PATH.L Regulatory News (PATH)

27 April 2017

Path Investments plc

("Path" or the "Company)

Annual results for the year ended 31 December 2016 

Path Investments plc (TIDM: PATH), the energy investment company, is pleased to to announce its audited financial results for the year ended 31 December 2016.

Highlights

· Roll out of corporate strategy met with an encouraging response from an embattled Energy sector

· Capital reconstruction completed

· One new member of the Board

· Admission to the London Stock Exchange Official List concluded after year-end

Christopher Theis, Chief Executive of Path, commented: "We are pleased to present our first set of accounts since admission to trading on the London Stock Exchange, although the period under review was entirely prior to admission. We continue to explore a number of interesting investment opportunities as we look to deliver shareholder value through building a portfolio of low risk, cash generative, assets. We look forward to 2017 being a transformational year for Path Investments."

Enquiries:

About Path Investments

Path Investments is an investment company with the objective of acquiring oil and gas production, or near production, assets which possess a lower risk profile than exploration or development assets. The company has a highly experienced management team and has a worldwide pipeline of potential opportunities.

CHAIRMAN'S STATEMENT

Review

During 2016 the Company continued with the roll out of its corporate strategy. To recap, 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 development assets. Whilst there are 30 Non-Disclosure Agreements ("NDA's") in place with various energy industry participants, the Company has not traded in the last 12 months. However, as of the date of this document, the directors, together with the Technical Advisory team, are investigating a number of opportunities that have been presented.

The Directors are looking to create a diversified portfolio of assets which will be mindful of the maturity of asset developments, life of income stream and the potential for growth. However, the Company does not intend to be limited to a specific geographical region or geological basin and whilst proposed investments may likely involve non-operated assets they may range from a minority position to majority ownership.

To assist with preparations for our return to quotation on the London Stock Exchange a General Meeting was held in October 2016. At that meeting shareholders gave overwhelming support to a capital reconstruction, which subdivided each ordinary 40p nominal value share into one Ordinary share of 0.1p and one Deferred share of 39.9p. The Deferred shares confer the holders the right to receive dividends paid, made or declared solely from the sale of the Company's investments in Turkey, which have been fully provided for in the Accounts.

We were delighted to welcome Tommaso Corrado to the Board during the year, who brings a wealth of direct and relevant experience to the business. Tommaso has joined as a Non-Executive Director and has already been instrumental in widening our contacts within the private equity and family office community.

Subsequent to year-end, the Company was successfully admitted to the Standard List segment of the Official List of the London Stock Exchange. Our Financial Adviser and Broker, Shard Capital, in conjunction with our legal, accounting and PR advisers, facilitated a fundraising and Admission on the 30th March 2017.

The Board remains strongly of the belief, shared by Shard Capital and our Institutional and private shareholders, that the time is right for the acquisition of a portfolio of economic, income-producing energy assets, which forms the backbone of our corporate strategy.

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 objective of the Company is to acquire oil and gas production, or near production, assets which possess a lower risk profile than exploration or development assets.

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 professional and associated expenses related to the Standard Listing, placing, advisory and consultancy fees, along with general administration expenses.

Subsequent to the year-end, 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 £937,904 were waived and the Company raised approximately £1.4 million before expenses through the subscription of new ordinary shares.

The Company does not have any specific acquisitions under formal consideration, but intends to acquire direct interests in oil and gas production licences. There is no specific expected target value for acquisitions, although the Company is targeting acquisitions within a twelve-month timescale from Admission.

The Directors continue to monitor the severe difficulties that some companies operating in exploration and production in the oil and gas sector are currently facing in the market and believe that the sharp decline in the oil price over the last 3 years to around $50 a barrel (Brent) today, alongside the erosion of investor confidence, has created a window of opportunity for well capitalised oil and gas investors to acquire interests in assets owned by financially distressed oil and gas businesses. Initial targets are assets amongst the 500+ quoted SME energy companies on AIM, ASX and TSX Venture Exchanges. The identification of investments will be around the acquisition of quality assets which are, in the opinion of the Directors, underperforming, undeveloped and/or undervalued. The Company will apply strict financial hurdles which will include minimum cash pay back periods, a focus on Internal Rates of Return ("IRR") and a requirement to be economic at today's prices.

