address is being provided solely for information purposes in order to ensure that the AGM is properly notified, and shareholders are reminded that they must not attend in person. All valid proxy votes (whether submitted electronically or in hard copy form) will be included in any poll to be taken at the meeting.

The board of directors (the "Board") requests that shareholders vote on the resolutions being put to the AGM by appointing the chairman of the AGM as a proxy and giving voting instructions in advance, either electronically, through the CREST system or by using the enclosed Form of Proxy.

The Board understands that the AGM also serves as a forum for shareholders to raise questions and comments.  Therefore, if shareholders do have any questions or comments relating to the business of the meeting that they would like to ask the Board then they are asked to submit those questions in writing via email to AGM20@hawkwing.co by no later than 10.00 a.m. on 29 June 2020.  The Board will publish a summary of any questions received together with a written response on the Company's website as soon as practicable after the AGM. Only questions from registered shareholders of the Company will be accepted.