REG - Cloudified Holdings - Final Results
10/02/2025 13:00
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RNS Number : 5548W Cloudified Holdings Limited 10 February 2025
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.
Cloudified Holdings Limited
("Cloudified" or the "Company")
Final Results
Cloudified Holdings Limited ("Cloudified" or "CHL" or "the Group" or "the
Company"), an AIM quoted cash shell announces its final results for the year
ended 31 March 2024 (the "Period").
Highlights post Period
· £500,000 (gross) of cash raised by Salonica GP subscribing for
9,651,385 new ordinary shares at 5.2p (131% premium to last share price pre
suspension) on 13 November 2024.
· Othman Shoukat and Richard Collett joined the board at that
point.
· Focus on workstreams to achieve a successful acquisition of a
media and events asset in Q2 2025, which will constitute a Reverse Take Over
under the Aim Rules ("RTO") to allow the Company's shares to resume trading.
· Cash at 31 December 2024 £674,210. Operating costs of c£30k/m
to run the shell since the disposal.
· Main activity was the review of RTO and refinancing opportunities
combined with the preparations to implement an MVL if required.
Review of the Period to 31 March 2024
· Main activity was the disposal of the former cyber security
division which completed on 12 December 2023 and the Company transitioning to
a Rule 14 cash shell at that point.
· Overall loss of £1.41m (2023: loss £2.55m)
The Annual Report & Accounts for the year ended 31 March 2024 will shortly
be available on the Company's website
(https://cloudified-holdings.com/reports-and-results
(https://cloudified-holdings.com/reports-and-results) ) in accordance with the
electronic communication provisions under its Articles of Association and AIM
Rule 20.
Enquiries:
Cloudified Holdings Limited Via IFC
Ian Selby, Director
Zeus (NOMAD & Broker) + 44 (0) 203 829 5000
Mike Coe/ James Bavister
IFC Advisory Ltd +44 (0) 203 934 6630
Financial PR & IR
Graham Herring / Zach Cohen
Strategic Report
The Directors present the Strategic Report of the Company for the year ended
31 March 2024.
Business Review
Historically, the Group functioned as a provider of cyber security services to
the SME market via its former subsidiary Falanx Cyber Defence Limited. On 12
December 2023, the Group finalised the sale of its cyber security assets
(Falanx Cyber Defence Ltd and Falanx Cyber Technologies Limited),
transitioning to a cash shell in accordance with AIM Rule 15 on the same day.
The background to the sale was explained in our annual report for the year to
31 March 2023, but in summary it was due to market changes arising from
Microsoft initiatives through its Managed Services Provider ("MSP") channels
and these were compounded by a worsening economy. Considering this, the board
viewed the prospects of the former business operating as a self-sustaining
business which could generate the necessary cash flows to both support the
group and pay down debt were much diminished.
Consequently, the main activity in the group was management of the sale
process led by external advisors which resulted in the announcement of the
sale to Wavenet Limited (a Macquarie backed MSP) on 9 November 2023 with the
deal completing on 12(th) December 2023. On that date the Company became a
cash shell and restructured itself accordingly.
Since then, and into the new financial year the board of Alex Hambro and Ian
Selby (with Mike Read having retired on 31 March 2024) has evaluated over
thirty opportunities for potential reverse takeover candidates. Opportunities
were carefully screened for their ability to complete a deal as well as for
their ability to demonstrate credible business plans so support future growth.
Costs were kept to a minimum to support this process, and no external advisory
costs would be incurred unless the deal was credible and risk sharing with the
target was in place. In parallel to this, a plan was developed to put the
company into a Members Voluntary Liquidation ("MVL") if the board, in
conjunction with its advisors, deemed it unrealistic to expect an appropriate
transaction to complete in a realistic time frame.
Financial Commentary
In the year to 31 March 2024, continuing operations solely comprised of costs
held in the Company. Some of these were for support services (IT, finance, HR
& legal) across the wider Group, as well as board and listing related
costs. Towards the end of the year, they were reduced, and when the Group
became a cash shell on 12 December 2023, they were very significantly reduced
to an average of £30,000 per month to support the cash shell. Binding
completion accounts were agreed with the purchaser, and transitional services
were completed in March 2024. Costs were then further reduced from 1 April
2024. Continuing operations costs of £1.48m included approximately £0.7m
related to termination costs arising from restructuring the Company to a cash
shell.
Discontinued operations (profit £0.05m, 2023: loss £1.36m) represented the
net profit on the sale of the cyber security division less losses incurred by
that business between 1 April 2023 and 12 December 2023. In the six months to
30 September 2023 the Cyber Division's revenues had grown by c.3% but this was
much less than planned as referenced previously and the Group remained loss
making and cash negative. The Group's results for the year are set out in the
consolidated statement of comprehensive income. Net assets at 31 March 2024
primarily consisted of cash balances of £0.53m, with other amounts arising
from routine amounts for debtors, prepayments, trade payables, payroll taxes
and accruals. The Group had no debt and all assets and liabilities (including
the premises in Reading) relating to the former cyber security businesses were
treated as items held for sale in the accounts for the year to 31 March 2023.
