REG - Curzon Energy plc - Final Results
29/04/2022 07:00
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RNS Number : 7834J Curzon Energy PLC 29 April 2022
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this
announcement via Regulatory Information Service ('RIS'), this inside
information is now considered to be in the public domain.
Curzon Energy Plc
("Curzon" or the "Company")
Results for the Year Ended 31 December 2021
29 April 2022
Curzon Energy Plc (LON:CZN), ("Curzon" or the "Company"), the London Stock
Exchange listed company, announces its full year audited results for the year
ended 31 December 2021.
A copy of the Company's annual report and financial statements for the year
ended 31 December 2021, extracts of which are set out below, will be made
available on the Company's website www.curzonenergy.com
(http://www.curzonenergy.com) shortly.
Curzon further announces that a Notice of Annual General Meeting ("AGM") will
be posted to shareholders, along with the Annual Report and Financial
Statements for the year ended 31 December 2021, on or before 6 May 2022.
The Company will be holding its AGM at the Company's business address, which
is located at Curzon Energy Plc, (WeWork), 71-91 Aldwych House, London WC2B
4HN on Tuesday 31 May 2022 at 2.00 pm, the details of which are explained in
the Notice of AGM, which will be also available on the Company's website
www.curzonenergy.com (http://www.curzonenergy.com) shortly.
Forms of proxy must be completed, signed and returned so as to be received by
the Company's Registrars no later than 2.00 pm on 27 May 2022.
For further information please contact:
Curzon Energy Plc +44 (0) 20 7747 9980
Scott Kaintz
www.curzonenergy.com (http://www.curzonenergy.com)
SP Angel Corporate Finance LLP +44 (0) 20 3470 0470
Broker
Chairman's Statement
I am pleased to present the annual report for Curzon Energy Plc (the
"Company"), covering its results for the year to 31 December 2021.
Period in Review
During the course of 2021, the Company focused its efforts on progressing a
potential reverse takeover transaction ("RTO") with Poseidon Plastics Ltd
("PPL" or "Poseidon"), developer of an integrated process based on its
patented technology platform, to convert currently unrecyclable PET waste,
including colored and opaque materials, into high value enhanced recycled PET
resin (''erPET'') and recycled BHET ("rBHET").
Poseidon plans to build on the success of its pilot plant operations in Hull
and a number of intensive verification programs that have been undertaken with
international PET manufacturers and end product users in the UK and Germany.
Through these programs PPL is working to further optimize the design of the
integrated process and to develop a much larger continuous integrated
processing plant at a commercial scale. Plans for the construction of
multiple commercial processing facilities across Europe are being developed to
provide recycled materials for major global consumer packaged goods ("CPG")
brands.
At the Company's coal bed methane project at Coos Bay, activities were minimal
during the course of the year, with the project remaining on care and
maintenance. The Company has been advancing formal extensions of the project
leases, as well as a potential farm-out or sale of the project in light of
increasing natural gas demand and prices.
Results
For the period ended 31 December 2021, the Group incurred a loss of US$821,344
(2020: loss of US$699,871). The majority of this loss comprised the
recognition of a provision for reclamation obligations associated with the
Coos Bay project as well as administrative expenses and required listing and
regulatory overheads. Overall administrative expenses were broadly consistent
during the period at US$569,865 in 2021 (2020: US$528,799) and finance
expenses rose slightly to US$165,598 (2020: US$88,775) reflecting the ongoing
costs of funding the business during this phase of due diligence.
Outlook
While the timeline to complete mutual due diligence on the PPL RTO transaction
has been extended, recent world developments including the immediate need to
reduce CO2 emissions and reduce plastic waste, as well as the war in Ukraine
and associated resources shortages, have only served to strengthen the appeal
of, and requirement for, a business such as PPL with its innovative plastics
recycling technology. These developments have simultaneously increased the
perceived value of the Company's historic natural gas assets in Coos Bay,
Oregon.
Initially targeting global CPG brands that require ever increasing volumes of
recycled packaging materials, the Poseidon technology platform is also being
developed for the polyester fiber and specialty chemicals industries.
Poseidon's addressable global markets represent revenue of > $100BN
annually, growing at 3 - 4% p.a. The use of PPL's proprietary erPET and
rBHET products reduces the amount of single use plastics destined for landfill
or incineration and reduces critical emissions of greenhouse gasses.
PPL's plastics recycling offering falls squarely in the critical
Environmental, Social and Governance ("ESG") space, where PPL's technology can
address imminent requirements for recycled content being imposed on the
world's major CPG brands; before either substantial fines and/or charges for
the continued use of virgin plastics takes effect - both in Europe and across
North America.
Substantial organizational progress was made on the proposed RTO, as well as
operationally and organizationally at PPL. Reflecting this progress, and
after the year-end, the Company extended PPL's exclusivity rights to allow it
additional time to complete key business development discussions with
international PET manufacturers and certain global CPG brands, prior to
undertaking the proposed RTO; currently targeted for the latter half of
2022.
PPL is looking to meet strong demand growth for recycled material from global
CPG brands faced with a limited supply of recycled PET alternatives. Such
brands are subject to increasing customer, regulatory and public opinion
pressure to reduce both their general environmental impact as well as their
shipments of single-use plastics. With an active conflict in Europe for the
first time in many decades, much of the world is now also actively looking to
both reduce hydrocarbon demand and to move away from Russian supplies, and
PPL, with its innovative plastics recycling technology, is expected to assist
in reducing such reliance by providing a recycled PET product practically
identical to a virgin one.
In relation to the Company's coal bed methane project at Coos Bay, the
conflict in Ukraine has led directly to both short and long term increases in
natural gas prices, with European countries in particular, looking to develop
alternate sources of energy including imported LNG from North America and the
Middle East. The war is also driving increased construction of new modular
nuclear reactors and increasing reliance on renewables globally.
Notwithstanding that Coos Bay is currently earmarked for disposal, such global
factors make it a potentially more valuable asset in this environment, and one
that may well deliver this value through a transaction timed with the
completion of the proposed PPL RTO.
During 2022 the Company looks forward to being able to the conclude our
efforts to reposition the business away from traditional oil and gas
development and into a new sector that we believe is set to assist the world
in moving on from its unsustainable relationship with virgin plastics. We
thank all investors and partners for their patience and support during this
period of transition and we look forward to both delivering the PPL RTO and to
creating a high-impact, high-growth international plastics recycling business
to the benefit of all stakeholders.
John McGoldrick
Non-Executive Chairman
28 April 2022
Strategic Report
Financial Results
The Group loss for the year to 31 December 2021 was US$860,463 (2020:
US$617,574). There were no revenues and the majority of this loss related to
the administrative and listing costs.
The loss per share was US$0.009 (2020: loss per share US$0.008).
The Group currently has no source of revenue and is reliant on loans to
continue to meet its overhead expenditure. The Group held cash balances of
US$138,142 as at 31 December 2021 and has after the year end increased its
borrowing capacity and current liquidity through the extension and expansion
of the financing agreement with Poseidon Plastics Ltd.
The Directors note that the Group will need additional funding to continue
operations for the foreseeable future and this means there is a material
uncertainty as to the Group's ability to continue as a going concern, however,
the Directors are confident that the Group will be able to raise, as required,
sufficient cash or reduce its commitments to enable it to continue its
operations and to continue to meet, as and when they fall due, its liabilities
for at least the next twelve months from the date of approval of the Group
financial statements. The Group financial statements have, therefore, been
prepared on the going concern basis.
The Group has 3 members of staff (including Directors).
Principal Activities
The Company was incorporated in England and Wales on 29 January 2016 as an
investment company to acquire oil and gas assets. Its first acquisition was of
Coos Bay, which has now been wholly written off.
The Group's business is now operated through the United Kingdom and is focused
on identifying and acquiring a new business in a promising sector.
Review of the Business
On 3 February 2021 the Company terminated discussions with Seven Sun Stars
Investment Group ("SSSIG") to acquire a 100% interest in the London Critical
Metals Market ("LCMM").
On 3 February 2021, the Company announced that it had executed a letter of
intent with Poseidon Plastics Limited ("PPL"), where Curzon Chairman John
McGoldrick is the Executive Chairman, to acquire a 100% interest via a
potential reverse takeover. PPL and the Company had entered a period of
exclusivity, where each party will conduct due diligence on the other.