The Company believes it may be possible to build a portfolio of income producing assets which can deliver investors a premium yield as well as offering development potential. The Company's efforts in identifying a prospective target company, business or asset will not be limited to a particular geographic region except that it will not invest in businesses with substantial exposure to countries with significant geopolitical or economic risks.

The Board collectively has many years' experience between them, comprising both practical energy and a specialty in assessing and investing in early stage projects.

It is intended that further appropriate appointments will be made, when the Company makes an acquisition, with specific experience in the local area of the acquisition. The Company intends to be an active rather than a passive investor in respect of any acquisition.

Financial Review

Loss for the year

In the year ended 31 December 2016, the Company recorded a loss of £1,907,687 . There was no income in the period. The loss for the year was arrived at after making full provision against the residual carrying value of its investments.

The loss for the year included salary accruals amounting to £262,170. These were waived on the successful Standard Listing of the Company in March 2017.

Cash flow

During the year, the Company raised £227,750 from an issue of its equity to fund its working capital needs.

As at 31 December 2016 the Company held £23,672 in the bank account.

Subsequent to the year-end, in relation to its Listing, the Company issued a further 140 million additional Ordinary Shares for a subscription price of £0.01, raising a further £1.4 million before expenses.

strategic report

The directors present their strategic report on the company for the year ended 31 December 2016.

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 development assets.

Business Review

During 2016, the Company fully impaired the legacy investments in which it had minority stakes and changed its investment strategy to seeking to invest in or acquire oil and gas production, or near production, assets which possess a lower risk profile than exploration or development assets. In March 2017, in order to pursue this strategy, the company raised gross proceeds of £1.4M 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

Since the Company has only recently been funded for its proposed activities which is to seek suitable investment opportunities, it does not at present have any key performance indicators.

Positon of the Company's business at the year-end

At the year-end, the Company's Statement of Financial Position shows net liabilities totalling £1,246,271.

The future plans of the Company

The Company is utilising funds raised from share issues subsequent to the year-end in researching potential investments in oil and gas producing or near producing opportunities that may form its first investment.

Employees

The Company's only employees are its three executive directors. There are no other employees.

Principal risks and uncertainties

The Company is subject to a variety of risks including those which derive from the nature of the oil and gas development and production business and relate to the country in which it conducts its activities. Outlined below is a description of the principal risk factors that may affect performance. Such risk factors are not intended to be presented in any order of priority. Any of the risks, as well as the other risks and uncertainties referred to in this report, could have a material adverse effect on business performance. In addition, the risks set out below may not be exhaustive and additional risks and uncertainties, not presently known to the Company, or which the Company currently deems immaterial, may arise or become material in the future. Executive management review the potential risks, assess the likelihood of these risks occurring and consider and implement risk mitigation factors where possible based on the level and likelihood of occurrence. The Audit Committee, which was formed on the Company's Standard Listing, will review the risk register and monitor the implementation of improved risk mitigation procedures via Executive management.

The Company has analysed the following categories as key risks:

The Strategic Report was approved by the board of directors and signed on its behalf by:

Christopher Theis

Chief Executive Officer

PATH INVESTMENTS PLC INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF PATH INVESTMENTS PLC FOR THE YEAR ENDED 31 DECEMBER 2016

We have been engaged to audit the financial statements of Path Investments Plc for the year ended 31 December 2016 which comprise the Statement of Financial Position, Statement of Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows and related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRS) as adopted by the European Union.

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 Auditors' 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.

Respective responsibilities of directors and auditors

As explained more fully in the Statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implication for our report.

Opinion on financial statements

In our opinion the financial statements:

· give a true and fair view of the state of the Company's affairs as at 31 December 2016 and of its loss for the year 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.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion based on the work undertaken in the course of our 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 Directors' Report and the Strategic 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 Directors' Report.

