REG - Cel AI PLC - Annual results
30/12/2024 07:00
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RNS Number : 5336R Cel AI PLC 30 December 2024
30 December 2024
This announcement contains information which, prior to its disclosure, was
inside information as stipulated under Regulation 11 of the Market Abuse
(Amendment) (EU Exit) Regulations 2019/310 (as amended). Upon the publication
of this announcement via a Regulatory Information Service, this inside
information is now considered to be in the public domain.
CEL AI plc
("Cel AI" or the "Company")
Annual results
Cel AI (LSE: CLAI), a company specialising in cutting-edge artificial
intelligence (AI) to deliver tailored beauty advice and product
recommendations as well as next-generation skincare and wellness products,
announces its audited results for the year ended 31 August 2024.
The Annual Report will be available on the Company's website at
https://www.getcel.ai/investors (https://www.getcel.ai/investors) .
For further information please contact:
Cel AI
Director Michael Edwards via FSCF +44 7572 873 300
First Sentinel Corporate Finance (FSCF)
Corporate Advisor
Brian Stockbridge +44 7858 888 007
CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 31 AUGUST 2024
Introduction
During the course of the year it became apparent to the Board of Directors
that there was a need for a change of strategic direction for the Company.
Whilst every effort had been made to create a profitable and cash generative
business based around skincare products it was increasingly clear that to
continue to pursue this strategy would potentially prejudice the long term
survival of the company. The Board has decided that the correct strategic
route for the business is to build on its experience in Artificial
Intelligence and to utilise this in the AI field more generally and, more
specifically, in the field of AI Agents.
As a result of this review, there were a number of changes in the management
of the company. Darcy Taylor, Chairman and Interim CEO, resigned on 08 January
2024 and was replaced by Michael Edwards. On 30 April 2024 Gill Whitty-Collins
resigned as Non-Executive Director at the end of her fixed term appointment.
On 28 June 2024 Bruna Nikola, Finance Director resigned and was replaced by
Nicholas Lyth. This resulted in a Board of Directors of two Operational
Executives and two Non Executives. Mr Edwards is a significant shareholder in
his own right.
As part of the strategic review of the company the Board of Directors have
decided to cease all marketing, development and promotion of skincare products
and to cease the active management of subsidiaries including King Tide Carbon
Singapore. On 29 February 2024 CBX Cellular Goods Canada Ltd was dissolved and
it is anticipated that all other subsidiaries currently in existence will be
dissolved at the earliest opportunity. Certain physical inventory had been
disposed during the year, the remaining inventory as at year end was 100%
provided for obsolescence in the accounts and arrangements will be made for
its disposal shortly. During the year the company's name was changed to CEL AI
plc to more accurately reflect the change of strategic focus going forward.
Having reduced the cash burn of the company significantly the Board was in a
position to reposition the company. Mr Edwards and Mr Lyth are both executive
directors of companies with Artificial Intelligence and AI Agent exposure. The
decision was made to manage the company's treasury by making a significant
investment into the Solana ("SOL") crypto token. As a result, on 05 August
2024, 4,149 SOL were purchased at a price of £96.40 per token. These tokens
were then staked onto a Delegator which generated further SOL as a yield. This
yield can then be sold to offset the operational expense of the company. As at
the date of signing of these financial statements, the number of SOL held has
increased to 4,253 with a carrying value of approximately £630,000.
Having stabilised the company it is the intention of the Board to pursue
profitable and cash generative opportunities in the Artificial Intelligence
and AI Agent sectors to create profitable returns for shareholders.
Strategy & Operational Review and Outlook
The Company's previous strategy resulted in the cash reserves being depleted
at an unsustainable rate so it was imperative that a change of direction was
implemented. The current Board has significant experience in the Artificial
Intelligence and AI Agent sectors and these generally require minimal
operational expense beyond the normal running costs of a public company. The
Board retain a positive outlook regarding the crypto sector up to the medium
time frame and as such are confident to retain its position in the SOL token
for the time being. The Company may sell some of these tokens going forward if
a more value accretive opportunity presents itself.
I would like to thank our shareholders for their support. The Board of
Directors sometimes have to make challenging decisions on the strategy of the
Company and this was one of those time. We look forward to improvement and
growth in performance in the year ahead.
Michael Edwards
Chairman
27 December 2024
STRATEGIC REPORT FOR THE YEAR ENDED 31 AUGUST 2024
The directors present their strategic report for the year ended 31 August
2024.
Principal activity
During the course of the year the Company exited the skincare sector and
invested available funds into Solana crypto token for treasury management
purposes and is actively seeking Artificial Intelligence and AI Agent
opportunities.
Review of the business and future developments
The Company's medium to long-term goal, having stabilised its position is to
expand in the Artificial Intelligence and AI Agent sectors.
Performance of the business during the year and at the end of the year:
The Company reported a loss of £1,827,461 for the year ended 31 August 2024
(2023: loss of £3,309,721). Of this loss, £583,624 was as a result of the
write down in the inventory of skincare products.
Net assets of the Company at the year-end were £514,554 (2023: net assets
£2,262,808).
Key Performance Indicators ("KPIs")
The Board aims to monitor the activities and performance of the Company
regularly. The Directors regularly reviewed sales, stock levels, new product
development, and cash reserves before the cessation of the skincare sector
marketing and sales.
For now, the Directors consider that a KPI applicable to the Company is
maintaining cash reserves held in cash and cryptocurrency assets.
2024 2023
Cash at
bank
£213,627 £1,772,892
Cryptocurrency
assets
£431,784
£Nil
Principal risks and uncertainties
The Company operates in an uncertain environment and is subject to a number of
risk factors. The Directors consider the risk factors in this report will be
relevant to the Company's activities. It should be noted that the list is not
exhaustive and other risk factors not presently known or currently deemed
immaterial may apply.
Nature of operations and cash levels
The Company's operations were at an early stage in nascent industries, with
products in its wellness division and entry into the carbon removal. As part
of the strategic review of the company during the year, the Board of Directors
have decided to cease all marketing, development and promotion of skincare
products and to cease the active management of subsidiaries including King
Tide Carbon Singapore.
The Directors consider the principal risks for the Company to be the
maintenance of cash while it focuses on developing businesses in the
Artificial Intelligence and AI Agent sectors.
Reliance on key personnel
The Company's business is dependent on the services of a small management team
and the loss of a key individual could have an adverse effect on the future of
the Company's business. The Company's future success will also depend in part
on its ability to attract and retain highly skilled personnel. This risk is
managed by offering salaries that are competitive in the current market.
Regulatory risk
A breach with any environmental or regulatory requirements, including data
protection and privacy breaches, may give rise to reputational, financial, or
other sanctions against the Company, and therefore the Board considers these
risks seriously and designs, maintains and reviews the policies and processes
to mitigate or avoid these risks. The Board has a good record of compliance,
but there is no assurance that the Company's activities will always be
compliant.
Promotion of the Company for the benefit of the members as a whole
The Directors believe they have acted in the way most likely to promote the
success of the Company for the benefit of its members as a whole, as
required by s172(1) of the Companies Act 2006.
The requirements of s172(1) are for the Directors to:
· Consider the likely consequences of any decision in the long term
· Act fairly between the members of the Company
· Maintain a reputation for high standards of business conduct
· Consider the interests of the Company's employees
· Foster the Company's relationships with suppliers, customers and
others, and
· Consider the impact of the Company's operations on the community
and the environment.
During the year, seven individuals served as directors of the company, of whom
five were male and two were female. There are no employees other than the
directors of the company during the year.
The application of the s172 requirements can be demonstrated in relation to
some of the key decisions made during the year, including the appointment of
new directors, and hiring key executives for exploring and developing
businesses in the Artificial Intelligence and AI Agent sectors.
This strategic report was approved by the board on 27 December 2024 and signed
on its behalf by:
Michael Edwards
Chairman
DIRECTORS' REPORT FOR THE YEAR ENDED 31 AUGUST 2024
The Directors present the Annual Report and the audited financial statements
for the year ended 31 August 2024.
Principal activities
The Company established a biosynthetic CBD and CBG retail business and was
admitted to the Official List (by way of a Standard Listing under Chapter 14
of the Listing Rules) and trading on the London Stock Exchange on 26 February
2021. The Company was incorporated in England and Wales. As at year end, the
Company has one subsidiary; King Tide Carbon Pte. Ltd. incorporated in
Singapore as part of the Company's May 9th, 2023, acquisition. During the
current year the directors reviewed the strategy of the Company and decided to
exit the skincare business and to cease the active management of subsidiaries
including King Tide Carbon Singapore.
Directors
The Directors of the Company during the year ended 31 August 2024 and to the
date of this report were:
Michael Edwards (appointed 08 January 2024)
Nicholas Lyth (appointed 28 June 2024)
Darcy Taylor (resigned 08 January 2024)
Bruna Nikolla (resigned 28 June 2024)
Gill Whitty Collins (resigned 30 April 2024)
Timothy Vincent Le Druillenec (appointed 16 June 2024 and resigned 28 June
2024)
Misha Sher
Matthew Lodge
Events after the reporting date
The company's position it has taken in the SOL crypto token has been value
accretive and at the date of signing of the accounts has increased from an
initial investment of £400,000 to £630,000
Future developments
See the Strategic Report for anticipated future developments of the Company.
