Final Results for the year ended 31 December 2020

RNS Number : 8080V

EQTEC PLC

19 April 2021

EQTEC plc

("EQTEC", the "Company" or the "Group")

Final Results for the year ended 31 December 2020

EQTEC plc (AIM: EQT), a world leading gasification technology solutions company for sustainable waste-to-energy projects, announces its final audited results for the year ended 31 December 2020.

Operational and commercial highlights

• Accelerated pipeline growth through strategic partners: An additional 17 opportunities added in H2 2020, bringing the total pipeline to 58 at the end of 2020 (a further 17 were added post period, between January and March 2021). The 58 in pipeline at the end of 2020 represent non-contracted tender opportunities worth a potential aggregate €559 million, amongst which we sent full commercial offers in 2020 worth a total of €334 million.

• Gasification into Greece scaling rapidly: The Company signed an agreement for the construction of a 0.5 MWe project in Larissa with Greek project developer, Agrigas Energy SA ("Agrigas"), via German EPC partners, ewerGy GmbH ("ewerGy"). In March 2020, a Collaboration Framework Agreement was completed with ewerGy for 13 potential new projects in the Balkan region (notably, Greece and Bulgaria), with exclusivity. In August, EQTEC signed an equipment sales and services contract worth €2 million with ewerGy for the project.

• Forestry waste in USA: The Company reached financial close in January on 2 MWe the North Fork Community Power ("NFCP") project in California, USA, including sale of equipment and engineering and design services worth €2.2 million, concurrent with the acquisition of a 19.99% interest in NFCP. This project and a pipeline of others of similar size are being developed with US partners, Phoenix Biomass Energy LLC ("Phoenix") and a full planning permit is progressing for a second project with Phoenix in Napa, California. Technology due diligence has been completed successfully for a third project with Phoenix, in Wilseyville, California and has already received indicative non-binding terms for funding.

• RDF Billingham Project in UK: Following a Memorandum of Understanding, EQTEC signed an Option Agreement to acquire the project. Post period, the project received amended planning approval and EQTEC signed a conditional Land Purchase Agreement. The project includes a plant with capacity of up to 25 MWe. The project is under review for funding by Idex Group ("Idex"), an established European owner-operator of waste-to-energy infrastructure with over 40 energy-from-waste ("EfW") plants in France.

• RDF Deeside Project in UK: An exclusivity agreement was signed in July 2020 with Logik Developments Limited ("Logik") for a 20 MWe recycling and anaerobic digestion project in Wales. A planning application for deployment of EQTEC's advanced gasification technology has been made and a decision is expected by Q3 2021. EQTEC signed an agreement to acquire the project SPV from Logik Developments in December. Post period end, in February 2021, the Company signed a Collaboration Agreement with Logik to jointly develop other projects in the UK, with two currently under review.

• Southport Hybrid Energy Park Project in UK: The Company is co-developing and has an option agreement with Rotunda Group Limited ("Rotunda") for a waste management project in Southport, Merseyside for which EQTEC would seek additional planning permission for the deployment of its advanced gasification technologies. The proposed plant could convert over 55,000 tonnes of RDF annually for an estimated 6 MWe to 8 MWe of 'green' electricity.

• Collaboration with Carbon Sole Group, Ireland: A framework agreement was completed with Carbon Sole Group Limited ("Carbon Sole") for joint participation in projects in Ireland involving biogas and district heating, biomass-to-energy and advanced biofuels, applying EQTEC's technology. With an immediate pipeline of three deals, planning application for the first deal in Shannon has been submitted and a decision is expected in Q3 2021.

• Innovation, Research and Development: In January 2020, the Company received approval to carry out tests utilising Refuse Derived Fuel ("RDF") at the Research and Demonstration Plant located at the University of Lorraine ("U of L"), in France. The plant was built in collaboration between U of L and EQTEC and should accelerate technology validation tests of different types of RDF to satisfy adoption by key stakeholders. The Company signed a contract in February 2020 for upgrade of existing syngas research and development facility at the University of Extremadura ("U of E") in Spain. Installation of a Fischer-Tropsch unit supports the production of sustainable biofuels utilising high quality syngas produced from EQTEC's advanced gasification process, in use at the university since 2010. In October, a Technology Review and potential collaboration with Wood Group UK Limited commenced.

• Other strategic sales: In January 2020, the sale of €300,000 worth of equipment and spare parts to Mostos Vinos y Alcoholes S.A. ("Movialsa") was completed. As part of the contract, the Group is able to arrange visits to Movialsa's plant in Spain to showcase the Group's technology, which has been fully operational on the site for nearly a decade, to potential future stakeholders in the Group's projects. In August, the sale of Pluckanes Windfarm Limited took place for maximum net proceeds of up to €383,503 (dependent on certain milestones relating to planning permission).

• Appointment of Chief Operating Officer: The Company hired Jeffrey Vander Linden as Operations Director to lead strategic and business planning and to drive operational and delivery excellence. Having worked with the Company as an advisor since July, Jeff joined the company in December as an Executive Director, COO and Board Member.

Financial highlights

• Revenue: For the period through to 31 December 2020, the Company recognised revenue of €2.2 million (FY 2019: €1.7 million).

• Loss for the financial year: For the period, the Group incurred losses of €5.8 million (FY 2019: €3.6 million), principally the result of recognition of share-based payment costs of €1.8 million and an increase in administrative expenses over the period.

• Assets: The net assets of the Company increased to €25.3 million at 31 December 2020 (31 December 2019: €15.5 million).

• Placing: In July, the Company raised £10 million gross in an oversubscribed placing and PrimaryBid offer at 0.45 pence per share.

• Cash: The cash balances of the Company at 31 December 2020 stood at €6.4 million (31 December 2019: €0.5 million).

• Debt: Total debt repaid during the period amounted to €1.4 million. Agreed a reprofiling of existing debt plus interest of €2.6 million due to mature on 31 July 2020, with a new maturity on 30 June 2021. In December agreed new loan facility with Altair to fully repay existing debt with a new maturity on 31 December 2021 and a lower interest rate.

• Warrants: All executed from placings in 2019 and 2020, with the Company receiving €1.5 million from the exercise of warrants during the period.

Post period highlights

· January 2021: Biomass gasification in Greece: Option Agreement to acquire a project for Nobilis Pro Energy S.A. ("Nobilis"). The second in a growing pipeline of opportunities pursued with ewerGy, the plant will apply EQTEC's advanced gasification to waste from olive mills and wineries at a 0.9 MWe gasification plant in Almyros, Greece. The project agreement is based on an MoU signed with Nobilis for more general development of biomass gasification plants based on EQTEC technology.

· February 2021: Long-term Incentive Plan. Adoption of the EQTEC All Employee Long-term Incentive Plan (the "LTIP") as a core part of the Company's new approach to business planning, performance management and employee incentives. The LTIP is designed to drive individual and team performance in line with Company performance, thereby creating value for shareholders while minimising cash outlay. All Company Executive Directors and employees are eligible to participate in the LTIP.

· March 2021: Collaboration Agreement with Toyota: The Company has agreed to collaborate to explore an innovative, circular and sustainable waste-to-energy solution for Toyota's engine manufacturing plant in Deeside. Subject to Financial Close, construction is expected to commence at Deeside in 2022.

· March 2021: Dismissal of patent infringement claim in USA: Aries Clean Energy LLC ("Aries") of Franklin, Tennessee, USA withdrew its patent infringement complaint, stipulating the action be dismissed 'with prejudice', forbidding Aries from filing another lawsuit on the same grounds and indicating EQTEC's continued right to produce, use, and sell technology without further harassment from Aries, either directly or through EQTEC customers.

Outlook

The Company is focused on the following objectives, all of which are supported by EQTEC advanced gasification technology innovation and engineering, the strength of partner relationships and ability to deliver sustainable waste-to-energy projects. The Company aims to build more advanced gasification plants in more markets with a greater, cleaner impact on local communities and greater returns for investors.

1. Biomass-to-Energy. The Company is pursuing multiple deals in Europe, predominantly in Greece, Croatia and other central and southern countries, as well as in the USA. It anticipates the closure in 2021 of five to eight deals with contract values to the Group totalling €20-40 million.

2. RDF to Energy. The Company will apply its expertise with the capabilities of local teams to begin construction at the Billingham, Teesside, UK plant, a 25 MWe plant that will produce electricity and heat. The project is anticipated to have a contract value in excess of €30 million to the Group, and to lead the way for the two more similarly-sized UK RDF facilities in 2022, in Deeside, Flintshire and Southport, Merseyside.

3. Biomass-to-Bioenergy. The Company intends to close the first of several potential deals for biomass-to-bioenergy plant construction in Ireland, with local partner Carbon Sole. Working with them and one or more methanation technology partners, EQTEC will pursue at least one deal in 2021, worth €15 million to the Group, for production of biofuels and potentially other clean, bioenergy, with similar deals to follow in successive years.

4. Recommissioning EQTEC technology. Two plants are expected to be recovered for lack of technical integration capabilities. EQTEC will lead a consortium to acquire, repower, own and operate its technology in target markets in Italy, a 1.0 MWe plant for converting local, agricultural waste to electricity and heat. In Croatia, EQTEC will work with local partner Sense ESCO d.o.o. ("Sense ESCO") to recommission a 1.2 MWe plant transforming local forestry waste wood to provide electricity and heat. The two plants are both expected to be acquired in 2021, with the first acquisition nearing contract completion.

In 2021, revenues from both current and new projects and gradual growth from maintenance and consulting contracts are forecast to generate revenues of approximately €15 million in 2021. These revenues, together with an expected contribution from EQTEC Capital, are forecast to generate positive EBITDA, making 2021 EQTEC's first year of profitability.

David Palumbo, CEO of EQTEC, commented: "2020 was a year in which we advanced and embedded our business strategy, significantly added to our pipeline, strengthened our management team, increased the depth and number of our partner relationships and expanded our platform for growth. In the first half of the year, we achieved financial close on two ground-breaking projects, each with an additional pipeline attached to them and we concentrated on maturing our relationships with our go-to-market partners. In the second half of the year, we built further discipline into our business operations and project execution capabilities, toward mitigating risks and accelerating delivery of business cases and measurable value.

"I look forward to our delivery of further growth and profitability in 2021 and beyond."

The 2020 Annual Report and Accounts will shortly be available on the Company's website at www.eqtec.com .

ENQUIRIES

EQTEC plc	+353 21 2409 056
David Palumbo / Gerry Madden

Strand Hanson - Nomad & Financial Adviser	+44 20 7409 3494
James Harris / James Dance

Arden Partners - Joint Broker	+44 20 7614 5900
Paul Shackleton (Corporate) / Simon Johnson (Sales)

Canaccord Genuity - Joint Broker	+44 20 7523 8000
Henry Fitzgerald-O'Connor / James Asensio / Patrick Dolaghan

Maitland/AMO - Communications & PR/IR adviser	+44 20 7379 5151
James Benjamin / Rhys Jones	EQTEC-maitland@maitland.co.uk

About EQTEC plc

As the world's leading experts in gasification for sustainable waste-to-energy projects, EQTEC is building the future of the sector, combining its technology innovation and engineering with expert plant construction and project deliveries, to help drive the global energy transition. EQTEC's proven, proprietary and patented technology is at the centre of projects that aim to enhance local communities and champion local businesses with an improved environmental impact.

EQTEC designs and supplies advanced gasification solutions that have a higher efficiency product offering and are modular and scalable from 1MW to 30MW. EQTEC's versatile solutions are independently proven to process over 50 different types of feedstock, including municipal waste, agricultural waste, biomass and plastics with no hazardous waste or toxic emissions . EQTEC's solutions produce a uniquely pure high-quality synthesis gas (syngas), that is capable of being used for the widest applications in the creation of energy, hydrogen and biofuels.

EQTEC's proprietary technology design together with deployment and maintenance capabilities mitigate the risks when using third party equipment. EQTEC's Technology Integration capabilities enable the Group to lead collaborative ecosystems that build sustainable waste elimination and green energy infrastructure.

The Company is quoted on AIM (ticker: EQT) and the London Stock Exchange awarded EQTEC the Green Economy Mark that recognises listed companies with 50% or more of revenues from environmental/green solutions.

Further information on the Company can be found at www.eqtec.com .

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Chairman's Statement

I am very pleased to introduce EQTEC plc's Annual Report and Accounts for 2020 and share my perspective on the prospects of an international company that is building the future of the sustainable waste-to-energy sector.

It is especially pleasing to start this report by stating my belief that EQTEC's capabilities have never been stronger and that its prospects at addressing various market needs have never been greater, even despite some challenges presented to the business during the year.

Against a backdrop of home-working, restrictions preventing travel to sites and delays with approvals at government agencies and financial institutions, EQTEC worked with agility and speed to respond productively. The team further invested in relationships with partners, advancing deals with intensive collaboration in particular in Greece, Croatia and the UK. The leadership focused on strengthening EQTEC's platform for growth, attracting and hiring new talent for key positions and building improved, robust standards for business management and project delivery. More than ever, EQTEC is now well prepared for the increasing growth and demand for new and more sustainable solutions to the world's waste management challenges and well positioned to play its role in accelerating the energy transition.

The markets for those challenges have themselves gained increased attention and commitment from consumers, local government, policymakers and investors in 2020 and into 2021. Not only did the pandemic give consumers time for pause and reflection about a world that was, for a time, noticeably freer from pollutants due to decreased economic activity and social movement, but it also created a realisation that alternatives were becoming increasingly available thanks to interest from the news media and the stock markets.

The European Union ramped up its European Green Deal to drive a range of actions, including:

• investing in environmentally-friendly technologies;

• supporting industry to innovate; and

• decarbonising the energy sector.

All three of these efforts support EQTEC's advancement in EU economies and as a business with operations, partners and strong pipeline in the EU.

The UK started the year by leaving the EU and ended with a raft of environmental and energy pledges, papers, policies and plans from the Government, as it looked ahead to hosting the next United Nations Climate Change conference, COP26, in Glasgow this November. As a former Science and Climate Change Minister I am excited at the progress that can be made. In my view the UK has reinforced its commitment to decarbonisation and there is much potential for innovation in better waste management to support the energy transition. EQTEC's progress with building RDF-to-energy plants in the UK is strong, enhancing local communities and championing local businesses. The team is focused on creating localised solutions that can offer the next best option after reduction, reuse and recycling, with a low environmental and emissions impact and high efficiency amongst the very best of waste-to-energy approaches.

By the end of 2020, we saw confirmation from the newly elected Administration that the USA would re-join the Paris Climate Accord and put the country back on the path to Net Zero emissions by 2050, something made official in February 2021. It is my belief that this will create additional momentum, even in California where support of cleantech is arguably greatest. EQTEC is already progressing projects there, growing its partner relationships to support construction of plants to address waste forestry materials with its Advanced Gasification Technology.

EQTEC remains uniquely well-placed to address future waste market potential. As an innovator at the leading edge of advanced gasification technologies combining engineering with expert construction and project delivery capabilities, EQTEC has been building a solid business platform, partner ecosystem and team. All of these elements will allow it to successfully pursue and deliver on international opportunities in line with the Company's focused strategy.

To complement its long-standing Technical Centre in Barcelona, EQTEC has now designed and formally implemented a Corporate Centre across Cork and London. This includes bringing in a small number of top professionals to drive standards, methods and support for rapid scale of business development, project delivery and partnering. With the operational disciplines brought in through 2020, the business is clearly positioning itself to move quickly to convert a sizeable, stress-tested pipeline into solid growth in 2021 and beyond.

Looking ahead, I confidently expect EQTEC's growth to be strong and sustained across markets as the world recovers from the pandemic and countries look to build back better and greener. 2020 delivered a global shock, and for EQTEC some hurdles and delays, but it also brought the opportunity for further clarity of the Company's mission alongside an increased determination and readiness to seize opportunities in the immediate years to come.

Ian Pearson

Non-Executive Chairman

16 April 2021

Chief Executive's Report

Our vision is a world where, through technology innovation, waste of all types is transformed into a valuable resource just as Nature repurposes its own surplus materials. Our contribution to realising this vision continues to be transformation of waste into clean energy and biofuels.

Even despite the global pandemic and ensuing economic slowdown, EQTEC's business platform has proven resilient. In 2020 we pushed on with our business strategy, significantly adding to our pipeline, strengthening and increasing our partner relationships and expanding our platform for growth. In the first half of the year, we closed two ground-breaking deals, each with additional pipeline attached to them - and we concentrated on maturing our relationships with our go-to-market partners. In the second half of the year, we built further discipline into our business operations and project execution capabilities, toward mitigating risks and accelerating delivery of business cases and measurable value.

Our pipeline grew with greater pace than we expected and it shows no signs of slowing. With that growth comes greater commitment to our strengths with biomass-to-energy solutions, new focus on RDF-to-energy solutions and emerging expectations for biomass-to-bioenergy and other solutions. At the core of EQTEC's market attractiveness remains our technology leadership with production of the world's purest synthesis gas, a vital source of clean, efficient energy and biofuels. Supplementing our technology is our commercial know-how with defining attractive business models for sustainable, waste-to-energy operations and project delivery capabilities to ensure plants become operational on time and to the expectations of investors, partners and local communities.

Two biomass-to-energy projects reached financial close in 2020. Two projects were delayed into the next financial year as a result of slowdowns in planning, approvals, home working and alignment of financial institutions in key markets, primarily through the impact of Covid-19 restrictions. Our current project in California with North Fork Community Power ("NFCP") was delayed during construction due to Covid-related delays but also to the forest fires that spread right up to the border of the site. But given our technology leadership and the enduring attractiveness of our proposition, no deals were lost in 2020.

To mitigate the risk to revenue impact from delays to Financial Close, we ramped up application of our own development capital programme (EQTEC Capital), and plan to invest up to €4 million to deploy dedicated, professional teams for pre-Financial Close business development, engineering and delivery readiness. We defined Financial Close milestones and instilled team disciplines and oversight to support qualified and timely delivery of projects ready for construction and commissioning. This approach is now our preferred one for most opportunities in our pipeline, as we expect it to deliver a healthy return on investment and generate additional development finance whilst contributing to EBITDA.

We also followed through on our commitment to further strengthen our team, bringing key roles in house and decreasing reliance on external contractors. In our Technical Centre, we went to market for specific, new Engineering roles. We formalised our Corporate Centre in London and Cork, adding a Strategy & Operations Director (COO) to the executive team and Board of Directors, along with critical roles in Marketing and Communications, Analytics and Business Development. The enhanced and experienced team evidences our dedication to high quality work at pace, in qualifying deals, developing opportunities, delivering projects and supporting high quality operations of commercial plants with EQTEC's Advanced Gasification Technology at the centre.

Our go-to-market approach with qualified strategic partners is proving its value, with 57% of new opportunities coming through these relationships. We signed eight collaboration agreements in three countries and are in the process of formalising these project and operational agreements through joint ventures or other vehicles.

Operational, Commercial and Corporate Highlights

• Accelerated pipeline growth through strategic partners: An additional 17 opportunities were added to our pipeline in H2 2020, bringing the total pipeline to 58 at the end of 2020 (a further 17 were added post period, between January and March 2021). Critically, over half of the opportunities added have come through only six of our maturing strategic partnerships, indicating the strength of that go-to-market approach. The 58 in pipeline at the end of 2020 represent non-contracted tender opportunities worth a potential €559 million, amongst which we sent full commercial offers in 2020 worth a total of €334 million.

• Gasification into Greece scaling rapidly: We signed an agreement for the construction of a 0.5 MWe project in Larissa with Greek project developer, Agrigas Energy SA ("Agrigas"), via German EPC partners, ewerGy GmbH ("ewerGy"). In March, a Collaboration Framework Agreement was completed with ewerGy for 13 potential new projects in the Balkan region (notably, Greece and Bulgaria), with exclusivity. In August, we signed an equipment sales and services contract worth €2 million with ewerGy for the project. Post period, seven new projects are under review in the context of the Collaboration Agreement with ewerGy.

• Forestry waste in USA: We reached financial close in January on a 2 MWe the North Fork Community Power project in California, USA, including sale of equipment and engineering and design services worth €2.2 million, concurrent with the acquisition of a 19.99% interest in NFCP. This project and a pipeline of others of similar size is being developed with US partners, Phoenix Biomass Energy LLC ("Phoenix") and a full planning permit is progressing for a second project with Phoenix in Napa, California. Technology due diligence has been completed successfully for the third project with Phoenix, in Wilseyville, California and has already received indicative terms for funding.

• RDF Billingham Project in UK: Following a Memorandum of Understanding, EQTEC signed an Option Agreement to acquire the project. Post period, the project received amended planning approval and EQTEC signed a conditional Land Purchase Agreement. The project includes a plant with capacity of up to 25 MWe. The project is under review for funding by Idex Group, an established European owner-operator of waste-to-energy infrastructure with over 40 EfW plants in France.

• RDF Deeside Project in UK: An exclusivity agreement was signed in July with Logik Developments Limited for a 20 MWe recycling and anaerobic digestion project in Wales. A planning application for deployment of EQTEC's Advanced Gasification Technology has been made and a decision is expected by Q3 2021. EQTEC signed an agreement to acquire the project SPV from Logik Developments in December. Post period, in February 2021, the Company signed a Collaboration Agreement with Logik to jointly develop other projects in the UK, with two currently under review.

• Southport Hybrid Energy Park Project in UK: We are co-developing and have an option agreement with Rotunda Group Limited for a waste management project in Southport, Merseyside for which EQTEC would seek additional planning permission for the deployment of its Advanced Gasification Technologies. The proposed plant could convert over 55,000 tonnes of RDF annually for an estimated 6 MWe to 8 MWe of 'green' electricity.

• Collaboration with Carbon Sole Group, Ireland: A framework agreement was completed with Carbon Sole Group Limited for joint participation in projects in Ireland involving biogas and district heating, biomass-to-energy and advanced biofuels, applying EQTEC's technology. With an immediate pipeline of three deals, planning application for the first deal in Shannon has been submitted and a decision is expected in Q3 2021.

• Innovation, Research and Development: In January, we achieved approval to carry out tests utilising Refuse Derived Fuel ("RDF") at the Research and Demonstration Plant located at the University of Lorraine ("U of L"), in France. The plant was built in collaboration between U of L and EQTEC and should accelerate technology validation tests of different types of RDF to satisfy adoption by key stakeholders. We signed a contract in February for upgrade of existing syngas research and development facility at the University of Extremadura ("U of E") in Spain. Installation of a Fisher-Tropsch unit supports the production of sustainable biofuels utilising high quality syngas produced from EQTEC's advanced gasification process, in use at the university since 2010. In October, a Technology Review and potential collaboration with Wood Group UK Limited commenced.

• Cashing in non-core assets whilst strengthening strategic relationships: In January, the sale of €300,000 worth of equipment and spare parts to Mostos Vinos y Alcoholes S.A. ("Movialsa") was completed. As part of the contract, the Group is able to arrange visits to Movialsa's plant in Spain to showcase the Group's technology, which has been fully operational on the site for nearly a decade, to potential future stakeholders in the Group's projects. In August, the sale of Pluckanes Windfarm Limited took place for maximum net proceeds of €383,503 (dependent on certain milestones relating to planning permission).

• Appointment of broker: We appointed Arden Partners PLC as the Company's Broker, with analyst research produced.

• Appointment of Chief Operating Officer and consolidation of Corporate Centre: In December, the Company hired Jeffrey Vander Linden as Operations Director to drive operational and delivery excellence. Having worked with the company as a Contracted Advisor since July, Jeff joined the Company in December as an Executive Director and Board Member. Shortly thereafter, the Company went to market and filled a number of critical roles including for Head of Marketing & Communications, Head of Analytics and two additional Business Development Managers.

• Dismissal of patent infringement claim in USA: Aries Clean Energy LLC ("Aries") of Franklin, Tennessee, USA withdrew its patent infringement complaint, stipulating the action be dismissed 'with prejudice', forbidding Aries from filing another lawsuit on the same grounds and indicating EQTEC's continued right to produce, use, and sell technology without further harassment from Aries, either directly or through EQTEC customers. Aries made its complaint in July 2020, which EQTEC immediately rejected on grounds that the Company's technology does not infringe Aries' patents, especially as the technology accused was actually prior art to every patent claim that Aries asserted. Aries capitulated in March 2021, prior to the Court's ruling on a Motion to Dismiss filed by EQTEC in December 2020. Aries' only response to the December motion admitted their case was speculative and that they had no information about the project they claimed would implement technology that infringed their patents. Having attempted through the second half of 2020 to seek review of EQTEC intellectual property by its own engineers and even its CTO, Aries finally agreed in January 2021 to have its outside counsel review EQTEC's IP under a strict nondisclosure agreement, a review completed in February. Aries' offer to dismiss followed in March and EQTEC accepted. EQTEC does not expect to give any further attention to the matter.

Financial Highlights

• Revenue: For the period through to 31 December 2020, the Group recognised revenue of €2.2 million (FY 2019: €1.7 million).

• Assets: The net assets of the Group increased to €25.3 million at 31 December 2020 (31 December 2019: €15.5 million).

• Placing: In July, the Company raised £10 million gross in an oversubscribed placing and PrimaryBid offer at 0.45 pence per share.

• Cash: The cash balances of the Group at 31 December 2020 stood at €6.4 million (31 December 2019: €0.5 million).

• Debt: Total debt repaid during the period amounted to €1.4 million. Agreed a reprofiling of existing debt plus interest of €2.6 million due to mature on 31 July 2020, with a new maturity on 30 June 2021. In January 2021 agreed new loan facility with Altair to fully repay existing debt with a new maturity on 31 December 2021 and a lower interest rate.

• Warrants: All executed from placings in 2019 and 2020, with the Company receiving €1.5 million from the exercise of warrants during the period.

Outlook and Future Plans

Looking ahead, we are focused on three objectives, all supported by our world-leading technology innovation and engineering, the strength of our partner network and our devotion to delivery excellence.

First, we will reaffirm our core capabilities with waste biomass-to-energy gasification through multiple deals in Europe and the USA. We anticipate closure of five to eight deals with EQTEC contract values totalling €20 - 40 million, which will be recognised as revenue over the life of the contract of between one to two years. We will pursue opportunities in Greece with ewerGy, in Croatia through a joint venture with local developer Sense ESCO d.o.o. ("Sense ESCO") and in California, USA with a range of local partners including developer Phoenix.

Second, we expect to recover two plants built with core EQTEC technology where operations were suspended by their owner-operators due to lack of technical integration capabilities. In Italy, we expect to lead a consortium to acquire, repower and operate a 1.0 MW plant for converting local, agricultural waste to electricity and heat for the local community. In Croatia, we expect to work through our local joint venture to acquire, repower and operate a 1.2 MW plant for gasification of forestry waste and provision of electricity and heat for the local community there. In each case we will have an option to acquire majority ownership and consolidate revenues from operations. We then expect to use these plants to showcase EQTEC technology in action to stakeholders and to undertake innovation work in a commercially active setting. The local teams we develop and mobilise to recommission and operate these will be leveraged for other work in their local markets and across the EU.

Along with recommissioning facilities containing EQTEC technology, we will pursue other decommissioned facilities with other technology. We see this as an opportunity to leverage existing infrastructure to rapidly deploy our capabilities, increase our operational footprint and further our company's mission.

Third, we will apply our expertise with the capabilities of local teams to begin construction at the Billingham, UK plant, a 25 MW plant that will produce electricity and heat. We anticipate the project will have a contract value in excess of €30 million, which will be recognised as revenue over the life of the contract and lead the way for the two more similarly sized UK RDF facilities in 2022.

Additionally, toward the end of 2021 we intend to close the first of several potential deals for biomass-to-bioenergy in Ireland, with partner Carbon Sole. Working with them and one or more methanation technology partners, we will pursue at least one deal in 2021 worth €15 million toward production of biofuels and potentially other clean energy, with similar deals to follow in successive years. Overall, for 2021, the Group is forecasting revenues from current projects, new projects and gradual growth from maintenance and consulting contracts of approximately €15 million in 2021, with positive EBITDA, which would make 2021 EQTEC's first year of profitability.

Finally, but importantly for the business, in 2021 we expect to invest in five significant innovation projects with existing R&D partners and with private sector companies with whom we have collaboration agreements. These will accumulate more data utilising our core technology for new types of feedstock, including all variations of RDF, sludge and plastics; as well as a range of joint technologies for applications in biofuel, bio-SNG and 'green' hydrogen.

Looking further out to 2022 and 2023, we have already identified significant growth in biomass-to-energy plant construction in Greece and the Aegean, Croatia, Italy, France, Spain, Portugal and gradually, Northern and Eastern Europe. We see further opportunity in California and possibly other parts of the USA. For RDF-to-energy and biomass-to-bioenergy opportunities, there are more opportunities identified in the UK and Ireland. Our strengthened business development team will build relationships and qualify partners in Asia so that we can pursue waste biomass and RDF opportunities and we will work with partners and potentially new staff to assess the opportunities becoming visible in the Middle East. We have identified and will target potential contract values for 2022-23 in excess of €200 million.

At our heart, we are a technology and engineering company and will maintain our leadership in innovation, to apply advanced gasification and grow our commercial impact further.

David Palumbo

Chief Executive Officer

16 April 2021

Consolidated statement of profit or loss

for the financial year ended 31 December 2020

	Notes	2020			2019
		€			€
Revenue		2,234,727			1,686,312
Cost of sales		(1,978,987)			(1,598,250)
Gross profit		255,740			88,062
Operating income/(expenses)
Administrative expenses		(3,694,217)			(2,677,995)
Other income		61,922			195,152
Reversal of impairment of property, plant and equipment and intangible assets		-			94,985
Impairment of inventories		-			(98,851)
Impairment of investments		(17,250)			-
Other (losses)/gains		(170,059)			128,235
Employee share-based compensation		(1,297,309)			-
Foreign currency gains/(losses)		211,337			(187,249)
Operating loss		(4,649,836)			(2,457,661)
Finance income		17,329			-
Finance costs		(1,206,392)			(1,125,312)

Loss before taxation		(5,838,899)			(3,582,973)
Income tax		-			-

Loss for the financial year f rom continuing operations		(5,838,899)			(3,582,973)
Profit for the financial year from discontinued operations		71,084			21,684

LOSS FOR THE FINANCIAL YEAR		(5,767,815)			(3,561,289)
Loss attributable to:
Owners of the Company		(5,762,733)			(3,764,519)
Non-controlling interest		(5,082)			203,230

		(5,767,815)			(3,561,289)

			2020	2019
			€ per share	€ per share
Basic loss per share:
From continuing operations			(0.001)	(0.001)
From continuing and discontinued operations			(0.001)	(0.001)
Diluted loss per share:
From continuing operations			(0.001)	(0.001)
From continuing and discontinued operations			(0.001)	(0.001)

Consolidated statement of other comprehensive income

for the financial year ended 31 December 2020

	Notes	2020	2019
		€	€

Loss for the financial year		(5,767,815)	(3,561,289)

Other comprehensive income/(loss)

Items that may be reclassified subsequently to profit or loss
Exchange differences arising on retranslation
of foreign operations		6,080	118,066

		6,080	118,066

Total comprehensive loss for the financial year		(5,761,735)	(3,443,223)

Attributable to:
Owners of the company		(5,848,045)	(3,669,812)
Non-controlling interests		86,310	226,589

		(5,761,735)	(3,443,223)

Consolidated statement of financial position

At 31 December 2020


	Notes	2020	2019
ASSETS		€	€
Non-current assets
Property, plant and equipment		187,792	271,255
Intangible assets	7	15,283,459	15,283,459
Financial assets	8	5,950,513	2,229,006
Other financial investments		-	17,324

Total non-current assets		21,421,764	17,801,044

Current assets
Development costs	9	503,653	-
Loan receivable from project development undertakings	9	482,537	-
Trade and other receivables		894,531	728,587
Cash and cash equivalents		6,394,791	482,392
		8,275,512	1,210,979

Assets included in disposal group classified as held for resale		-	1,198,074

Total current assets		8,275,512	2,409,053

Total assets		29,697,276	20,210,097

Consolidated statement of financial position

At 31 December 2020 - continued


	Notes	2020	2019
EQUITY AND LIABILITIES		€	€
Equity
Share capital		24,355,545		21,317,482
Share premium		62,896,521		52,487,278
Other reserves		2,148,220		-
Accumulated deficit		(61,875,561)		(56,011,538)

Equity attributable to the owners of the Company		27,524,725		17,793,222
Non-controlling interests		(2,223,986)		(2,326,274)

Total equity		25,300,739		15,466,948

Non-current liabilities
Borrowings		-		188,729
Lease liabilities		106,465		191,708

Total non-current liabilities		106,465		380,437

Current liabilities
Trade and other payables		3,183,979		876,071
Borrowings		1,020,851		2,556,960
Lease liabilities		85,242		82,726
		4,290,072		3,515,757
Liabilities included in disposal group classified as held for resale		-		846,955

