RDGC.L Regulatory News (RDGC)

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Ridgecrest plc

("Ridgecrest" or the "Company")

Final results for the year ended 31 March 2021

Ridgecrest, an AIM Rule 15 cash shell, announces its final audited results for the year ended 31 March 2021.

Enquiries:

CHAIRMAN'S STATEMENT

Ridgecrest plc was formerly called Nakama Group plc and was a recruitment business. During the course of 2020 the Board made several announcements relating to the financial instability of the business in light of the COVID 19 outbreak and its trading environment. Various recapitalisation strategies were pursued by the Board, but none of them came to fruition. The Board therefore embarked on a sale process and in January 2021 the whole of the Group's business and assets were sold to Sanderson Group Plc. Nakama Group plc was re-named Ridgecrest plc and became an AIM Rule 15 cash shell. The Company raised £2 million of new funds in mid-January 2021 since when it has been seeking and negotiating a suitable reverse takeover for the shell.

On 6 July 2021 the Company announced that it entered into a non-binding heads of agreement with Mr Cristian Rada, as a result of which, subject to, inter alia, the execution of a legally-binding share purchase agreement, Ridgecrest would acquire Airline Invest SA and its wholly owned subsidiaries, Blue Air Aviation SA and Blue Air Technic SRL (together "Blue Air", a low-cost airline based in Romania).

At the same time, trading in the Company's shares on AIM was suspended as neither a Reverse Takeover nor readmission to trading on AIM as an investing company under the AIM Rules had been completed within six months of the disposal of the Group's operating business. Should the Company not complete a reverse transaction within six months of the date of suspension or be re-admitted to trading on AIM as an investing company under the AIM Rules, it is expected that the Company's shares will be cancelled from trading on AIM.

On 25 October, the Company announced that it had terminated negotiations on the proposed reverse takeover of Blue Air, as a consequence of Blue Air's inability to raise the pre-RTO funding that was the principal condition of the non-binding heads of agreement between Ridgecrest and Blue Air's vendors.

The Board of Ridgecrest has concluded that it is in the Company's shareholders' best interests to pursue an alternative transaction. The Board hope to be able to make a further announcement regarding an alternative transaction in the near future.

Robert Thesiger

Chairman

29 October 2021

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 MARCH 2021

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MARCH 2021

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2021

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

AS AT 31 MARCH 2021

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2021

NOTES TO THE FINANCIAL STATEMENTS

 A full set of notes to the Financial Statements is included in the Annual Report.

1. Nature of operations and general information

At 31 March 2021 Ridgecrest plc (the "parent company") was an AIM Rule 15 cash shell company. Until January 2021, when the trading subsidiaries were sold, the business included Nakama; a global recruitment consultancy for the digital technology and interactive media industry and also Highams; a technology and business information recruitment consultancy for the insurance and investment management industry.

Ridgecrest plc changed its name from Nakama Group plc on 29 December 2020. It is registered in England and Wales with the company number 01700310. The address of Ridgecrest plc's registered office, which is also its principal place of business, is New Kings Court Tollgate Chandler's Ford Eastleigh Hampshire SO53 3LG. The details of the previous subsidiary undertakings are listed in note 5 to the Company financial statements.

The parent company's shares are listed on the London Stock Exchange's Alternative Investment Market (AIM). The Group consolidated full year financial statements are presented in British pounds (£), which is also the functional currency of the Company.

2. Accounting policies

Basis of preparation

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) UK adopted, and with those parts of the Companies Act 2006 applicable to companies preparing their accounts under IFRS.

The financial statements have been prepared under the historical cost convention. The principal accounting policies of the group are set out below.

The accounting policies that have been applied in the opening statement of financial position have also been applied throughout all periods presented in these financial statements.

The areas where significant judgements and estimates have been made in preparing the financial statements and their effect are disclosed in note 2.

Going concern

In determining the appropriate basis of preparation of the financial statements, the Directors are required to consider whether the Company can continue in operational existence for the foreseeable future. The parent company had cash and cash equivalents of £2,001,000 and net current assets of £1,974,000 as at 31 March 2021.

The parent company is an AIM Rule 15 cash shell and as such is seeking a suitable target business to perform a reverse takeover (RTO). The Board believes that there is sufficient working capital to perform such a transaction.

8.Operating loss

The loss on ordinary activities before taxation is stated after charging:

The analysis of auditor's remuneration is as follows:

9. Income tax expense

The relationship between the expected tax expense based on the effective tax rate of the Group at 19% (2020: 19%) and the tax expense actually recognised in the consolidated income statement can be reconciled as follows:

10. Loss per share

The weighted average number of shares excludes 183,953 (2020: 183,953) shares held by the Employee Share Benefit Trust.

* No diluted earnings per share is shown since the effect would be anti-dilutive.