Dividends
The Directors do not propose a dividend in respect of the year ended 31 August
2024 (2023: nil).
Corporate governance
As a Company listed on the standard segment of the Official UK Listing
Authority, the Company was not required to comply with the provisions of the
UK Corporate Governance Code.
The Company does not choose to voluntarily comply with the UK Corporate
Governance Code. The Directors are responsible for internal control in the
Company and for reviewing effectiveness. Due to the size of the Company, all
key decisions are made by the Board. The Directors have reviewed the
effectiveness of the Company's systems during the year under review and
consider that there have been no material losses, contingencies or
uncertainties due to weaknesses in the controls. The Company will comply with
the Quoted Company Alliance Code insofar as is appropriate having regard to
the size and nature of the Company and the size and composition of the Board.
Diversity
As the company is at a very early stage, it is focused on appointing Board
members with the best expertise to achieve its short-term objectives being
strategic acquisitions. Once this has been achieved, the Board will implement
a strategy to achieve the required targets on gender and ethnicity. During the
year, seven individuals served as directors of the company, of whom five were
male and two were female. At today's date, the board consists of four males.
Table for reporting the gender identity or sex
Number of board members Percentage of the board Number of senior positions on the board (CEO, CFO, and Chairman) Number in executive management Percentage of executive management
Men 4 100% 2 - -
Woman - - - - -
Table for reporting on ethnic background
Number of board members Percentage of the board Number of senior positions on the board (CEO, CFO, and Chairman) Number in executive management Percentage of executive management
White British or other White (including minority-white groups) 4 100% 2 - -
Mixed/Multiple Ethnic Groups - - - - -
Carbon and greenhouse gas emissions
The Company had minimal sales revenue in the period, no employees other than
Directors and no offices. Therefore, the Company has minimal carbon emissions
and it is not practical to obtain emissions data at this stage. The Company
consumed less than 40,000 KWh of energy in the United Kingdom and is currently
exempt from the requirement to disclose its greenhouse gas and other emission
producing sources under the Companies Act 2006 (Strategic Report and Directors
Report) Regulations 2014.
Going concern
The Directors, having made due and careful enquiry, are of the opinion that
the Company has adequate working capital to meet its obligations over the next
12 months. The Directors therefore have made an informed judgement, at the
time of approving the financial statements, that there is a reasonable
expectation that the Company has adequate resources to continue in operational
existence for the foreseeable future. As a result, the Directors have
adopted the going concern basis of accounting in the preparation of the annual
financial statements.
The Board presents a balanced and understandable assessment of the Company's
position and prospects in all interim and price sensitive reports to
regulators as well as in the information required to be presented by statutory
requirements.
Employees
The Company is in early stages of development. As at 31 August 2024, the
Company utilised the expertise of the Directors, consultants/contractors and
there are no employees in the UK & Canada.
Climate - Related Financial Disclosure
CEL AI PLC acknowledges the detrimental consequences of climate change and
remains steadfast in our commitment to evaluating and addressing both the
influence of climate change on our operations and our broader impact on the
environment. We recognise the growing interest and concerns of investors,
employees, regulators, the local community, and other stakeholders regarding
our approach to climate change planning and adaptation.
CEL AI PLC aligns its climate-related financial disclosures with global best
practices, prominently guided by the four core elements outlined by the Task
Force on Climate-related Financial Disclosures (TCFD).
Core Elements Description
Governance Structures and processes in place to oversee climate-related issues, including
the role of the board, management, and relevant committees.
Strategy Insights into the company's actual and potential impacts of climate-related
risks and opportunities on its business, strategy, and financial planning
Risk Management Processes used to identify, assess, and manage climate-related risks
integrated into overall risk management. Adaptations to strategies in response
to climate considerations.
Metrics and Targets Disclosure of metrics and targets used to assess and manage relevant
climate-related risks and opportunities, providing quantitative information on
performance and progress.
Given the small size of our business, establishing a dedicated team within the
Financial Stability Task Force has not been operationally feasible. However,
we recognise the critical importance of oversight in managing climate-related
risks. In lieu of a dedicated team, responsibilities for climate-related
oversight are distributed among existing personnel with relevant expertise.
This approach allows us to maintain a nimble and adaptive governance
structure, ensuring that climate-related considerations are integrated into
various aspects of our decision-making processes.
In our TCFD-aligned report, we acknowledge the existing gaps in achieving full
compliance with the TCFD's Recommendations and Recommended Disclosures. As we
embark on this journey, we commit to evaluating and enhancing our reporting
practices continually. Looking ahead, we plan to develop a comprehensive
roadmap towards full compliance over the next year. Recognising that
improvement extends beyond reporting, we aim to bolster the Company's
strategies, structures, resources, and tools to effectively manage
climate-related risks and opportunities.
The table below shows our current progress against TCFD Recommendations
TCFD pillar Recommended Disclosure Company Summary
Governance The Board's supervision of risks and opportunities associated with The Board of Directors exercises oversight over climate-related issues,
climate-related factors. integrating them within the broader framework of governance.
Strategy The influence of climate-related risks and opportunities on the business, The Board are aware that air transportation has higher carbon emissions
strategic decisions, and financial planning. compared to other forms of public transport and will make every effort, where
applicable, to transition our air transport to other modes of transport.
Risk Management The company's protocols for effectively managing climate-related risks. The process of identifying climate-related risks is seamlessly integrated into
our regular operations. Although we may not have a dedicated task force, every
team member is accountable for considering climate-related risks within their
specific areas of responsibility.
This decentralized approach guarantees that climate considerations are
incorporated into our day-to-day decision-making processes. Given our small
team size, collaboration plays a vital role. We regularly facilitate
cross-functional discussions to collectively evaluate climate-related risks.
By leveraging the expertise of each team member, we ensure a comprehensive
understanding of potential impacts on our market dynamics. This collaborative
effort cultivates a shared awareness of the challenges posed by
climate-related factors.
Metrics and targets Metrics used by the organization to assess climate related risks and The carbon capture initiative entails goals for mitigating emissions and
opportunities in line with its strategy and risk management process. actively contributing to wider climate initiatives. These metrics underscore,
where applicable the Company's steadfast dedication to comprehensive
sustainability practices.
Financial risk management
The Company has a simple capital structure and its principal financial asset
is cash. The Company's market risk principally refers to price risk associated
with the crypto tokens. The Directors manage the Company's exposure to this
risk by carefully monitoring crypto price movements on a daily basis.
Further details regarding risks are detailed in the Note 25 to the financial
statements.
Provision of information to auditors
So far as each of the Directors is aware at the time this report is approved:
· there is no relevant audit information of which the Company's
auditors are unaware; and
· the Directors have taken all steps that they ought to have taken
to make themselves aware of any relevant audit information and to establish
that the Company's auditors are aware of that information.
Auditors
PKF Littlejohn LLP will be proposed for reappointment in accordance with
Section 485 of the Companies Act 2006. PKF Littlejohn LLP, the auditors, have
indicated their willingness to continue in office as auditors.
Approved by the Board on 27 December 2024 and signed on its behalf by:
Nicholas Lyth
Director and Company Secretary
STATEMENT OF DIRECTORS' RESPONSIBILITIES FOR THE YEAR ENDED 31 AUGUST 2024
The directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each
financial period. Under that law the directors have prepared the Group and
Company financial statements in accordance with UK-adopted international
accounting standards and as regards the Company financial statements, as
applied in accordance with the provisions of the Companies Act 2006. 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 and
Company for that year.
In preparing these financial statements, the directors are required to:
· Select suitable accounting policies and then apply them
consistently;
· Make judgements and accounting estimates that are reasonable and
prudent;
· State whether applicable UK-adopted international accounting
standards have been followed, subject to any material departures disclosed and
explained in the financial statements; and
· Prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and 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 Company's transactions and
disclose with reasonable accuracy at any time the financial position of the
Group and Company and enable them to ensure that the financial statements and
the Directors' Remuneration Report comply with the requirements of the
Companies Act 2006 and, as regards the Group financial statements, in
accordance with UK-adopted international accounting standards. They are also
responsible for safeguarding the assets of the Group and
Company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
Website publication
The directors are responsible for ensuring the annual report and the financial
statements are made available on a website. Financial statements are
published on the Company's website in accordance with legislation in the
United Kingdom governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions. The
maintenance and integrity of the Company's website is the responsibility of
the directors. The directors' responsibility also extends to the ongoing
integrity of the financial statements contained therein.
Directors' responsibilities pursuant to DTR4 (Disclosure and Transparency
Rules)
The directors confirm to the best of their knowledge and belief:
· The Group and Company financial statements have been prepared in
accordance with UK-adopted international accounting standards, and give a true
and fair view of the assets, liabilities, financial position and profit or
loss of the Group and Company; and
· The annual report includes a fair review of the development and
performance of the business and financial position of the Group and Company,
together with a description of the principal risks and uncertainties.
On behalf of the board.