Overall shareholders' funds decreased to £0.39m (2023: £1.80m) due to losses
from continuing and discontinued operations.
Subsequent Events Review and Future Strategy
Since this disposal, the Company's strategy has been to identify another
company or business to acquire in exchange for the issue of Ordinary Shares in
a single transaction (a "reverse takeover" or "RTO") or, if no suitable
acquisition could be identified on a timely basis, to appoint a liquidator and
enter an MVL and return any remaining cash to shareholders. In considering the
Company's future strategy, the then Directors sought to identify opportunities
offering the potential to deliver value accretion to shareholders over the
medium to long-term in the form of capital and/or dividends.
On 13 June 2024, the Company's shares were suspended from trading on the AIM
market as it was not able to make an acquisition or acquisitions which
constituted a reverse takeover under Rule 14 of the AIM Rules, within six
months of becoming an AIM Rule 15 cash shell, in accordance with Rule 15 of
the AIM Rules.
On 28 October 2024, the Company announced a refinancing of £500,000 (before
expenses), through a subscription for 9,615,385 new Ordinary Shares at an
issue price of 5.20 pence per new Ordinary Share, representing a 131% premium
to the last share price, and also to the expected proceeds from an MVL. The
investment was by Salonica GP (advised by Salonica Capital Ltd) and is to
support the execution of an RTO by the acquisition of an identified asset (the
"Acquisition"), as set out below, in the media and entertainment sector. On 13
November 2024 the investment was completed following approval by the Company's
shareholders and Othman Shoukat and Richard Collett joined the Board. Cash
balances on 31 December 2024 were £674,210.
The Acquisition, which was introduced by Salonica Capital, will be of a newly
incorporated company which is has been established to acquire the global
distribution rights of certain media assets and technology licences from an
established international media company, and this process is currently
underway. Its management team, who are highly experienced in this sector, are
focussing their plans on driving recurring revenues from these assets as well
as event specific revenues. The Acquisition is currently expected to complete
in the second quarter 2025. Consideration for the Acquisition is expected to
be settled via the issue of new Ordinary Shares in the capital of the Company.
A fundraising may be undertaken alongside this to accelerate the development
and growth of the Company, as well as to settle certain contingent deal costs.
Should the Acquisition complete as envisaged, shareholders will each receive a
further seven new Ordinary Shares by way of bonus issue for every four
Ordinary Shares they hold. This will increase the uplift to shareholders to
536% compared to the last quoted price.
Consolidated income statement
for the year ended 31 March 2024
2024 2023
Note £ £
Revenue 4 13,935 -
Cost of sales - -
Gross profit 13,935 -
Administrative expenses (continuing operations) (1,479,951) (1,195,191)
Operating loss (1,466,016) (1,195,191)
Finance income 8,764 5,607
Finance expense (1,021) -
Finance income / (expense) - net 7,743 5,607
Loss before income tax (1,458,273) (1,189,584)
Income tax credit - -
Loss for the year from continuing operations (1,458,273) (1,189,584)
Discontinued operations
Profit / (Loss) for the year from discontinued operations 51,391 (1,360,554)
(Loss) for the year (1,406,882) (2,550,138)
Loss per share from continuing operations
Basic & diluted loss per share 6 (28) p (23.0) p
Profit / (Loss) per share from discontinued operations
Basic and diluted profit / (loss) per share 6 0.98 p (25.8) p
2024 2023
Note £ £
Profit / (Loss) for the year (1,406,882) (2,550,138)
Other comprehensive income:
Exchange differences recycled to the income statement on disposal of business - -
Other comprehensive income for the year, net of tax - -
Total comprehensive income for the year (1,406,882) (2,550,138)
Attributable to:
Owners of the parent
Continuing operations (1,458,273) (1,189,584)
Discontinued operations 5 51,391 (1,360,554)
Total comprehensive income for the year (1,406,882) (2,550,138)
Consolidated statement of financial position
as at 31 March 2024
2024 2023
Note £ £
Assets
Current assets
Trade and other receivables 68,740 127,799
Cash and cash equivalents 530,492 974,333
599,232 1,102,132
Assets in a disposal group classified as held for sale 5 - 4,421,446
Total assets 599,232 5,523,578
Equity
Capital and reserves attributable to equity holders of the Company
Share capital 4,035,003 4,035,003
Shares based payment reserve 462,386 697,900
Accumulated losses (4,105,874) (2,930,008)
Total equity 391,515 1,802,895
Liabilities
Current liabilities
Trade and other payables 207,717 265,738
207,717 265,738
Liabilities directly associated with assets in a disposal group classified as 5 - 3,454,945
held for sale
Total liabilities 207,717 3,720,683
Total equity and liabilities 599,232 5,523,578
Consolidated statement of changes in equity
for the year ended 31 March 2024
Share Accumulated Share based 2022
Note capital losses payment reserve Liabilities reserve Total
£ £ £ £
Balance at 1 April 2022 4,043,194 (1,397,476) 703,151 1,000,000 4,348,869
Loss for the year - (2,550,138) - - (2,550,138)
Transactions with owners:
Capital reconstruction - 1,000,000 - (1,000,000) -
Proceeds from trade of fractional shares 18 - - - 18
Costs of share consolidation (8,209) (8,209)
Share based payment charge - - 12,355 - 12,355
Forfeited share options reversed through reserves - 17,606 (17,606) - -
Balance at 31 March 2023 4,035,003 (2,930,008) 697,900 - 1,802,895
Profit for the year - (1,406,882) - - (1,406,882)
Transactions with owners:
Share based payment charge - - (4,498) - (4,498)
Forfeited share options reversed through reserves - 231,016 (231,016) - -
Balance as at 31 March 2024 4,035,003 (4,105,874) 462,386 - 391,515
The share capital account represents the amount subscribed for share capital,
net of share issue expenses. Share issue expenses comprise the costs in
respect of the issue by the Company of new shares.