11. Intangible assets

The amounts recognised in the statement of financial position relate to the following:

12. Goodwill

The Goodwill arose on the acquisition of Nakama Group in October 2011. The business formed part of the Group with effect from the date of acquisition of Nakama offices in London, Australia and Hong Kong.

The carrying amount of goodwill was allocated to the cash generating units (CGU's) as follows:

The Group is required to test, on an annual basis, whether goodwill has suffered any impairment. Impairment tests were undertaken annually on 31 March using value in use calculations for each CGU. The value in use calculations were based on cash flow projections from formally approved budgets covering a 12 month period and an extrapolation from that budget covering a further 4 years plus a terminal value. The key assumptions within the calculations were considered to be revenue growth and the discount rate.

Following the impairment review for the year ended 31 March 2018 goodwill was written off. The businesses have now been sold and hence the goodwill is no longer recognised.

16. Borrowings

The Group's confidential invoice discounting facilities of £2,500,000 were terminated in January 2021 (2020: £2,500,000).

17.Commitments

The total future value of minimum lease payments is due as follows:

Lease payments recognised as an expense during the year amount to £119,000 (2020: £266,000). No sublease income was expected as all assets held under lease agreements were used exclusively by the Group. All leases relate to offices and office equipment.

Operating lease agreements do not contain any contingent rent clauses. None of the operating lease agreements contain renewal or purchase options or escalation clauses or any restrictions regarding further leasing.

As at 31 March 2021, there were no outstanding lease commitments.

18. Deferred tax

Deferred tax recognised in the financial statements is set out below

In accordance with IAS 12 "Income Taxes", the deferred tax asset has been recognised to the extent that trade losses will be recoverable against profits in the foreseeable future. The deferred tax asset brought forward from the previous year in relation to the trading losses in Highams Recruitment Limited only was fully utilised in the current year. The temporary differences for which the deferred tax asset has not been provided in the financial statements are set out below:

No deferred tax is recognised for the Company's losses being a cash shell company. It is not probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

19. Related party transactions and controlling related party

There were no related party transactions in the year.

Summary of financial assets and liabilities by category

The carrying amounts of the Group's financial assets and liabilities as recognised at the statement of financial position date of the years under review may also be categorised as follows:

22. Employee share schemes

(a) EMI option scheme

The EMI option scheme has been terminated.

(b) Employee Share Benefit Trust

An Employee Share Benefit Trust was established in November 1995 and its Trustees have the power to grant options to eligible employees over shares in the Company at the Trust's expense, and the Company's discretion, upon such terms as they think fit and to purchase such shares to be acquired by the eligible employees.

The Company did not make any contributions to the Trust during the year (2020: £nil). The Trust holds 183,953 shares in the Company, with a market value of £2,723 (2020: 183,953 shares at a market value of £1,647). These shares were purchased at a cost of £61,000.

No shares have been transferred to employees or were under option as at 31 March 2021. The Trust's only other asset at 31 March 2021 was cash at bank of £2,111 (2020: £2,111) which is included in the Group's statement of financial position as part of cash and cash equivalents. The Trust had no liabilities.

All other options granted in prior years have lapsed and no other types of options were granted in the year.

(c) Share based options

The establishment of the Share Option Plan was approved by shareholders in 2008. The share option is designed to provide long-term incentives for key management personnel (including directors) to deliver long-term shareholder returns. Under the plan, participants are granted options which only vest if certain performance standards are met. Participation in the plan is at the board's discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits. The amount of options that will vest depends on the parent company's total return to shareholders (TSR), including share price growth, dividends and capital returns, ranking within a peer group of 20 selected companies that are listed on the London Stock Exchange over a three year period. Once vested, the options remain exercisable for a period of two years. Options are granted under the plan for no consideration and carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share fourteen days after the release of the half-yearly and annual financial results of the group to the market. The exercise price of options is based on the weighted average price at which the company's shares are traded on the London Stock Exchange during the week up to and including the date of the grant.

The directors are committed to pursuing acquisition opportunities with a view to conducting a reverse takeover. They believe that successfully executing a reverse takeover will deliver value for their shareholders. As a cash shell company, they are mindful of managing cash and costs carefully. To that end, they consider that these Share Options are an appropriate way to incentivise the directors and to align their interests with shareholders.

Set out below are summaries of share options:

The new share options were granted on 22 January 2021 (5,301,000 shares) and 24 February 2021 (15,000,000 shares). The options granted represent 4.5 per cent of the Company's current issued share capital.

The fair value of the share options at grant date is equivalent to the London Stock Exchange mid-market closing price of an ordinary share at the grant date. This is also the determined exercise price. The options are exercisable from the date falling 12 months from the date of grant. The average contractual life of the options is ten years.

The amount charged to profit and loss in 2021 is £35,746.

23. Contingent liability

The previous dispute for the repayment of intercompany balances with Nakama Sydney has been settled and there were no contingent liabilities at 31 March 2021.