Michael Edwards
Chairman
27 December 2024
DIRECTORS' REMUNERATION REPORT FOR THE YEAR ENDED 31 AUGUST 2024
This remuneration report sets out the Company's policy on the remuneration of
executive and non-executive Directors together with details of Directors'
remuneration packages and service contracts for the year ended 31 August 2024.
Due to the size of the Board and the early stage upon the Company's listing,
an independent remuneration committee is not considered appropriate. The
Company did not appoint any third-party advisers in relation to directors'
remuneration.
The items included in this report are unaudited unless otherwise stated.
Remuneration policy
In setting the policy, the Board has taken the following into account:
· The need to attract, retain and motivate individuals of a calibre
who will ensure successful leadership and management of the Company;
· The Company's general aim of seeking to reward all employees
fairly according to the nature of their respective roles and performance;
· Remuneration packages offered by similar companies within similar
sectors;
· The need to align the interests of shareholders as a whole with
the long-term growth of the Company; and
· The need to be flexible and adjust with operational changes
throughout the term of this policy.
Current and future policy
Executive directors are paid monthly, and their compensation package includes
a combination of fixed salaries, pensions, and any other performance-related
bonuses. Any increase will be properly documented highlighting the reasons and
mainly be based on comparisons with other companies of a similar size and
sector.
UK-based executive directors are entitled to participate in the company's
auto-enrolment pension scheme if they wish. No directors receive any benefits
for life insurance, accidental death or critical illness cover, hospital
fees, dental care or similar. No director has any entitlement to a company
car, fuel allowance, or equivalent benefits.
The Directors are reimbursed by the Company for any travel, hotel or other
expenses that occur in connection with the discharge of their duties.
Non-executive directors may be entitled to remuneration based on
recommendations of the Chairman and comparisons with other companies of a
similar size in a similar sector.
No directors have received bonuses, and any eventual bonuses will be decided
upon by the full board with each director recusing himself or herself from
discussions about his or her bonus.
The company does not have a remuneration committee. During the year, key
decisions made by the full board in respect of remuneration were remuneration
packages for Michael Edwards and Nicholas Lyth.
The Directors have considered the requirement to present information on the
relative performance of spend on pay compared to shareholder dividends. As the
company does not currently pay dividends, we have not considered it necessary
to include such information.
Directors' remuneration (audited)
Details of the directors' remuneration during the year ended 31 August 2024
are as follows:
Director Salary Benefits- Pension 2024 2023
and fees in-kind Contributions Total Total
£ £ £ £ £
Executive directors
Darcy Taylor (resigned 08 Jan 2024) 186,830 - - 186,830 220,000
Bruna Nikolla (resigned 28 June 2024) 184,949 - - 184,949 138,052
Anna Chokina (resigned - - - 320,879
26 September 2022)
Simon Walters (resigned - - - - 10,237
21 December 2022)
Nicholas Lyth 6,000 - - 6,000 -
- - - - -
- - - - -
(appointed 28 Jun 2024)
Michael Edwards (appointed 08 Jan 2024)
Timothy Vincent Le Druillenec (appointed 16 June 2024 and resigned 28 June
2024)
Non-executive directors
Darcy Taylor (resigned 08 Jan 2024) - - - - 4,000
Gill Whitty Collins (resigned 30 April 2024) 19,682 - - 19,682 30,000
Matthew Lodge 14,877 - - 14,877 10,000
Misha Sher - - - - -
Peter Wall (resigned - - - - 17,500
21 December 2022)
Total 412,338 - - 412,338 750,668
Service agreements and Letters of Appointment
Under a letter of appointment with Darcy Taylor dated 18 February 2020,
conditional upon Admission, he was
appointed as a non-executive
director of the Company for an annual fee of £30,000, payable monthly in
arrears. From 10 May 2022, Mr. Taylor's role changed to non-executive
chairman, under a new two-year agreement at £48,000 per annum, payable
monthly in arrears. On the 1 October 2022, he was appointed as an interim CEO,
in addition to the chairman role, with a fee of £192,000 per annum.
The appointment as chairman was for an initial term of 24 months and was
terminable on three months' notice by either party. No compensation was
payable for loss of office and the appointment may be terminated immediately
if, among other things, Mr Taylor was in material breach of the terms of the
appointment. He was appointed to oversee the transition of the company into
new markets, with his role intended to last until a permanent CEO is
established and to explore potential merger and acquisitions avenues.
Darcy Taylor resigned from the Board of Directors on 08 January 2024.
Bruna Nikolla was appointed as a director on 22 August 2022 and was the
company's Chief Financial Officer and Company Secretary. She received a salary
of £150,000 per annum, payable monthly in arrears.
Bruna Nikolla resigned from the Board of Directors on 28 June 2024.
Gill Whitty Collins was appointed as a non-executive director of the company
on 12 May 2022 and is entitled to fees of £30,000 per year under a contract
for services for an initial two-year period which could be terminated by
either party giving three months' notice. Ms. Whitty Collins was expected to
devote at least six days a year to perform duties for the Company. The
appointment may be terminated immediately if, among other things, she was in
material breach of the terms of the appointment.
Gill Whitty Collins resigned from the Board of Directors on 30 April 2024.
Misha Sher was appointed as a non-executive director of the company on 12 May
2022 and is entitled to fees of £30,000 per year under a contract for
services for an initial two-year period which can be terminated by either
party giving three months' notice. Mr. Sher is expected to devote at least six
days a year to perform duties for the Company. The appointment may be
terminated immediately if, among other things, he is in material breach of the
terms of the appointment.
Matthew Lodge was appointed as a non-executive director of the company on 5
May 2023 and is entitled to fees of £30,000 per year under a contract for
services for an initial two-year period which can be terminated by either
party giving three months' notice. Mr. Lodge is expected to devote at least
six days a year to perform duties for the Company. The appointment may be
terminated immediately if, among other things, he is in material breach of the
terms of the appointment.
Michael Edwards was appointed as Chairman on 08 January 2024. His contract for
services is via Marallo Pte Ltd. His fee for the remainder of the financial
year was nil.
Nicholas Lyth was appointed as Finance Director on 28 June 2024. His contract
for services is via Dark Peak Services Ltd. This fee for the remainder of the
financial year was £3,000 per month plus VAT.
Share warrants
Individuals who served as Directors as at the end of financial year hold
warrants to subscribe for Ordinary shares in the company in the future, as
shown in the table below.
At 0.97p each
Misha Sher 2,000,000
Matthew Lodge 5,000,000
The warrants at 0.97p per share were issued on 5 May 2023 and 10 May 2023
respectively. One third vested on 5 May 2024 and 10 May 2024 respectively with
the remaining two thirds vesting in twenty-four equal monthly instalments
thereafter.
Share options
Bruna Nikolla (who resigned on 28 June 2024) held options to subscribe for
7,000,000 Ordinary shares in the Company at 31 August 2024. Director Anna
Chokina (who resigned on 26 September 2023) held options to subscribe for
16,781,594 Ordinary shares in the Company at 31 August 2024.
Statement of directors' shareholdings
The Directors who held office at 31 August 2024 and their respective
beneficial interests in the Ordinary shares of the Company at the
year-end were:
Ordinary shares Share options
Michael Edwards 10,233,333 -
Corporate Governance Statement
The Company intends to comply with the provisions of the Corporate Governance
Code published by the Quoted Companies Alliance (QCA Corporate Governance
Code) insofar as is appropriate having regard to the size and nature of the
Company and the size and composition of the Board.
The QCA has identified 10 principles that focus on the pursuit of medium to
long-term growth in value for shareholders without stifling the
entrepreneurial spirit in which a company was created.
Companies need to deliver growth in long-term shareholder value. This requires
an efficient, effective and dynamic management framework and should be
accompanied by good communication which helps to promote confidence and trust.
Deliver growth
Principle 1: Establish a strategy and business model which promote long-term
value for shareholders.
The Company's strategy and business model were established and set out in the
Company's IPO Admission Document. The strategy is reviewed, assessed and
revised at Board meetings as required. The Company's strategy, business model
and progress are communicated through the Strategic Report of each Annual
Report.
Principle 2: Seek to understand and meet shareholder needs and expectations.
The Chairman meets with existing shareholders from time to time as do the
Executive Directors.
The Company welcomes all attendees to its Annual General Meetings ("AGMs") and
seeks to engage with them both formally and informally on the day.
Principle 3: Take into account wider stakeholder and social responsibilities
and their implications for long-term success.
As a people-centric business, much of their 'day job' involves
communication/meetings with both external third parties and the Company's
staff. Minimising the environmental impact of these activities is actively
encouraged through the Group's:
· Employment policies eg travel, use of public transport, working from
home
· Use of Zoom, a web-based meeting facility.
Principle 4: Embed effective risk management, considering both opportunities
and threats, throughout the organisation.
The Company's approach to risk management together with the principal risks
and uncertainties applicable, their possible consequences and mitigation are
set out in the Principal Risks and Uncertainties section of the Group's Annual
Report. The Board reviews, evaluates and prioritises risks to ensure that
appropriate measures are in place to effectively manage and mitigate those
identified.
Maintain a dynamic management framework
Principle 5: Maintain the Board as a well-functioning, balanced team led by
the Chair.
The Corporate Governance section of the Company's Annual Report details the
composition of its Board and Committees. These are also included within the
Investor Relations section of its website.
All of the Directors (both Executive and Non-executive) are committing the
time necessary to fulfil their roles. Non-executive Directors sit on the Audit
and Risk and Remuneration Committees.
Principle 6: Ensure that between them the Directors have the necessary
up-to-date experience, skills and capabilities.
A biography of each Board member is included within the Investor Relations
section of its website. These list current and past roles of each Board member
and also describe the relevant business experience that each Director brings
to the Board, plus their academic and professional qualifications.
The biographies show the balanced blend of skills and experience required to
enable the Company to execute its strategic objectives within a corporate
governance framework which has been tailored to its business activities.
Principle 7: Evaluate Board performance based on clear and relevant
objectives, seeking continuous improvement.
The Corporate Governance section of the Annual Report describes the function
of the Board and its Committees. Whilst the Company does not have a
Nominations Committee, the Directors regularly review the structure, size,
composition (including the skills, knowledge, experiences and diversity) of
the Board and make recommendations to the Board with regard to any changes.
Principle 8: Promote a corporate culture that is based on ethical values and
behaviours.
Within the Annual Report, the Chairman's statement provides further evidence
of the iteration and implementation of the framework that continues to develop
the Company's culture and support both existing and new employees. This sets
out the Company's purpose, values and culture.
Principle 9: Maintain governance structures and processes that are fit for
purpose and support good decision-making by the Board.
The Investor Relations area of the Company's website includes a Corporate
Governance section which, in addition to the high-level explanation of the
application of the QCA Code, describes the composition of the Board and its
Committees, together with a brief biography of each Board member.
The roles of Committees are described, along with their terms of reference and
matters reserved by the Board for its consideration.
Other matters
The Company does not have an annual or long-term incentive scheme in place for
any of the Directors and as such there are no disclosures in this respect.
This report was approved by the board on 27 December 2024 and signed on its
behalf by:
Michael Edwards
Chairman
INDEPENDENT AUDITOR'S REPORT FOR THE YEAR ENDED 31 AUGUST 2024
Opinion
We have audited the financial statements of CEL Plc (the 'parent company') and
its subsidiaries (the 'group') for the year ended 31 August 2024 which
comprise the Consolidated Statement of Comprehensive Income, the Consolidated
and Company Statements of Financial Position, the Consolidated and Company
Statements of Changes in Equity, the Consolidated and Company Statements of
Cash Flows and notes to the financial statements, including significant
accounting policies. The financial reporting framework that has been applied
in their preparation is applicable law and UK-adopted international accounting
standards and as regards the parent company financial statements, as applied
in accordance with the provisions of the Companies Act 2006.
In our opinion:
· the financial statements give a true and fair view of the state
of the group's and of the parent company's affairs as at 31 August 2024 and of
the group's loss for the year then ended;
· the group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
· the parent company financial statements have been properly
prepared in accordance with UK-adopted international accounting standards and
as applied in accordance with the provisions of the Companies Act 2006; and
· the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
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 Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the group and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed public interest entities, 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.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the group's and parent company's ability to continue to adopt
the going concern basis of accounting included:
· an assessment of management's assumptions in modelling future
financial performance and cash flow requirements, including consideration of
future plans and ensuring all commitments are reflected therein;
· checking the mathematical accuracy of the spreadsheet used to
model future financial performance and cash flow requirements; and
· assessing whether management has adequately disclosed any
conditions which may cast significant doubt on the ability of the group and
parent company to continue as a going concern in the financial statements.
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 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.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit,
and in evaluating the effect of misstatements on our audit and on the
financial statements. For the purposes of determining whether the financial
statements are free from material misstatements, we define materiality as the
magnitude of misstatements that makes it probable that the economic decisions
of a reasonably knowledgeable person, relying on the financial statements,
would be changed or influenced.
We also determine a level of performance materiality which we use to assess
the extent of testing needed to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements
exceeds materiality for the financial statements as a whole. In determining
our overall audit strategy, we assessed the level of uncorrected misstatements
that would be material for the financial statements as a whole.
We determined the group and parent company materiality for the financial
statements as a whole to be £51,400 and £48,700 (2023: £99,100 and
£97,600) respectively, calculated at 3% (2023: 3%) of loss before tax. We
considered loss before tax to be an appropriate benchmark as the group
undertook commercial operations in the year, together with cost controls and
cash preservation measures. Performance materiality was set at 60% (2023: 60%)
of overall materiality for the group and parent company at £30,800 and
£29,200 (2023: £59,400 and £58,560) respectively, whilst the threshold for
reporting unadjusted differences to those charged with governance was set at
£2,570 for the group and £2,430 for the parent company (2023: £4,955 and
£4,880). We agreed with management and the audit committee to report
differences below these thresholds that, in our view, warranted reporting on
qualitative grounds.
The component materiality was set at group performance materiality.
Our approach to the audit
In designing our audit, we determined materiality and assessed the risk of
material misstatement in the financial statements. In particular, we looked at
areas involving significant accounting estimates and judgement by the
directors and considered future events that are inherently uncertain such as
the valuation of share based payments and stock provisions. We also addressed
the risk of management override of internal controls, including among other
matters consideration of whether there was evidence of bias that represented a
risk of material misstatement due to fraud. The component was audited by the
group audit team for consolidation purposes.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key Audit Matter How our scope addressed this matter
Recognition and valuation of cryptocurrency assets - Group and parent company Our audit work in this area included:
(refer to note 15)
· Confirming good title to and quantities of the cryptocurrency
During the year, the parent company invested in cryptocurrency assets as a assets held within the parent company's wallet at year-end and subsequent to
treasury management tool. year-end by observing a director gaining access to the wallet via the unique
reference access key;
Depending on the type of cryptocurrency held, the fair value at the reporting
date could be subject to management judgement and estimation uncertainty · Testing the original investment to the cash disbursement;
depending on trading volumes and ability to exchange or convert into fiat
cash. · Performing an assessment of the fair values attributed to the
cryptocurrency assets at the transaction date and year-end date, and agreeing
In addition, the cryptocurrency assets are held in digital wallets, which to market prices to an independent source;
gives rise to an increased risk of ownership, completeness and existence and
as such the recognition and valuation of cryptocurrency assets is a key audit · Recalculating the unrealised gain or loss and agreeing to other
matter. comprehensive income;
· Performing an assessment of the liquidity of the cryptocurrency
assets held and the ability to realise as fiat cash, if required; and
· Discussing with management the strategy for the holding of
cryptocurrency assets and reviewing the relevant accounting treatment applied.
The directors' recognition and valuation of cryptocurrency assets was
concluded as reasonable.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the group and parent company 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors' remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the strategic report and the directors' report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and their environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent company,
or returns adequate for our audit have not been received from branches not
visited by us; or
· the parent company financial statements and the part of the
directors' remuneration report to be audited are not in agreement with the
accounting records and returns; or
· certain disclosures of directors' remuneration specified by law are
not made; or
· we have not received all the information and explanations we require
for our audit.
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities, the
directors are responsible for the preparation of the group and parent company
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors
are responsible for assessing the group's and the parent company's ability to
continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
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 auditor's 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 financial statements.
Auditor's responsibilities for the audit of the 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:
· We obtained an understanding of the group and parent company and
the sector in which they operate to identify laws and regulations that could
reasonably be expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through discussions with management,
industry research and cumulative audit knowledge.
· We determined the principal laws and regulations currently
relevant to the group and parent company in this regard to be those arising
from Financial Conduct Authority Rules, the Food Standards Agency, Rules of
the London Stock Exchange, Disclosure Guidance and Transparency Rules, UK tax
legislation, and UK-adopted international accounting standards.
· We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by the group
and parent company with those laws and regulations. These procedures included,
but were not limited to, enquiries of management and review of minutes, review
of Regulatory News Service (RNS) announcements and review of legal and
regulatory correspondence.
· We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from management override
of controls, that the estimates, judgements and assumptions applied by
management in their recognition and valuation of cryptocurrency assets;
impairment assessment of unlisted equity interests and stock provisions
represented the highest risk of material misstatement, and we addressed this
by challenging the assumptions and judgements made by management in those
areas.
· We addressed the risk of fraud arising from management override
of controls by performing audit procedures which included, but were not
limited to: the testing of journals; reviewing accounting estimates for
evidence of bias; and evaluating the business rationale of any significant
transactions that are unusual or outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
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.
(http://www.frc.org.uk/auditorsresponsibilities.) This description forms part
of our auditor's report.
Other matters which we are required to address
We were appointed by Board of Directors on 24 August 2021 to audit the
financial statements for the year ended 31 August 2020 and subsequent
financial periods. Our total uninterrupted period of engagement is five years,
covering the years ended 31 August 2020 to 2023.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the group or the parent company and we remain independent of the
group and the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit
committee.
Use of our 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 auditor's 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.