Accumulated losses represent the cumulative losses of the Group attributable
to the owners of the parent.
The share-based payment reserve represents the cumulative share option and
warrant charges.
The 2022 Liabilities reserve was a special non distributable reserve in
respect of certain longer-term liabilities including HMRC COVID -19 deferral
and rental liabilities on the Reading office. This reserve was created as part
of the capital variation in completed in February 2021. The balance on this
account transferred to accumulated losses on 31 December 2022.
Consolidated cash flow statement
for the year ended 31 March 2024
2024 2023
Note £ £
Cash flows from operating activities
Loss before tax from continuing activities (1,458,273) (1,189,584)
Profit / Loss before tax from discontinued activities 51,391 (1,360,554)
Loss profit before tax (1,406,882) (2,550,138)
Adjustments for:
Depreciation 4 17,887 61,418
Amortisation and impairment of intangibles 4 188,683 286,533
Amortisation of right of use assets 4 35,364 87,879
Share based payment (4,498) 12,355
Gain on disposal of subsidiaries 5 (602,904) -
Gain on disposal of fixed assets (289) -
Gain on disposal of right of use assets (2,876) -
Amortisation of borrowing costs 122,291 41,928
Net finance expense recognised in profit or loss 276,382 295,136
(1,376,842) (1,764,889)
Changes in working capital:
Decrease / (increase) in trade and other receivables 413,146 (186,649)
(Decrease) / increase in trade, contract liabilities and other payables (57,147) 122,997
Cash used in operations (1,020,843) (1,828,541)
Interest paid (5,257) (934)
Net cash used in continued operating activities (1,026,100) (1,829,475)
Cash flows from investing activities
Interest received 9,616 5,607
Acquisition of property, plant and equipment - (48,209)
Proceeds from disposal of fixed assets 1,279 -
Proceeds on disposal of subsidiaries, net of cash disposed 1,181,148 -
Net cash (used in) / generated from investing activities 1,192,043 (42,602)
Cash flows from financing activities
Repayment of lease liabilities (15,251) (62,951)
Interest on lease liabilities (4,435) (16,290)
Repayment of borrowings (396,278) (265,702)
Interest paid on borrowings (193,820) (283,519)
Proceeds from trade of fractional shares - 18
Costs of share consolidation - (8,209)
Net cash (used in) / generated from financing activities (609,784) (636,653)
Net (decrease) / increase in cash equivalents (443,841) (2,508,730)
Cash and cash equivalents at beginning of year 974,333 3,483,063
Cash and cash equivalents at end of year 530,492 974,333
Notes to the consolidated financial statements
for the year ended 31 March 2024
1. General information
Cloudified Holdings Limited (the "Company" or "Cloudified") is a cash shell
under Rule 15 of the AIM rules. This followed the disposal of its trading
subsidiaries in the cyber security division on 12 December 2023. The Company
is a public limited company which is listed on the AIM Market of the London
Stock Exchange and is incorporated and domiciled in the British Virgin
Islands. The address of its registered office is PO Box 173, Kingston
Chambers, Road Town, Tortola, British Virgin Islands. The UK registered office
is c/o Blake Morgan LLP, Apex Plaza, Forbury Road, Reading, RG1 1AX.
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below. These policies have been
applied consistently to all the years presented unless otherwise stated.
2.1 Basis of preparation
These consolidated financial statements have been prepared in accordance with
UK adopted International Accounting Standards. The functional and
presentational currency for the financial statements is Sterling. The
financial statements have been prepared under the historical cost convention,
as modified by financial assets and financial liabilities at fair value
through profit or loss.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the consolidated
financial statements are disclosed in note 3.
2.1.1 Going concern.
The company is now a cash shell with no trading operations. On 31 December
2024 it had cash balances of £674,210 and has an expected cash consumption of
c£32,000 per month comprising of directors' fees, audit fees and PLC running
costs. The sale of the Cyber Division in December 2023 included a Warranties
and Indemnities insurance policy which caps the Company's liabilities (save in
the case of fraud) at £1. The major expected cost going forward is expected
to be professional fees which will be incurred on pursuing the identified
Acquisition. This potential transaction will require the usual advisory fees,
and these will be incurred across is delivery. Contingent fee arrangements
will be used where practicable and economic.
The definition of a going concern is that of "any entity unless its management
intends to liquidate the entity or to cease trading or has no realistic
alternative to liquidation or cessation of operations". The directors took the
decision to cease trading through the disposal in December 2023 of all the
trading subsidiaries of the Company and, as such, have prepared the financial
statements on a basis other than a going concern. The directors do not
consider that this basis of preparation has given rise to any material
differences compared to the financial statements prepared on a going concern
basis.