We have nothing to report in respect of the following matters where 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 required for our audit.

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

27 April 2017

PATH INVESTMENTS PLC

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2016

All operating income and operating gains and losses relate to continuing activities.

The notes form an integral part of the financial statements.

PATH INVESTMENTS PLC

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2016

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 option scheme.

The Retained Earnings reserve represents the cumulative net gains and losses less distributions made.

The notes form an integral part of the financial statements.

PATH INVESTMENTS PLC

STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2016

The financial statements were approved by the board of directors and authorised for issue on 27 April 2017 and signed on its behalf by:

C Theis

Chief Executive Officer

The notes an integral part of the financial statements.

PATH INVESTMENTS PLC

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2016

The notes form an integral part of the financial statements.

PATH INVESTMENTS PLC

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2016

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, initially in Turkey.

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 2016, the Company had cash and cash equivalents totalling £23,672.

Following the year end the company issued a further 140 million Ordinary Shares at a subscription price of £0.01, raising a further £1.4m before costs.

The Directors have prepared working capital projections which show that the Company has sufficient working capital to cover its costs for at least the next 12 months. These working capital projections include the assumption that £93,000 of the convertible loan notes in issue and £93,000 of related interest as at today's date will be converted into new Ordinary Shares. The Directors (as holders of these loan notes) have confirmed that the loan notes and related interest will be converted and no repayment will be sought.

The working capital projections do not include provision for making an investment and therefore in order to pursue the Company's stated strategy to acquire oil and gas production, or near production, assets the Company will require additional funding. The Directors hope to fund future acquisitions through one of, or a combination of, new equity financing or debt financing.

The Directors continue to adopt the going concern basis of accounting in preparing the financial statements, however it is noted that the Company's ability to pursue its investment strategy is dependent on future fundraising.

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 2016:

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 companies, 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 assets are allocated based on where the assets are located, as follows:

3. EXPENSES BY NATURE

4. OPERATING LOSS

The operating loss is stated after charging:

5. EMPLOYEES

Number of employees

The average monthly number of employees (including Directors) during the period was:

Included in employment costs above is an increase in accrued remuneration of £275,850 (2015: £155,457).

6. FINANCE income and costs

7. DIRECTORS' REMUNerATION

The highest paid Director received remuneration of £117,263 (2015: £216,935). During the period retirement benefits accrued to one Director (2015: 1).

The Directors have continued to work without full payment of their remuneration as detailed below:

Following the year end the Directors have waived accrued salaries and pension costs as at 30 September 2016 totalling £937,904, this included £275,850 of aggregate remuneration accrued during the year ended 31 December 2016 and included in the directors' remuneration figures above. The remaining £108,412 directors' remuneration was paid during the year ended 31 December 2016.

In association with the waiver of the above detailed accrued salaries the Directors were issued with share options as detailed further in note 22.

In addition a gross bonus was paid to C Theis of £94,621 in April 2017 in recognition of his efforts in assisting the company's listing on the Standard market and associated fundraising.

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 £4,319,873 (2015: £4,017,987). In addition the Company has non-trading loan relationship debits to carry forward to offset against future non-trading loan relationship credits of £18,880,318 (2015: £18,804,827).

A deferred tax asset of £743,478 (2015: £732,958) 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 £1,907,687 (2015: £7,817,587) and on the weighted average number of ordinary shares of 21,824,355 (2015: 20,884,862) in issue. The basic and diluted loss per share is 8.74p (2015: 37.4p). As the Company is loss making, there was no dilutive effect from the share options or convertible loan notes outstanding during the year.

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.

Post year-end the Company issued 140 million new Ordinary Shares (as disclosed in note 22); had this transaction occurred before the end of the reporting period it would have changed significantly the number of ordinary shares outstanding at the end of the period and therefore the loss per share.

10. PROPERTY, PLANT AND EQUIPMENT

11. INVESTMENTS - AVAILABLE FOR SALE

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 2015 comprised of a 5 per cent. interest each in ARAR and Alpay Enerji as at an aggregate cost of £8 million.

