Annual Financial Report

About this update from Iofina Plc

[{"type":"text","content":"\n \n \n \n RNS Number : 6388Z \n Iofina PLC \n 25 May 2021 \n   \n \n \n \n This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (\"MAR\"), and is disclosed in accordance with the company's obligations under Article 17 of MAR. \n \n \n   \n \n \n 25 May 2021 \n \n \n   \n \n \n Iofina plc \n \n \n (\"Iofina\", the \"Company\" or the \"Group\") \n \n \n (LSE AIM: IOF) \n \n \n   \n \n \n AUDITED 2020 FINAL RESULTS \n \n \n   \n \n \n RECORD REVENUE, EBITDA and IODINE PRODUCTION \n \n \n   \n \n \n Iofina plc, specialists in the exploration and production of iodine and manufacturers of specialty chemical products, announces its audited final results for the 12 months to 31 December 2020. \n \n \n   \n \n \n 2020 Sales and profits grow despite Covid-19 headwinds: \n \n \n \n · \n Revenue increased by 1.5% to $29.7m (2019: $29.2m) \n \n \n · \n Gross profit increased by 1.9% to $8.4m (2019: $8.2m) \n \n \n · \n EBITDA improved by 6.7% to $4.7m (2019: $4.4m) \n \n \n · \n Operating profit increased by 4.1% to $2.9m (2019: $2.8m) \n \n \n · \n Profit before tax increased by 131.3% to $1.28m (2019: $0.55m) \n \n \n \n   \n \n \n Debt refinanced and interest payments reduced: \n \n \n \n · \n Debt of $18.2m was refinanced by $5.2m repayments and $13.0m of bank facilities \n \n \n · \n Finance expense decreased by 37.7% to $1.7m (2019: $2.7m) \n \n \n · \n Cash of $3.5m at year end (2019: $8.2m) following $5.2m repayments as part of debt refinancing \n \n \n \n   \n \n \n Increasing production and delivering on investment plan: \n \n \n \n · \n Iofina Resources produced 610 MT of crystalline IOflo® iodine from Oklahoma based IOsorb® plants (2019: 602.7 MT) \n \n \n · \n Construction of IO#8 plant completed and production commenced April 2020 \n \n \n · \n Capital investment into iodine and chemical plants was $2.4m (2019: $1.7m) \n \n \n \n   \n \n \n 2021 so far: \n \n \n \n · \n Record revenues for Q1 2021 partially as a result of sales of excess inventory \n \n \n · \n Extreme February weather impacted Q1 crystalline iodine production, producing 108MT  (2020: 129.7 MT), but operations are since normalised \n \n \n \n \n · \n Iodine prices have remained stable and recently lifted to $34-37/kg in Q2 2021 \n \n \n \n   \n \n \n Commenting, President and CEO Dr. Tom Becker, stated: \n \n \n \"I am extremely pleased with the excellent progress that Iofina has made in 2020, and we are proud to report that the Company has had another record-breaking year, testament to the hard work and dedication of our staff and the resilience of our business model even in the face of a global pandemic. \n \n \n   \n \n \n \"The Group's debt refinancing during the period was a key highlight and has greatly strengthened the balance sheet, placing us in an excellent position to continue to make operational improvements and to expand our production and chemicals product portfolio. In line with our expansion strategy, IO#8 was completed on time and within budget during the period and we are now carefully reviewing several promising locations for expanding further, while carefully considering the timing around this. \n \n \n   \n \n \n \"Following a brief slowdown in the second half of the year as a result of the COVID-19 pandemic and its effects on the global economy, we have been particularly encouraged to see the strong state of the iodine market and its recovery in Q1'21, with prices having bounced back to roughly where they were this time last year. We are confident that this recovery will continue for the remainder of 2021 and beyond and we are pleased to be on track to continue our growth. \n \n \n   \n \n \n \"I'd like to thank our staff for their dedication throughout what was a challenging year and I'd like to thank shareholders for their continued support. I look forward to updating the market going forward as we continue to progress with our prudent growth strategy.\" \n \n \n   \n \n \n Investor presentation \n \n \n Thomas Becker, CEO and Malcolm Lewin, CFO will provide a live presentation relating to the 2020 results and outlook for the Company via the Investor Meet Company platform on 26 May 2021 at 3pm BST. The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via the Investor Meet Company dashboard up until 9:00am today, or at any time during the live presentation. \n \n \n   \n \n \n Investors can sign up to Investor Meet Company for free and add to meet Iofina plc via: \n \n \n \n \n https://www.investormeetcompany.com/iofina-plc/register-investor \n \n \n \n \n   \n \n \n Investors who already follow Iofina plc on the Investor Meet Company platform will automatically be invited. \n \n \n   \n \n \n Annual General Meeting \n \n \n The Company is posting its 2020 Financial Results and notice of its AGM to shareholders today. The 2021 AGM of Iofina plc will be held at 2:00 p.m. on 18 June 2021 at 4-6 Russell Street, London WC2B 5HZ.  In light of COVID-19 circumstances and due to continued travel and meeting restrictions in place and other safety factors, it will not be possible for shareholders to attend the meeting in person. The AGM will be run as a closed meeting with the minimum necessary quorum of two shareholders in accordance with Iofina's articles of association. \n \n \n   \n \n \n To ensure shareholder votes are counted at the AGM, all shareholders are asked to submit a Form of Proxy and are advised to appoint the chairman of the meeting as your proxy to ensure your vote is counted.  The Company will provide any further relevant information regarding AGM matters in future RNS releases. \n \n \n   \n \n \n Enquiries: \n \n \n   \n \n \n Dr. Tom Becker \n \n \n CEO & President \n \n \n Iofina plc \n \n \n Tel: +1 859 356 8000 \n \n \n   \n \n \n Christopher Raggett/Tim Harper (corporate finance) \n \n \n Tim Redfern (ECM) \n \n \n finnCap Ltd \n \n \n Tel: +44 (0)20 7220 0500 \n \n \n   \n \n \n Media Contact: \n \n \n Charles Goodwin/Joe Burgess \n \n \n Yellow Jersey PR Limited \n \n \n Tel: +44 (0)7747 788 221 \n \n \n About Iofina: \n \n \n Iofina plc (AIM: IOF) is a vertically integrated Company that specialises in the production of Iodine and the manufacturing of specialty chemical products. As the second largest producer of iodine in North America, it comprises three USA entities; Iofina Resources, Iofina Chemical and IofinaEX. \n \n \n   \n \n \n LEI: 213800QDMFYVRJYYTQ84 \n \n \n ISIN: GB00B2QL5C79 \n \n \n   \n \n \n Iofina Resources \n \n \n Iofina Resources develops, builds, owns and operates iodine extraction plants using Iofina's WET® IOsorb® technology. Iofina currently operates five producing IOsorb® plants in Oklahoma and is consistently using technology and innovation to improve and expand its operations. \n \n \n   \n \n \n Iofina Chemical \n \n \n Iofina Chemical has manufactured high quality halogen speciality chemicals derived from raw iodine, as well as non-iodine based products for over 35 years. \n \n \n   \n \n \n IofinaEX \n \n \n Iofina's newest subsidiary, IofinaEX, is fully licensed to process hemp in the state of Kentucky and is currently managing a hemp seed investment in this market. \n \n \n   \n \n \n \n \n www.iofina.com \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n Contents  \n \n \n   \n \n \n COMPANY   INFORMATION ................................................................................................................................................. 2 \n \n CHAIRMAN'S   STATEMENT ................................................................................................................................................. 3 \n \n FINANCIAL   REVIEW ............................................................................................................................................................ 7 \n \n DIRECTORS'   BIOGRAPHIES….............................................................................................................................10 \n \n STRATEGIC   REPORT ........................................................................................................................................................... 12 \n \n S172   STATEMENT…..................20 \n \n CORPORATE   GOVERNANCE…................21 \n \n DIRECTORS'   REPORT ......................................................................................................................................................... 22 \n \n CORPORATE   GOVERNANCE   STATEMENT ....................................................................................................................... 24 \n \n INDEPENDENT   AUDITOR'S   REPORT   TO   THE   MEMBERS   OF   IOFINA   PLC .................................................................... 31 \n \n CONSOLIDATED   STATEMENT   OF   COMPREHENSIVE   INCOME. .................................................................................... 41 \n \n CONSOLIDATED   BALANCE   SHEET. .................................................................................................................................. 42 \n \n CONSOLIDATED   STATEMENT   OF   CHANGES   IN   SHAREHOLDERS'   EQUITY ................................................................. 43 \n \n CONSOLIDATED   CASH   FLOW   STATEMENT. ................................................................................................................... 44 \n \n COMPANY   BALANCE   SHEET. ........................................................................................................................................... 45 \n \n COMPANY   STATEMENT   OF   CHANGES   IN   SHAREHOLDERS'   EQUITY .......................................................................... 46 \n \n NOTES   TO   THE   CONSOLIDATED   FINANCIAL   STATEMENTS .......................................................................................... 47 \n \n   COMPANY INFORMATION  Directors                                                L J Baller   T M Becker   W D Bellamy   M T Lewin   J F Mermoud   M C Fallin   Secretary                                              Simon Holden Company number                                05393357 Registered office                                  48 Chancery Lane   London WC2A 1JF   Auditor                                                  UHY Hacker Young LLP   Quadrant House   4 Thomas More Square   London E1W 1 YW   Nominated Adviser                             finnCap Ltd   1 Bartholomew Close   London EC1A 7BL    Brokers                                                  finnCap Ltd   1 Bartholomew Close   London EC1A 7BL   Solicitors                                                Keystone Law Limited   48 Chancery Lane   London WC2A 1JF   Registrar                                               Link Asset Services   34 Beckenham Road   Kent BR3 4TU   Financial PR                                         Yellow Jersey PR Limited   70-71 Wells Street   London W1T 3QE \n \n   CHAIRMAN'S STATEMENT Introduction We began 2020 with the business poised for further growth across all business lines. We were experiencing strong growth in existing products, and there was exciting new oilfield development that would enhance our iodine production and new specialty chemical product lines. The COVID-19 pandemic impacted our 2020 aspirations, however I am extremely pleased with the way in which the Company navigated the year.   Iofina took immediate steps to protect its workforce from the spread of COVID-19, as well as precautions to enable continuity of business operations. Chemical manufacturing was deemed an 'essential business' in the United States where Iofina operates, and by creating the safest working environment our staff were able to perform their duties throughout these unprecedented times. On behalf of the Board, I would like to say a big thank you to our staff for their commitment throughout, given how difficult the pandemic has been for many people.    