2.1.2 New and Revised Standards
New and amended IFRS Accounting Standards that are effective for the current
year
There are a number of standards and amendments to standards which have been
issued by the IASB that are effective in future accounting periods that have
not been adopted early. The following standard is effective for annual
reporting periods beginning on or after 1 January 2024:
· IFRS 17 Insurance Contracts
· Classification of liabilities as current or non-current
(Amendments to IAS 1)
· Deferred tax related to assets and liabilities arising from a
single transaction (Amendments to IAS 12)
· Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
· Classification of Financial Instruments (Amendments to IFRS 9)
· Non-current liabilities with covenants (Amendments to IAS 1)
· Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
New and revised IFRS Accounting Standards in issue but not yet effective
The following amendments are effective for annual reporting periods beginning
on or after 1 January 2025:
· Guidance on the exchange rate to use when a currency is not
exchangeable (Amendments to IAS 21)
· Accounting treatment for the sale or contribution of assets
(Amendments to IFRS 10 and IAS 28)
The following standards are effective for annual reporting periods beginning
on or after 1 January 2027:
· IFRS 18 Presentation and Disclosure in Financial Statements
· IFRS 19 Subsidiaries without Public Accountability: Disclosures
2.2 Consolidation
Subsidiaries
Subsidiary undertakings are entities that are controlled by the Company. The
definition of control involves three elements: power over the investee;
exposure or rights to variable returns and the ability to use the power over
the investee to affect the amount of the investor's returns. The Group
generally obtains power through voting rights. Subsidiaries are consolidated
from the date at which the Group obtains the relevant level of control and are
treated as disposed of, and so de-consolidated from the date at which that
control ceases.
The acquisition method of accounting is used for all business combinations. On
acquisition, the cost is measured at the aggregate of their fair values at the
date of exchange, of assets given, liabilities incurred or assumed, and equity
instruments issued by the Group in exchange for control of the acquire. Any
costs directly attributable to the business combination are expensed as
incurred. The acquiree's identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3 (Revised),
"Business Combinations" are recognised at fair values at the acquisition date.
Goodwill represents the excess of the consideration transferred, the amount of
any non-controlling interest in the acquiree and the acquisition date fair
value of any previous equity interest in the acquiree over the fair value of
the Group's share of the identifiable net assets acquired is recorded as
goodwill. If, after reassessment, the Group's interest in the net fair value
of the acquiree's identifiable assets, liabilities and contingent liabilities
exceeds the cost of the business combination, the difference is recognised
directly in profit or loss. Any subsequent adjustment to reflect changes in
consideration arising from contingent consideration amendments are recognised
in profit or loss.
Inter-company transactions, balances and unrealised gains on transactions
between group companies are eliminated. Unrealised losses are also eliminated.
Accounting policies of subsidiaries have been adjusted where necessary to
ensure consistency with the policies adopted by the Group. All subsidiaries
are wholly owned by the Group.
2.3 Segmental reporting
In accordance with IFRS 8, segmental information is presented based on the way
in which financial information is reported internally to the chief operating
decision maker. The Group's internal financial reporting was historically
organised along product and service lines, but this as a consequence of the
disposal of trading operations on 12 December 2023, has been changed to
reflect discontinued and continuing items. A business segment is a group of
assets and operations engaged in providing products and services that are
subject to risks and returns which are different from those of other business
segments.
2.4 Revenue recognition
Revenue comprises the fair value of the consideration received or receivable
for the sale of goods and services in the ordinary course of the Group's
activities. Revenue is shown net of value-added tax, returns, rebates and
discounts and after eliminating sales within the Group.
The Group recognises revenue when the amount of revenue can be reliably
measured, it is probable that future economic benefits will flow to the entity
and when specific criteria have been met for each of the Group's activities.
Revenue is recognised on the following bases:
Class of revenue Recognition criteria
Subscription fees straight line basis over
the life of the contract
Managed services straight line basis over the
life of the contract
Consultancy on delivery
of service to customers
Vulnerability assessment on delivery of service to customers
Revenue is recognised as the client receives the benefit of the services
provided under a commercial contract, in an amount that reflects the
consideration to which the provider expects to be entitled for the transfer of
the goods or services.
Performance obligations and timing of revenue recognition
Revenue from the provision of professional services such as penetration
testing, consultancy and strategic intelligence assignments are recognised as
services are rendered, based on the contracted daily billing rate and the
number of days delivered during the period. Revenue from pre-paid contracts
are deferred in the statement of financial position and recognised on
utilisation of service by the client.
Revenue from cyber monitoring contracts (including installation), intelligence
embedded analyst and report subscriptions includes advance payments made by
the customer is deferred (as a contract liability) and is then subsequently
recognised on a straight-line basis over the term of the contract. Where they
are billed periodically in a monthly in arrears basis, revenues are recognised
at that point.
Contracts values are typically fixed price and the pricing level is based on
management experience of pricing adequate mark up of prime cost. Where
additional services need to be delivered outside of the contract a time and
materials basis based on day rates is used.
Determining the transaction price
The Group's revenue is derived from fixed price contracts and therefore the
amount of revenues to be earned from each contract is determined by reference
to those fixed prices. Costs of obtaining long-term contracts and costs of
associated sales commissions are prepaid and amortised over the terms of the
contract on a straight-line basis. Commissions paid to sale staff for work in
obtaining the Prepaid Consultancy are recognised in the month of invoice. The
timing and any conditionality for the payment of commissions is governed under
the then applicable sales incentive plan.
Revenues are exclusive of applicable sales taxes and are net of any trade
discounts. There are no financing components in any of our revenue streams.
Contract Assets (accrued incomes) balance was £nil (2022: £21,100) as all
arose from assets held for sale and were reflected in that balance. Contract
Liabilities (deferred incomes) balance of £nil (2022: £529,496) were
similarly included in assets held for sale. All contract assets had short
cash conversion periods and all assets at the year-end have since been
monetised. All contract assets and liabilities related to discontinued items.
The Board considers that the information in note 4 adequately depicts how the
nature, amount, timing and uncertainty of revenue and cash flow are affected
by economic factors.
2.5 Taxation
The tax expense for the year represents the total of current taxation and
deferred taxation. The charge in respect of current taxation is based on the
estimated taxable profit for the year. Taxable profit for the year is based on
the profit as shown in the income statement, as adjusted for items of income
or expenditure which are not deductible or chargeable for tax purposes. The
current tax liability for the year is calculated using tax rates which have
either been enacted or substantively enacted at the reporting date.
Deferred tax is provided in full, using the liability method on temporary
differences arising between the tax base of assets and liabilities and their
carrying values in the financial statements. Deferred tax is not accounted for
if it arises from initial recognition of an asset or liability in a
transaction other than a business combination that, at the time of the
transaction, affects neither accounting nor taxable profit or loss. Deferred
tax is determined using tax rates which have been enacted or substantively
enacted at the reporting date and are expected to apply when the related
deferred tax asset is realised, or the deferred income tax liability is
settled.
Deferred tax assets are recognised for all deductible temporary differences,
carry forward of tax assets and unutilised tax losses, to the extent that it
is probable that taxable profits will be available against which the
deductible temporary differences, and the carrying forward of tax assets and
unutilised tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date
and adjusted to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the deferred tax
assets to be utilised. Conversely, previously unrecognised deferred tax assets
are recognised to the extent that it is probable that sufficient taxable
profit will be available to allow all or part of the deferred tax asset to be
utilised.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the year when the asset is realised or the liability is
settled, based on tax rates and tax laws that have been enacted or
substantively enacted at the statement of financial position date.
2.6 Foreign Currency
The Company has determined Sterling as its functional currency, as this is the
currency of the economic environment in which the Company predominantly
operates.
Transactions in currencies other than Sterling are recorded at the rates of
exchange prevailing on the dates of the transactions. At each reporting date,
the monetary assets and liabilities that are denominated in foreign currencies
are retranslated at the rates prevailing on the reporting date. Non-monetary
assets and liabilities are carried at fair value that are denominated in
foreign currencies are translated at the rates prevailing at the date when the
fair value was determined. Gains and losses arising on exchange are included
in profit or loss.
Foreign currency differences arising on retranslation are recognised in profit
or loss.
In the case of foreign entities, the financial statements of the Group's
overseas operations are translated as follows on consolidation: assets and
liabilities, at exchange rates ruling on reporting date, income and expense
items at the average rate of exchange for the period and equity at exchange
rates ruling on the dates of the transactions. Exchange differences arising
are classified as equity and transferred to a separate translation reserve.
Such translation differences are recognised in profit or loss in the period in
which the operation is disposed of. Foreign exchange gains and losses arising
from monetary item receivable from or payable to a foreign operation, the
settlement of which is neither planned nor likely within the foreseeable
future, are considered to form part of net investment in a foreign operation
and are recognised directly in equity.
Goodwill and fair value adjustments arising on the acquisition of a foreign
entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate.
Foreign currency gains and losses are reported on a net basis.
2.7 Impairment of non-financial assets
Assets that are subject to depreciation or amortisation are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. A review for indicators of impairment
is performed annually. An impairment loss is recognised for the amount by
which the asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less costs to sell
and value in use. Any impairment charge is recognised in the income statement
in the year in which it occurs. When an impairment loss, other than an
impairment loss on goodwill, subsequently reverses due to a change in the
original estimate, the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, up to the carrying amount that
would have resulted, net of depreciation, had no impairment loss been
recognised for the asset in prior years.
2.8 Financial instruments
The Group applies a simplified method of the expected credit loss model when
calculating impairment losses on its financial assets which are measured at
amortised cost such as trade receivables, other debtors and prepayments. This
resulted in greater judgement due to the need to factor in forward-looking
information when estimating the appropriate amount to provisions.
(a) Financial Assets
The Group's Financial Assets include Cash and Cash Equivalents, Trade
Receivables and Other Receivables.
· Initial Recognition and Measurement: Financial Assets are
classified as amortised cost and initially measured at fair value.
· Subsequent Measurement: Financial assets are subsequently
measured at amortised cost, using the effective interest method, less
impairment. Interest is recognised by applying the effective interest method,
except for short-term receivables when the recognition of interest would be
immaterial. The company only offers short (typically 30 day) periods of credit
to its customers.
· Derecognition of Financial Assets: The Company derecognises a
Financial Asset only when the contractual rights to the cash flows from the
asset expire, or it transfers the Financial Asset and substantially all the
risks and rewards of ownership of the asset to another entity.
(b) Financial Liabilities and Equity Instruments
The Group's Financial Liabilities include Trade Payables, Accruals and Other
Payables. Financial Liabilities are classified at amortised cost.
(c) Investments
Investments not in subsidiary undertakings are carried at fair value through
profit and loss.
Classification as Debt or Equity. Financial Liabilities and Equity Instruments
issued by the Company are classified according to the substance of the
contractual arrangements entered into and the definitions of a Financial
Liability and an Equity Instrument.
2.9 Share capital
Ordinary shares (of nil par value) in the Company are classified as equity. By
definition all amounts arising from the issue of these shares are attributable
to Share Capital as are any directly attributable (including any warrants
issued as commissions) to issue of new shares are shown in equity as a
deduction to the share capital account. The Company does not maintain a
separate share premium account.
2.10 Reserves
The consolidated financial statements include the following reserves:
translation reserve, share option reserve, 2022 Liabilities reserve and
accumulated losses. Premiums paid on the issue of share capital, less any
costs relating to these, are posted to the share capital account as referenced
above.
2.11 Trade payables
Trade payables are obligations to pay for goods and services that have been
acquired in the ordinary course of business from suppliers. Accounts payable
are classified as current liabilities if payment is due within one year or
less. If not, they are presented as non-current liabilities.
Trade payables are recognised initially at fair value and are subsequently
measured at amortised cost using the effective interest method. As the payment
period of trade payables is short, future cash payments are not discounted as
the effect is not material.
2.12 Leases
When entering into a contract the Group assesses whether or not a lease
exists. A lease exists if a contract conveys a right to control the use of an
identified asset under a period of time in exchange for consideration. Leases
of low value items and short-term leases (leases of less than 12 months at the
commencement date) are charged to the profit or loss on a straight-line basis
over the lease term in administrative expenses.
The Group recognises right-of-use assets at cost and lease liabilities on the
statement of financial position at the lease commencement date based on the
present value of future lease payments. The right-of-use assets are amortised
on a straight-line basis over the length of the lease term. The lease
liabilities are recognised at amortised cost using the effective interest rate
method. Discount rates used reflect the incremental borrowing rate specific to
the lease.
2.13 Pensions
The Company operates a defined contribution pension scheme under which fixed
contributions are payable. Pension costs charged to the income statement
represent amounts payable to the scheme during the year.
2.14 Share-based payments
The cost of share-based payment arrangements, which occur when employees
receive shares or share options, is recognised in the income statement over
the period over which the shares or share options vest.
The expense is calculated based on the value of the awards made, as required
by IFRS 2, 'Share-based payment'. The fair value of the awards is calculated
by using the Black-Scholes and Monte Carlo option pricing models taking into
account the expected life of the awards, the expected volatility of the return
on the underlying share price, vesting criteria, the market value of the
shares, the strike price of the awards and the risk-free rate of return. The
charge to the income statement is adjusted for the effect of service
conditions and non-market performance conditions such that it is based on the
number of awards expected to vest. Where vesting is dependent on market-based
performance conditions, the likelihood of the conditions being achieved is
adjusted for in the initial valuation and the charge to the income statement
is not, therefore, adjusted so long as all other conditions are met.
Where an award is granted with no vesting conditions, the full value of the
award is recognised immediately in the income statement.
2.15 Provisions
Provisions are recognised in the statement of financial position where there
is a legal or constructive obligation to transfer economic benefits as a
result of a past event. Provisions are discounted using a rate which reflects
the effect of the time value of money and the risks specific to the
obligation, where the effect of discounting is material.
Provisions are measured at the present value of expenditures expected to be
required to settle the obligation using a pre-tax rate that reflects current
market assessments of the time, value of money and the risks specific to the
obligation. The increase in provision due to the passage of time is recognised
as interest expense.
3. Critical accounting estimates and judgements
The preparation of the Group financial statements in conformity with IFRSs as
applied in accordance with the provisions of the Companies Act 2006 requires
the use of certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group's accounting
policies. Estimates and judgements are continually evaluated and are based on
historical experience and other factors, including expectations of future
events that are believed to be reasonable under the present circumstances. The
areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the Group financial statements
are disclosed below.
Estimates:
Management do not consider there to be significant accounting estimates in
respect of the year ended 31 March 2024 or 31 March 2023.
Treatment of disposed assets & liabilities discontinued operations
On 12 December 2023, the Company announced that it had completed the disposal
of Falanx Cyber Defence Limited and Falanx Cyber Technologies Limited
(together the "Cyber Division") for an enterprise value of £4.2 million
(payable in cash) to Thetis Bidco Limited. This represented all of the
professional services and monitoring managed services operating segments other
than some remaining operating costs supporting the AIM Rule 15 cash shell. In
the year ended 31 March 2023, management were committed to selling the Cyber
division with the sale of these businesses being considered highly probable
within 12 months. There was a board meeting held on 30 March 2023 to discuss
the sale of the Cyber Division and a letter was sent to BOOST&Co on 31
March 2023 outlining the position, therefore 31 March 2023 is considered to be
the date the Cyber Division are classified as held for sale and therefore
included in discontinued operations. All assets and liabilities relating to
the cyber security division, including those which were held in the name of
the parent company (such as the lease on the Reading offices) and the
borrowings from BOOST&Co (which were held by Falanx Cyber Defence Limited)
were therefore treated as items held for sale.
4. Segmental reporting
As described in note 2, the Directors consider that the Group's internal
financial reporting is organised along continuing and discontinuing lines of
business following the disposal of the strategic intelligence business on 6
October 2021 and the disposal of the remaining cyber business on 12 December
2023. At that point the operations of the group were ceased and remaining
infrastructure reorganised to support a cash shell.
The results for the business operating segment for the years ended 31 March
2024 and 31 March 2023 are as follows:
2024 2024 2024 2023 2023 2023
£ £ £ £ £ £
Continuing Discontinued Total Continuing Discontinued Total
Professional services 13,935 1,882,331 1,896,266 - 2,748,579 2,748,579
Monitoring managed services - 826,435 826,435 1,041,794 1,041,794
Revenues from external customers 13,935 2,708,766 2,722,701 - 3,790,373 3,790,373
Gross Margin 13,935 1,155,651 1,169,586 - 1,362,908 1,362,908
Cyber operating expenses - (1,059,607) (1,059,607) - (1,947,208) (1,947,208)
Corporate operating expenses (1,483,657) - (1,483,657) (1,180,589) - (1,180,589)
Segment Reported EBITDA (1,469,722) 96,044 (1,373,678) (1,180,589) (584,300) (1,764,889)
Finance expense-net 7,743 (406,415) (398,672) 5,607 (342,671) (337,064)
Depreciation and amortisation (792) (241,142) (241,934) (2,247) (433,583) (435,830)
Share option expense 4,498 - 4,498 (12,355) - (12,355)
Profit on sale of discontinued operations - 602,904 602,904 - - -
Segment loss before tax for the year (1,458,273) 51,391 (1,406,882) (1,189,584) (1,360,554) (2,550,138)
Segment assets consist primarily of property, plant and equipment, intangible
assets, trade and other receivables and cash and cash equivalents. Unallocated
assets comprise deferred tax assets, financial assets held at fair value
through profit or loss and derivatives.
Segment assets, liabilities and capital expenditure for the year then ended
are as follows:
2024 2023
Continuing Continuing
£ £
Other assets 599,232 1,101,356
Other liabilities 207,717 394,366
Capital expenditure - Tangible - -
Geographical information
Discontinued items historically operated in five geographical areas, although
all were managed on a worldwide basis from the Group's head office in the
United Kingdom. All non-current assets are in the United Kingdom.
A geographical analysis of revenue and non-current assets is given below.
Revenue is allocated based on location of customer; non-current assets are
based in the United Kingdom. Continuing revenues were £13,935 in 2024 (2022:
£nil) and arose from support by the buyers of the Cyber division disposed of
on 12 December 2023.
Revenue by geographical location
2024 2024 2024 2023 2023 2023
Continuing Discontinued Total Continuing Discontinued Total
£ £ £ £ £ £
United Kingdom 13,935 2,112,507 2,126,442 - 3,100,163 3,100,538
Europe - 156,541 156,541 - 216,009 216,009
The Americas - 367,479 367,479 - 417,564 417,564
Australasia - 72,239 72,239 - 56,637 56,637
13,935 2,708,766 2,722,701 - 3,790,373 3,790,373
5. Discontinued operations
On 12 December 2023, Cloudified announced that it had completed the disposal
of Falanx Cyber Defence Limited and Falanx Cyber Technologies Limited
(together the "Cyber Division") for an enterprise value of £4.2 million
payable in cash to Thetis Bidco Limited. This represented all of the
professional services and monitoring managed services operating segments other
than some remaining operating costs supporting the AIM Rule 15 cash shell. In
the year ended 31 March 2023, management were committed to selling the Cyber
division with the sale of these businesses being considered highly probable
within 12 months. There was a board meeting held on 30 March 2023 to discuss
the sale of the Cyber Division and a letter was sent to BOOST&Co on 31
March 2023 outlining the position, therefore 31 March 2023 is considered to be
the date the Cyber Division, including certain costs relating to the former
premises of the Company which were in support of the Cyber Division, are
classified as held for sale at 31 March 2023 and included in discontinued
operations.