As at 31 December 2015 the Directors considered that the fair value of the investments was at least equal to the cost and therefore no impairment of the investments was recognised. In making this assessment the Directors considered the valuation placed on the underlying assets at the time of acquisition and that no material changes had occurred which would in their opinion result in an impairment.

During the year, Mr. S. Faith Alpay, the majority owner of ARAR and Alpay Enerji AS, made an initial offer to the Company of £1,050,000 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 been slow, and as the payment is by instalment over a period of time, and the directors now consider the likelihood of finding an alternative buyer to be low, the directors have decided to impair the asset to £nil.

12. Trade and other receivables

13. TRade and other payables

Included in other payables is £75,500 raised from the Directors in respect of Convertible Unsecured Loan Stock 2016 together with accrued interest thereon of £75,500.

Convertible Unsecured Loan Stock 2016

In October and December 2016 the company raised £75,500 under the Convertible Unsecured Loan Stock 2016 instrument issued on 26 October 2016.

At the option of the loan stockholder, on an Admission of the Company to AIM or other recognised investment exchange, the loan will either be 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:

The following amounts were raised from the Directors:

14. SHARE Capital

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 £10,000,000 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. 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

16. CASH & CASH EQUIVALENTS

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

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

Liquidity risk is the risk that the Company will not be able to sell or earn dividend from its financial assets, in particular the shareholdings in Alpay Enerji and ARAR. The Company monitors the activities of both companies and reviews key management information when it is provided.

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:

All options outstanding at the year-end are exercisable at that date.

The following warrants have been granted by the Company:

18. Share options (continued)

The number of shares and warrants included in the above tables have been updated to give effect to the restructuring of share capital which took place during the year (see note 14).

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:

The expense recognised by the Company for share based payments during the year ended 31 December 2016 was Nil (2015: £32,138).

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:

18. Share options (continued)

At 31 December 2016 At 31 December 2015

The weighted average remaining contractual life of options as at 31 December 2016 was 3.8 years (2015: 2.9 years).

The number of shares included in the above table for both the current and previous year have been updated to give effect to the restructuring of share capital which took place during the year (see note 14).

19. RELATED PARTY TRANSACTIONS

During the year Adler Shine LLP, a firm in which R Patel is a partner, invoiced the Company £nil (2015:nil) for the provision of bookkeeping and accountancy services, £nil (2015: £720) for the provision of company secretarial services, £96 (2015: £420) for the provision of payroll services and £nil (2015:£257) for the provision of telephone services. At the period end an amount of £nil (2015: £3,600) was included in accruals in respect of bookkeeping and accountancy fees. The above transactions were on a commercial arm's length basis.

During the year, the director C Theis charged the Company £5,000 (2015: £19,490) and £nil (2015: £28,157) for commissions and consultancy services, respectively and a further £13,000 in respect of Directors' fees

Included in debtors is a directors' overdrawn loan account of £38,000 for Christopher Theis, which was interest-free, repayable on demand and cleared in April 2017 by way of a bonus as detailed in note 7.

Included within trade payables are unpaid Directors fees amounting to £7,500 due to Brent Fitzpatrick.

19. RELATED PARTY TRANSACTIONS (continued)

During the year the following shares were issued at par to directors:

The following share options were held by the directors during the year:

The following warrants were held by the directors during the year:

The number of shares included in the above tables for both the current and previous year have been updated to give effect to the restructuring of share capital which took place during the year (see note 14).

Included in other payables are the following convertible loan notes issued to the Directors together with accrued interest thereon:

20. ultimate controlling party

The Company considers that there is no ultimate controlling party.

21. INVESTMENT IN SUBSIDIARIES

As at 31 December 2016 the company held more that 20% of the share capital in the following companies:

Path Newco Limited was dissolved in August 2016. Path Investments (Turkey) Limited was dissolved in September 2016.

22. EVENTS AFTER THE REPORTING DATE

In January 2017, 1,675,000 options were waived by the option holders as follows: