FOR THE YEAR ENDED 31 DECEMBER 2020
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CLOUDVIEW HOLDINGS LIMITED
COMPANY INFORMATION
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CLOUDVIEW HOLDINGS LIMITED
CONTENTS
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CLOUDVIEW HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
The directors present their report and the financial statements for the year ended 31 December 2020.
The directors who served during the year were:
Cloudview is a video surveillance system and service which enables the capture, storage and management of visual data using the Cloud. It securely consolidates visual data from any number of CCTV systems into a unified, encrypted account held on secure Cloud servers – immediately accessible anywhere via a browser.
2020 was an important year for the Group. We reduced our cost burn substantially, created our next generation product, hired an experienced tech CEO to take the Group forward and agreed a further set of fundings from our key investors. This combined with important new customer contracts and recurring revenue from our existing 4000+ connections caused our loss-making to reduce substantially from 2019. We are now on the path, that combined with growing the sales and marketing team, we should achieve cashflow breakeven early in 2022. Our next generation technology unifies, manages and securely consolidates smart triggered events from IP CCTV cameras in any location. It is easy to deploy, configure and control. Data is stored safely and is always accessible. With the safety and security of assets and people assured, users can focus on their core business goals. Cloudview is built from the ground up: British made technology with military grade data security and ‘privacy by design’ at its core, offering an effective way to manage visual data in the context of GDPR compliance. All data is hosted in the UK. Cloudview utilises existing infrastructure and equipment, eliminating the need for expensive and disruptive replacement. It unlocks the value of current networks by upgrading often fragmented deployments into a centrally managed, visual data framework. The principal risks facing the Group involve our ability to ramp up the sales function to capture more customers, and to move v1 customers to the license SaaS model of v2. The principal uncertainties facing us involve the speed at which the evolution from on-site storage (NVRs and DVRs) to cloud storage occurs and whether this sector attracts other competitive responses . We expect to move towards our future goal of a visual data platform provider which should reduce both business risk and external uncertainties. The Board looks forward to continued growth and success with our improved product and expanded team.
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CLOUDVIEW HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
The directors are responsible for preparing the Directors' report and the
consolidated
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year
. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙
select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙
make judgments and accounting estimates that are reasonable and prudent;
∙
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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CLOUDVIEW HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
The auditors, Bishop Fleming LLP, will be proposed for reappointment in accordance with
section 485 of the Companies Act 2006.
In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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CLOUDVIEW HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CLOUDVIEW HOLDINGS LIMITED
We have audited the financial statements of Cloudview Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2020, which comprise the Consolidated Statement of comprehensive income, the Consolidated and Company Statements of financial position, the Consolidated and Company Statement of changes in equity
and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards,
including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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CLOUDVIEW HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CLOUDVIEW HOLDINGS LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙
the information given in the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙
the Directors' report has been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors' report.
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CLOUDVIEW HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CLOUDVIEW HOLDINGS LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and noncompliance with laws and regulations, we considered the following: • the nature of the industry and sector, control environment and business performance. • the results of our enquiries of management about their own identification and assessment of the risk of irregularities. • any matters we identified having obtained and reviewed the Group and Company’s documentation of their policies and procedures relating to: identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and • the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and potential indicators of fraud. As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud, which included incorrect recognition of revenue and management override of controls using manual journal entries, and these were identified as the greatest potential area for fraud. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. We also obtained an understanding of the legal and regulatory frameworks that the Group and Company operate in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, FRS 102 and tax legislation. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Group and Company’s ability to operate or to avoid a material penalty. These included data protection regulations, health and safety regulations, employment legislation and information security regulations including ISO27001. Our procedures to respond to risks identified included the following: • reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; • reviewing the financial statement disclosures and testing to supporting documentation to assess the recognition of revenue; • audit procedures to gain assurance that these financial statements are materially correct in relation to the Group and Company’s compliance with laws and regulations; • performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; • reading minutes of meetings of those charged with governance; • in addressing the risk of fraud through management override of controls, testing the appropriateness of
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CLOUDVIEW HOLDINGS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CLOUDVIEW HOLDINGS LIMITED (CONTINUED)
journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from an error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of our Auditors' report.
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
2nd Floor Stratus House
Emperor Way
Exeter Business Park
EX1 3QS
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CLOUDVIEW HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2020
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CLOUDVIEW HOLDINGS LIMITED
REGISTERED NUMBER:
09628894
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2020
The
financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
The notes on pages 15 to 28 form part of these financial statements.