The results of the discontinued operations and the effect of the discontinued
operations on the financial position of the Group were as follows:
Financial performance and cash flow information
Results of the discontinued operations for the year for Falanx Cyber Defence
Limited and Falanx Cyber Technologies Limited
2024 2023
Cyber Cyber
Income statement £ £
Revenue 2,708,766 3,790,373
Administrative expenses (2,853,864) (4,808,256)
Operating loss (145,098) (1,017,883)
Finance costs (406,415) (342,671)
Loss before income tax (551,513) (1,360,554)
Income tax credit - -
Loss from discontinued operations before gain on sale (551,513) (1,360,554)
Profit on sale of discontinued operations 602,904 -
Profit / (Loss) from discontinued operations 51,391 (1,360,554)
2024 2023
Cash flows from/(used in) discontinued operations £ £
Net cash flows from operating activities 444,594 (1,072,624)
Net cash flows from investing activities 1,331 (48,209)
Net cash flows from financing activities (609,784) (549,221)
Net cash flows for the year (163,859) (1,670,054)
Intra-Group funding and transactions 192,756 1,568,601
Net cash flows from discontinued operations, net of intercompany 28,897 (101,453)
Net cash flows from investing activities does not include proceeds from the
disposal of discontinued operations of £1,181,148.
Effect of discontinued operations on the financial position of the Group
2024 2023
Net assets disposed of and the gain on disposal £ £
Assets of the disposal group
Property, plant & equipment 31,517 90,367
Intangible assets 2,787,446 2,976,129
Right of use asset - 103,104
Trade and other receivables 910,529 1,251,846
Total assets 3,729,492 4,421,446
Liabilities of the disposal group
Trade and other payables 607,434 595,992
Contract liabilities 598,648 595,670
Borrowings 1,945,166 2,136,667
Lease liabilities - 126,616
Total liabilities 3,151,248 3,454,945
Net assets of the disposal group 578,244 966,501
Consideration received in cash and cash equivalents, net of transactions costs 1,181,148 -
Gain on sale of discontinued operation 602,904 -
Net cash inflow arising on disposal:
Consideration received in cash and cash equivalents, net of transaction costs 1,181,148 -
1,181,148 -
6. Basic and diluted earnings per share
Basic loss per share is calculated by dividing the loss attributable to equity
holders of the Company by the weighted average number of ordinary shares in
issue during the year. There are no dilutive share options at present as these
would currently increase the loss per share.
Continuing operations
2024 2023
£ £
Loss for the year attributable to equity holders of the Company (1,406,882) (2,550,138)
Less profit / (loss) from discontinued operations 51,391 (1,360,554)
Loss from continuing operations (1,458,273) (1,189,584)
Total basic and diluted (loss)/profit per share from continuing operations (28) p (23) p
(pence per share)
Continuing and discontinued operations
2024 2023
£ £
(Loss) / Profit for the year attributable to equity holders of the Company (1,406,882) (2,550,138)
Total basic and diluted profit / (loss) per share (pence per share) (27) p (48) p
Weighted average number of shares used as the denominator
2024 2023
Weighted average number of ordinary shares used as the denominator in the 5,264,212 5,264,212
calculating basic earnings per share
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares in issue to assume the conversion of all dilutive
potential ordinary shares. The Company's dilutive potential ordinary shares
arise from warrants and share options. In respect of the warrants, a
calculation is performed to determine the number of shares that could have
been acquired at fair value, based upon the monetary value of the subscription
rights attached to the outstanding warrants. The number of shares calculated
as above is compared with the number of shares that would have been issued
assuming the exercise of the warrants.
At 31 March 2024, the potentially dilutive ordinary shares were anti-dilutive
because the Group was loss-making. The basic and diluted earnings per share as
presented on the face of the income statement are therefore identical. All
earnings per share figures presented above arise from continuing and total
operations and, therefore, no earnings per share for discontinued operations
is presented.
IAS 33 requires presentation of diluted EPS when a company could be called
upon to issue shares that would decrease earnings per share or increase the
loss per share. For a loss-making company with outstanding share options, net
loss per share would be decreased by the exercise of the options Therefore per
IAS 33:36 the antidilutive potential ordinary shares are disregarded in the
calculation of diluted EPS.
7. Events after the reporting period
Further to the RNS of 28 October 2024 and the launch of the circular, which
was approved at the shareholders meeting on 13 November 2024, the board is
pleased that Salonica have invested £500,000 for ordinary shares in the
Company. Salonica have appointed 2 directors who bring significant sector and
corporate finance skills to the board. This bolsters its existing cash
resources to cover operating costs and professional fees supporting the
acquisition of identified assets in the media and events sector. This will
constitute an RTO under the AIM rules. It is the Company's intention that it
will seek admission in the first few months of 2025 with an RTO announced, and
during this period it will still govern itself as if it was a quoted company.
The statutory accounts for the year ended 31 March 2024 have not yet been
delivered to the Registrar of Companies. The auditors have reported on them,
and their report was qualified, but did not contain a statement, which had the
Company been UK incorporated, would have been required under either Section
498 (2) or Section 498 (3) of the Companies Act 2006. The qualification
related to a limitation in scope during the audit process where certain
records relating to a disposed of operation could not be accessed for audit
purposes, but that there was no impact on the financial position. It also
included an emphasis of matter which explained that the directors having made
the decision to dispose of the trading subsidiaries of the group, have made
the decision to cease trading and therefore do not consider it to be
appropriate to adopt the going concern basis of accounting in preparing the
financial statements. This final results announcement does not constitute
statutory accounts under Section 435 of the companies Act 2000.
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