Total current liabilities		4,290,072		4,362,712

Total equity and liabilities		29,697,276		20,210,097

Consolidated statement of changes in equity

for the financial year ended 31 December 2020

	Share Capital	Share premium	Other reserves	Accumulated deficit	Equity attributable to owners of the company	Non-controlling interests	Total
	€	€	€	€	€	€	€
Balance at 1 January 2019	19,182,850	47,582,446	-	(52,341,726)	14,423,570	(2,552,863)	11,870,707
Issue of ordinary shares in EQTEC plc	1,157,100	2,529,382	-	-	3,686,482	-	3,686,482
Conversion of debt into equity	977,532	2,645,675	-	-	3,623,207	-	3,623,207
Share issue costs (Note 27)	-	(270,225)	-	-	(270,225)	-	(270,225)
Transactions with owners	2,134,632	4,904,832	-	-	7,039,464	-	7,039,464
Loss for the financial year	-	-	-	(3,764,519)	(3,764,519)	203,230	(3,561,289)
Unrealised foreign exchange losses	-	-	-	94,707	94,707	23,359	118,066
Total comprehensive loss for the financial year	-	-	-	(3,669,812)	(3,669,812)	226,589	(3,443,223)
Balance at 31 December 2019	21,317,482	52,487,278	-	(56,011,538)	17,793,222	(2,326,274)	15,466,948
Issue of ordinary shares in EQTEC plc (Note 27)	2,658,622	9,841,484	-	-	12,500,106	-	12,500,106
Conversion of debt into equity (Notes 27 and 29)	379,441	1,536,252	-	-	1,915,693	-	1,915,693
Share issue costs (Note 27)	-	(639,931)	-	-	(639,931)	-	(639,931)
Employee share-based compensation (Notes 13 & 27)	-	-	1,297,309	-	1,297,309	-	1,297,309
Recognition of equity element of debt (Notes 14 & 27)	-	-	522,349	-	522,349	-	522,349
Warrants issued on placing of shares	-	(328,562)	328,562	-	-	-	-
Change in the ownership interest	-	-	-	(15,978)	(15,978)	15,978	-
Transactions with owners	3,038,063	10,409,243	2,148,220	(15,978)	15,579,548	15,978	15,595,526
Loss for the financial year	-	-	-	(5,762,733)	(5,762,733)	(5,082)	(5,767,815)
Unrealised foreign exchange losses	-	-	-	(85,312)	(85,312)	91,392	6,080
Total comprehensive loss for the financial year	-	-	-	(5,848,045)	(5,848,045)	86,310	(5,761,735)
Balance at 31 December 2020	24,355,545	62,896,521	2,148,220	(61,875,561)	27,524,725	(2,223,986)	25,300,739

Consolidated statement of cash flows

for the financial year ended 31 December 2020

	2020	2019
	€	€
Cash flows from operating activities
Loss for the financial year	(5,838,899)	(3,582,973)
Adjustments for:
Depreciation of property, plant and equipment	83,463	100,261
Loss on disposal of investments	1,275	-
Gain on disposal of investment	-	(3,078)
Reversal of Impairment of property, plant and equipment	-	(94,985)
Impairment of other financial investments	17,250	-
Employee share-based compensation	1,297,309	-
Impairment of inventories	-	98,851
Impairment of trade receivables	19,016	150,379
Impairment of other receivables	-	60,000
Bad debt expense	-	3,255
Loss/(gain) on debt for equity swap	170,059	(128,235)
Unrealised foreign exchange movements	(201,723)	70,439
Operating cash flows before working capital changes	(4,452,250)	(3,326,086)
Decrease/(increase) in:
Development cost	(503,653)	-
Loan receivable from project development undertakings	(482,537)	-
Trade and other receivables	(475,783)	204,097
Increase/(decrease) in trade and other payables	264,141	(453,854)
Cash used in operating activities - continuing operations	(4,685,008)	(3,575,843)
Finance income	(17,329)	-
Finance costs	1,206,392	1,125,312
Net cash used in operating activities - continuing operations	(3,495,945)	(2,450,531)
Net cash (used in)/generated from operating activities - discontinued operations	(47,741)	110,184

Cash used in operating activities	(3,543,686)	(2,340,347)

Cash flows from investing activities
Additions to property, plant and equipment	-	(10,272)
Proceeds from the disposal of property, plant and equipment	300,000	-
Cash inflow from disposal of subsidiary	218,635	-
Selling expenses on disposal of subsidiary	(65,261)	-
Loans advanced to project development undertakings	(469,769)	-
Proceeds from the disposal of other investments	84	-
Investment in associate undertaking	(1,150,619)	-
Investment in related undertaking	(333,882)	-
Proceeds from the sale of other investments	-	1,610
Proceeds from the sale of interest in associates	-	3,078
Net cash used in investing activities - continuing operations	(1,500,812)	(5,584)
Net cash (used in)/ generated from investing activities - discontinued operations	(19,997)	6
Net cash used in investing activities	(1,520,809)	(5,578)

Consolidated statement of cash flows

for the financial year ended 31 December 2020 - continued

	2020	2019
	€	€
Cash flows from financing activities
Proceeds from borrowings and lease liabilities	107,000	301,584
Repayment of borrowings and lease liabilities	(1,363,348)	(1,019,978)
Loan issue costs	(30,944)	-
Proceeds from issue of ordinary shares	12,735,236	3,451,697
Share issue costs	(635,911)	(223,556)
Interest paid	(21,955)	(32,091)
Net cash generated from financing activities - continuing operations	10,790,078	2,477,656
Net cash used in financing activities - discontinued operations	(63,196)	(111,106)

Net cash generated from financing activities	10,726,882	2,366,550

Net increase in cash and cash equivalents	5,662,387	20,625

Cash and cash equivalents at the beginning of the financial period	608,194	587,569

Cash and cash equivalents at the end of the financial period	6,270,581	608,194
Cash and cash equivalents included in disposal group	-	(125,802)

Cash and cash equivalents for continuing operations	6,270,581	482,392

Company statement of financial position

At 31 December 2020

	Notes	2020	2019
ASSETS		€	€
Non-current assets
Investment in subsidiary undertakings		21,249,255	17,440,929

Total non-current assets		21,249,255	17,440,929

Current assets
Development costs	9	9,275	-
Loan receivable from project development undertakings	9	243,598	-
Trade and other receivables		2,703,491	1,334,004
Cash and bank balances		6,111,864	448,619

Total current assets		9,068,228	1,782,623

Total assets		30,317,483	19,223,552

EQUITY AND LIABILITIES
Equity
Share capital		24,355,545	21,317,482
Share premium		81,830,601	71,421,358
Other reserves		2,148,220	-
Accumulated deficit		(79,661,097)	(76,390,202)

Total equity		28,673,269	16,348,638

Total non-current liabilities		-	-

Current liabilities
Borrowings		896,641	2,426,045
Trade and other payables		747,573	448,869

Total current liabilities		1,644,214	2,874,914

Total equity and liabilities		30,317,483	19,223,552

The Group is availing of the exemption in Section 304 of the Companies Act 2014 from filing its Company Statement of Comprehensive Income. The loss for the financial year incurred by the Company was €3,270,895 (2019: €4,674,802).

Company statement of changes in equity

for the financial year ended 31 December 2020

	Share capital	Share premium	Other reserves	Accumulated deficit	Total
	€	€	€	€	€

Balance at 1 January 2019	19,182,850	66,516,526	-	(71,715,400)	13,983,976

Issue of ordinary shares in EQTEC plc	1,157,100	2,529,382	-	-	3,686,482

Conversion of debt into equity	977,532	2,645,675	-	-	3,623,207

Share issue costs	-	(270,225)	-	-	(270,225)

Transactions with owners	2,134,632	4,904,832	-	-	7,039,464

Loss for the financial year (Note 37)	-	-	-	(4,674,802)	(4,674,802)

Total comprehensive loss for the financial year	-	-	-	(4,674,802)	(4,674,802)

Balance at 31 December 2019	21,317,482	71,421,358	-	(76,390,202)	16,348,638

Issue of ordinary shares in EQTEC plc (Note 27)	2,658,622	9,841,484	-	-	12,500,106
Conversion of debt into equity (Notes 27 and 29)	379,441	1,536,252	-	-	1,915,693
Share issue costs (Note 27)	-	(639,931)	-	-	(639,931)
Employee share-based compensation (Notes 13 and 27)	-	-	1,297,309	-	1,297,309
Recognition of equity element of debt (Notes 14 and 27)	-	-	522,349	-	522,349
Warrants issued on placing of shares (Note 27)	-	(328,562)	328,562	-	-
Transactions with owners	3,038,063	10,409,243	2,148,220	-	15,595,526
Loss for the financial year (Note 37)	-	-	-	(3,270,895)	(3,270,895)

Total comprehensive loss for the financial year	-	-	-	(3,270,895)	(3,270,895)


Balance at 31 December 2020	24,355,545	81,830,601	2,148,220	(79,661,097)	28,673,269

Company statement of cash flows

for the financial year ended 31 December 2020

	2020	2019
	€	€
Cash flows from operating activities
Loss before taxation	(3,270,895)	(4,674,802)
Adjustments for:
Depreciation of property, plant and equipment	-	616
Impairment of property, plant and equipment	-	206
Employee share-based compensation	1,297,309	-
Reversal of impairment of intercompany loans	(1,720,704)	-
Finance costs	1,177,335	1,083,703
Finance income	(13,397)	-
Provision for impairment of investment in subsidiaries	-	1,427,038
Provision for impairment of trade and other receivables	-	30,000
Provision for impairment of intercompany balances	140,678	489,689
Provision for impairment of other receivables	-	60,000
Bad debt expense	-	3,255
Loss/(gain) on debt for equity swap	170,059	(128,235)
Foreign currency losses/(gains) arising from retranslation of borrowings	235,968	(36,110)

Operating cash flows before working capital changes	(1,983,647)	(1,744,640)
Funds advanced to inter-company accounts	(2,112,285)	(1,376,852)
Repayment of inter-company balances	689,637	79,251
(Increase) in development costs	(9,275)	-
(Increase) in loan receivable from project development undertakings	(243,598)	-
Decrease/(increase) in trade and other receivables	135,825	(10,826)
Increase in trade and other payables	352,350	323,096

Net cash used in operating activities	(3,170,993)	(2,729,971)

Cash flows from investing activities
Investment in associate undertakings	(1,150,619)	-
Investment in subsidiary	(1,000,000)	-
Loans advanced to project development undertakings	(230,957)	-

Net cash generated from/(used in) investing activities	(2,381,576)	-

Cash flows from financing activities
Proceeds from borrowings	-	301,584
Repayment of borrowings	(852,567)	(732,794)
Proceeds from issue of ordinary shares	12,735,236	3,451,697
Share issue costs	(635,911)	(223,556)
Loan issue costs	(30,944)	-
Interest paid	-	(482)
Net cash generated from financing activities	11,215,814	2,796,449

Net increase in cash and cash equivalents	5,663,245	66,478

Cash and cash equivalents at the beginning of the financial year	448,619	382,141

Cash and cash equivalents at the end of the financial year	6,111,864	448,619

Notes

1. Report and accounts

The statutory accounts for the year ended 31 December 2020 which were approved by the Board of Directors on 16 April 2021, will be sent to shareholders of the Company in due course and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The Annual Report and accounts will also be made available on the Company's website: www.eqtec.com

2. General Information

EQTEC plc ("the Company") is a company domiciled in Ireland. These financial statements for the financial year ended 31 December 2020 consolidate the individual financial statements of the Company and its subsidiaries (together referred to as 'the Group').

The Group is a waste-to-value group, which uses its proven proprietary Advanced Gasification Technology to generate safe, green energy from over 50 different kinds of feedstock such as municipal, agricultural and industrial waste, biomass, and plastics. The Group collaborates with waste operators, developers, technologists, EPC contractors and capital providers to build sustainable waste elimination and green energy infrastructure.

The Company's principal activity is the management of holding companies.

Our income currently comes from the following streams: gasification technology sales including software, engineering & design and other related services; maintenance income from operating plants; and we receive development fees from projects where we invest development capital. In the future we expect to receive potential revenue from licensing opportunities and revenue from live operations where EQTEC has an equity stake in a plant.

3. Statement of compliance, basis of preparation and going concern

The Group's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union ('EU') and effective at 31 December 2020 for all years presented as issued by the International Accounting Standards Board.

The financial statements of the parent company, EQTEC plc have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union ('EU') effective at 31 December 2020 for all years presented as issued by the International Accounting Standards Board and Irish Statute comprising the Companies Act 2014.

The consolidated financial statements are prepared under the historical cost convention except for certain financial assets and financial liabilities which are measured at fair value. The principal accounting policies set out below have been applied consistently by the parent company and by all of the Company's subsidiaries to all years presented in these consolidated financial statements.

Comparative amounts have been represented where necessary, to present the financial statements on a consistent basis.

The financial statements are presented in euros and all values are not rounded, except when otherwise indicated.

The Group incurred a loss of €5,767,815 (2019: €3,561,289) during the financial year ended 31 December 2020 and had net current assets of €3,985,440 (2019: net current liabilities of €1,953,659) and net assets of €25,300,739 (31 December 2019: €15,466,948) at 31 December 2020.

The financial statements have been prepared on a going concern basis. The Group's business activities, together with the factors likely to affect its future development, performance and position, are set out in the Chairman's Statement and Chief Executive's Report. The principal risks and uncertainties are set out in the Directors' Report.

Management have produced forecasts for the period up to April 2022 taking account of reasonably plausible changes in trading performance and market conditions, which have been reviewed by the Directors. These reasonably plausible changes include the continued impact of the Covid-19 pandemic and any related operational and execution delays caused by it. The forecasts demonstrate that the Group and Company is forecast to generate profits and cash in 2021/2022 and beyond and that the Group has sufficient cash reserves to enable the Group and Company to meet its obligations as they fall due for a period of at least 12 months from the date when these financial statements have been signed.

After undertaking the assessments and considering the uncertainties set out above, the Directors have a reasonable expectation that the Group and Company has adequate resources to continue to operate for the foreseeable future and for these reasons they continue to adopt the going concern basis in preparing the financial statements.

4. COVID-19

There remains significant uncertainty and concern as to the duration and impact of the Covid-19 crisis going forward.

Whilst the waste-to-energy sector has been at a macroeconomic level unaffected by the pandemic, operationally there have been delays surrounding logistics, administration and execution of projects caused by national lockdowns and impacts from domestic and international travel restrictions. At this point in time, it is unclear as to how quickly or otherwise restrictions will be lifted.

We are closely monitoring the coronavirus situation, are following Government guidelines in all jurisdictions in which we operate and are sharing these with colleagues. We have taken and are prepared to take further action to deal with this situation as it changes. We have considered the impact, actual and potential, of Covid-19 in our scenario analysis and forecasting.

5. Brexit

The end of the transition period on 31 December 2020 following the withdrawal of the United Kingdom from the EU (commonly referred to as "Brexit") and the regulations associated with the EU-UK Trade and Cooperation Agreement ("TCA") which has been applied provisionally since 1 January 2021 has reduced the uncertainty surrounding Brexit. Following the conclusion of the TCA Brexit is no longer considered as a standalone principal risk for the Group and any ongoing issues with regard to the movement of goods are considered as part of either global macro-environment risk or operational and supply chain risk.

6. Estimation uncertainty

Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Actual results may be substantially different.

Impairment of goodwill and non-financial assets

Determining whether goodwill and non-financial assets are impaired requires an estimation of the value in use of the cash generating units to which the assets have been allocated. The value in use calculation requires the directors to estimate the future cash flows to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Where the actual cash flows are less than expected, a material impairment may arise. The estimate for future cash flows includes consideration of possible delays due to Covid-19. The total property, plant and equipment reversal of impairment charges during the financial year amounted to €Nil (2019: Reversal of Impairment cost of €94,985), while the impairment for goodwill during the financial year amounted to €Nil (2019: €Nil).

Provision for impairment of financial assets

Determining whether the carrying value of financial assets has been impaired requires an estimation of the value in use of the investment in subsidiaries and joint venture vehicles. The value in use calculation requires the directors to estimate the future cash flows expected to arrive from these vehicles and a suitable discount rate in order to calculate present value. After reviewing these calculations, the directors are satisfied that a net impairment cost of €Nil (2019: €Nil) be recognised in the Group accounts and €Nil (2019: €1,427,038) be recognised in the Company accounts of EQTEC plc.

Allowances for impairment of trade receivables

The Group estimates the allowance for doubtful trade receivables based on assessment of specific accounts where the Group has objective evidence comprising default in payment terms or significant financial difficulty that certain customers are unable to meet their financial obligations. In these cases, judgment used was based on the best available facts and circumstances including but not limited to, the length of relationship. The Group and Company measure expected credit losses of a financial instrument in a way that reflects an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes, the time value of money and information about past events, current conditions and forecasts of future economic conditions. When measuring ECL the Group and Company use reasonable and supportable forward-looking information, which is based on assumptions for the future movement of different economic drivers and how these drivers will affect each other. At 31 December 2020, provisions for doubtful debts amounted to €475,687 which represents 74% of trade receivables at that date (31 December 2019: €456,671- 57%).