While Iofina and the iodine market was not as negatively affected as many other sectors, there was a temporary slowdown in iodine demand and a reduction in iodine price. We also saw oil futures prices go negative on delivery, which had a significant negative impact on our partners.   Despite the various headwinds of 2020, Iofina produced record levels of Iodine and achieved record figures across all its key Group financial reporting metrics. We also delivered record revenue from non-iodine products (up 23%), completed the construction of the IO#8 plant on time and on budget and successfully restructured the Company's debt, which has helped to significantly strengthen the balance sheet. Current total debt is now less than half of the debt 24 months prior, with interest rates on debt considerably reduced. The reduction in finance expense was a major factor in the 131% increase in profit before tax.   We began to see markets recover during the latter half of 2020, and with this we got straight back on track with our targets. Momentum has continued into 2021 and the progress we've seen in Q1 and early Q2 of the new year has been extremely pleasing.   We have built an excellent business with its diversified, low-cost production across five IOsorb® plants and a specialty chemicals business meeting the needs of its customers across a number of end markets. With debt reduced and the balance sheet strengthened, we are able to continue investing in the right areas to deliver future growth and profitability. Our main goal remains 'continuous improvement' throughout the business, which can be measured by financial results and production, as well as the creation of new products and the wellbeing of our staff. The management is committed to delivering improvements across the business every year, which will ultimately drive shareholder value.   Iofina Resources Iofina Resources (\"IR\") produced a record 610 metric tonnes ('MT') of crystalline iodine during the period and continued to execute its expansion plans, completing its latest IOsorb® plant IO#8 in April while operating its four other plants in western Oklahoma.  IR's unique technology and business model allows the Company to isolate a valuable resource, iodine, from brine waste streams produced from current oil and gas operations.  The Company believes its iodine production costs are among the lowest in the world.   Prior to restrictions and market changes caused by the COVID-19 pandemic, IR met its production expectations. As COVID-19 restrictions increased, IR and its workforce continued to operate plants and produce iodine in a challenging environment. Additionally, construction continued on IO#8 during this time.  Oil and gas production and demand in the USA changed significantly during Q2 2020 and oil prices briefly turned negative. As a result, many oil and gas operators made decisions to shut-in production and/or spend less money on operations to conserve cash. As a result of this knock-on effect, IO#8 saw its brine supply limited and management took the prudent decision to temporarily shut down the plant in early May. IR continued to focus on factors within its control at that time. Its four other plants continued to produce iodine and IR utilized federal programs to keep its personnel fully employed.  The IO#8 shut-in was short-lived, and operations resumed in June.    It is a crucial part of IR's strategy to continue investing in maintenance at our sites and to work closely with our brine suppliers to maximize brine available to our plants. Lower brine supply had some impact on iodine production at a few plants in H2 2020 as oil fields in our core area matured and less capital was spent on oil production to conserve cash. However, Iofina has good relations with its brine suppliers and together we continue to work on projects to maximize brine availability to IOsorb® plants to the benefit of both Iofina and its partners.   The achievement of building IO#8 on time and on budget is a testament to the maturity of IR as a Company and its talented employees. Exploration efforts remain a focus for IR and the Company intends to continue its prudent growth strategy and expand its iodine production, with the next expansion likely to start late in 2021. The Company's main priority when looking to expand its operations has always been to find locations that demonstrate the highest potential for stable, long-term, and quality brine supply. Given the events of 2020 this, along with ensuring we execute at a time when growth will be best supported by the global iodine market, are of even greater importance for Iofina. The Directors are committed to production growth but prudently after risk factors are fully evaluated for future sites.    For IR's next expansion, the Company is exploring traditional IOsorb® sites, investigating alternative brine sources for existing plants, considering locations outside Oklahoma, and studying means to better control brine streams to both future and current plants. The Company is well geared for expansion and, as with IO#8, expansion can be accomplished with minimum SGA costs.  The Company believes at this time that expansion can be funded from current company resources and credit lines.    Iofina Chemical Iofina Chemical (\"IC\") and its employees, deemed an essential business, maintained operations throughout the pandemic and achieved record sales of $29.7m over the course of the period, all in spite of challenging market conditions which saw iodine demand decrease in H2.   One of the pillars of Iofina's business model is to diversify the business within our technological expertise.  This was particularly important in 2020 where iodine-based product demand slowed but IC's non-iodine products remained strong, seeing sales increases of over 22% YOY.  This diversification has allowed Iofina to successfully navigate the difficult market conditions.   A major part of IC's strategy is to reinvest in existing processes and to develop new products within its core expertise, and this has continued throughout 2020. IC has been developing other iodine derivatives to add to its portfolio, process improvements to existing semi-conductor and disinfectant lines are ongoing, and we continue to work with a major Fortune 100 company on an iodine-based process which is expected to continue to grow.  Due to competitive reasons and confidentiality agreements more info cannot be presented.   Iofina Chemical continues to cultivate relationships with existing and new customers and strives to meet or exceed its customer's expectations. Iodine Prices Since the iodine price lows of early 2017, prices steadily increased through to early 2020, reaching $36-37/kg.  During the second half of 2020, as global economies contracted, so did the demand for iodine, resulting in prices reducing slightly to $33-35/kg during the second half of 2020. The Company's iodine inventories were higher than normal at the end of 2020, due to this reduced demand. However, they normalized in Q1 2021 as global markets bounced back, resulting in a record sales quarter for the Company. Iodine prices have recently moved higher to approximately $34-37/kg, which is similar to where prices were in early 2020. Currently iodine prices are trending higher and Iofina now expects iodine prices to continue to slowly increase in 2021, assuming global economies maintain their recoveries.   Debt Refinancing In September 2020, the Group announced that it had refinanced its entire debt with First Financial Bank of Ohio. The debt refinance included a 7-year $10m term loan and a revolving line of credit of up to $8m. Initially the company drew $3m on the line of credit and currently minimizes the line of credit interest expense by 'sweeping' any funds not required for operations. Interest rates on Company debt have been lowered from 7.5% to below 4%.   The debt refinancing was a major accomplishment for the Group, particularly doing so at a time when banks were particularly cautious due to the level of uncertainty in the market. Significantly, since March 2019, the Group has more than halved its total debt, thus achieving substantial reductions in both debt and interest outgoings moving forward. This allows the Group to utilize more profits to reinvest in the Company's growth.   Environment, Health and Safety (\"EHS\") Iofina is committed to operating in a safe, efficient, and environmentally friendly manner. The Group is committed to the highest standards of safety for our employees and our community. Iofina's iodine production utilizes a produced brine stream which, without Iofina, would simply be disposed of along with the contained iodide. Isolation of this valued resource from a produced stream is an extremely environmentally friendly method in contrast to other major US based iodine production, which requires the drilling of new brine wells which serve no other purpose than iodine production.   The Group is constantly striving towards continuous improvements in its EHS policies and programs. Iofina Chemical is a Chemstewards® certified facility (recertified in 2019 and currently active). Iofina Resources and Iofina Chemical each have an EHS manager to oversee practices, and upper management personnel are regularly updated on EHS performance matrices. All Iofina employees are engaged in practices to continually improve safety and reduce environmental impact.   Iofina has also implemented further safety initiatives in the wake of the COVID-19 pandemic to protect its employees.   Strong Board and Governance The Directors continue to acknowledge the importance of high standards of corporate governance. The Group's Corporate Governance Statement is found on page   24 of this report. Given the Group's size and the constitution of the Board, the Directors decided to adopt the principles set out in the QCA Corporate Governance Code published in April 2018 (the \"QCA Code\") in advance of the requirement to adopt a corporate governance code under AIM Rule 26 of the AIM Rules for Companies. In addition, we continue to operate a robust framework of systems and controls to maintain high standards throughout the Group, further details of which can be found in the Corporate Governance Statement. The Board believes that effective corporate governance assists us in the delivery of our corporate strategy, the sustainable generation of shareholder value and the safeguarding of our stakeholders' long-term interests. We continue to strengthen the Board by adding independent appointments that have the interest of all shareholders at the forefront. Iofina will continue to seek a diverse board with strong skillsets that continue to grow and challenge the Company. The Board was particularly pleased with the 2020 appointment of the former Governor of the State of Oklahoma and former US Congresswoman for Oklahoma in the United States. Mrs. Mary Fallin has brought a strong set of unique experience that has enhanced the Board of Iofina as it continues to deliver on its strategy.   Outlook The next few years look to be transformational for Iofina.  The limits of the excessive debt to EBITDA ratio are of the past, as we go into a debt to EBITDA range of 2-3x.  Cashflow generation will compound and allow the Group to continue paying off debt while allowing for controlled growth, something that the Group has struggled to achieve since 2013 and which has been a key goal for the Board.  