David Thompson (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London E14 4HD
27 December 2024
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 AUGUST 2024
Discontinued operations 2024 2023
Note £ £
Revenue 3 17,942 67,236
Cost of sales (7,683) (25,796)
Gross profit 10,259 41,440
Administrative expenses 2.5, 5 (1,859,240) (3,375,179)
Operating loss (1,848,981) (3,333,739)
Finance income 21,520 24,113
Loss before taxation (1,827,461) (3,309,626)
Corporation tax 9 - (95)
Loss for the year (1,827,461) (3,309,721)
Other comprehensive (loss)/gain
Exchange difference on translation currency (3,979) (24)
Fair value gain on intangible assets (continuing operations) 31,784 -
27,805 (24)
Total comprehensive loss for the year (1,799,656) (3,309,745)
Earnings per share
Basic earnings per share 10 (0.303p) (0.615p)
The consolidated statement of comprehensive income has been prepared on the
basis that all operations are discontinued operations, except as stated
above and disclosed within note 2.5.
The Accounting Policies and notes on pages 27-41 form part of these
consolidated financial statements.
The Company has elected to take exemption under section 408 of the Companies
Act 2006 not to present the parent company Statement of Comprehensive
Income.
The loss of the parent company for the year was £1,883,846 (2023: loss of
£3,259,358).
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 AUGUST 2023
Consolidated Consolidated Company Company
2024 2023 2024 2023
Note £ £ £ £
ASSETS
Non-current assets
Investments in subsidiaries 13 - 60 61
Intangible 15 431,784 - 431,784 -
assets
Current assets
Cash and cash equivalents 213,627 1,772,892 210,294 1,711,893
Inventory 16 - 582,883 - 582,883
Trade and other receivables 12 9,570 92,835 8,215 198,107
Total Assets 654,981 2,448,610 650,353 2,492,944
EQUITY AND LIABILITIES
Equity attributable to owners
Share capital
17 602,250 602,250 602,250 602,250
Share premium 17 12,988,101 12,988,101 12,988,101 12,988,101
Accumulated losses (13,514,304) (13,040,611) (13,521,898) (12,991,820)
Share-based payment reserve 19 412,026 1,714,392 412,026 1,714,392
Revaluation reserve 31,784 - 31,784 -
Foreign translation reserve (5,303) (1,324) - -
Total Equity and Reserves 514,554 2,262,808 512,263 2,312,923
LIABILITIES
Current Liabilities
Trade and other payables
18 140,427 185,802 138,090 180,021
140,427 185,802 138,090 180,021
Total Equity and Liabilities 654,981 2,448,610 650,353 2,492,944
The Accounting Policies and Notes on pages 27-41 form part of the financial
statements
The consolidated and company financial statements were approved and authorised
for issue by the Board of Directors. Signed on behalf of the Board of
Directors by:
Nicholas Lyth
Director
27 December 2024
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 31 AUGUST 2024
Share capital Share premium Foreign currency translation Revaluation Share- Retained Total equity
reserve based earnings
payment
reserve
£ £ £ £ £ £ £
As at 1 September 2023 602,250 12,988,101 (1,324) - 1,714,392 (13,040,611) 2,262,808
Loss for the year - - - - - (1,827,461) (1,827,461)
Exchange difference on translation - - (3,979) - - - (3,979)
Fair value gain on intangible assets - - - 31,784 - - 31,784
Total comprehensive loss for the year - - (3,979) 31,784 - (1,827,461) (1,799,656)
Share-based payments - - - - 51,402 - 51,402
Lapsed warrants and share options - - - (1,353,768) 1,353,768 -
-
Total transactions with owners recognised in equity - - - - (1,302,366) 1,353,768 51,402
As at 31 August 602,250 12,988,101 (5,303) 31,784 412,026 (13,514,304) 514,554
2024
Share capital Share premium Foreign currency translation Revaluation Share-based payment reserve Retained earnings Total equity
reserve
£ £ £ £ £ £ £
As at 1 September 2022 507,250 12,513,101 (1,300) - 1,564,070 (9,730,889) 4,852,232
Loss for the year - - - - - (3,309,721) (3,309,721)
Exchange difference on translation - - (24) - - - (24)
Total comprehensive loss for the year - - (24) - - (3,309,721) (3,309,745)
Issue of ordinary shares 95,000 475,000 - - - 570,000
-
Share-based payments - - - 150,322 - 150,322
-
Total transactions with owners recognised in equity 95,000 475,000 - - 150,322 - 720,322
As at 31 August 2023 602,250 12,988,101 (1,324) - 1,714,392 (13,040,611) 2,262,808
The Accounting Policies and Notes on pages 27-41 form part of the financial
statements.
COMPANY STATEMENT OF CHANGES IN EQUITY AS AT 31 AUGUST 2024
Share capital Share Premium Share-based Retained Total equity
Revaluation payment earnings
reserve reserve
£ £ £ £ £ £
As at 1 September 2023 602,250 12,988,101 - 1,714,392 (12,991,820) 2,312,923
Loss for the year - - - - (1,883,846) (1,883,846)
Fair value gain on intangible assets - - 31,784 - - 31,784
Total comprehensive loss - - - (1,883,846) (1,852,062)
for the year
31,784
Share-based payments - - - 51,402 - 51,402
Lapsed warrants and share options - - (1,353,768) 1,353,768 -
-
Total transactions with owners recognised in equity - - (1,302,366) 1,353,768 51,402
-
As at 31 August 2024 602,250 12,988,101 31,784 412,026 (13,521,898) 512,263
Share capital Share Premium Share-based payment reserve Retained earnings Total equity
Revaluation
reserve
£ £ £ £ £ £
As at 1 September 2022 507,250 12,513,101 - 1,564,070 (9,732,462) 4,851,959
Loss for the year - - - - (3,259,358) (3,259,358)
Total comprehensive loss - - - (3,259,358)
for the year
- (3,259,358)
Issue of ordinary shares 95,000 475,000 - - 570,000
-
Share-based payments - - - 150,322 - 150,322
Total transactions with owners recognised in equity 95,000 475,000 150,322 - 720,322
-
As at 31 August 2023 602,250 12,988,101 - 1,714,392 (12,991,820) 2,312,923
The Accounting Policies and Notes on pages 27-41 form part of the financial
statements.
CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2024
Consolidated 2024 Consolidated 2023 Company Company
£ £ 2024 2023
£ £
Cash flows from operating activities
Loss for the year (1,827,461) (3,309,721) (1,883,846) (3,259,358)
Share-based payment charge 51,402 150,322 51,402 150,322
Fair value loss on investment 78,660 - - -
Impairment of amounts due from subsidiaries - - 228,450 -
Inventories written off 588,545 - 588,545 -
(Gain)/loss on deregistration of a subsidiary (94) - 1 -
Increase in inventory (5,662) (78,757) (5,662) (78,757)
Decrease/(Increase) in debtors 82,926 158,269 (38,558) 52,723
Decrease in creditors (43,905) (93,331) (41,931) (99,111)
Research and development non-cash - 570,000 - 570,000
Foreign exchange differences (3,979) (24) - -
Finance income (21,426) (22,812) (21,426) (22,812)
Net cash flow used in operating activities (1,100,994) (2,626,054) (1,123,025) (2,686,993)
Cash flows from investing activities
Increase in intangible assets (400,000) - (400,000) -
Increase in equity investment (78,660) - - (60)
Net cash outflow on deregistration of a subsidiary (1,037) - - -
Finance income 21,426 22,812 21,426 22,812
Net cash flow (used in)/from investing activities (458,271) 22,812 (378,574) 22,752
Net increase in cash and cash equivalents (1,559,265) (2,603,242) (1,501,599) (2,664,241)
Cash and cash equivalents at beginning of year 1,772,892 4,376,134 1,711,893 4,376,134
Cash and cash equivalents at end of year 213,627 1,772,892 210,294 1,711,893
The Accounting Policies and Notes on pages 27-41 form part of the financial
statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
1. General Information
The Company was incorporated in England and Wales on 25 August 2018 as Leaf
Studios Limited, but subsequently re-registered as a public limited company
and renamed as Leaf Studios PLC. On 29 September 2020, the Company's name was
changed to Cellular Goods PLC.
The registered office is 9th Floor, 16 Great Queen Street, London, WC2B 5DG.
The principal activity of the Company is establishing a biosynthetic CBD/CBG
retail business as well as delivering carbon removal as a service.
The Company gained admission to the Official List (by way of a Standard
Listing under Chapter 14 of the Listings Rules) and trading on the London
Stock Exchange on 26 February 2021.
The company had two subsidiaries, CBX Cellular Goods Canada Limited
incorporated in Canada until the date of dissolution on 29 February 2024, and
King Tide Carbon Pte.Ltd which was incorporated in Singapore.
During the year, the Company's name was changed from Cellular Goods PLC to CEL
AI PLC and its previous principal activities were ceased. On 29 February 2024,
subsidiary undertaking CBX Cellular Goods Canada Limited was dissolved. The
Group going forward is actively seeking Artificial Intelligence and AI Agent
opportunities.
2. Accounting Policies
The critical or significant areas which required the use of accounting
estimates and exercise of judgement by management while applying the Company's
accounting policies are discussed in Note 4.
There is no material difference between the fair value of financial assets and
liabilities and their carrying amount.
The parent company functional and presentational currency is Pounds Sterling
("GBP"). The group presentational
currency is Pounds Sterling ("GBP").