Fair value measurement

Management uses valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management bases its assumptions on observable data as far as possible, but this is not always available. In that case management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date.

Share based payments and warrants

The calculation of the fair value of equity-settled share-based awards and warrants issued in connection with share issues and the resulting charge to the consolidated statement of profit or loss or share-based payment reserve 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 at the date of grant.

Estimating impairment of development assets

Management estimates the net realisable values of development assets, taking into account the most reliable evidence available at each reporting date. The future realisation of these development assets may be affected by market-driven changes that may reduce future prices/premiums.

7. Intangible assets

			Goodwill
Cost			€

As at 1 January 2019, 31 December 2019 and 31 December 2020			16,710,497
Impairment As at 1 January 2019			1,427,038
Impairment losses			-

As at 31 December 2019			1,427,038
Impairment losses			-

As at 31 December 2020			1,427,038

Carrying value
As at 31 December 2019			15,283,459
As at 31 December 2020			15,283,459

Cash-generating units

Goodwill acquired in business combinations is allocated, at acquisition, to the cash-generating units (CGUs) that are expected to benefit from that business combination. A CGU is the smallest identifiable group of assets that generate cash inflows that are largely independent of the cash inflows from other assets or group of assets. The CGUs represent the lowest level within the Group at which the associated goodwill is assessed for internal management purposes and are not larger than the operating segments determined in accordance with IFRS 8 Operating Segments. A total of 1 CGUs (2019: 1) have been identified and these are all associated with the Technology Sales Segment. The carrying value of the goodwill within the Technology Sales Segment is €15,283,459 (2019: €15,283,459).

In accordance with IAS 36 Impairment of Assets, the CGUs to which significant amounts of goodwill have been allocated are as follows:

	2020	2019
	€	€
Eqtec Iberia SLU	15,283,459	15,283,459

For the purpose of impairment testing, the discount rates applied to this CGU to which significant amounts of goodwill have been allocated was 14% (2019: 14%) for the Eqtec Iberia CGU.

Annual test for impairment

Goodwill acquired through business combinations has been allocated to the above CGU for the purpose of impairment testing. Impairment of goodwill occurs when the carrying value of the CGU is greater than the present value of the cash that it is expected to generate (i.e. the recoverable amount). The Group reviews the carrying value of each CGU at least annually or more frequently if there is an indication that a CGU may be impaired.

The recoverable amount of each CGU is determined from value-in-use calculations. The forecasts used in these calculations are based on a financial plan approved by the Board of Directors, plus 5-year projections forecasted by management, and specifically excludes any future acquisition activity.

The value in use calculation represents the present value of the future cash flows, including the terminal value, discounted at a rate appropriate to each CGU. The real pre-tax discount rates used is 14% (2019: 14%). These rates are based on the Group's estimated weighted average cost of capital, adjusted for risk, and are consistent with external sources of information.

The cash flows and the key assumptions used in the value in use calculations are determined based on management's knowledge and expectation of future trends in the industry. Expected future cash flows are, however, inherently uncertain and are therefore liable to material change over time. The key assumptions used in the value in use calculations are subjective and include projected EBITDA margins, net cash flows, discount rates used and the duration of the discounted cash flow model. The estimate for future cash flows includes consideration of possible delays due to Covid-19.

The directors performed sensitivity analysis to account for changes in value in use calculation due to potential delays in commencement of the projects. The following are the sensitivities performed:

· 1% increase in discount rate

· 1 project delayed in 2021, 2 projects delayed in 2022, 3 projects delayed in 2023

· Zero percentage long term growth rate (year 6 onwards)

· 1 major anticipated project delayed until 2022

All of these sensitivity analysis resulted to no impairment. An impairment loss of €Nil (2019: €Nil) has been calculated for the financial year ended 31 December 2020.

8. Financial assets

Group

	2020	2019
Investment in associate undertakings	€	€
At beginning of financial year	2,229,006	-
Reversal of impairment of investment in GG Eco Energy Limited	-	3,078
Disposal of investment in GG Eco Energy Limited	-	(3,078)
Investment in shares in North Fork Community Power LLC	-	2,229,006
Loans to North Fork Community Power LLC	1,150,619	-

At end of financial year	3,379,625	2,229,006
Investment in related undertaking
At beginning of financial year	-	-
Investment in shares in Logik WTE Limited	2,570,888	-

At end of financial year	2,570,888	-

Total financial assets	5,950,513	2,229,006

Investment in associate

Details of the Group's interests in associated undertakings at 31 December 2020 is as follows:

Name of associated	Country of	Shareholding	Principal activity
undertaking	incorporation

North Fork Community Power LLC	United States of America	19.99%	Operator of biomass gasification power project
For the first five years of operation the share of profits from the associate is limited to 0.1999% rising to 19.99% thereafter. During the financial year, the Group advanced loans of €1,150,609 to North Fork Community Power LLC. These loans which are the subject of commercial negotiation were interest free with no fixed repayment terms at year end. Since the year end the shareholders of North Fork Community Power LLC, including the Company, have agreed that these loans are to be converted into 15% of the equity of North Fork Community Power LLC subject to the completion of formal legal documentation. Previously, the investment was recorded in the books of a subsidiary; it has been transferred to EQTEC plc in the current financial year.
Summarised financial information in respect of the Group's interests in associated undertakings is as follows:
			2020	2019
			€	€
Non-current assets			44,552	1,339,413
Current assets			17,686,647	17,993,577
Non-current liabilities			(16,213,836)	(18,721,867)
Current liabilities			(263,150)	(34,885)

Net assets/(liabilities)			1,254,213	576,238

Group's share of net assets of associated entities			250,717	115,190

	2020	2019
	€	€
Total revenues	22,047	257,440
Total expenses	(16,506)	(495,346)

Total profit/(loss) for the financial year	5,541	(237,906)

Group's share of profits of associated entities	-	-

Investment in related undertaking

On 8 December 2020, it was announced that the Company's wholly owned subsidiary, Deeside WTV Limited (the Buyer), had signed a share purchase agreement with Logik Developments Limited to acquire full ownership of the Deeside Refuse Derived Fuel project through the acquisition of Logik WTE Limited, a company incorporated in the United Kingdom.

The key terms of the share purchase agreement (SPA) are as follows:

· Initial consideration of €2,570,888 (£2,310,000) of which a deposit amount of €333,882 (£300,000), from which the existing exclusivity payment of £100,000 will be deducted, is payable on the signing of the agreement and the balance of €2,237,006 (£2,010,000) payable on or before 12 months from 8 December 2020 (and which sum shall be netted off the existing debts of Logik WTE Limited);

· Additional deferred conditional consideration of €2,548,630 (£2,290,000) payable on the achievement of certain conditions precedent related to development milestones of the Project.

· The issue of a fixed dividend share in the Buyer to Logik Developments Limited, which gives Logik Developments Limited the right to 5% of distributable profits in Deeside WTV Limited. This share carries no voting rights in Deeside WTV Limited.

· An additional development premium or overage payment, subject to a maximum further amount of €6.01 million (£5.4 million), calculated in accordance with an agreed formula payable on the achievement of each of the following:

Financial close on the funding for the Waste Reception & Anaerobic Digestion plant on the site for which planning and the necessary permits have been obtained ("Project Phase I").

Financial close as defined on the funding for the Advanced Gasification plant on the site for which planning and the necessary permits have been obtained ("Project Phase II").

Contracts have been exchanged but completion as defined in the share purchase agreement had not occurred at the year-end, and as a result Logik WTE Limited is not considered a subsidiary of the Group at 31 December 2020.

In these financial statements the full initial consideration of €2,570,888 (£2,310,000) has been recognised as an investment in a related undertaking and the balance of consideration payable of €2,237,006 (£2,010,000) has been recognised as a payable in other payables.