We now have a highly attractive, profitable Company story to present to institutional and retail investors worldwide and we are looking forward to the return of investor roadshows and new investor programs starting mid-year 2021.   In terms of our expansion, we are squarely focused on growing our current iodine production and chemical compounds while moving into new and exciting chemical compounds. We are also considering strategies to reduce our reliance on our current oil and gas partners.    Over the past several years we have been working to diversify our product lines, recognizing the importance of product diversification in our core chemical competencies. This diversification was shown to be particularly important in 2020 as many sectors contracted and in the coming years we will continue this diversification. In 2021, we plan to invest in a new production line to improve our largest non-iodine process to improve efficiencies, safety, and purity. We will continue to explore new products and business relationships to ensure future growth.    We continue to be prudent in our approach to growth and are looking at all the data points we have available with regards to the paradigm shift we've seen both politically and economically from the low oil and natural gas prices experienced in 2020.  This data is enabling us to strategically select our next IOsorb® plant locations in mid to late 2021 as we continue to grow.   We would like to thank all of our shareholders for their continued support as we guided the business through a tough 2020 and we are looking forward to the excellent opportunities we are seeing as we move forward into the next chapter for the Company.     \n    Lance J Baller Non-Executive Chairman Iofina plc 24 May 2021       FINANCIAL REVIEW   Summary 2020 v 2019 · Sales slowed by COVID-19 pandemic but results still ahead of 2019 · Revenue increased by 1.5% from $29.2m to $29.7m · Gross profit increased by 1.9% from $8.2m to $8.4m · EBITDA improved by 6.7% from $4.4m to $4.7m · Operating profit increased by 4.1% from $2.8m to $2.9m · Finance expense decreased by 37.7% from $2.7m to $1.7m · Profit before tax increased by 131.3% from $0.55m to $1.28m · Debt of $18.2m was refinanced by $5.2m repayments and $13.0m of bank facilities · Paycheck Protection Program loans of $1.09m were received, and forgiven in 2021 · Capital investment into iodine and chemical plants was $2.4m (2019: $1.7m) · Construction of IO8 plant completed and production commenced April 2020 · Inventories increased by $3.6m largely due to COVID-19 impact on sales · Cash reduced from $8.7m to $3.5m after debt repayments   Trading results   Total revenue increased by 1.5% from $29.2m to $29.7m. Demand for Iofina's iodine related products fell due to the COVID-19 pandemic, but the effect on total revenue was offset by price increases achieved and by an increase in sales revenue from non-iodine products. Turnover of iodine related products declined by 8% from $20.2m to $18.5m. Sales of crystallised iodine fell by 9%, with a 23% volume reduction from 422 metric tonnes to 324 metric tonnes offset by 18% price increases, with an average price of $34.84 (2019 $29.42) per kilogram. Sales of iodine derivative products showed a combined 34% volume decline mitigated by a 26% overall price increase. Non-iodine products revenue increased by 23% from $9.1m to $11.2m, with volume increases of 23% and no overall pricing change.   Gross profit improved overall by $0.2m (2%) to $8.4m (2019 $8.2m), remaining at 28% of sales as for 2019. Margins over costs of materials were some 4% higher for all iodine products combined, while for non-iodine products there was a 4% fall in margins. Costs of the Iofina Chemical plant increased by $0.6m (18%) reflecting higher maintenance costs and the strengthening of the production management function. Production costs of iodine per kilogram at Iofina Resources increased by 8% reflecting startup costs at the new IO8 plant and lower output in relation to costs. The net result of all the above factors was a similar gross profit to 2019.   Crystallised iodine production was 610 metric tonnes compared to 603 metric tonnes for 2019. A new plant IO8 was put into service in April 2020. Sales of crystallised iodine, both as raw iodine and in derivative compounds, fell by 28% from 665 metric tonnes to 476 metric tonnes. Sales of crystallised iodine were 68% of the total (2019 64%), and sales of crystallised iodine in derivative products were 32% of the total  (2019 36%).   EBITDA improved by 6.7% from $4.4m to $4.7m after deducting $3.7m SGA expenses (2019 $3.8m) from gross profit of $8.4m (2019 $8.2m).   Operating profit after depreciation and amortisation of $1.8m (2019 $1.6m) was $2.9m compared to $2.8m for 2019.   Finance expense and derivative liability   Finance expense fell from $2.7m in 2019 to $1.7m in 2020, and there was a non-cash derivative liability credit of $0.4m in 2019 (2020 Nil). The 2019 expense amount of $2.7m comprised principally $1.6m interest payable, $0.2m arrangement fees, and a $0.8m non-cash charge for discount amortisation on convertible loan notes. The 2020 expense of $1.7m comprises principally $1.1m interest payable and $0.5m refinancing and arrangement fees. The reduction of $0.5m in interest payable reflects both loan repayments of $5.2m made during 2020 and the reduction in interest rates from 7.5% to 3.50% and 3.25% resulting from the debt refinancing described in Note 20. The refinancing and arrangement fees of $0.5m are expected to be a non-recurring item.   Profit before tax   Profit before tax improved from $0.6m (2019) to $1.3m (2020). Given that 2020 trading results were on a par with 2019, the improvement mainly reflects the reduction in finance expense described above.   Debt refinancing   2019 term loan notes debt of $18.2m was refinanced during the year by repayments of $5.2m and new bank facilities totalling $13.0m. The facilities comprise a seven year term loan of $10.0m repayable in monthly instalments, and a revolving line of credit of $8.0m, of which $3.0m was drawn initially. The 2019 term loan notes carried an interest rate of 7.5%, whereas the new facilities are at 2.5% over US LIBOR as regards the term loan and 2.25% over US LIBOR as regards the revolving line of credit. Further details of these facilities are given in Note 20.   Paycheck Protection Program loans   Paycheck Protection Program loans totalling $1.090m were received during the year. Notification of forgiveness of these loans was received from the Small Business Administration in January 2021.   Investment   Progress towards a return on the Group's November 2019 investment of $0.9m in the hemp seed production undertaken by Organic Vines OP LLC has been delayed, with the COVID-19 pandemic a factor. See Note 16 for details.       Capital investment   The Group invested $2.4m in capital projects and equipment (2019 $1.7m), of which $0.6m relates to improvements and replacements at the Iofina Chemical plant (2019 $0.4m), and $1.8m relates to the Iofina Resources Oklahoma plants. Of this latter amount $1.7m was spent on completing construction of IO8 plant, placed in service April 2020, and together with the $1.2m spent in 2019 brings the total cost of the plant to $2.9m.   Cash flow   Cash started the year at $8.7m and ended at $3.5m, a net cash outflow of $5.2m. The major contributor to the outflow was the $5.2m debt repayments made as part of the debt refinancing. There was also an increase of $3.5m in inventories, offset by a $2.7m decrease in receivables. These latter changes reflect the slowdown in sales due to the COVID-19 pandemic, that became more pronounced as the year progressed. However the Group is experiencing much more favourable trading conditions so far in 2021, and it is expected that working capital ratios will continue to normalise.       Malcolm Lewin Chief Financial Officer Iofina plc 24 May 2021                           DIRECTORS' BIOGRAPHIES Lance J. Baller, Non-Executive Chairman Mr. Baller was co-founder, CEO and President of Iofina Plc prior to his departure for health reasons in June 2013. Mr. Baller was the Group's Finance Director from 2007 until his appointment as CEO in 2010. Mr. Baller returned as Chairman in April 2014.  Mr. Baller is the former managing partner of The Elevation Fund and Elevation Capital Management. Mr. Baller is the former managing partner of Shortline Equity Partners, Inc., a mid-market merger and acquisitions consulting and investment company in the United States. He has actively served on the investment, audit, corporate governance and compensation committees, while on the board of directors of companies in Asia and North America. Mr. Baller is also a former vice president of mergers and acquisitions, financing and corporate development at Integrated Biopharma, Inc., and prior to this a vice president of the investment banking firms UBS AG and Morgan Stanley. He has served as Chairman to various companies and has led successful restructurings. Mr. Baller is on the board of trustees of Index Funds and also serves as the chairman of the audit committee and as the audit committee financial expert under the Sarbanes-Oxley Act of the United States for Index Funds. Dr. Thomas M. Becker, Chief Executive Officer Dr. Becker has served as President/CEO of Iofina plc since 2014 and has led Iofina Chemical since March 2010. Previously, Dr. Becker was the Vice President of Research and Development at H&S/Iofina Chemical. Iofina bought H&S in July 2009. Dr. Becker has conducted extensive research in both inorganic and organic halogen-based chemistry. Dr. Becker has written a magnitude of published technical papers in his career. Prior to H&S Dr. Becker worked as an Oak Ridge Scholar on behalf of the US EPA and for various other chemical manufacturing companies. Dr. Becker earned a BS in Chemistry from Indiana University, and a PhD in Chemistry from the University of Cincinnati. He has extensive experience in scale-up of chemical processes from laboratory to pilot to full scale production. Dr. Becker is a former member of the Board of Governors of the Society of Chemical Manufacturers and Affiliates (\"SOCMA\"). Dr. William D. Bellamy, Non-Executive Director Dr. Bellamy is the former Senior Vice President of the Water Business Group at CH2M HILL, Inc. (\"CH2M\"), a company he has worked at for 30 years until his recent retirement. CH2M is one of the largest consulting engineering companies in the world, providing leadership and strategic direction for the water business and application of technologies worldwide. Dr. Bellamy has participated in energy and sustainability forums, including as a panellist at the World Future Energy Conference in Abu Dhabi, the World Bank Sustainable Cities Symposium and the Future of Water Economic Forum. Dr. Bellamy serves as Professor of Practice at the University of Wyoming, where he teaches graduate courses and is responsible for securing grants and research funding in the areas of water resources, water treatment and sustainable energy development. Dr. Bellamy has a PhD in Civil Engineering from Colorado State University, an MSc in Civil (Environmental) Engineering from the University of Wyoming and a BSc in Electrical (Bio-Medical) Engineering from the University of Wyoming.     Malcolm T. Lewin, Chief Financial Officer Mr. Lewin was named CFO and a director of the Group in November 2016 after having joined Iofina as interim CFO in February 2016.  