2.1. Basis of preparation
These financial statements have been prepared in accordance with UK-adopted
international accounting standards in accordance with the requirements of the
Companies Act 2006. The financial statements have been prepared under the
historical cost convention with the exception of intangible assets which are
carried at fair value. There is no material difference between the fair value
of financial assets and liabilities and their carrying amount.
Amounts in the financial statements have been rounded to the nearest pound.
2.2. Revenue recognition
Revenue from the sale of goods is recognised when a group entity sells a
product to a customer. Sales are mostly made via online portals, paid by
credit card, at which point revenue is recognised. For sales made in
traditional retail shops, revenue is recognised when consumers buy each
product (goods held by retail outlets are not treated as sales by Cellular
Goods).
2.3. Inventory
Inventory is valued at lower of cost and net realisable value. Cost is based
on the purchase price of the manufactured products, materials and transport
costs. Net realisable value is based on the estimated selling price less
estimated selling costs. Stock considered to have no value has been written
down to nil.
2.4. Basis of consolidation
The Group financial statements consolidate those of the Company and its
subsidiaries as of 31 August 2024. The subsidiaries have a reporting date of
31 August and are entities over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable
returns from its involvement with the subsidiary and has the ability to affect
those returns through its power over the entity. The subsidiaries have been
fully consolidated from the date on which control was transferred to the
Group.
Inter-company transactions, unrealised gains and losses on intra-group
transactions and balances between Group companies are eliminated on
consolidation.
New standards, amendments and interpretations adopted by the Group and Company
The following IFRS or IFRIC interpretations were effective for the first time
for the current financial year. Their adoption has not had any material impact
on the disclosures or on the amounts reported in these financial statements:
Standard / Interpretation
Application
Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure of
Accounting Policies
Amendments to IAS
8
Definition of Accounting Estimates
Amendments to IAS
12
Deferred Tax related to Assets and Liabilities arising from a Single
Transaction
New standards, amendments and interpretations not yet adopted
Standard / Interpretation
Application
IAS 1
amendments
Classification of Liabilities as Current or Non-current
Effective: Annual periods beginning on or after 1 January 2024
IAS 1
amendments
Non-current Liabilities with Covenants
Effective: Annual periods beginning on or after 1 January 2024
IFRS 16
amendments
Lease liability in a Sale and Leaseback
Effective: Annual periods beginning on or after 1 January 2024
IAS 7 & IFRS 7 amendments Supplier
finance arrangements
Effective: Annual periods beginning on or after 1 January 2025
IAS 21
amendments
Lack of Exchangeability
Effective: Annual periods beginning on or after 1 January 2025
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture
Effective: To be determined
There are no IFRSs or IFRIC interpretations that are not yet effective that
would be expected to have a material impact on the Company or Group.
2.5. Discontinued operations
A discontinued operation is a component of the Group that has been disposed of
or is classified as held for sale, and represents a separate line of business
or geographical area of operations. Assets associated with discontinued
operations are measured at the lower of their carrying value and fair value
less costs to sell. Following the cessation of all marketing, development and
promotion of skincare products, and cessation of active management of all
entities connected to the carbon removal business, the results for both years
within the Consolidated Statement of Comprehensive Income comprise
discontinued operations. Certain professional costs, together with auditor's
remuneration, amounting to approximately £132,000 will be required to be
incurred going forward in order to maintain the Group's listing, but are not
significant and have therefore not been separately categorised as continuing
operations in the Statement of Comprehensive Income.
2.6. Going concern
The Directors have assessed the current financial position of the Group, along
with future cash flow requirements, to determine whether the Group has the
financial resources to continue as a going concern for the foreseeable future.
As part of their assessment, the Directors have also taken into account the
ability to raise additional funding whilst maintaining sufficient cash
resources to meet all commitments.
The Directors have prepared detailed cash flow forecasts with strong cost
control measures in place to enable the Group to operate according to its
plans. Given the current economic uncertainties, the Group has controls in
place to monitor spending and ensure that it can continue to operate for the
foreseeable future. Additional cost control measures are available, if
required. The conclusion of this assessment is that it is appropriate that the
Group be considered a going concern. For this reason, the Directors continue
to adopt the going concern basis in preparing the financial statements.
2.7. Capital risk management
The Company's objectives when managing capital is to safeguard the Company's
ability to continue as a going concern, in order to provide returns for
shareholders and benefits for other stakeholders, and to maintain an
optimal capital structure. The Company has no borrowings. In order to maintain
or adjust the capital structure, the Company may adjust the amount of
dividends paid to shareholders, return capital to shareholders or issue new
shares. The Company monitors capital on the basis of the total equity held by
the Company.
2.8. Financial Instruments
Initial recognition
A financial asset or financial liability is recognised in the Statement of
Financial Position of the Group when it arises or when the Group becomes
part of the contractual terms of the financial instrument.
Classification
Financial assets at amortised cost
The Group measures financial assets at amortised cost if both of the following
conditions are met:
1. The asset is held within a business model whose objective is to
collect contractual cash flows; and
2. The contractual terms of the financial asset generating cash
flows at specified dates only pertain to capital and interest payments on
the balance of the initial capital.
Financial assets which are measured at amortised cost, are measured using the
Effective Interest Rate method ("EIR") and are subject to impairment. Gains
and losses are recognised in profit or loss when the asset is derecognised,
modified or impaired.
Financial assets measured at fair value through profit or loss ("FVPL")
Investments in unlisted equity interest, over which the Group has no control,
joint control or significant influence, are measured at fair value through
profit or loss.
Financial liabilities at amortised cost
Financial liabilities measured at amortised cost using the EIR method include
trade and other payables that are short term in nature.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included as finance costs in profit or loss.
2.8. Financial instruments (Continued)
Derecognition
Financial liabilities are derecognised if the company's obligations specified
in the contract expire or are discharged or cancelled.
A financial asset is derecognised when:
1. The rights to receive cash flows from the asset have expired,
or
2. The company has transferred its rights to receive cash flows
from the asset or has undertaken the commitment to fully pay the cash flows
received without significant delay to a third party under an arrangement and
has either (a) transferred substantially all the risks and the assets of the
asset or (b) has neither transferred nor held substantially all the risks and
estimates of the asset but has transferred the control of the asset.
2.9. Impairment
The Group recognises a provision for impairment for expected credit losses
regarding all financial assets. Expected credit losses are based on the
balance between all the payable contractual cash flows and all discounted cash
flows that the Company expects to receive. Regarding trade receivables, the
Company applies the IFRS 9 simplified approach in order to calculate expected
credit losses. Therefore, at every reporting date, provision for losses
regarding a financial instrument is measured at an amount equal to the
expected credit losses, trade receivables and contract assets have been
grouped based on shared risk characteristics.
At each balance sheet date, the Directors review the carrying amounts of the
Company's investments, to determine whether there are any indications that
those investments have suffered an impairment loss.
2.10. Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements are measured using the currency of
the primary economic environment in which entities operate ('the functional
currency'). The financial statements are presented in Pounds Sterling, which
is the parent company's functional and presentation currency. There has been
no change in the functional currency during the current or preceding period.
(ii) Transactions and balances
Transactions in foreign currencies are translated into Pounds Sterling using
monthly average exchange rates. This is permissible in this case as there are
no significant fluctuations between the currencies with which the entity
operates. Monetary assets and liabilities denominated in foreign currencies
are retranslated at the exchange rates ruling at the Statement of Financial
Position date and any exchange differences arising are taken to profit
or loss.
(iii) Foreign operations
In the Group's financial statements, all assets, liabilities and transactions
of Group entities with a functional currency other than GBP are
translated into GBP upon consolidation. The functional currency of the
entities in the Group has remained unchanged during the reporting period. On
consolidation, assets and liabilities have been translated into GBP at the
closing rate at the reporting date. Income and expenses have been translated
into GBP at the average rate over the reporting period. Exchange differences
arising from significant foreign subsidiaries are charged or credited to other
comprehensive income and recognised in the currency translation reserve in
equity. On disposal of a foreign operation, the related cumulative translation
differences recognised in equity are reclassified to profit or loss and are
recognised as part of the gain or loss on disposal.
2.11. Share-based payments
Where share options are awarded to employees, the fair value of the options at
the date of grant is charged to profit or loss over the vesting period.
Non-market vesting conditions are taken into account by adjusting the number
of equity instruments expected to vest at each balance sheet date so that,
ultimately, the cumulative amount recognised over the vesting period is based
on the number of options that eventually vest. Market vesting conditions are
factored into the fair value of the options granted. The cumulative expense is
not adjusted for failure to achieve a market vesting condition.
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 Company 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.
2.12. Intangible assets
Intangible fixed assets comprise of the Group's cryptocurrency assets that
were not mined by the Group and are held by the Group as part of treasury
management. Such cryptocurrency assets recorded under IAS 38 have an
indefinite useful life initially measured at cost, and subsequently measured
at fair value.
Increases in the carrying amount arising on revaluation of cryptocurrency
assets are credited to other comprehensive income and shown as other reserves
in shareholders' equity. Decreases that offset previous increases of the same
asset are charged in other comprehensive income and debited against the
revaluation reserve directly in equity; all other decreases are charged to the
income statement.