Company

	2020	2019
Investment in subsidiary undertakings	€	€
At beginning of financial year	16,869,625	16,796,663
Reclassification of inter-company balance as contribution to capital in Eqtec Iberia	1,000,000	1,500,000
Investment in other subsidiaries	5	-
Provision for impairment in investment in subsidiaries	-	(1,427,038)

At end of financial year	17,869,630	16,869,625

Loans to subsidiary undertakings
At beginning of financial year	571,304	571,304
Provision for impairment of investment in subsidiaries	(571,304)	-

At end of financial year	-	571,304
Investment in associate undertakings
At beginning of financial year	-	-
Transfer of investment in North Fork Community Power LLC from subsidiary to Company	2,229,006	-
Additional loans to North Fork Community Power LLC	1,150,619	-

At end of financial year	3,379,625	-

Total	21,249,255	17,440,929

9. Development assets

	2020	2019
	€	€
Group
Costs associated with project development Loan receivable from project development undertakings	503,653 482,537	- -

The Group invests capital in assisting in the development of waste to value projects which can deploy its technology and expertise and make a profit from the realisation of the development costs at the financial close, when project financing is in place so that the project undertaking can commence construction. Cost comprises direct materials and overheads that have been incurred in furthering the development of a project towards financial close.

For the financial year ended 31 December 2020, €Nil (2019: €Nil) of development assets was included in consolidated statement of profit or loss as an expense and €Nil (2019: €98,581) was impaired resulting from write down of development assets.

Included in loans receivable from project development undertakings is an amount of €200,000 which is receivable, along with accrued interest, 12 months from the date of drawdown. Interest is charged at 15% per annum. At 31 December 2020, the loan is valued at €213,297 (2019: Nil).

The remaining loans receivables were issued with no interest and no fixed repayment date.

	2020	2019
	€	€
Company
Costs associated with project development Loan receivable from project development undertakings	9,275 243,598	- -

The remaining loans receivables were issued with no interest and no fixed repayment date.

10. Related party transactions

The Group's related parties include Altair Group Investment Limited ("Altair"),who at 31 December 2020 held 19.66% (2019: 28.87%) of the shares in the Company. Other Group related parties include the associate companies and key management.

Transactions with Altair

During the financial year ended 31 December 2020, Altair advanced €Nil (2019: €301,584) to the Group by way of borrowings. During the financial year ended 31 December 2020, the Group repaid borrowings of €1,175,839 (2019: €2,562,329) by way of conversion into equity. Interest payable to Altair for the financial year ended 31 December 2020 amounted to €170,084 (2019: €397,356); this includes a redemption fee of €114,583 (2019: €114,583) with respect to a redemption fee for the early settlement of the loan and a reprofiling fee of €106,321 (2019: €Nil) with respect to the reprofiling of the debt.

Included in borrowings, net of amortisation costs, at 31 December 2020 is an amount of €Nil (2019: €1,070,915) due to Altair from the Group.

Transactions with key management personnel

Key management of the Group are the members of EQTEC plc's board of directors. Key management personnel remuneration includes the following:

	Fees/Salaries /Expenses	Termination	Other	Pension	2020	2019
Directors	€'000	€'000	€'000	€'000	€'000	€'000
I Pearson	68	-	-	-	68	68
O Leiva (Resigned 28/6/2020)	-	-	-	-	-	12
T Quigley	41	-	-	-	41	42
I Price (Resigned 16/9/19)	-	-	-	-	-	176
G Madden	250	-	24	-	274	262
Y Alemán (Appointed 28/8/19)	241	-	-	-	241	92
D Palumbo (Appointed 28/8/19)	281	-	-	-	281	85
J Vander Linden (Appointed 1/12/20)	14	-	-	-	14	-
Total	895	-	24	-	919	737

At 31 December 2020, directors' remuneration unpaid (including past directors) amounted to €260,875 (31 December 2019: €185,347). As announced by the Company on 9 July 2020, these unpaid remuneration is to be applied (net of any required tax deductions) in subscribing for new ordinary shares of €0.001 each in the capital of the Company at a price of 0.45 pence per share. These shares were issued on 1 February 2021.

Prior to becoming a director, Mr D Palumbo provided advisory services to the Company. The cost of these services amounted to €Nil (2019: €103,201) for the financial year ended 31 December 2020. In addition, a company controlled by Mr. Palumbo provided office space to the Group in London. The cost of these services amounted to €21,843 (2019: €Nil). At 31 December 2020, an amount of €3,172 is included in trade and other payable with respect to payments due to this company (2019: €Nil).

Prior to becoming a director, Mr J Vander Linden provided advisory services to the Company. The cost of these services amounted to €144,148 (2019: €Nil) for the financial year ended 31 December 2020. At 31 December 2020, an amount of €63,883 is included in trade and other payable with respect to payments due to this company (2019: €Nil). This balance was settled through the issue of new ordinary shares of €0.001 each in the capital of the Company on 1 February 2021.

The following directors also received the benefit of share-based payments during the year through the granting and vesting of warrants and options (Note 27).

	Share based payments
Directors	€'000
T Quigley	28
G Madden	673
Y Alemán	142
D Palumbo	284
Total	1,127

Details of each director's interests in shares and equity related instruments that were in office at the year-end are shown in the Directors' Report.

Transactions with associate undertakings

During the financial year ended 31 December 2020, sales of €1,980,000 were made to associate undertakings (2019: €21,438).

During the financial year ended 31 December 2020, the Group advanced $37,040 to its associated undertaking. Included in trade and other receivables at 31 December 2020 is an amount of €30,201 with respect to this advance (2019: €Nil).

Unless otherwise stated, none of the transactions incorporate special terms and conditions and no guarantees were given or received. Outstanding balances are usually settled in cash.

11. Events after the balance sheet date

New Unsecured Loan Facility and Full Redemption of Secured Loan Facility

On 4 January 2021, the Group announced that it had agreed an unsecured term loan facility of £1.25 million with Altair Group Investment Limited, a substantial shareholder in the Company. The facility is for a term of 12 months and the principal and any accrued interest are repayable in full on 31 December 2021 but the company can repay the loan early without penalty. The facility is unsecured and has a coupon of 6% per annum, payable quarterly in arrears. The facility was used to pay all sums due under the secured loan facility in full and final settlement of amounts owed to them, releasing and discharging any secured assets and obligations under any previous agreements with the lenders.

Exercise of warrants

On 5 January 2021, the Group announced that warrants over 12,000,000 New Ordinary Shares at a price of 0.25 pence per share and warrants over 30,773,543 New Ordinary Shares at a price of 0.33 pence per share had been exercised. The aggregate gross proceeds of these exercises received by the Company amount to £131,553.

Directors' Dealings and Issue of equity to Strategic Suppliers

On 1 February 2021, the Group announced that it had issued, in aggregate, 37,980,000 New Ordinary Shares to certain Directors to satisfy the unpaid remuneration (net of tax where relevant), owed to them for the six months ended 31 December 2020 under the 2020 Director Remuneration Arrangements announced previously on 9 July 2020 at a price of 0.45 pence per share.

The Group also announced that it has issued, in aggregate, 28,446,341 New Ordinary Shares to certain strategic service providers who have provided business development and advisory services to the Group, and who previously agreed to receive such shares in satisfaction of fees due to them, such number of shares being determined by reference to the share price at certain points in time. The issue of these shares had reduced the Group's creditors by £136,500. Included in the shares issued are 12,844,444 New Ordinary Shares issued to Morichella Associates Limited, a company owned and controlled by one of the Executive Directors of the Company.

Exercise of warrants

On 1 March 2021, the Group announced that it had received a Notice to exercise warrants over 114,000,000 New Ordinary Shares at a price of 0.25 pence per share from Altair Group Investment Limited. The aggregate gross proceeds of the exercise receivable by the Company amounted to £285,000. These warrants were issued as part of the equity fundraise completed by the Company on 2 December 2019 and represent a full exercise of the remaining warrants issued to Altair as a result of their equity subscription at that time. The proceeds from the exercise of the warrants was used to repay a portion of the £1,250,000 loan drawn down by the Company from Altair, announced on 4 January 2021. Following the repayment of £285,000 the loan balance together with accrued interest amounted to £976,096 on 1 March 2021.

No other adjusting or significant non-adjusting events have occurred between the 31 December reporting date and the date of authorisation.

12. Contingent liabilities

On 13 July 2020, the Group announced that lawyers acting for Aries Clean Energy LLC of Franklin, Tennessee, USA ("Aries") filed a complaint in a Californian court on 9 July 2020 against the Company and others, alleging patent infringement through the use of the Group's Advanced Gasification Technology in the North Fork Community Power plant in California USA.

On 22 March 2021 the Company announced the Aries had withdrawn its patent infringement complaint. The joint stipulation that the action be voluntarily dismissed with prejudice was filed in the United States District Court Eastern District of California on 19 March 2021 and operates as a final determination on the merits of the case, forbidding Aries from filing another lawsuit on the same grounds.

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