Mr. Lewin is based in the UK and has over 30 years of experience in finance and accounting for both public and private companies. As well as being a partner in a chartered accounting firm for 11 years, he has acted for various companies listed on AIM and other exchanges. In particular, from 2000 to 2003 he was the Finance Director of Oxford Metrics plc, an AIM company supplying motion capture and visual geometry systems. From 2004 to 2006 he was the Finance Director of Real Estate Investors plc, an AIM property investment company with interests in quality commercial and industrial properties. From 2006 to 2011 he was a Director and CFO of Hunter Bay Minerals plc, a junior mining company listed on the Toronto Venture Exchange with interests in South America and Canada. From 2011 to 2014 he was CFO and Treasurer of VolitionRX Limited, an OTC life sciences company focused on developing blood tests for a broad range of cancer types and other conditions. Mr. Lewin has an MA in Classics from Oxford University and qualified as a chartered accountant with Coopers & Lybrand. J. Frank Mermoud, Non-Executive Director Mr. Mermoud has more than 30 years' experience in international business, facilitating trade and investment in both the public and private sectors. He has held senior international, economic and commercial policy positions within the United States Government having served as the Secretary of State's Special Representative for Commercial and Business Affairs at U.S. Department of State from 2002 to 2009. Mr. Mermoud is also a Non-Executive Director of Cub Energy Inc. an oil and gas company headquartered in Houston, Texas. Mary C. Fallin, Non-Executive Director Mary Fallin has served the State of Oklahoma for over 30 years. She was elected the first female Governor of the State in 2010, and was re-elected for a second term in 2014. Prior to serving as Governor she held a number of state and federal positions, including serving as US Congresswoman for Oklahoma's 5th district between 2007-2011 and serving as Lieutenant Governor of Oklahoma between 1995-2006.  Mary has been a major contributor to natural resources industries in Oklahoma, and implemented the State's first comprehensive energy plan as well as its State-wide water plan. She has held several positions, including Chair of the Southern State Energy Board, Chair of the Interstate Oil & Gas Compact Commission, and has served on the natural resource committee of the National Governors Association (NGA). Previously, she also served on the United States House of Representatives Committee on Small Business, was Small Business Chairman on the Republican Policy Committee, and was named the \"Guardian of Small Business\" by the National Federation of Independent Business. Mary has also served on numerous Boards of Directors for both commercial organizations and non-profits.           STRATEGIC REPORT Principal activities and review of the business Iofina plc (\"Iofina\" or the \"Company\") is the holding company of a group of companies (the \"Group\") involved in the exploration and isolation of iodine and the production of specialty chemicals. Brine water is sourced from partnerships with oil and gas operators, and saltwater disposal (\"SWD\") operators in the United States and is used as a raw material to produce iodine at the Group's multiple IOsorb® plants. The Group's unique business model isolates a resource, iodine, from a produced waste stream that, without Iofina's technology, would be lost. Iodine containing or other specialty chemicals are produced at and sold through the Company's wholly owned subsidiary Iofina Chemical, Inc., with the major raw material being the Group's produced iodine.  Additionally, the Group's crystalline IOflo® iodine is sold directly to other iodine end-users. IofinaEX Inc. is currently managing a hemp seed investment and has explored cannabinoid production from hemp. Iodine is a rare element that is produced only in a few countries in the world, with approximately 90 percent produced from Chile (~60 percent) and Japan (~30 percent, including recycled waste streams). Iodine is a unique element with numerous applications. Iodine and compounds made from iodine have many human health related applications including; x-ray contrast agents, pharmaceuticals, antiseptics, thyroid function, and others. Additional high volume uses of iodine include; LCD screen technology, material heat stabilisation, animal feed additives, biocides, catalysts and more. The Group produces iodine in the United States where the overall global iodine production is only a small percentage of the world's total production, but where there is a large consumption of the world's iodine by various American users. Iofina Resources, Inc. is the Group's wholly owned subsidiary which uses proprietary Wellhead Extraction Technology® (WET®) and WET® IOsorb® methods to produce iodine from brine. The Directors of the Company believe that Iofina's unique business model for the production of iodine by utilizing produced brine from third party oil and gas production is advantageous for long term raw material sourcing and minimised production and expansion costs. The ability of the Group to expand its iodine production quickly, at low cost, differentiates Iofina from other iodine producers. This has been proven from the recent expansion of production and opening of IOsorb® plants IO#7 and IO#8. Economically viable iodide rich brine is not common and the Group's proprietary geological model to locate and anticipate iodide rich sources is unique. The main focus of Iofina's current business model is the production of iodine from brine and the creation and sales of specialty chemicals through Iofina Chemical. The Directors feel strongly that diversification of the business while focusing on our core expertise is important. Iofina Resources diversifies its iodine production through multiple IOsorb® production plants with multiple brine suppliers in our core area in western Oklahoma. The technology the Group has developed, utilizing a waste resource already being produced, allows Iofina the ability to expand its operations quickly with minimal capital expenditure. Continued prudent growth in the number of IOsorb® plants increases production, profit and diversification. Continued expansion of the Group's geological model provides opportunities for Iofina outside of its current core area. Iofina Chemical produces many iodine-based products with applications in various industries including agricultural, pharmaceutical, biocides and others. Additional diversification is realised by the production of non-iodine-based products at Iofina Chemical. Markets for various products can change, and Iofina Chemical's ability to produce a variety of products allows the Group to take advantage of growing markets while not being as affected by temporarily depressed or declining markets. This was evident in 2020 where the global economic slowdown during the COVID-19 pandemic severely damaged many companies. However, through Iofina's business model which includes diversification and low-cost production, the Group was able to manage the business during a difficult time. Creating strong, transparent, long-term, mutually beneficial customer relationships are a fundamental tenet for Iofina Chemical. Research and Development remain a top focus at Iofina in order to improve on current systems, be at the forefront of new technologies, new specialty chemical products and applications in our core competencies.  Iodine prices are a key consideration for the Group. Over the last decade, iodine price fluctuations have been rather dramatic compared to iodine price changes before 2011.  Market supply and demand changes as well as manufacturing cost increases for iodine are the major factors influencing the price of iodine. In 2011, the combination of the Fukushima disaster in Japan and Chilean supply disruptions resulted in a shortage of iodine and a spike in iodine prices which resulted in iodine prices reaching all-time highs. Since that time, iodine prices have fallen dramatically from these highs as Chilean production increases caused over-supply in the market for some time while iodine producers were aggressively competing for market share. Iodine prices hit a low near the end of 2016 and into early 2017. From the beginning of 2017 through the middle of 2020 iodine spot prices rose by approximately 75%. Iodine prices retreated in H2 2020 as a result of lower global demand for iodine and iodine-based products during the global COVID-19 pandemic. As an iodine manufacturer, iodine prices have a significant impact on the Group's gross profit margins. Prices have again begun to increase in Q2 2021 and, whilst not certain, the Group expects iodine prices to continue to rise in 2021. Any increase in iodine prices and the rate of increase will likely be tied to the rate of reopening of global industries and economies as COVID-19 vaccine rollout globally increases which should end this pandemic in due course. The Directors properly recognized that, as the Company erected its IOsorb® plants, it was imperative for Iofina's iodine production costs to be amongst the lowest in the industry to be competitive.  Between 2014 and 2017 numerous initiatives were successfully implemented to optimise Iofina's technology and lower iodine production costs. Once a majority of these process cost optimisation goals were achieved, and iodine market conditions were positive, the Directors executed the next phase of Iofina's business plan and began a growth strategy.  In early 2018 the Group's iodine plant, IO#7, was completed. By expanding our operations and building IO#7, the Group has successfully lowered overall iodine production costs compared to the costs before IO#7.  The Directors continued this prudent growth strategy in 2019. In Q2 2019 the company performed an equity raise to reduce debt and provide working capital for expansion projects. The result was the construction of IO#8 which began in late 2019 and was completed in early April 2020. The Group is committed to continued growth and is investigating locations and partnerships to expand iodine production.  Any potential expansion of iodine production is not likely to occur before Q4 2021. Uncertainties in expansion of oil and gas production in our core areas in the USA, uncertainty of the recovery rate of economies and iodine demand, as well as learnt lessons of the past regarding locations of IOsorb® plants are all factors for the Directors when considering the timing of expansion projects. The Directors are aware of the risk of declining brine availability if our partners do not maintain or increase their hydrocarbon production in areas that supply the Group's current IOsorb® plants. The Group is investigating the economics and the technology to better control the iodide rich brine supply that feed the current and future IOsorb® plants. Iofina Chemical continues to be recognised as a world-renowned halogen specialty chemical producer. Vertical integration of the Group's iodine into iodine derivatives gives Iofina's customers stability of supply in addition to the long-standing quality and technical support to Iofina's global customers for the goods sold to them.  Additionally, the non-iodine-based halogen derivatives produced by Iofina Chemical gives the Group further diversity.  Key Performance Indicators The Directors review a range of financial indicators to assess and manage the Group's performance, including the following relating to revenue and iodine production:         Year ended     Year ended         31 December     31 December         2020     2019               Revenue from sales of iodine and iodine derivatives   $18,506,546   $20,094,135   Revenue from non-iodine products   $11,181,004   $9,151,093   Total revenue   $29,687,550   $29,245,228   Total pounds of product shipped   1,799,900   2,255,840   Metric tonnes of crystallised iodine produced   610   603   IOsorb® plants in operation (year-end)   5   4   Commentary on the above indicators is to be found in the Chairman's Statement on pages 3 to 6. Further commentary on the results for the year and the financial position at the year-end is to be found in the Financial Review on pages 7 to 9. Objectives At the end of 2020 the Group had five operating IOsorb® iodine production facilities in the Group's core area in Oklahoma. While the theoretical capacity of these plants is very high, the practical capacity of the plants is somewhat lower. Practical capacity takes into account multiple causes of downtime, including weather, repairs and maintenance, inadequate brine (low parts per million of iodine, heavily contaminated brine or little to no supply), power outages and other conditions. As we have proven our technology and continue to improve operations at current facilities, more accurate practical capacity operating targets have been realised as well as improvements for maximising practical capacity. Iofina Resources' unique business model allows the group to determine sites for new iodine production plants utilizing existing brine produced from oil/gas production and quickly bring these sites into production. The continued execution of this prudent growth strategy was continued with the start of construction of IO#8 in late 2019 which was completed in April 2020. While technology and efficiency improvements at current facilities remain an ongoing priority, the Company continues to explore new iodine production opportunities. This objective of strategic expansion in 2020 and beyond is focused on sites that will continue to improve Iofina's output with low production costs.  Brine supply to our IOsorb® plants can be affected by regulatory changes and adjustments of our partner's saltwater disposal systems and oil production programs. Iofina continues to work with its partners to implement plans to maximize brine input and iodine output at each of our existing sites. The mutually beneficial relationship between Iofina and its brine supply partners, which allows Iofina to create iodine and allows the brine suppliers to realize value from a waste stream, is a key component for existing projects and potentially for future sites. Continued efforts by our business development and geological teams have identified numerous other expansion opportunities that the Company will continue to evaluate and potentially execute, with current and other potential brine supply partners, when management determines proper timing for new sites.  Timing of future iodine production growth will be dependent on various factors including the stability or increase of iodine prices, global iodine demand, availability and costs to produce iodine at new sites, partnership agreements, oil prices and production in areas with high iodide content brines, and the regulatory landscape with respect to brine injection. With the fluctuations in oil prices, which was evident in 2020, the Group is increasingly focused on evaluating alternative brine sourcing opportunities which may allow the Group to better control brine supply at future sites. The Directors are focused on expansion in a prudent manner whilst properly managing the current debt and cash flow of the organisation. Expansion in 2021 is likely assuming the effects of COVID-19 are short lived and do not impact the global iodine markets or USA oil/gas production negatively long-term. Iofina Chemical has continued to invest in current products lines, safety improvements, and new product R&D. These include investments in both iodine-based products and other non-iodine specialty chemicals. Capital investment projects completed in 2020 included methyl fluoride capacity improvements, trichloromelamine process improvements, addition of reactor capacity for iodide products and other safety initiatives. The R&D and the sales groups continue to investigate and research new opportunities for and applications of our existing portfolio of products, as well as identify and produce new halogen-based derivatives for the Group in order to grow our halogen derivatives business. As Iofina Resources has continued to increase iodine production, the sales team has developed new outlets for this increased production of iodine including direct sales of the Group's crystalline IOflo® iodine directly to iodine consumers. Managing existing and developing new sales channels and relationships, as Iofina continues to grow, is a high priority for the sales force at Iofina Chemical. IofinaEX has explored extraction of cannabinoid-based products from hemp and is licensed in Kentucky. The market for cannabinoids from hemp has fluctuated greatly since IofinaEX was formed.  As a result of many factors, including increased regulation uncertainty and a significant price reduction of cannabinoids derived from hemp biomass, IofinaEX is now solely focused in monetizing its seed investment. This current hemp seed investment is a one-off investment project with Organic Vines OP with the potential to achieve up to a 2x's return on investment. Over 22 million certified organic seeds were produced in this project. By obtaining Organic certification for the seeds produced, we have obtained a differentiation factor from most other hemp seed and provides greater value. To date seed sales have been much slower than expected with only thousands of seeds sold. The partnership is confident that these high-quality seeds will be sold and realise profit, however the timeframe for this realisation is unknown. Lastly, the Directors are committed to employee retention whilst controlling costs. Employee safety and training are also key objectives for the Group. A key component for the Group is the high operational gearing whereby the Group's business model allows for the control of administrative and fixed expenses whilst expanding operations.  Principal risks and uncertainties Iofina plc is subject to a number of risks and uncertainties, which could have a material effect on its business, operations or future performance, including but not limited to: Raw Materials: Brine water produced from oil and gas operations is the raw material source for Iofina's iodine production.  The Group continues to evaluate opportunities to integrate its IOsorb® process into produced brine water streams associated with hydrocarbon operations in the USA, as well as other brine stream sources throughout the world. However, there is significant risk and no guarantee as to the volume of commercial quantities of iodide rich brine available to our current and future IOsorb® plants. Oil and gas prices and demand for these hydrocarbons, generally will dictate whether our partners continue to expand their production or possibly reduce hydrocarbon output. Changes in hydrocarbon production by our partners will change the total brine availability to isolate iodine and thus the iodine output of our IOsorb® plants. The SWDs that our partners operate may have temporary or permanent issues which would likely affect the brine supply to IOsorb® plants.  In the past year there has been a reduction of capital spent by our partners for new drilling and recompletion of wells in our core area which has resulted in a decline in total amounts of brine co-produced with oil and gas in our key areas. Iofina maintains good relationships with our partners who provide the brine water to our existing IOsorb® plants. Maintaining a positive, mutually beneficial relationship with our brine suppliers is a top priority for the Group. By continuing an aggressive water testing program and active exploration utilising geology and data analytics and incorporating reservoir and production engineering, we are constantly evaluating new potential locations for iodine extraction in our core area and in other locations. Iofina Chemical sources raw materials throughout the globe.  Understanding the supply chain of these materials is important to minimise supply disruptions.  Iofina Chemical has long term relationships with many of its suppliers.  Additionally, when possible, Iofina Chemical sources materials from multiple suppliers to reduce risk.  Increased regulations can adversely affect availability and cost of materials.  Prices of raw materials and energy can change and if increases in these prices are not able to be passed on to our customers, it would negatively affect margins for our products. COVID-19 and Global Crises : Global Crises, while rare, can impact businesses significantly.  The COVID-19 pandemic is an example of such an event.  These events could have a negative effect on the markets we serve and on profits.  COVID-19 resulted in a global economic slowdown and a reduced demand for many of Iofina's products.  These types of events can also result in delays in shipping, worker limitations, business closures and other challenges which may negatively affect the Group.  The diversity of Iofina's products along with the uses of products in areas like human health applications make Iofina less susceptible than most other businesses.  Iofina quickly implemented many protocols to minimize any negative impacts on the business but these protocols only reduce risk and cannot eliminate risk.  COVID-19 or other events such as political unrest, acts of aggression (wars), other health crises, major weather events or others would likely have a negative effect for the Group. Environmental:  The Group's operations are subject to the environmental risks inherent in the exploration and chemical industries. The Group is subject to environmental laws and regulations in connection with all of its operations. Although the Group intends to be in compliance in all material respects with all applicable environmental laws and regulations, there are certain risks inherent to its activities, such as accidental spills, leakages or other circumstances that could expose the Group to extensive liability. Accordingly, the Group promotes wherever possible environmental sustainability in its working practices and seeks to minimise, mitigate or remedy any harmful effects from the Group's operations on the environment at each of its operational sites. Regulations on brine injections in the state of Oklahoma into the Arbuckle geological formation in the Group's core area due to seismic activity were implemented mainly in late 2015 to early 2016 and have affected Iofina's partners' brine disposal into this formation near some of our sites. This reduced some brine availability to Iofina at some sites.  The Group and its partners have implemented and continue to implement strategies to minimise the effect on the availability of iodine rich brine to Iofina due to these regulations.  Moving forward the Group and its partners will continue to monitor these risks and act accordingly. While the frequency and intensity of earthquakes have significantly reduced in Oklahoma, and this reduction is likely a result of regulated changes in brine disposal into the Arbuckle formation, there is still risk of additional earthquakes and regulation moving forward. Changes in laws or regulation of brine streams could affect brine availability or the cost to produce iodine.  As a specialty chemical manufacturer, new regulations based on chemical use, adverse human health or environmental impact are a risk and may lead to higher costs or controlled production.  Other environmental regulations that restrict manufacturing of chemicals that Iofina produces would have a negative impact on the Group.  The Group has a robust Environmental, Health and Safety program and strives for continual improvement in this area.  Additionally, Iofina Chemical is a certified Chemstewards® facility. Iodine Price volatility:  The demand for, and prices of, iodine are highly dependent on a variety of factors including international supply and demand, the level of consumer product demand, the price and availability of alternatives, actions taken by governments and global economic and political developments. Increases in current iodine producers' production capacities or new iodine producers entering the market could negatively impact prices.  Fluctuations in iodine prices and, in particular, a material decline in the price of iodine would have a material adverse effect on the Group's business, financial condition and operations.  Since 2017 prices of iodine have been rising until demand for iodine slowed as the global demand for many products fell during the second half of 2020 as the COVID-19 pandemic surged.  This resulted in a slight decline on iodine prices that are now rising again in Q2 2021.  Key customers:  There are a limited number of potential customers who purchase many of the products of the Group's chemical business, which makes relationships with these customers, as well as the success of those customers' businesses, critical to the Group's success. The loss of one or more major customers could harm the business, operating results and financial condition of the Group. Iofina is continuing to diversify its customer base in its Chemical subsidiary. In addition, Iofina works closely with all of its customers to develop strong relationships, with a significant focus on ensuring that its products and services meet the needs of its customers and are of the highest quality.  In 2020, 15 percent (2019; 15 percent) of revenue recognised was attributable to one long term customer. Relations with this customer are good.  Key Partners:  Iofina partners with third party oil and gas producers and saltwater disposal operators to process iodine rich brine they extract with oil and gas production.  Fluctuations of oil and gas prices in the US can affect the financial stability of oil and gas producers.  Any changes in operator status or the financial strength of our partners is a risk to brine production and availability.  The Group has agreements with our partners to reduce any risk of change in status. Material changes in these brine supply contracts with our partners could negatively affect the Group. Regulation and Trade : The businesses are subject to various significant international, federal, state and local regulations currently in effect and scheduled to become effective in the near future, including but not limited to environmental, health and safety and import/export regulations. These regulations are complex, change frequently, can vary from country to country, state to state and have generally increased over time. Iofina may incur significant expense in order to comply with these regulations or to remedy violations of them.  The new federal administration in the USA is more likely to increase regulations for the oil, gas and chemical industries versus the previous administration. Any new regulation that would increase cost of raw materials the Group uses, reduces availability of these raw materials or caps production of products the Group produces would likely have a negative effect on margins. Any failure by Iofina to comply with applicable government regulations could result in non-compliant portions of our operations being shut down, product recalls or impositions of civil and criminal penalties and, in some cases, prohibition from distributing our products or performing our services until the products and services are brought into compliance, which could significantly affect our operations. IofinaEX is involved in the sale of hemp seeds, a highly regulated industry.  Laws and regulations for handling hemp seeds, biomass and products produced from hemp continue to change and evolve.  The Group closely monitors regulations across its businesses to ensure that it complies with the relevant laws and regulations. While Iofina does not believe that it is non-compliant with any laws or regulations, any instances of non-compliance would be brought to the attention of the appropriate authorities as soon as possible. Recently trade relationships between the USA and other areas of the world have become more unstable.  Increased tariffs implemented by the USA and retaliatory tariffs imposed by other governments against the USA has the potential to adversely affect both raw material supply and final product sales for Iofina in certain areas of the world.  Iofina has been proactive in reducing the impact of tariffs which directly impact the Company's supply and sales lines. Inventory Fluctuations: Inventory level changes can cause a financial instability. One recent example is that demand for some of the Group's products decreased in H2 2020 as the pandemic based global economic slowdown accelerated which resulted in the Group carrying abnormally high inventories.  This inventory increase negatively affects cash flow.  Low inventories can negatively affect sales volumes and customer relationships.  Insurance may not cover all material losses: The Group strives to carry standard insurance for our industry that would minimise loss when events occur.  However, certain scenarios or events may not be covered by insurance and could have a negative material impact on the Group.  For example, cyber-attacks have increased globally and while the Group has increased measures to thwart potential cyber-attacks, we cannot guarantee these measures will prevent a cyber-attack for which we do not carry specific insurance. Personnel: As a small technical organisation, the loss key technical or senior management employees could negatively affect the business. Significant Shareholders: Significant shareholders may have the ability to affect changes that result in a material adverse effect to the organisation including a change in senior management or control of the Group or its Board of Directors. Interest Rates: As a result of the 2020 debt changes that served to significantly reduce both overall debt and interest rates for the Group, a significant portion of the debt carries variable interest rates.  While unlikely in the short term, interest rates may rise significantly and negatively impact debt cost of the Group. Going concern The Group's former Term Loan Notes of $18,177,209, due 1 July 2020, were repaid during the year. New financing totalling $13 million was arranged as set out in Note 20, of which $10 million is repayable over seven years and $3 million has a two-year term. As disclosed in Note 27 the loans totalling $1.09m received by the Group under the Paycheck Protection Program were forgiven in full in January 2021. The size and maturities of the Group's debt obligations have therefore been greatly improved. Based on recent experience and market trends the Group does not expect the COVID-19 virus to have a material negative financial effect going forward. The Group also considers that recent shortfalls in brine supply from oil and gas operators can be mitigated to a significant extent. On that basis the Group has prepared forecasts and projections that indicate there are adequate resources to continue in operational existence for the foreseeable future. However, the Group recognises that there can be no certainty where these predictions are concerned. After due consideration of the foregoing, the Directors consider it appropriate to continue to adopt the going concern basis in preparing the financial statements. On behalf of the board   Lance J. Baller Non-Executive Chairman Iofina plc 24 May 2021 STATEMENT IN ACCORDANCE WITH SECTION 172 OF THE COMPANIES ACT 2006   The Directors are required to make a statement which describes how they have behaved with regard to the matters set out in Section 172(1) of the Companies Act 2006, namely: Duty to promote the success of the company (a)  the likely consequences of any decision in the long-term; (b)  the interests of the company's employees; (c)       the need to foster the company's business relationships with suppliers, customers, and others; (d)  the impact of the company's operations on the community and the environment; (e)  the desirability of the company maintaining a reputation for high standard of business conduct; (f)  the need to act fairly between members of the company. Section 172 Statement   The Directors insist on high operating standards and fiscal discipline and routinely engage with management and employees of the company to understand the underlying issues within the organization. Additionally, the Board looks outside the organization at macro factors affecting the business.  The Directors consider all known facts when developing strategic decisions and long-term plans, taking into account their likely consequences for the Company.  The Directors and management are committed to the interests and well-being of Iofina's employees.  Iofina is committed to the highest levels of integrity and transparency possible with employees and other stakeholders.  Safety initiatives, consistent training, strong benefit packages and open dialogue between all employees are just a few of the  ways  the Company ensures its employees improve skill sets and work hand-in-hand with management to improve all aspects of the Group's performance. Other stakeholders include, customers, suppliers, debt holders, industry associations, government and regulatory agencies, media, local communities and shareholders.  The Board, both individually and together, consider that they have acted in the way they consider would be most likely to promote the success of the Company as a whole. In order to do this, there is a process of dialogue with stakeholders to understand the issues that they might have. Iofina believes that any supplier/customer relationship must be mutually beneficial and the Company is known for its commitment to details to its customers.  Communications with debt holders and shareholders occur on an ongoing basis and as questions arise. The company also communicates through media interviews and Twitter. The Directors are committed to positive involvement in the local communities where we operate.  Part of this commitment is our program \"Iofina Gives Back', where Iofina supports local charities by donating time and goods.  Additionally, Iofina adheres to environmental regulations at its sites and supports sustainability practices where possible. Integrity is a key tenet for the Directors and the Company's employees.  The Company believes that any partnership must benefit both parties.  We strive to provide our stakeholders with timely and informative responses and are always striving to meet or exceed customers' needs. The Board recognises its responsibilities under section 172 as outlined above and has acted at all times in a way consistent with promoting the success of the Company with regard to all stakeholders.   