The parties have further agreed that during this period they will work towards
the execution and delivery of a sale and purchase agreement. This period of
exclusivity has been extended multiple times throughout the course of the year
as due diligence remains ongoing, with the current expiry of this period now
having been extended to 30 September 2022.
Key Performance Indicators (KPIs)
As the Company is currently pursuing a potential reverse takeover the
Directors take the view that KPIs would not provide materially useful
information to investors at this time. As the business develops further, the
addition of KPIs will be considered and added as appropriate.
Principal Risks and Risk Management
As the Company is currently pursuing a reverse takeover, that would materially
change the nature of the business, the primary risk to the business during
this period is going concern risk and a potential inability to fund the
business through this transition.
The Company's Risk Mitigation Strategies Include the Following:
§ Utilising the Directors' experience in fundraising to maintain a balance of
funding sources during the period of transition;
§ Managing the Company's existing debt positions, keeping all stakeholders up
to date and informed as to progress of the transaction;
§ Judicious use of capital and cost control during the transition.
Corporate Responsibility
The Company takes its responsibilities as a corporate citizen seriously. The
Board's primary goal is to create shareholder value in a responsible way,
which serves all stakeholders.
Section 172 Statement
Section 172 of the Companies Act 2006 requires Directors to take into
consideration the interests of stakeholders in their decision making. The
Directors continue to have regard to the interests of the Company's employees
and other stakeholders, including the impact of its activities on the
community, the environment and the Company's reputation, when making
decisions. Acting in good faith and fairly between members, the Directors
consider what is most likely to promote the success of the Company for its
members in the long term.
The Directors are fully aware of their responsibilities to promote the success
of the Company in accordance with section 172 of the Companies Act 2006. The
Board regularly reviews our principal stakeholders and how we engage with
them. The stakeholder voice is brought into the boardroom throughout the
annual cycle through information provided by management and also by direct
engagement with stakeholders themselves. The relevance of each stakeholder
group may increase or decrease depending on the matter or issue in question,
so the Board seeks to consider the needs and priorities of each stakeholder
group during its discussions and as part of its decision making.
The Board welcomes the opportunity to engage with our shareholders and with
the capital markets more generally. The Board achieves this through dialogue
with shareholders, prospective shareholders and capital markets participants,
including corporate brokers. Feedback from any such meetings or calls would
be shared with all Board members.
Investors, prospective investors and analysts can contact the Executive
Director as well as access information on our corporate website. The Board
believes that appropriate steps have been taken during the year so that all
members of the Board, and in particular the non-executive Directors, have an
understanding of the views of major shareholders.
Governance
The Board considers sound governance as a critical component of the Company's
success and the highest priority. The Company has an effective and engaged
Board, with a strong non-executive presence drawn from diverse backgrounds and
with well-functioning governance committees. Through the Company's
compensation policies and variable components of employee remuneration, the
Remuneration Committee of the Board seeks to ensure that the Company's values
are reinforced in employee behavior and that effective risk management is
promoted.
Analysis by Gender
Category Male Female
Directors 3 0
Senior Managers 0 0
Other Employees 0 0
Employees and Their Development
The Company is dependent upon the qualities and skills of its employees and
their commitment plays a major role in the Company's business success.
Employees' performance is aligned to the Company's goals through an annual
performance review process and via incentive programs. The Company provides
employees with information about its activities through regular briefings and
other media. The Company operates a Share Option Scheme operated at the
discretion of the Remuneration Committee.
Diversity and Inclusion
The Company does not discriminate on the grounds of age, gender, nationality,
ethnic or racial origin, non-job-related-disability, sexual orientation or
marital status. The Company gives due consideration to all applications and
provides training and the opportunity for career development wherever
possible. The Board does not support discrimination of any form, positive or
negative, and all appointments are based solely on merit.
Health and Safety
The Company endeavors to ensure that the working environment is safe and
healthy and conducive to the wellbeing of employees, who are able to balance
work and family commitments. The Company has a Health and Safety at Work
policy, which is reviewed regularly by the Board and is committed to the
health and safety of its employees and others, who may be affected by the
Company's activities. The Company provides the information, instruction,
training and supervision necessary to ensure that employees are able to
discharge their duties effectively. The health and safety procedures used by
the Company ensure compliance with all applicable legal, environmental and
regulatory requirements as well as its own internal standards.
Prospects
In February 2021 the Board announced that it had entered a period of
exclusivity with PPL, where Curzon Chairman John McGoldrick is the Executive
Chairman, in order to pursue the execution and delivery of a definitive
purchase agreement, contemplating a RTO of Curzon by PPL. A RTO would be
conditional upon receipt of the required regulatory approvals from the FCA and
its primary market functions, among other matters. Throughout the course of
2021 PPL extended its rights under the exclusivity arrangement by providing
ongoing funding to the Company.
PPL continues to work to prepare its business for a potential transaction with
Curzon, and meaningful progress has been made in this arena over the course of
the year. After the year end the Company extended PPL's exclusivity rights
to 1 June 2022, with PPL holding the right to continue to extend through to 30
September 2022, which is expected to provide enough time to complete both due
diligence and preparations ahead of the proposed RTO transaction.
Signed by order of the Board
Scott Kaintz
Chief Executive Officer
28 April 2022
Independent auditor's report to the members of Curzon Energy Plc
Opinion
We have audited the financial statements of Curzon Energy Plc (the "company")
and its subsidiaries (the "group") for the year ended 31 December 2021 which
comprise the consolidated statement of comprehensive income, the consolidated
and company statements of financial position, the consolidated and company
statements of cash flows, the consolidated and company statements of changes
in equity and notes to the financial statements, including significant
accounting policies. The financial reporting framework that has been applied
in preparation of the group and parent company financial statements is
applicable law and UK-adopted international accounting standards.
In our opinion:
· the financial statements give a true and fair view of the state
of the group and company's affairs as at 31 December 2021 and of the group's
loss for the year then ended;
· the group and company financial statements have been properly
prepared in accordance with UK-adopted international accounting standards; 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 the 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, 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.
Material uncertainty related to going concern
We draw attention to note 2 to the financial statements, which details the
factors the directors considered when assessing the going concern position. As
detailed in note 2, the group currently has no source of revenue and is
reliant on loans to continue to meet its obligations. The group will need
additional funding to continue operations for the foreseeable future, which
indicates the existence of a material uncertainty that may cast significant
doubt on the group's ability to continue as a going concern. Our opinion is
not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in preparation of the financial
statements is appropriate. Our evaluation of the directors' assessment of the
entity's ability to continue to adopt the going concern basis of accounting
included:
· discussions with management;
· reviewing the letter of intent regarding possible acquisition of
a 100% interest in Poseidon Plastics Ltd by means of a reverse takeover
('RTO');
· discussing the RTO progress directly with the target, Poseidon
Plastics Ltd;
· reviewing the directors' going concern assessment including the
worst-case scenario cash flow forecast that covers at least 12 months from the
date we expect to sign the audit report;
· assessing of the key assumptions, judgements and estimates used
in the cash flow forecast;
· reviewing funding and availability of finance;
· making enquiries of management as to its knowledge of events or
conditions beyond the period of their assessment that may cast significant
doubt on the entity's ability to continue as a going concern, and evaluating
the reliability of the data underpinning the forecast cash flows.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An
item is considered material if it could reasonably be expected to change the
economic decisions of a user of the financial statements. We used the concept
of materiality to both focus our testing and to evaluate the impact of
misstatements identified.
Based on our professional judgement, we determined overall materiality for the
group financial statements as a whole to be $41,000 (2020: $35,000), based on
a percentage the net liabilities (2020: based on 5% of adjusted result for the
year). The change in the basis for the materiality is due to the change in
nature of the group's operations.
Materiality for the parent company financial statements as a whole was set at
£34,000 (2020: £30,000) based on a percentage of net liabilities (2020:
based on 5% of adjusted result for the year). The change in the basis for the
materiality is due to the change in nature of the company's operations.
We use a different level of materiality ('performance materiality') to
determine the extent of our testing for the audit of the financial
statements. Performance materiality is set based on the audit materiality as
adjusted for the judgements made as to the entity risk and our evaluation of
the specific risk of each audit area having regard to the internal control
environment. Performance materiality was set at 70% of materiality for the
financial statements as a whole, which equates to $28,700 for the group and
£23,800 for the parent.
Where considered appropriate performance materiality may be reduced to a lower
level, such as, for related party transactions and directors' remuneration.
We agreed with the Audit Committee to report to it all identified errors in
excess of $2,000 (2020: $1,750). Errors below that threshold would also be
reported to it if, in our opinion as auditor, disclosure was required on
qualitative grounds.
Overview of the scope of our audit
There are two components of the group, Curzon Energy Plc as the parent entity
and the US sub-group headed by Coos Bay Energy LLC. All audit work has been
conducted by the group audit team.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, 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.
Apart from going concern, where our work is described in the 'Material
Uncertainty Related to Going Concern' section, we have determined that there
are no other key audit matters.
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 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 our audit:
· the information given in the strategic and the directors' reports
for the financial year for which the financial statements are prepared is
consistent with the financial statements; and
· the strategic and the directors' reports have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In 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 where the
Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the company, or
returns adequate for our audit have not been received from branches not
visited by us; or
· the group and 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 the directors for the financial statements
As explained more fully in the directors' responsibilities statement, the
directors are responsible for the preparation of the 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 financial statements, the directors are responsible for
assessing the 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 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.
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, however the primary
responsibility for the prevention and detection of fraud lies with management
and those charged with the governance of the partner company and group. We
obtained an understanding of the legal and regulatory frameworks that are
applicable to the Group and the procedures in place for ensuring compliance.
The most significant areas identified were the Companies Act 2006 and specific
regulations relevant to the group's past activities.
· As part of our audit planning process we assessed the different
areas of the financial statements, including disclosures, for the risk of
material misstatement. This included considering the risk of fraud where
direct enquiries were made of management and those charged with governance
concerning both whether they had any knowledge of actual or suspected fraud
and their assessment of the susceptibility of fraud.
· We have read board and committee minutes of meetings, as well as
regulatory announcements, as part of our risk assessment process to identify
events or conditions that could indicate an incentive or pressure to commit
fraud or provide an opportunity to commit fraud. As part of this process, we
have considered whether remuneration incentive schemes or performance targets
exist for the Directors.
· In addition to the risk of management override of controls, we
have considered the fraud risk related to any unusual transactions or
unexpected relationships, including assessing the risk of undisclosed related
party transactions. Our procedures to address this risk included testing a
risk-based selection of journal transactions, both at the year end and
throughout the year.
Owing to the inherent limitations of an audit, there is an unavoidable risk
that some material misstatements of the financial statements may not be
detected, even though the audit is properly planned and performed in
accordance with the ISAs (UK). The potential effects of inherent limitations
are particularly significant in the case of misstatement resulting from fraud
because fraud may involve sophisticated and carefully organized schemes
designed to conceal it, including deliberate failure to record transactions,
collusion or intentional misrepresentations being made to us.
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 the Board on 18 April 2016 to audit the financial
statements for the year ended 31 December 2016. Our total uninterrupted period
of engagement is six years, covering the period ended 31 December 2016 to 31
December 2021.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the 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.
Steve Gale
Senior Statutory Auditor
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
28 April 2022
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2021
Note 2021 2020
US$ US$
Administrative expenses 6 (569,865) (528,799)
Loss from operations (569,865) (528,799)
Finance expense, net 7 (165,598) (88,775)
Provision for reclamation obligation 12 (125,000) -
Loss before taxation 4 (860,463) (617,574)
Income tax expense 8 - -
Loss for the year attributable to
equity holders of the parent company (860,463) (617,574)
Other comprehensive loss
Gain/(loss) on translation of parent net assets and results from functional 39,119
currency into presentation currency
(82,297)
Total comprehensive loss for the year (821,344) (699,871)
Loss per share - Basic and diluted, US$ 9 (0.009) (0.008)
The notes form part of these Financial Statements
Consolidated Statements of Financial Position
as at 31 December 2021
Note 2021
2020
US$ US$
Assets
Non-current assets
Intangible assets 10 - -
Restricted cash 12 - 125,000
Total non-current assets - 125,000
Current assets
Prepayments and other receivables 13 44,058 41,699
Cash and cash equivalents 14 138,142 47,188
Total current assets 182,200 88,887
Total assets 182,200 213,887
Current liabilities
Trade and other payables 15 774,591 737,835
Borrowings 16 1,935,919 1,183,018
Total current liabilities 2,710,510 1,920,853
Total liabilities 2,710,510 1,920,853
Share capital 17 1,105,547 1,105,547
Share premium 3,619,332 3,619,332
Share-based payments reserve 474,792 474,792
Warrants reserve 375,198 375,198
Merger reserve 31,212,041 31,212,041
Foreign currency translation reserve (146,554) (185,673)
Accumulated losses* (39,168,666) (38,308,203)
Total capital and reserves (2,528,310) (1,706,966)
Total equity and liabilities 182,200 213,887
The Financial Statements were approved and authorised for issue by the Board
of Directors on 28 April 2022 and were signed on its behalf by:
John McGoldrick
Director
The notes form part of these Financial Statements.
Consolidated Statements of Changes in Equity
Share capital Share premium Other Accumulated losses Total
reserves
US$ US$ US$ US$ US$
Equity at 1 January 2020, 1,103,457 3,586,947 31,796,707 (37,690,629) (1,203,518)
Loss for the year - - - (617,574) (617,574)
Other comprehensive loss for the year - - (82,297) - (82,297)
Total comprehensive loss for the year - - (82,297) (617,574) (699,871)
Issue of shares 2,090 206,871 - - 208,961
Share issue costs - (12,538) - - (12,538)
Issue of warrants - (161,948) 161,948 - -
Total transactions with shareholders 2,090 32,385 161,948 - 196,423
Equity at 31 December 2020 1,105,547 3,619,332 31,876,358 (38,308,203) (1,706,966)
Loss for the year - - - (860,463) (860,463)
Other comprehensive loss for the year - - 39,199 - 39,199
Total comprehensive loss for the year - - 39,199 (860,463) (821,344)
Issue of shares - - - - -
Share issue costs - - - - -
Issue of warrants - - - - -
Total transactions with shareholders - - - - -
Equity at 31 December 2021 1,105,547 3,619,332 31,915,557 (39,168,666) (2,528,310)
Other Reserves
Merger reserve Share-based payments reserve Warrants reserve Foreign currency translation reserve Total Other reserves
US$ US$ US$ US$ US$
Other reserves at 1 January 2020 31,212,041 474,792 213,250 (103,376) 31,796,707
Other comprehensive loss for the year - - - (82,297) (82,297)
Total comprehensive loss for the year - - - (82,297) (82,297)
Issue of warrants - - 161,948 - 161,948
Other reserves at 31 December 2020 31,212,041 474,792 375,198 (185,673) 31,876,358
Other comprehensive loss for the year - - - 39,119 39,119
Total comprehensive loss for the year - - - 39,119 39,119
Issue of warrants - - - - -
Other reserves at 31 December 2021 31,212,041 474,792 375,198 (146,554) 31,915,477
Consolidated Statement of Cash Flows
Notes 2021 2020
US$ US$
Cash flow from operating activities
Loss before taxation (860,463) (617,574)
Adjustments for:
Finance expenses 7 159,087 111,881
Provision for reclamation obligations 12 125,000 -
Unrealised foreign exchange movements 7 6,511 (23,106)
Operating cashflows before working capital changes (569,865) (528,799)
Changes in working capital:
Increase in payables 46,220 26,464
(Increase)/decrease in receivables (2,359) (10,496)
Net cash used in operating activities (526,004) (512,831)
Financing activities
Issue of ordinary shares, net of share issue costs 17 - 196,423
Proceeds from new borrowings 16 619,886 331,760
Net cash flow from financing activities 619,886 528,183
Net increase /(decrease) in cash and cash equivalents in the period 93,882 15,352
Cash and cash equivalents at the beginning of the period 47,188 28,709
Restricted cash held on deposits 12 125,000 125,000
Total cash and cash equivalents at the beginning of the period, including 172,188 153,709
restricted cash
Effect of the translation of cash balances into presentation currency (2,927) 3,127
Cash and cash equivalents at the end of the period 138,142 47,188
Restricted cash held on deposits 12 125,000 125,000
Total cash and cash equivalents at the end of the period, including restricted 263,142 172,188
cash
Notes to the Consolidated Financial Information
1. General Information
The Company is incorporated and registered in England and Wales as a public
limited company. The Company's registered number is 09976843 and its
registered office is at Kemp House, 152 City Road, London EC1V 2NX. On 4
October 2017, the Company's shares were admitted to the Official List (by way
of Standard Listing) and to trading on the London Stock Exchange's Main
Market.
With effect from admission, the Company has been subject to the Listing Rules
and the Disclosure Guidance and Transparency Rules (and the resulting
jurisdiction of the UK Listing Authority) to the extent such rules apply to
companies with a Standard Listing pursuant to Chapter 14 of the Listing
Rules.
The principal activity of the Company is that of an investment company,
currently focused on acquiring a new business in the environmental, social and
corporate governance space (ESG).
The individual financial statements of the Company ("Company financial
statements") have been prepared in accordance with the Companies Act 2006
which permits a Company that publishes its Company and Group financial
statements together, to take advantage of the exemption in Section 408 of the
Companies Act 2006, from presenting
to its members its Company Income Statement and related notes that form part
of the approved Company financial statements.
2. Accounting Policies
The accounting policies set out below have been applied consistently to all
periods presented in these consolidated financial statements.
The Group Financial statements are presented in US Dollars as historically the
entirety of the Company's operations have been located in the United States.
Basis of Preparation
The Financial Statements have been prepared in accordance with UK adopted
International Accounting Standards ("IFRS") and the requirements of the
Companies Act applicable to companies reporting under IFRS.
The Financial Statements are prepared on a going concern basis and under the
historical cost convention.
a) New standards, interpretations and amendments effective
from 1 January 2021
There were no new standards or interpretations effective for the first time
for periods beginning on or after 1 January 2021 that had a significant effect
on the Curzon Group's Financial Statements.
b) New standards, interpretations and amendments not yet
effective
At the date of authorisation of these Financial Statements, a number of
amendments to existing standards and interpretations, which have not been
applied in these Financial Statements, were in issue but not yet effective for
the year presented. The Directors do not expect that the adoption of these
standards will have a material impact on the financial information of the
Group in future periods.
Basis of Consolidation
The Company was incorporated on 29 of January 2016; On the 4 of October 2017
it acquired Coos Bay Energy LLC. At the time of its acquisition by the
Company, Coos Bay Energy LLC consisted of Coos Bay Energy LLC and its wholly
owned US Group. It is the Directors' opinion that the Company at the date of
acquisition of Coos Bay Energy LLC did not meet the definition of a business
as defined by IFRS 3 and therefore the acquisition was outside on the IFRS 3
scope.
Where a party to an acquisition fails to satisfy the definition of a business,
as defined by IFRS 3, management have decided to adopt a "merger accounting"
method of consolidation as the most relevant method to be used.
Going Concern
The Group Financial Statements have been prepared on a going concern basis,
which assumes that the Group will continue to be able to meet its liabilities
as they fall due for the foreseeable future. The operations of the Company
are currently being financed by funds lent to the Company by Poseidon Plastics
Ltd. ("PPL"). On 03 February 2021, the Company announced that it had signed
a letter of intent with PPL to potentially acquire a 100% interest in their
business, a developer of a proprietary chemical recycling process for PPL
plastics. In exchange for a period of exclusivity in relation to this
potential reverse takeover transaction, PPL has agreed to loan the Company an
initial amount of £500,000 in the form of a one-year loan note, extended
following the reporting date to 14 February 2023 carrying an annual interest
rate of 10%. PPL has agreed to lend up to a total of £745,000 in order to
support the Company during the ongoing due diligence and potential reverse
takeover process. At this stage, there can be no assurance that this
transaction will be completed.
The Company further continues to rely on a US$1,000,000 credit facility
provided from a company related to the largest shareholder that provides the
Group up to US$500,000 minimum funding and an additional US$500,000 at the
discretion of the lender.
The Group believes that, based on the current low overhead expenditure, the
proceeds from the loans being provided by PPL and the undrawn amount of
US$800,000 remaining on the US$1,000,000 credit facility will be sufficient
for the Group to operate for a period of 12 months from the date of the
approval of these Financial Statements.
The Group currently has no source of revenue and is reliant on loans to
continue to meet its overhead expenditures. The Group held cash balances of
US$138,142 as at 31 December 2021 and has subsequently increased its borrowing
capacity and current liquidity through the extension and expansion of the
funding agreement with PPL.
The directors remain in discussions with the various creditors of the Company
regarding the forbearance of amounts payable until the conclusion of the
proposed RTO, with all creditors informally agreeing to defer payment of
amounts due until the transaction has completed.
The Directors note that the Group will need additional funding to continue
operations for the foreseeable future and this means there is a material
uncertainty as to the Group's ability to continue as a going concern, however
the Directors are confident that the Group will be able to raise, as
required, sufficient cash or reduce its commitments to enable it to continue
its operations, and to continue to meet, as and when they fall due, its
liabilities for at least the next 12 months from the date of approval of the
Group Financial Statements. The Group Financial Statements have, therefore,
been prepared on the going concern basis.
Functional Currency
Functional and Presentation Currency
The individual financial information of each Group entity is measured in the
currency of the primary economic environment in which the entity operates (its
functional currency). The Company's functional currency is UK Pound Sterling
(£). All other companies, belonging to the Curzon Group, have US Dollar as
their functional currency. The Group Financial Statements are presented in US
Dollars ($).
Transactions and Balances
Transactions in foreign currencies are converted into the respective
functional currencies on initial recognition, using the exchange rates
approximating those ruling at the transaction dates. Monetary assets and
liabilities at the end of the reporting period are translated at the rates
ruling as of that date.
Non-monetary assets and liabilities are translated using exchange rates that
existed when the values were determined. All exchange differences are
recognised in profit or loss.
On consolidation, the assets and liabilities of the Group's Pound Sterling
operations are translated into the Group's presentational currency (US Dollar)
at exchange rates prevailing at the reporting date. Income and expense items
are translated at the average exchange rates for the period unless exchange
rates have fluctuated significantly during the year, in which case the
exchange rate at the date of the transaction is used. All exchange differences
arising, if any, are recognised as other comprehensive income and are
transferred to the Group's foreign currency translation reserve.
Rates applied in these Financial Statements:
2021 2020
Closing USD/GBP rate at 31 December 1.3489 1.3672
Average USD/GBP rate for the year 1.3775 1.2760
Reclamation Costs
Where a material liability for the removal of production facilities and site
restoration at the end of the field life exists, a provision for
decommissioning is made. The amount recognised is the present value of
estimated future expenditure determined in accordance with local conditions
and requirements. An asset of an amount equivalent to the provision is also
created and depreciated on a unit of production basis. Changes in estimates
are recognised prospectively, with corresponding adjustments to the provision
and the associated asset. At 31 December 2021, a provision has been recognized
and set off against restricted cash as permitted by IAS 32. At 31 December
2020, no provision were deemed necessary.
Impairment
Impairment of Financial Assets
All financial assets are assessed at the end of each reporting period as to
whether there is any objective evidence of impairment as a result of one or
more events having an impact on the estimated future cash flows of the asset.
For an equity instrument, a significant or prolonged decline in the fair value
below its cost is considered to be objective evidence of impairment.
An impairment loss in respect of financial assets carried at amortised cost is
recognised in profit or loss and is measured as the difference between the
asset's carrying amount and the present value of estimated future cash flows,
discounted at the financial asset's original effective interest rate.
If, in a subsequent period, the amount of the impairment loss decreases and
the decrease can be related objectively to an event occurring after the
impairment was recognised, the previously recognised impairment loss is
reversed through profit or loss to the extent that the carrying amount of the
financial asset at the date the impairment is reversed does not exceed what
the amortised cost would have been had the impairment not been recognised.
When there is a change in the estimates used to determine the recoverable
amount, a subsequent increase in the recoverable amount of an asset is treated
as a reversal of the previous impairment loss and is recognised to the extent
of the carrying amount of the asset that would have been determined (net of
amortisation and depreciation) had no impairment loss been recognised. The
reversal is recognised in profit or loss immediately, unless the asset is
carried at its revalued amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.
Financial Instruments
Financial instruments are recognised in the statements of financial position,
when the Group has become a party to the contractual provisions of the
instruments.
Financial Assets
The Group classifies its financial assets as financial assets carried at
amortised cost, cash and cash equivalents and restricted cash. Financial
assets are initially measured at fair value and subsequently carried at
amortised cost.
Financial assets are derecognized, when the contractual rights to receive cash
flows from the financial assets have expired or have been transferred and the
Group has transferred substantially all the risks and rewards of ownership. On
de-recognition of a financial asset in its entirety, the difference between
the carrying amount and the sum of the consideration received and any
cumulative gain or loss that had been recognised in other comprehensive income
is recognised in profit or loss.
Amortised Cost
These assets incorporate such types of financial assets, where the objective
is to hold these assets in order to collect contractual cash flows and the
contractual cash flows are solely payments of principal and interest. They are
initially recognised at fair value plus transaction costs that are directly
attributable to their acquisition or issue and are subsequently carried at
amortised cost, using the effective interest rate method, less provision for
impairment. Impairment provisions receivables are recognised based on the
simplified approach within IFRS 9, using a provision matrix in the
determination of the lifetime expected credit losses. During this process, the
probability of the non-payment of the receivables is assessed. This
probability is then multiplied by the amount of the expected loss arising from
default to determine the lifetime expected credit loss for the receivables. On
confirmation that the receivable will not be collectable, the gross carrying
value of the asset is written off against the associated provision.
Impairment provisions for receivables from related parties and loans to
related parties are recognised based on a forward-looking expected credit loss
model. The methodology, used to determine the amount of the provision, is
based on whether there has been a significant increase in credit risk since
initial recognition of the financial asset. For those where the credit risk
has not increased significantly since initial recognition of the financial
asset, twelve month expected credit losses, along with gross interest income,
are recognised. For those for which credit risk has increased significantly
but not determined to be credit impaired, lifetime expected credit losses
along with the gross interest income are recognised. For those that are
determined to be credit impaired, lifetime expected credit losses along with
interest income on a net basis are recognised.
The Group's financial assets, measured at amortised cost, comprise other
receivables and cash and cash equivalents in the Consolidated Statement of
Financial Position.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand, bank balances, bank
overdrafts, deposits with financial institutions and short-term, highly liquid
investments that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value.
Restricted Cash
Restricted cash are funds held as a collateral related to stand-by letters of
credit related to the Group's oil and gas properties. Such deposits are
classified as non-current assets and are not classified as part of cash and
cash equivalents as these deposits are not accessible by the Company for
unrestricted use and are not accessible for more than 3 months. More details
on the Group's restricted cash are given in the note 12.
Financial Liabilities
Financial liabilities are recognised when the Group becomes a party to the
contractual provisions of the financial instrument.
Financial instruments are classified as liabilities or equity in accordance
with the substance of the contractual arrangement. Interest, dividends, gains
and losses, relating to a financial instrument classified as a liability, are
reported as an expense or income. Distributions to holders of financial
instruments classified as equity are charged directly to equity.
All financial liabilities are recognised initially at fair value less
financial costs and subsequently measured at amortised cost, using the
effective interest method other than those categorised as fair value through
the Statement of Comprehensive Income.
A financial liability is derecognised when the obligation under the liability
is discharged, cancelled or expires. When an existing financial liability is
replaced by another from the same party on substantially different terms, or
the terms of an existing liability are substantially modified, such an
exchange or modification is treated as a de-recognition of the original
liability and the recognition of a new liability and the difference in the
respective carrying amounts is recognised in the Income Statement.
Financial liabilities include the following items:
§ Bank borrowings are initially recognised at fair value net of any
transaction costs directly attributable to the issue of the instrument. Such
interest-bearing liabilities are subsequently measured at amortised cost,
using the effective interest rate method, which ensures that any interest
expense over the period to repayment is at a constant rate on the balance of
the liability carried in the consolidated statement of financial position. For
the purposes of each financial liability, interest expense includes initial
transaction costs and any premium payable on redemption as well as any
interest or coupon, payable while the liability is outstanding;
§ Liability components of convertible loan notes are measured as described
further below;
§ Trade payables and other short-term monetary liabilities, which are
initially recognised at fair value and subsequently carried at amortised cost,
using the effective interest method.
Convertible Debt
The proceeds, received on issue of the Group's convertible debt, are allocated
into their liability and equity components. The amount, initially attributed
to the debt component, equals the discounted cash flows, using a market rate
of interest that would be payable on a similar debt instrument that does not
include an option to convert. Subsequently, the debt component is accounted
for as a financial liability, measured at amortised cost until extinguished on
conversion or maturity of the bond. The remainder of the proceeds is allocated
to the conversion option and is recognised as a separate equity component
within shareholders' equity, net of income tax effects.
Equity instruments
(Ordinary Shares)
Ordinary shares are classified as equity. Incremental costs, directly
attributable to the issue of new shares, are shown in Share Premium account as
a deduction, net of tax, from proceeds. Dividends on ordinary shares are
recognised as liabilities, when approved for distribution.
(Warrants)
Warrants classified as equity are recorded at fair value as of the date of
issuance on the Company's Consolidated Statement of Financial Position and no
further adjustments to their valuation are made. Management estimates the fair
value of these liabilities, using option pricing models and assumptions that
are based on the individual characteristics of the warrants or instruments on
the valuation date as well as assumptions for future financings, expected
volatility, expected life, yield and risk-free interest rate.
Taxation
Income tax for each reporting period comprises current and deferred tax.
Current tax is the expected amount of income taxes, payable in respect of the
taxable profit for the year and is measured, using the tax rates that have
been enacted or substantively enacted at the end of the reporting period.
Deferred tax is provided in full, using the liability method, on temporary
differences, arising between the tax bases of assets and liabilities and their
carrying amounts in the Group Financial Statements.
Deferred tax assets are recognised for all deductible temporary differences,
unused tax losses and unused tax credits to the extent that it is probable
that future taxable profits will be available against which the deductible
temporary differences, unused tax losses and unused tax credits can be
utilised. The carrying amounts of deferred tax assets are reviewed at the end
of each reporting period and reduced to the extent that it is no longer
probable that sufficient future taxable profits will be available to allow all
or part of the deferred tax assets to be utilised.
Deferred tax liabilities are recognised for all taxable temporary differences
other than those that arise from goodwill or excess of the Group's interest in
the net fair value of the acquired Company's identifiable assets, liabilities
and contingent liabilities over the business combination costs or from the
initial recognition of an asset or liability in a transaction, which is not a
business combination and at the time of the transaction, affects neither
accounting profit nor taxable profit.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply in the period, when the asset is realised or the liability
is settled, based on the tax rates that have been enacted or substantively
enacted at the end of the reporting period.
Deferred tax assets and liabilities are offset, when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when the deferred income taxes relate to the same taxation
authority.
Unrecognised deferred tax assets are reassessed at each reporting date and are
recognised to the extent that it has become probable that future taxable
profit will allow deferred tax assets to be recovered.
Deferred tax, relating to items recognised outside profit or loss, is
recognised outside profit or loss. Deferred tax items are recognised in
correlation to the underlying transactions either in other comprehensive
income or directly in equity.
Deferred tax assets and liabilities are recognized, where the carrying amount
of an asset or liability in the Consolidated Statement of Financial Position
differs from its tax base, except for differences, arising on the initial
recognition of goodwill, the initial recognition of an asset or liability in a
transaction, which is not a business combination and at the time of the
transaction affects neither accounting or taxable profit, and investments in
subsidiaries and joint arrangements, where the Group is able to control the
timing of the reversal of the difference and it is probable that the
difference will not reverse in the foreseeable future.
Leases
The Group previously held leases to approximately 45,370 acres of prospective
coalbed methane lands in the Coos Bay Basin during the period. These leases
are outside of IFRS16 scope as they fall within the scope of IFRS 6. The
annual rental payments, under these operating leases, were recognised in prior
years as an expense on a straight-line basis over the lease term.
Employee Benefits
Short-Term Benefits
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary
benefits are accrued in the period in which the associated services are
rendered by employees of the Group.
Post-Employment Benefits
The Group does not currently make provision for post-employment benefits by
way of pension plans or similar arrangements.
Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized, when the Group has a present or constructive
obligation as a result of past events, when it is probable that an outflow of
resources, embodying economic benefits, will be required to settle the
obligation and when a reliable estimate of the amount can be made. Provisions
are reviewed at the end of each financial reporting period and adjusted to
reflect the current best estimate. Where the effect of the time value of money
is material, the provision is the present value of the estimated expenditure
required to settle the obligation.
A contingent liability is a possible obligation that arises from past events
and whose existence will only be confirmed by the occurrence of one or more
uncertain future events not wholly within the control of the Group. It can
also be a present obligation arising from past events that is not recognised
because it is not probable that an outflow of economic resources will be
required or the amount of obligation cannot be measured reliably.
A contingent liability is not recognised but is disclosed in the notes to the
Financial Statements. When a change in the probability of an outflow occurs so
that the outflow is probable, it will then be recognised as a provision.
A contingent asset is a probable asset that arises from past events and whose
existence will be confirmed only by the occurrence or non-occurrence of one or
more uncertain events not wholly within the control of the Group. The Group
does not recognise contingent assets but discloses its existence, where
inflows of economic benefits are probable, but not virtually certain.
Share-Based Payment Arrangements
Equity-settled share-based payments to employees and others, providing similar
services, are measured at the fair value of the equity instruments at the
grant date. Details regarding the determination of the fair value of
equity-settled share-based transactions are set out in note 18 to the Group
Financial Statements.
The fair value determined at the grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based
on the Directors' estimate of equity instruments that will eventually vest,
with a corresponding increase in equity. Where the conditions are non-vesting,
the expense and equity reserve, arising from share-based payment transactions
is recognised in full immediately on grant.
At the end of each reporting period, the Directors revise their estimate of
the number of equity instruments expected to vest. The impact of the revision
of the original estimates, if any, is recognised in profit or loss such that
the cumulative expense reflects the revised estimate, with a corresponding
adjustment to other reserves.
Operating Segments
An operating segment is a component of the Group that engages in business
activities from which it may earn revenues and incur expenses. The results of
an operating segment are reviewed regularly by the chief operating decision
maker to make decisions about resources to be allocated to the segment and
assess its performance, and for which discrete financial information is
available.
Summary of Critical Accounting Estimates and Judgments
The preparation of the Group Financial Statements, in conformity with IFRS,
requires the use of certain critical accounting estimates. It also requires
the Directors to exercise their judgment in the process of applying the
accounting policies, which are detailed above. These judgments are continually
evaluated by the Directors and management and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
The key estimates and underlying assumptions, concerning the future and other
key sources of estimation uncertainty at the reporting date, that have a
significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial period 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 prime areas, involving a higher degree of judgment or complexity, where
assumptions and estimates are significant to the Financial Statements, are as
follows:
Going Concern
The Group Financial Statements have been prepared on a going concern basis as
the Directors have assessed the Group's ability to continue in operational
existence for the foreseeable future. The operations are currently being
financed by third party loans. See Going Concern section for more details.
The Group Financial Statements do not include the adjustments that would
result if the Group were not to continue as a going concern.
3. Segmental Analysis
IFRS 8 "Operating Segments" requires operating segments to be identified on
the basis of internal reports about components of the Group that are regularly
reviewed by the chief operating decision maker (which takes the form of the
Directors) as defined in IFRS 8 "Operating Segments", in order to allocate
resources to the segment and to assess its performance.
The principal activity of the Company is that of an investment company,
currently focused on acquiring a new business in the environmental, social and
corporate governance space (ESG). At 31 December 2021 and 31 December 2020,
the Directors consider there is one reportable operating segment. Accordingly,
an analysis of segment profit or loss, segment assets, segment liabilities and
other material items has not been presented.
The Group operates in one geographic area, being the USA. All intangible
assets and operating assets and liabilities are located in the USA, excluding
cash and cash equivalents, which are currently kept and managed from the UK
head office. The management does not consider the UK to be a separate
operating segment. The Group has not yet commenced production and therefore
has no revenue.
4. Loss for the Year Before Taxation
Loss before tax is stated after charging / (crediting): 2021 2020
US$ US$
Auditor's remuneration:
- fees payable to the Company's auditor for the 34,438 31,900
audit of the consolidated and Company financial statements
Foreign currency translation (gain) 6,511 (23,106)
5. Directors and Staff
There were no staff employed by the Group during the years ended 31 December
2021 and 31 December 2020, except for one Director, Mr Scott Kaintz, who was
employed by the Company from 27 June 2018.
Remuneration of Key Management Personnel
The following table sets forth the compensation awarded, paid to or earned by
each Director during 2020:
2021 Directors' Social Total cash-compensation Share-based Payments (options) Total
fees security US$ US$ compensation
US$ costs US$
US$
John McGoldrick 68,876 - 68,876 - 68,876
Scott Kaintz 151,528 13,219 164,747 - 164,747
Owen May 34,438 - 34,438 - 34,438
Total Directors' compensation 254,842 13,219 268,061 - 268,061
2020 Directors' Social Total cash-compensation Share-based Payments (options) Total
fees security US$ US$ compensation
US$ costs US$
US$
John McGoldrick 63,800 - 63,800 - 63,800
Scott Kaintz 148,335 20,995 169,330 - 169,330
Owen May 29,242 - 29,242 - 29,242
Total Directors' compensation 241,377 20,995 262,372 - 262,372
John McGoldrick has, through agreement with the Company, agreed to defer
payment of his 2017, 2018, 2019, 2020 and 2021 Director's compensation until
the completion of the RTO, which at 31 December 2021 totaled $273,160 and has
been recognized in other payables at the reporting date.
Owen May has, through agreement with the Company, agreed to defer payment of
his 2018, 2019, 2020 and 2021 Director's compensation until the completion of
the RTO, which at 31 December 2021 totaled $98,360 and has been recognized in
other payables at the reporting date.
As at 31 December 2021 Scott Kaintz was owed $67,400 in unpaid salary (31
December 2020: $68,400).
6. Administrative Expenses
2021 2020
US$ US$
Staff costs
Directors' salaries 254,842 241,376
Employers NI 13,219 15,891
Consultants 22,729 42,445
Professional services
Accounting, audit & taxation 90,527 74,752
Legal - -
Marketing 14,447 12,235
Other 440 -
Regulatory compliance 63,298 93,484
Standard Listing Regulatory Costs 48,351 -
Travel - 492
Business development - -
Office and Admin
General 11,716 -
IT costs - 1,622
Mineral rights lease (outside of IFRS 16 scope) - 11,349
Temporary storage and office rent 7,199 19,140
Insurance 43,097 16,013
Total administrative costs 569,865 528,799
7. Finance Expense (net)
2021 2020
US$ US$
Foreign exchange loss/(gain) 6,511 (23,106)
Interest expense on promissory notes and other short-term loans 159,087 111,881
Total finance expense 165,598 88,775
8. Taxation
The Group has made no provision for taxation as it has not yet generated any
taxable income. A reconciliation of income tax expense, applicable to the loss
before taxation at the statutory tax rate to the income tax expense at the
effective tax rate of the Group, is as follows:
2021 2020
US$ US$
Loss before tax (860,463) (617,574)
UK corporation tax credit at 19.00% (2019: 19.00%) (163,488) (117,339)
Effect of non-deductible expense - 10,559
Differences in overseas tax rates (2,916) (1,287)
Effect of tax benefit of losses carried forward 166,404 108,067
Current tax (credit) - -
As at 31 December 2021, the tax effects of temporary timing differences,
giving rise to deferred tax assets, was US$1,583,815 (2020: US$1,417,411).
A deferred tax asset in respect of these losses and temporary differences has
not been established as the Group has not yet generated any revenues and the
Directors have, therefore, assessed the likelihood of future profits being
available to offset such deferred tax assets to be uncertain.
9. Loss Per Share
The basic loss per share is derived by dividing the loss for the year
attributable to ordinary shareholders of the Company by the weighted average
number of shares in issue.
Diluted loss per share is derived by dividing the loss for the year
attributable to ordinary shareholders of the Company by the weighted average
number of shares in issue plus the weighted average number of ordinary shares
that would be issued on conversion of all dilutive potential ordinary shares
into ordinary shares.
The following reflects the loss and share data used in the basic and diluted
loss per share computations:
2021 2020
(Loss) after tax attributable to the shareholders of the parent (US$) (860,463) (617,574)
Weighted average number of ordinary shares of £0.01 in issue used calculation 99,639,565 92,632,948
of in basic and diluted EPS
(Loss) per share - basic and fully diluted (US$) (0.009) (0.008)
At 31 December 2021 and 31 December 2020, the effect of all potential ordinary
shares and contingently issuable shares, that are presented in the table
below, was anti-dilutive as it would lead to a further reduction of loss per
share, therefore, these instruments were not included in the diluted loss per
share calculation.
2021 2020
Number Number
Share options granted to employees - fully vested at the end of the respective 280,854 280,854
period
Warrants given to shareholders as a part of placing equity instruments - fully 18,606,594 20,612,925
vested at the end of the respective period
Total instruments fully vested 18,887,448 20,893,779
Total number of instruments and potentially issuable instruments (vested and 18,887,448 20,893,779
not vested) not included into the fully diluted EPS calculation
10. Intangible Assets
2021 2020
Exploration and evaluation expenditure US$ US$
Cost:
At the beginning of the year 24,716,316 24,716,316
Additions - exploration costs capitalised - -
At the end of the year 24,716,316 24,716,316
Impairment provision:
At the beginning of the year (24,716,316) (24,716,316)
Provision for the year - -
At end of the year (24,716,316) (24,716,316)
Net Book Value - -
Environmental Matters
The Group has established procedures for a continuing evaluation of its
operations to identify potential environmental exposures and to assure
compliance with regulatory policies and procedures. The Directors monitor
these laws and regulations and periodically assesses the propriety of its
operational and accounting policies related to environmental issues. The
nature of the Group's business requires routine day-to-day compliance with
environmental laws and regulations. The Group has incurred no material
environmental investigation, compliance or remediation costs for each of the
years ended 31 December 2021 and 31 December 2020. The Directors are unable to
predict whether the Group's future operations will be materially affected by
these laws and regulations. It is believed that legislation and regulations,
relating to environmental protection will not materially affect the results of
operations of the Group.
11. Subsidiary Undertakings
The Group has the following subsidiary undertakings:
Name Country of incorporation Issued capital Proportion held by Group Activity
Coos Bay Energy LLC USA Membership interests 100% Holding company
Westport Energy Acquisitions Inc. USA Shares 100% Holding company
Westport Energy LLC USA Membership interests 100% Oil and gas exploration
Curzon Energy Inc.* USA Shares 100% Holding company
Rigel Energy LLC** USA Membership interests 100% Holding company
* Incorporated on 1 May 2019 and dissolved on 26 February 2020 as related
transaction did not complete.
** Incorporated on 1 May 2019 and dissolved on 27 February 2020 as related
transaction did not complete.
Coos Bay Energy LLC is a limited liability corporation incorporated in Nevada,
USA whose registered office is 1370 Crowley Avenue SE, Portland, Oregon 97302,
USA.
Westport Energy Acquisition Inc. was incorporated in May 2010 in Delaware,
USA. Its registered office is located at 100 Overlook Center, 2nd Floor,
Princeton Junction, NJ 08540, USA.
Westport Energy LLC was incorporated in December 2008 in Delaware, USA. Its
registered office is located at 100 Overlook Center, 2nd Floor, Princeton
Junction, NJ 08540, USA.
12. Restricted Cash
Restricted cash of $125,000 comprises funds held as a collateral to support
stand-by letters of credit related to the Group's oil and gas properties. The
letters of credit secure the reclamation obligations under the leases and
state law. The cash can be taken by Umpqua Bank in the event the letters of
credit are drawn on by the State of Oregon, Department of Geology &
Mineral Industries (DOGAMI). The cash is held in the form of a Certificate of
Deposit. At the year end the Group has recognized a provision for
reclamation obligations equivalent to the entire restricted cash balance in
recognition of the fact that recovery of these funds may only be possible
following completion of reclamation work on these oil and gas properties.
This provision has been offset against the restricted cash balance as
permitted by IAS 32.
13. Prepayments and Other Receivables
2021 2020
US$ US$
VAT recoverable 8,404 3,106
Other debtors 35,654 38,593
Total prepayments and other receivables 44,058 41,699
The fair value of receivables and deposits approximates their carrying amount
as the impact of discounting is not significant. The receivables are not
impaired and are not past due.
14. Cash and Cash Equivalents
For the purpose of the Statements of Financial Position, cash and cash
equivalents comprise the following:
2021 2020
US$ US$
Cash in hand and at bank 138,142 47,188
15. Trade and Other Payables
2021
2020
US$ US$
Trade and other payables 734,146 674,527
Accruals 33,724 46,350
Total financial liabilities, excluding loans and borrowings, classified as 767,870 720,877
financial liabilities measured at amortised cost
Other payables - tax and social security payments 6,721 16,958
Total trade and other payables 774,591 737,835
16. Borrowings
Details of the notes and borrowings originated by the Group are disclosed in
the table below:
Origination date Contractual settlement date Original note value in original currency Annual interest rate Security Status at 31 December 2021
C4 Energy Ltd 22 Sept 2017 Conversion/Repayment at RTO date $200,000 15% unsecured Outstanding
Bruce Edwards 1 Sep 2017 Conversion at RTO date $100,000 15% unsecured Outstanding
HNW Investor Group 1 July 2019 Conversion/Repayment at RTO date £263,265 13% 100% interest in Coos Bay LLC Outstanding
Sun Seven Stars Investment Group ("SSSIG") 13 Mar 2020 Conversion/Repayment at RTO date £260,000 10% unsecured Outstanding
Poseidon Plastics Limited ("PPL") 2 February 2021 14 February 2023* £450,000 10% unsecured Outstanding
*Please refer to note 22 Post Balance Sheet Events for more information
No interim payments are required under the promissory notes, as the payment
terms require the original principal amount of each note and all accrued
interest thereon, to be paid in single lump payments on the respective
contractual settlement dates.
2021 2020
US$ US$
At 1 January 1,183,018 698,798
Received during the year 619,886 331,760
Interest accrued during the year 158,564 109,943
Exchange rate differences (25,549) 42,517
Short-term loans and borrowings 31 December 1,935,919 1,183,018
Reconciliation of Liabilities Arising from Financing Activities
31 Dec 2020 Cash flows Proceeds from new borrowings Non-cash flow Forex movement Non-cash flow Interest accrued 31 Dec 2021
HNW Investor Group 395,060 - (6,225) 47,145 435,950
C4 Energy Ltd. 262,378 - - 30,000 292,378
Bruce Edwards 147,350 - - 15,000 162,350
Sun Seven Stars Investment Group ("SSSIG") 378,230 - (5,795) 35,816 408,251
Poseidon Plastics Ltd ("PPL") - 619,886 (13,499) 30,604 636,991
Total liabilities from financing activities 1,183,018 619,886 (25,519) 158,565 1,935,920
31 Dec 2019 Cash flows Proceeds from new borrowings Non-cash flow Forex movement Non-cash flow Interest accrued 31 Dec 2020
HNW Investor Group 334,070 - 17,286 43,704 395,060
C4 Energy Ltd. 232,378 - - 30,000 262,378
Bruce Edwards 132,350 - - 15,000 147,350
Sun Seven Stars Investment Group ("SSSIG") - 331,760 25,231 21,239 378,230
Total liabilities from financing activities 698,798 331,760 42,517 109,943 1,183,018
17. Share Capital
Authorised Share Capital
As permitted by the Companies Act 2006, the Company does not have an
authorised share capital. The Company has one class of ordinary shares, which
carry no right to fixed income. The ordinary shares carry the right to one
vote per share at General Meetings of the Company and the rights to share in
any distribution of profits or returns of capital and to share in any residual
assets available for distribution in the event of a winding up.