The fair value of intangible cryptocurrency assets at the end of the reporting
period is calculated as the quantity of cryptocurrencies on hand multiplied by
the price quoted on an active market website.
2.13. Taxation and deferred taxation
The income tax expense or income for the year is the tax payable on the
current period's taxable income. This is based on the national income tax rate
enacted or substantively enacted for each jurisdiction with any adjustment
relating to tax payable in previous years and changes in deferred tax assets
and liabilities attributable to temporary differences between the tax bases
of assets and liabilities and their carrying amounts in the financial
statements.
Current tax credits arise from the UK legislation regarding the treatment of
certain qualifying research and development costs, allowing for the
surrender of tax losses attributable to such costs in return for a tax rebate.
Deferred tax assets and liabilities are recognised for temporary differences
at the tax rates expected to be applicable when the asset or liability
crystallises based on current tax rates and laws that have been enacted
or substantively enacted by the reporting date. The relevant tax rates are
applied to the cumulative amounts of deductible and taxable temporary
differences to measure the deferred tax asset or liability.
A deferred tax asset is regarded as recoverable and therefore recognised only
when, on the basis of all available evidence, it can be regarded as more
likely than not that there will be suitable taxable profits against which to
recover carried forward tax losses and from which the future reversal of
temporary differences can be deducted. The carrying amount of deferred tax
assets are reviewed at each reporting date.
2.14. Trade and other payables
Short-term creditors are measured at the transaction price. Other financial
liabilities are measured initially at fair value, net of transaction costs,
and are measured subsequently at amortised cost using the effective interest
rate method.
2.15. Trade and other receivables
Trade and other receivables are short-term financial assets due to the
Company. Other receivables are recognised at the transaction's price when it
is probable that economic benefit will flow to the Company.
2.16. Equity
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in equity as a
deduction from the proceeds.
The share premium account represents premiums received on the initial issuing
of the share capital. Any transaction costs associated with the issuing of
shares are deducted from share premium, net of any related income tax
benefits.
2.17. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and demand deposits with banks
and other financial institutions, that are readily convertible into known
amounts of cash, and which are subject to an insignificant risk of changes in
value.
3. Segment information
During the year ended 31 August 2024, revenue was derived wholly from the sale
of cannabinoid products. This has been consistent with the prior year's
revenue, derived wholly from the sale of cannabinoid products.
Under IFRS 8 there is a requirement to show the profit or loss for each
reportable segment and the total assets and total liabilities for each
reportable segment if such amounts are regularly provided to the chief
operating decision-maker.
The Group has one operating segment, being the establishment and operation of
a biosynthetic retail services business, therefore all IFRS 8 disclosures are
incorporated within other notes to the financial statements. The carbon
renewal business had no material transactions, assets or liabilities during
the period and at year-end.
4. Critical accounting estimates and judgement
In the application of the Group's and Company's accounting policies, the
directors are required to make judgements, estimates and assumptions about the
carrying amount of assets and liabilities that are not readily apparent from
other sources. The estimates and associated assumptions are based on
historical experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised, if the revision affects only that period, or in the
period of the revision and future periods if the revision affects both current
and future periods.
The Group conducts fair value review on the investment in unlisted equity
interest which requires estimation. If the result of the review indicates that
there is a fair value difference from the carrying amount, a fair value
gain/loss is recognised in profit or loss.
The directors have applied their knowledge and experience in determining the
classification and measurement of cryptocurrency assets. Specific judgements
on classification are required based on the ordinary model of business,
objective of holding the assets etc. Fair value estimates are forward looking
and are formed using a combination of factors including the market value
subsequent to year end, liquidity and availability of active market etc.
5. Expenses by nature
2024 2023
£ £
Legal and professional 84,089 318,234
Auditor's remuneration 28,750 34,000
Directors' remuneration 412,338 740,741
Share-based payment charge 51,402 150,322
Impairment loss on equity investment 78,660 -
Consultancy 74,413 57,513
Advertising and promotion 74,982 607,504
Product research and development 57,223 586,576
Inventories written off 583,624 53,397
Other expenses 413,759 826,892
1,859,240 3,375,179
6. Auditor's remuneration
2024 2023
£ £
Fees payable to the Company's auditor for the audit of the Group's and 36,000 34,000
Company's annual financial statements
36,000 34,000
7. Directors' remuneration
Directors' remuneration amounted to £412,338 during the year (2023:
£750,668), of which £nil (2023: £nil) remained outstanding at the year end.
Detailed disclosure of Directors' remuneration, including highest paid
director, is disclosed in the Directors' Remuneration Report.
8. Employees
The average number of employees for the Group during the year was 1 (2023: 5),
apart from the Directors.
2024 2023
£ £
Directors' remuneration 412,338 740,741
Wages and salaries 108,608 499,293
Social security costs 22,372 87,620
Pension 40,052 8,318
Share-based payments 51,402 150,322
634,772 1,486,294
9. Taxation
The tax charge for the year was £ nil (2023 - £95). The Company had tax
losses carried forward at the year-end of approximately £13,068,000 (2023:
£11,371,000), on which no deferred tax asset has been recognised. The
available losses will be significantly restricted by the change of trade.
Factors affecting the tax charge
The tax assessed for the year is higher (2023: higher) than the standard rate
of corporation tax in the UK. The difference is explained below:
2024 2023
£ £
Loss on ordinary activities before tax (1,827,461) (3,309,626)
Loss for year multiplied by standard rate of corporation tax in the UK of 25% (456,865) (628,829)
(2023: 19%)
Effects of:
Disallowable expenditure 32,515 137,795
Unutilised losses on which no deferred tax losses is recognised 424,350 491,034
Tax charge for the year - -
10. Earnings per share - discontinued operations
2024 2023
Loss attributable to equity holders of the Company £1,827,461 £3,309,721
Weighted average number of Ordinary Shares in issue (number) 602,250,000 537,962,329
Basic earnings per share (pence per share) (0.303p) (0.615p)
11. Financial Instruments
2024 2023 2024 2023
£ £ £ £
Group Group Company Company
Carrying amount of financial assets
Financial assets measured at amortised cost
Trade and other receivables 790 2,244 790 108,502
Cash and cash equivalents 213,627 1,772,892 210,294 1,711,893
214,417 1,775,136 211,084 1,820,395
Carrying amount of financial liabilities
Financial liabilities measured at amortised cost
Trade and other payables 140,427 185,802 138,090 180,021
12. Trade and other receivables
2024 2023 2024 2023
£ £ £ £
Group Group Company Company
VAT debtor 7,627 31,491 7,425 31,491
Prepayments 1,153 59,100 - 58,114
Amounts due by subsidiary undertaking - - - 107,712
Other debtors 790 2,244 790 790
9,570 92,835 8,215 198,107
13. Investment in subsidiaries
As at 31 August 2023, The Company held complete ownership of two subsidiary
companies, CBX Cellular Goods Canada Ltd, and King Tide Carbon Pte. Ltd
Singapore, each with distinct focuses and contributions to the parent
company's operations. CBX Cellular Goods Canada is incorporated in Canada and
has its registered office at 700-401 West Georgia Street, Vancouver, British
Columbia V6B 5A1, Canada. It specializes in the research, development, and
production of innovative consumer skincare and wellness products in the
biosynthetic CBD and CBG space. King Tide Carbon Pte. Ltd Singapore is a
wholly owned subsidiary dedicated to oceanic biosynthetic carbon removal
industry. Incorporated and registered in Singapore with its registered office
at 101 Telok Ayer Street, #03-02, Singapore 068574. Furthermore, King Tide
Pte. Ltd Singapore also has its wholly owned subsidiary, King Tide Carbon
Canada Ltd, dedicated to the carbon removal industry and registered office at
700-401 West Georgia Street, Vancouver, British Columbia V6B 5A1, Canada.
On 29 February 2024, CBX Cellular Goods Canada Limited was dissolved.
The subsidiary undertakings are set out below.
Name Principal activity Holding
CBX Cellular Goods Canada Ltd** Cannabinoid wellness products 100%
King Tide Carbon Pte. Ltd Singapore Carbon removal services 100%
** (Dissolved as at 29 February2024 in Canada, refer to Note 22)
Investments
in subsidiary
Cost and net book value £
As at 1 September 2022 1
Additions 60
As at 31 August 2023 61
Deregistration (1)
As at 31 August 2024 60
14. Investment in unlisted equity interest
During the year, the Group, through its subsidiary, King Tide Carbon Pte. Ltd., acquired approximately 3.8% equity interest in Haven Carbon Pte. Ltd., with a cost of US$100,000 (equivalent to £78,660). Haven Carbon Ptd. Ltd. is principally engaged in the development of software and applications in relation to carbon credits projects and has a common director in Matthew Lodge. As on the date of authorising these financial statements, the Directors, by reference to the carbon credits market, determined a £Nil fair value on such investment as at the year end date, resulting a fair value loss of £78,660 recorded in profit or loss. The fair value measurement is categorised under level 3 fair value measurements.