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CLOUDVIEW HOLDINGS LIMITED
REGISTERED NUMBER:
09628894
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2020
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CLOUDVIEW HOLDINGS LIMITED
REGISTERED NUMBER:
09628894
COMPANY STATEMENT OF FINANCIAL POSITION
(CONTINUED)
AS AT
31 DECEMBER 2020
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
The notes on pages 15 to 28 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 DECEMBER 2020
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 DECEMBER 2020
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COMPANY STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR ENDED
31 DECEMBER 2020
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CLOUDVIEW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Cloudview Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is at 2nd Floor Stratus House, Emperor Way, Exeter Business Park, Exeter, EX1 3QS.
The group consists of Cloudview Holdings Limited and all of its subsidiaries.
2.
ACCOUNTING POLICIES
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of
Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of income and retained earnings in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of income and retained earnings from the date on which control is obtained. They are deconsolidated from the date control ceases. In accordance with the transitional exemption available in FRS 102, the group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 January 2015.
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CLOUDVIEW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.
ACCOUNTING POLICIES (continued)
The Group’s financial statements have been prepared on a going concern basis, which assumes that the Group will be able to realise its assets and discharge its liabilities in the normal course of business.
For the year ended 31 December 2020, the Group recorded a loss from operations in the year of £1.3m, a significant reduction from the previous year of a loss of £4.9m, and as at 31 December 2020 had cash of £350k (2019: £973k). Current cash balances at the date of approving the financial statements is £911k. All current commitments to creditors, VAT and PAYE are current as well. Through a new strategy, the Directors changed the composition of the Board, appointed a new highly experienced Senior Management Team, repositioned the business, and substantially invested in its technology platform. To implement the strategy, the Group raised a total of £3.2m in 2020 under binding agreements with preferred shareholders, payable in 4 equal tranches. The first tranche of £800k was received in February 2020. The impact of the Covid pandemic meant that the speed of implementing the new strategy was materially affected during 2020 and the Board put the remaining 3 tranches, totalling £2.4m, on hold due to the significantly reduced volume of activity in the Group’s markets. As a show of Investor support, in 2020, all the Convertible Loan Notes totalling £9.7m were converted into equity. Additionally, the Group’s preferred shareholders have re-committed to the 3 remaining tranches of £2.4m, and the Group has drawn down the first 2 tranches in February 2021 and June 2021 of £1.6m. The third tranche is due to be drawn down in October 2021, which is milestone based, and which the Directors are confident of achieving. The Group’s core markets are opening up in 2021 and with the launch of v2.0 of the Cloudview Platform the strategy is now gathering real momentum. The Directors have prepared forecasts for the period up to 31 December 2023. These show that with the £2.4m of funding already secured, the Group will successfully trade through to being cash generative in Q2 2022. Based on the above, the Directors are confident that the Group and Company have adequate resources to continue to operate for at least twelve months from the date of approval of these financial statements and have, therefore, continued to adopt the going concern basis in preparing the Directors’ Report and Financial Statements.
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CLOUDVIEW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.
ACCOUNTING POLICIES (continued)
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only. Grants of a revenue nature are recognised in the Consolidated statement of income and retained earnings in the same period as the related expenditure.
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CLOUDVIEW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.
ACCOUNTING POLICIES (continued)
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Group keeping the scheme open or the employee maintaining any contributions required by the scheme). Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period. Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.
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CLOUDVIEW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.
ACCOUNTING POLICIES (continued)
Goodwill
Other Intangible Assets
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the methods below.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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CLOUDVIEW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.
ACCOUNTING POLICIES (continued)
Financial liabilities and equity are classified according to the substance of the financial instrument's contractual obligations, rather than the financial instrument's legal form.
Financial liabilities within the scope of IAS 39 are initially classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
The Group determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, plus directly attributable transaction costs. Subsequently, the measurement of financial liabilities depends on their classification as follows: After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Gains and losses arising on the repurchase, settlement or otherwise cancellation of liabilities are recognised respectively in finance revenue and finance cost.
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CLOUDVIEW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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CLOUDVIEW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
4.
INTANGIBLE ASSETS (CONTINUED)
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CLOUDVIEW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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CLOUDVIEW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
5.
TANGIBLE FIXED ASSETS (CONTINUED)
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CLOUDVIEW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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CLOUDVIEW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
7.
DEBTORS (CONTINUED)
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CLOUDVIEW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
11.
SHARE CAPITAL (CONTINUED)
On 31 January 2020 the loan notes held by the Company were converted. 95,406,600 Ordinary shares and 81,812,500 Preference shares were issued.
Share premium account
Other reserves
Profit and loss account
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £14,768 (2019: £26,756). Contributions totalling £Nil (2019: £3,138) were payable to the fund at the reporting date.
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CLOUDVIEW HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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