CORPORATE GOVERNANCE It is the Chairman's responsibility, working with Board colleagues, to ensure that good standards of corporate governance are embraced throughout the Group. As a Board, we set clear expectations concerning the Group's culture, values and behaviours. In September 2018, the Board adopted the Quoted Companies Alliance Corporate Governance Code (the \"QCA Code\"). On our website (https://iofina.com/corporate-governance/) we set out how we seek to comply with the 10 principles of the QCA Code. The following sections of the Corporate Governance Statement explain how the QCA Code is applied by the Company. The Board comprises six Directors: the Non-Executive Chairman, two full time Executive Directors and three Non-Executive Directors (each of whom are considered by the Board to be independent), reflecting a blend of different experiences and backgrounds. The function of the Chairman is to supervise and manage the Board and to ensure its effective control of the business. The Board believes that the composition of the Board brings a desirable range of skills and experience given the Group's challenges and opportunities as a publicly quoted company, while at the same time ensuring that no individual (or group of individuals) can dominate the Board's decision-making. The Board meets regularly to review, formulate and approve the Group's strategy, budgets, corporate actions and oversee the Group's progress towards its goals. The Board has established the following committees to fulfil specific functions, each with formally delegated duties and responsibilities (details of which can be found on our website; see: http://www.iofina.com/about/committees ): the Audit Committee and the Remuneration Committee. These committees meet on a regular basis and at least two times a year. The Board has elected not to constitute a dedicated nomination committee, instead retaining such decision making with the Board as a whole. This approach is considered appropriate to enable all Board members to take an active involvement in the consideration of Board candidates and to support the Chair in matters of nomination and succession. From time to time, separate committees may also be set up by the Board to consider specific issues when the need arises.                   DIRECTORS' REPORT The Directors present their report and financial statements for the Group for the year ended 31 December 2020. Strategic report Included in the Strategic Report on pages 12 to 19 is the review of the business and principal risks and uncertainties. Post balance sheet events Post balance sheet events are set out in note 27. Directors' responsibilities for the preparation of the financial statements The Directors are responsible for preparing the Strategic Report and the Directors' Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare Group and Company financial statements for each financial year. The Directors are required by the AIM Rules for Companies (as published by the London Stock Exchange) to prepare Group financial statements in accordance with International Financial Reporting Standards (\"IFRS\"), as adopted by the European Union (\"EU\"), and have elected under company law to prepare the Company financial statements in accordance with IFRS. The financial statements are required by law and IFRS adopted by the EU to present fairly the financial position of the Group and the Company and the financial performance of the Group. The Companies Act 2006 provides, in relation to such financial statements, that references in the relevant part of that Act to financial statements giving a true and fair view are references to their achieving a fair presentation. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing the Group and Company financial statements, the directors are required to: a.      select suitable accounting policies and then apply them consistently; b.      make judgements and accounting estimates that are reasonable and prudent; c. state whether they have been prepared in accordance with IFRS adopted by the EU; and d.      prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the Company will continue in business.   The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Iofina plc website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Results and dividends The results for the year are set out in the consolidated statement of comprehensive income and detailed in the Financial Review. The directors do not recommend payment of a dividend. Financial instruments and risk management Note 14 details the risk factors for the Group and how these risks are managed, including the degree to which it is appropriate to use financial instruments to mitigate risks.   Directors The directors who served during the year and subsequently were as follows: Lance J. Baller, Non-Executive Chairman Dr. William D. Bellamy, Non-Executive Director J. Frank Mermoud, Non-Executive Director Mary C. Fallin, Non-Executive Director (appointed 1 April 2020) Dr. Thomas M. Becker, Chief Executive Officer and President Malcolm T. Lewin, Chief Financial Officer   Statement as to disclosure of information to the auditor The directors who were in office on the date of approval of these financial statements have confirmed that, as far as they are aware, there is no relevant audit information of which the auditor is unaware. Each of the directors has confirmed that they have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that it has been communicated to the auditor. Auditor UHY Hacker Young were appointed as auditors to the Company and in accordance with Section 485 of the Companies Act 2006 a resolution proposing that they be reappointed will be put to the next Annual General Meeting. On behalf of the Board   Dr. Thomas M. Becker Chief Executive Officer and President 24 May 2021 CORPORATE GOVERNANCE STATEMENT The Board is accountable to the Company's shareholders for good corporate governance and it is the objective of the Board to attain a high standard of corporate governance. The Chairman has primary responsibility to lead the Board effectively and to oversee the adoption, delivery and communication of the Company's corporate governance model. The Company is listed on the AIM market of the London Stock Exchange (\"AIM\") and is subject to the continuing requirements of the AIM Rules for Companies. In April 2019, the Company adopted The QCA Corporate Governance Code, as published by the Quoted Companies Alliance (the \"QCA Code\"). On our website (https://iofina.com/corporate-governance-2/) we set out how we comply with the 10 principles of the QCA Code. The following sections explain how the QCA Code is applied by the Company. Business model, strategy and approach to risk The Group focuses on the exploration and production of iodine and halogen-based specialty chemical derivatives. We identify, develop, build, own and operate iodine extraction plants, currently focused in North America, based on Iofina's Wellhead Extraction Technology® (WET®) IOsorb® technology. The Group has complete vertical integration from the production of iodine in the field to the manufacture of the chemical end-products derived from iodine to the consumer, and the recycling of iodine using iodinated side-streams from waste chemical processes. We use patented or proprietary processes throughout all business lines. Together these allow us to be the Technology Leaders in Iodine®. The Group's strategy is to continue to focus on the exploration and production of iodine and iodine specialty chemical derivatives, delivering growth throughout our operations. Growth is intended to be achieved with the continued upgrading and expanding of our plants, which in turn will boost the level of iodine production. All of the Group's activities involve an ongoing assessment of risks and the Group seeks to mitigate such risks where possible. The Board has undertaken an assessment of the principal risks and uncertainties facing the Group, including those that would threaten its business model, future performance, solvency and liquidity. In addition, the Board has considered the longer-term viability of the Group, including factors such as the prospects of the Group and its ability to continue in operation for the foreseeable future. The Board considers that the disclosures outlined in the Strategic Report on pages 16 to 19 are appropriate. The Board considers that these disclosures provide the information necessary for shareholders and other stakeholders to assess the Group's future viability and potential requirements for further capital to fund its operations. Having carried out a review of the level of risks that the Group is taking in pursuit of its strategy, the Board is satisfied that the level of retained risk is appropriate and commensurate with the financial rewards that should result from achievement of its strategy. Board of Directors As of the date of this Report the Board comprises six Directors in total: the Non-Executive Chairman, two Executive Directors (being the Chief Executive Officer (\"CEO\") and the Chief Financial Officer (\"CFO\")) and three Non-Executive Directors (each of whom are considered by the Board to be independent), reflecting a blend of different experiences and backgrounds. The skills and experience of the Board are set out in their biographical details on pages 10 and 11. The experience and knowledge of each of the Directors give them the ability to challenge strategy constructively and to scrutinize performance. The Board is responsible to the shareholders for the proper management of the Group. Both the Board and senior managers are responsible for reviewing and evaluating risk and the Executive Directors meet at least monthly to review ongoing trading performance, discuss budgets and forecasts, and new risks associated with ongoing trading. The entire Board typically meets quarterly to set the overall direction and strategy of the Group, to review operational and financial performance, and to advise on management appointments (if necessary). The Board has also convened, when necessary, by video conference during the year to review the strategy and activities of the business. All key operational and investment decisions are subject to Board approval. The Company Secretary is responsible for ensuring that Board procedures are followed, and applicable rules and regulations are complied with. The number of meetings attended by each Director can be found on page 27. There is a clear separation of the roles of CEO and Non-Executive Chairman. The Chairman is responsible for overseeing the running of the Board, ensuring that no individual or group dominates the Board's decision making and ensuring the Non-Executive Directors are properly briefed on matters. The CEO has the responsibility for implementing the strategy of the Board and managing the day-to-day business activities of the Group. Time commitment On joining the Board, Non-Executive Directors receive a formal appointment letter, which identifies the terms and conditions of their appointment and, in particular, the time commitment expected of them. A potential Director candidate (whether an Executive Director or Non-Executive Director) is required to disclose all significant outside commitments prior to their appointment. The Board is satisfied that both the Chairman and the other Non-Executive Directors are able to devote sufficient time to the Group's business. Independence of Directors The Directors acknowledge the importance of the principles of the QCA Code which recommends that a company should have at least two independent Non-Executive Directors. The Board considers it has sufficient independence on the Board and that all the Non-Executive Directors are of sufficient competence and calibre to add strength and objectivity to the Board, and bring considerable experience in industry, operational and financial development of chemical products and companies. Specifically, the Board has considered and determined that since the date of their respective appointments William Bellamy, J. Frank Mermoud and Mary Fallin are independent in character and judgement, specifically that they: · have not been employees of the Company within the last five years; · do not have a material business relationship with the Group; · have no close family ties with any of the Group's advisers, Directors or senior employees; · do not hold cross-directorships or have significant links with other Directors through involvement in other companies or bodies; and · do not represent any shareholder. The Company Secretary maintains a register of outside interests and any potential conflicts