15. Intangible assets
2024
Group and Company - Cryptocurrency assets £
Cost
At 31 August 2023 and 1 September 2023 -
Additions 400,000
At 31 August 2024 400,000
Fair value movement
At 31 August 2023 and 1 September 2023 -
Fair value gain recognised in other comprehensive income 31,784
At 31 August 2024 31,784
Balance at 31 August 2024 431,784
Balance at 31 August 2023 -
Cryptocurrency assets are not mined by the Group. The Group acquired and held
cryptocurrency assets during the year, which are recorded at cost on the day
of acquisition. Movements in fair value in crypto assets held at the year-end
is recorded in the fair value reserve in equity.
The cryptocurrency assets held below are discussed above. The assets are all
held in secure custodian wallets controlled by a Director of the Group. The
assets detailed below are all accessible and liquid in nature.
Coins / tokens Fair value
£
As at 31 August 2024
Crypto asset name
Solana 4,149 431,784
16. Inventory
2024 2023 2024 2023
£ £ £ £
Group Group Company Company
Raw materials and packaging 288,541 456,297 288,541 456,297
Finished goods 196,872 179,983 196,872 179,983
Written off (485,413) (53,397) (485,413) (53,397)
- 582,883 - 582,883
The cost of inventory recognised within cost of sales amounted to £5,306
(2023: £25,796). Total write-offs of inventory to net realisable value during
the year amounting to £583,624 (2023: £53,397) was recognised in
administrative expenses in the statement of profit or loss.
17. Share capital and share premium
Number of Share Share Total
shares capital premium
No. £ £ £
At 1 September 2023 602,250,000 602,250 12,988,101 13,590,351
Issue of ordinary shares - - - -
At 31 August 2024 602,250,000 602,250 12,988,101 13,590,351
18. Trade and other payables
2024 2023 2024 2023
£ £ £ £
Group Group Company Company
Trade creditors 110,453 104,892 109,341 100,381
Accruals 29,974 56,926 28,749 55,728
Other creditors - 23,984 - 23,912
140,427 185,802 138,090 180,021
19. Share-based payments
The Company has issued a total of 64,960,000 warrants to subscribe for
additional share capital of the company, of which, 2,500,000 have been
exercised and 50,210,000 have lapsed, leaving 12,250,000 in issue. Each
warrant entitles the holder to subscribe for one ordinary equity share in the
Company. The right to convert each warrant is unconditional.
The Company has issued a total of 30,050,000 share options to subscribe for
additional share capital of the Company to its directors and employees, of
which 5,918,406 have lapsed, leaving 24,131,594 in issue. Each option entitles
the holder to subscribe for one ordinary equity share in the Company. The
right to convert each option is subject to the terms of each respective share
option agreement.
Weighted average exercise price 31-Aug-24 31-Aug-23
Warrants Number Number
At the beginning of the year 3.62p 41,460,000 50,460,000
Issued on 3 April 2023 2.90p - 2,000,000
Issued on 9 May 2023 0.97p - 5,000,000
Issued on 10 May 2023 0.97p - 2,000,000
Issued on 8 June 2023 1.50p - 3,000,000
Lapsed in the year 4.41p (29,210,000) (21,000,000)
At the end of the year 1.40p 12,250,000 41,460,000
Equity-settled share-based payments are measured at fair-value (excluding the
effect of non-market- based vesting conditions) as determined through use of
the Black-Scholes technique at the date of issue.
Weighted average exercise price 31-Aug-24 31-Aug-23
Share options Number Number
At the beginning of the year 5.74p 24,331,594 22,550,000
Issued in the year 1.20p - 7,000,000
Lapsed in the year 7.81p (200,000) (5,218,406)
Exercised in the year - - -
At the end of the year 5.72p 24,131,594 24,331,594
19. Share-based payments (Continued)
The total share-based payment charge for year was £51,402 (2023: £150,322).
An amount of £51,402 (2023: £150,322) has been charged to administrative
expenses and £nil (2023: £nil) to share premium.
The share-based payment charge was calculated using the Black-Scholes model.
All warrants have a vesting period between one and three years from the date
of issue and are subject to their respective lock-in conditions if exercised.
All share options have an exercise period of between three and ten years.
Volatility for the calculation of the share-based payment charge in respect of
the warrants issued was determined by reference to movements in share price of
the Company for the period after the date of admission and by reference to the
relative share prices of a selected peer group of companies listed on the
London Stock Exchange up to the date of admission.
The inputs into the Black-Scholes model for the share options issued in the year are as follows:
Share options
Share options Issued in 2022
Issued in 2023
Weighted average share price at grant date - pence 0.398 6.79
Weighted average exercise price - pence 3.615 7.47
Weighted average volatility 126.33% 70.80%
Weighted average expected life in years 3 1.8
Weighted average contractual life in years 10 10
Risk-free interest rate 2.5 to 3.5% 1.5 to 2.5%
Expected dividend yield 0% 0%
Weighted average fair-value of warrants granted (pence) 0.49 2.07
The total number of warrants held by directors at 31 August 2024 was 9,000,000
(2023: 13,000,000). The total number of share options issued to directors at
31 August 2024 was 7,000,000 (2023: 7,000,000).
20. Contingent liabilities
There were no contingent liabilities at 31 August 2024 and 31 August 2023.
21. Capital commitments
There were no capital commitments at 31 August 2024 and 31 August 2023.
22. Deregistration of a subsidiary
In February 2024, the Group's subsidiary CBX Cellular Goods Canada Ltd was
dissolved.
The following summarises the carrying amount of the assets and liabilities at
the date of deregistration:
£
Net liabilities of the deregistered subsidiary
Prepayments and other receivables 340
Cash and cash equivalents 1,037
Other payables and accrued expenses (1,470)
Share capital (1)
(94)
Gain on deregistration of subsidiaries 94
-
Net cash flow on deregistration of subsidiaries -
Net outflow of cash and cash equivalents (1,037)
23. Controlling party
There was no ultimate controlling party as at the year-end.
24. Fair value estimates
The level in which fair value measurement is categorised is determined by the
level of the fair value hierarchy of the lowest level input that is
significant to the entire fair value measurement:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or
liabilities. The fair value of the Group's intangible assets related to
cryptocurrency assets are measured under level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability. As at 31 August 2024,
the Group's assets measured at fair value is only the investment in unlisted
equity instrument that is categorised in level 3.
During the year ended 31 August 2024, the Group has no transfers among the
fair value level between level 1, level 2 or level 3.
25. Financial risk management
The Board's overall risk management strategy seeks to assist the Group in
meeting its financial targets, while minimising potential adverse effects on
financial performance. Its functions include the review of future cash flow
requirements.
The Group's activities expose it to a variety of financial risks as below.
(i) Interest rate risk
The Group has floating rate financial assets in the form of deposit accounts
with major banking institutions of £213,627. Apart from the abovementioned
amount, no other financial instrument is subjected to interest rate risk. The
interest rate risk is therefore considered minimal.
(ii) Foreign exchange risk
Foreign currency risk is the risk to earnings or capital arising from
movements in foreign exchange rates. The Group's foreign currency risk
primarily arises from currency exposures originating from its foreign exchange
dealings and other investment activities.
The Group monitors the relative foreign exchange positions of its assets and
liabilities to minimise foreign currency risk. The foreign currency risk is
managed and monitored on an ongoing basis by senior management of the Group.
It is considered by the management of the Group that the exposure to foreign
exchange risk is minimal.
(iii) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a
financial loss for the other party by failing to discharge an obligation. The
carrying amount of financial assets recognised on the consolidated statement
of financial position, which is net of impairment losses, represents the Group
' s exposure to credit risk without taking into account the value of any
collateral held or other credit enhancements. The Group' s maximum exposure to
credit risk is summarised in Note 11.
Most of the Group' s cash in banks have been deposited with reputable and
creditworthy banks. Management considers there is minimal credit risk
associated with those balances.
(iv) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
obligations associated with financial liabilities. The management considered
the liquidity risk is low given the current cash balance and the strong
liquidity of the cryptocurrency assets, however remain aware of potential
significant price volatility of such assets.
(v) Market risk
The Group is dependent on the state of the cryptocurrency market, sentiments
of crypto assets as a whole, as well as general economic conditions and their
effect on exchange rates, interest rates and inflation rates.
The Group is also subject to market fluctuations in foreign exchange rates.
Cryptocurrency is primarily convertible into fiat through USD currency pairs
and through USD denominated stable coins and is the primary method for the
Group for conversion into cash.
(vi) Capital risk management
The Group manages its capital to ensure that the Group will be able to
continue as a going concern while maximising the return to shareholder through
the optimisation of the debt and equity balances.
The capital structure of the Group consists of debt and equity attributable to
the owners of the Company, comprising share capital, share premium and
retained earnings.
The directors of the Group review the capital structure regularly. As part of
this review, the directors of the Group consider the cost of capital and the
associated risks, and take appropriate actions to adjust the Company's capital
structure. The overall strategy of the Company remained unchanged.
26. Related party transactions
During the year, the Company incurred fees of £6,000 (2023: £nil) for
consulting services from Dark Peak Services Ltd, a company controlled by
Nicholas Lyth.
As at 31 August 2024, included in trade creditors was an amount due to a
company controlled by an ex-director of the Company amounting to £10,000
(2023: £nil); and an amount due to a close family member of a director
amounting to £5,000 (2023: £nil).
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