of interest are reported to the Board. If they so wish, the Non-Executive Directors have opportunities to meet without Executive Directors being present (including after Board and Committee meetings). Because the Board is spread out geographically, the majority of communications between Directors is conducted by video. However, the Board does convene in person at least once a year, and this presents an opportunity (before, after and between management and operational meetings) for the Non-Executive Directors to meet in person without the Executive Directors being present, albeit in-person meetings have been limited during the financial year under review due to the global COVID-19 pandemic and the ensuing travel restrictions in place. Professional development Throughout their period in office, the Directors are continually updated on the Group's business, the competitive and regulatory environments in which it operates, corporate social responsibility matters and other changes affecting the Group and the industry it operates in as whole. The updates are usually provided by way of written briefings and meetings with senior management. Directors are also advised on appointment of their legal and other duties and obligations as a director of an AIM-quoted company both in writing and in communications (being face-to-face meetings whenever possible) with the Company's Nominated Adviser. The Directors also have recourse to the Company Secretary, a qualified and practising solicitor, who is a recognised practitioner within the AIM community. All the Directors are subject to election by shareholders at the first Annual General Meeting of the Company (\" AGM \") after their appointment to the Board. Each Director will continue to seek re-election at least once every three years. Board Committees There are two committees - the Audit Committee and the Remuneration Committee. Their full terms of reference are published on the Company's website at https://iofina.com/committees/. Audit Committee During the financial period under review, the members of the Audit Committee were Lance Baller, Dr William Bellamy, J. Frank Mermoud and Mary Fallin (who became a member on her appointment to the Board). Mr Baller is the Chairman of the Audit Committee. The responsibilities of the committee include the following: ·   ensuring that the financial performance of the Group is properly monitored, controlled and reported on; ·   reviewing accounting policies, accounting treatment and disclosures in the financial reports; ·     meeting   the   auditors   and   reviewing   reports   from   the   auditors   relating   to   accounts   and   internal   control   systems; and · overseeing the Group's relationship with external auditors, including making recommendations to the Board as to the appointment or re-appointment of the external auditors, reviewing their terms of engagement, and monitoring the external auditors' independence, objectivity and effectiveness. During the year, the committee met to review audit planning and findings with regard to the Annual Report. In addition, it reviewed the appointment of auditors, and agreed unanimously to re-elect UHY Hacker Young LLP. Remuneration Committee During the financial period under review, the members of the Remuneration Committee were Dr William Bellamy, Lance Baller and J. Frank Mermoud. Dr Bellamy is the Chairman of the Remuneration Committee. The responsibilities of the committee include the following: · reviewing the performance of the Executive Directors and setting the scale and structure of their remuneration with due regard to the interest of shareholders; · overseeing the evaluation of the Executive Directors; and · determining the vesting of awards, including the setting of any performance criteria in relation to the exercise of share options, granted under the Company's share option plan. During the year, the committee met to discuss remuneration and bonuses for the Executive Directors, and share option awards for the Directors and senior management. The Directors' remuneration information is presented on page 29. Attendance at meetings The Board meets regularly on a quarterly basis, together with further meetings as required. The Audit and Remuneration Committees meet as required, and try to hold a minimum of two meetings each year. The Directors attended the following meetings during the year:   Board Audit Remuneration Lance Baller 9 2 1 Dr Thomas Becker 9 - - Malcolm Lewin 9 - - Dr William Bellamy 9 2 1 J. Frank Mermoud 9 2 1 Mary Fallin 5 1 -     Risk management and internal control The Board is responsible for the systems of internal controls and for reviewing their effectiveness. The internal controls are designed to manage rather than eliminate risk and provide reasonable but not absolute assurance against material misstatement or loss. The Board reviews the effectiveness of these systems annually by considering the risks potentially affecting the Group. Iofina employs strong financial and management controls within the business. Examples of control procedures include: · an annual budget set by the Board with regular review of progress; · regular meetings of Executive Directors and senior management to review management information and follow up on operational issues or investigate any exceptional circumstances; · clear levels of authority, delegation and management structure; and · Board review and approval of significant contracts and overall project spend. The Company's system of internal control is designed to safeguard the Company's assets and to ensure the reliability of information used within the business. The system of controls manages appropriately, rather than eliminates, the risk of failure to achieve business objectives and provides reasonable, but not absolute, assurance against material misstatement or loss. The Group does not consider it necessary to have an internal audit function due to the small size of the administrative function. Instead, there is a detailed monthly review and authorisation of transactions by the CFO and the CEO. The independent auditors do not perform a comprehensive review of internal control procedures, but do report to the Audit Committee on the outcomes of its annual audit process. The Board confirms that the effectiveness of the system of internal control, covering all material controls including financial, operational and compliance controls and risk management systems, has been reviewed during the year under review and up to the date of approval of the Annual Report. The Group maintains appropriate insurance cover in respect of actions taken against the Directors because of their roles, as well as against material loss or claims against the Group. The insured values and type of cover are comprehensively reviewed on a periodic basis. Board effectiveness and performance evaluation The Board is mindful that it needs to continually monitor and identify ways in which it might improve its performance and recognises that board evaluation is useful for enhancing a board's effectiveness. The individual contributions of each of the members of the Board are regularly assessed to ensure that: (i) their contribution is relevant and effective; (ii) that they are committed; and (iii) where relevant, they have maintained their independence. The Board intends to review the performance of the team as a unit to ensure that the members of the Board collectively function in an efficient and productive manner. One-third of the Directors must stand for re-election by shareholders annually in rotation and all Directors must stand for re-election at least once every three years. The Company considers that the Board and its individual members continue to perform effectively, that the Chairman performs his role appropriately and that the process for evaluation of his performance has been conducted in a professional and rigorous manner. Corporate Social Responsibility The Board recognises the growing awareness of social, environmental and ethical matters and it endeavours to take into account the interest of the Group's stakeholders, including its investors, employees, suppliers and business partners, when operating the business. Employment The Group endeavours to appoint employees with appropriate skills, knowledge and experience for the roles they undertake and thereafter to develop and incentivise staff. The Board recognises its legal responsibility to ensure the wellbeing, safety and welfare of its employees and maintain a safe and healthy working environment for them and for its visitors. Investor Relations The Board recognises the importance of communication with the Company's shareholders to ensure that its strategy and performance is understood and that it remains accountable to shareholders. Our website has a section dedicated to investor matters and provides useful information for the Company's shareholders (see: http://iofina.com/investors/ ). The Board as a whole is responsible for ensuring that a satisfactory dialogue with shareholders takes place, while the Chairman and the CEO ensure that the views of the shareholders are communicated to the Board as a whole. The Board ensures that the Group's strategic plans have been carefully reviewed in terms of their ability to deliver long-term shareholder value. Fully audited Annual Reports are published, and Interim Results notified via Regulatory News Service announcements. All financial reports and statements are available on the Company's website (see: http://iofina.com/investors/financial-results ). There is an opportunity at the Annual General Meeting for individual shareholders to question the Chairman and the Executive Directors. Notice of the meeting is sent to shareholders at least 21 clear days before the meeting. Shareholders are given the opportunity to vote on each separate issue.  The Company counts all proxy votes and indicates the level of proxies lodged on each resolution, after it has been dealt with by a show of hands. Details of the resolutions and explanations thereto are included with the notice, including any special arrangements necessitated by COVID-19. Directors' remuneration   Remuneration provided to each Director was as follows:   2020   2019   Salary Bonus Total $   Salary Bonus Total $ Lance Baller 109,620 - 109,620   109,620 - 109,620 Dr. Thomas Becker 236,400 50,000 286,400   235,600 40,000 275,600 Malcolm Lewin 160,000 40,000 200,000   160,000 30,000 190,000 William Bellamy 30,000 - 30,000   30,000 - 30,000 Frank Mermoud 30,000 - 30,000   30,000 - 30,000 Mary Fallin 22,500 - 22,500   - - - Total $588,520 $90,000 $678,520   $565,220 $70,000 $635,220 No pension contributions were paid on behalf of the directors in 2019 or 2020.   Directors' and officers' insurance is in place on a Group-wide basis.   The interests of the Directors in office as at 31 December 2020 in the shares of the Company at the end of the financial year and the beginning of the financial year or date of appointment, if later, were as follows:                                                    31 December 2020                                                1 January 2020 L J Baller                                                   4,812,500                                                          4,812,500 Dr. T M Becker                                              93,750                                                                           - W D Bellamy                                                 46,875                                                                           - M T Lewin                                                     93,750                                    ...

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