Issued Equity Share Capital
Ordinary shares, number Deferred shares, number Share capital, US$
At 1 January 2020 83,032,971 - 1,103,457
Share subdivision on 6 May 2020 - details of subdivision are presented in the 83,032,971 83,032,971 1,103,457
table below
Issue of shares at £0.01 per share via placement on 3 June 2020 for cash 16,606,594 - 2,090
At 31 December 2020 99,639,565 83,032,971 1,105,547
At 31 December 2021 99,639,565 83,032,971 1,105,547
Number Number Share Capital, US$ Number Share Capital, US$
Ordinary shares of £0.0001 Deferred shares of £0.0099 Ordinary shares of £0.01 before subdivision
Issued and fully paid
Existing Ordinary Shares of £0.01 each immediately before subdivision - - - 83,032,972 1,103,457
After subdivision*:
New Ordinary shares of £0.0001 each 83,032,972 - 11,035 - -
Deferred Shares of £0.0099 each - 83,032,972 1,092,422 - -
Total Share Capital 1,103,457 1,103,457
*On 6 May 2020, the Company's shareholders approved the subdivision and
re-designation of the 83,032,971 Existing Ordinary Shares ("Existing Ordinary
Shares") of £0.01 each in the capital of the Company into (i) 83,032,971 New
Ordinary Shares ("New Ordinary Shares") of £0.0001 each and (ii) 83,032,971
Deferred Shares ("Deferred Shares") of £0.0099 each in the capital of the
Company, and to amend the Company's Articles of Association accordingly.
Each New Ordinary Share carries the same rights in all respects under the
amended Articles of Association as each Existing Ordinary Share did under the
existing Articles of Association, including the rights in respect of voting
and the entitlement to receive dividends. Each Deferred Share carries no
rights and is deemed effectively valueless.
18. Share Based Payments
Employee Share Options
At 31 December 2021, the Company had outstanding options to subscribe for
ordinary shares as follows:
Option exercise price Number of options granted Vesting date Expiry date Fair value of individual option
£0.10 280,854 4 Oct 2018 4 Oct 2022 £0.074
Total options outstanding at 31 December 2021 280,854
2021 2020
Number of Weighted Number of Weighted
options average options average
exercise exercise
price price
£ £
Outstanding at the beginning of the period 280,854 0.10 280,854 0.10
Outstanding at the end of the period 280,854 0.10 280,854 0.10
Vested and exercisable at the end of the period 280,854 0.10 280,854 0.10
During the financial year, no options (2020: none) were granted. The weighted
average fair value of each option granted during the year was £nil (2020:
nil).
The exercise price of options outstanding on 31 December 2021 and 31 December
2020 is £0.1 Their weighted average remaining contractual life was 0.75 years
(2020: 1.45 years).
No options were exercised during the reporting year (2020: nil).
Warrants
On 31 December 2021, the following warrants were in issue:
Warrant exercise price Number of warrants granted Expiry date Fair value of individual warrant
£0.011 1,000,000 1 Oct 2022 £0.0056
£0.015 17,606,594 9 June 2022 £0.00731
Total warrants in issue at 31 December 2021 18,606,594
2021 2020
Number of Number of
warrants warrants
Outstanding at the beginning of the period 20,612,925 5,636,531
Granted during the period - 17,606,594
Lapsed during the period (2,006,331) (2,630,200)
Exercised during the period - -
Outstanding at the end of the period 18,606,594 20,612,925
Vested and exercisable at the end of the period 18,606,594 20,612,925
The exercise price of warrants, outstanding on 31 December 2021, ranged
between £0.011 and £0.015 (2020: ranged between £0.0158 and £0.1). Their
weighted average remaining contractual life was 0.45 years (2020: 1.24 years).
The weighted average share price (at the date of exercise) of warrants
exercised during the year was nil (2020: nil) as no warrants were exercised.
The following information is relevant in the determination of the fair value
of the warrants granted during the year ended 31 December 2020:
Granted on 3 June 2020
Warrant pricing model used Black-Scholes
Weighted average share price at grant date, £ 0.013
Warrant exercise price, £ 0.015
Weighted average contractual life, years 2
Expected volatility, % 117
Expected dividend growth rate, % 0
Risk-free interest rate (2-year bond), % 0.006
FV of 1 warrant, £ 0.00731
Calculation of volatility involves significant judgement by the Directors due
to the absence of the historical trading data for the Company at the date of
the grant. Volatility number above was estimated based on the range of 5-year
month end volatilities of 10 similar sized listed companies operating in the
Oil and Gas sector.
The aggregate fair value, related to the share warrants granted to
shareholders acting in the capacity of shareholders during the year ended 31
December 2020, has been allocated to share premium as directly attributable
share issue cost in the amount of US$161,948.
19. Reserves
Share Premium
The share premium account represents the excess of consideration received for
shares issued above their nominal value net of transaction costs.
Foreign Currency Translation Reserve
The translation reserve represents the exchange gains and losses that have
arisen from the retranslation of operations with a functional currency, which
differs to the presentation currency.
Retained Earnings
Retained earnings represent the cumulative profit and loss net of
distributions to owners.
Warrants Reserve
The warrants reserve represents the cumulative fair value of the warrants,
granted to the investors together with placement shares.
Share-Based Payment Reserve
The share-based payment reserve represents the cumulative charge for options
granted.
Merger Reserve
The merger reserve represents the cumulative share capital and membership
capital contributions of all the companies included into the legal acquire
sub-group less cost of investments into these legal acquirees.
20. Financial Instruments - Risk Management
General Objectives, Policies and Processes
The overall objective of the Directors is to set policies that seek to reduce
risk as far as possible without unduly affecting the Group's competitiveness
and flexibility. Further details regarding these policies are set out below.
The Directors review the Group's monthly reports through which they assess the
effectiveness of the processes put in place and the appropriateness of the
objectives and policies it sets.
Categories of Financial Assets and Liabilities
The Group's activities are exposed to a variety of market risk (including
currency risk) and liquidity risk. The Group's overall financial risk
management policy focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on its financial performance.
The principal financial instruments used by the Group, from which financial
instrument risk arises, are as follows:
§ other receivables;
§ cash and cash equivalents;
§ trade and other payables; and
§ borrowings.
The carrying value of financial assets and financial liabilities, maturing
within the next 12 months, approximates their fair value due to the relatively
short-term maturity of the financial instruments.
The Group had no financial assets or liabilities carried at fair values at the
end of each reporting date.
A summary of the financial instruments held by category is provided below:
2021 2020
US$ US$
Financial assets
Cash and cash equivalents 138,142 47,188
Other receivables - -
Restricted cash* 125,000 125,000
Financial liabilities
Trade payables 292,592 349,117
Accruals 481,999 388,718
Short-term borrowings 1,935,919 1,183,018
*Note that the restricted cash balance has been impaired to nil in the current
year, see note 12 for further details.
Credit Risk
The Group's exposure to credit risk, or the risk of counterparties defaulting,
arises mainly from notes and other receivables. The Directors manage the
Group's exposure to credit risk by the application of monitoring procedures on
an ongoing basis. For other financial assets (including cash and bank
balances), the Directors minimise credit risk by dealing exclusively with high
credit rating counterparties.
Credit Risk Concentration Profile
The Group's receivables do not have significant credit risk exposure to any
single counterparty or any group of counterparties having similar
characteristics. The Directors define major credit risk as exposure to a
concentration exceeding 10% of a total class of such asset.
The Company maintains its cash reserves in Barclays Bank UK PLC, which
maintains the following credit ratings:
Credit Agency Standard and Poor's Moody's Fitch R&I
Long Term A/Stable A1/Stable A+/Negative A+/Stable
Short Term A-1 P-1 F1 N/A
Unsupported Group Credit /Baseline Credit Assessment/Viability Rating bbb+ baa3 a N/A
Exposure to Credit Risk
The Group is exposed to the credit risk of the US Specialty Insurance Company,
currently holding a US$125,000 bond on behalf of the Company's Coos Bay Energy
LLC subsidiary. Note that this balance has been impaired to nil in the
current year, see note 12 for further details.
Market Risk - Interest Rate Risk
Borrowings issued at fixed rates expose the Group to fair value interest rate
risk. The Directors' policy is to maintain a majority of the Group's
borrowings in fixed rate instruments. The Directors have analysed the Group's
interest rate exposure on a dynamic basis. This takes into consideration
refinancing, renewal of existing positions and alternative financing. Based on
these considerations, the Directors believe the Group's exposure to cash flow
and fair value interest rate risk is not significant.
Market Risk - Currency Risk
Currency risk is the risk that the value of financial instruments will
fluctuate due to changes in foreign exchange rates. Currency risk arises when
future commercial transactions and recognised assets and liabilities are
denominated in a currency that is not the Company's (Pound Sterling, £) or
its subsidiaries' functional currency (US$). The Group is exposed to foreign
exchange risk, arising from currency exposures primarily with respect to the
UK Pound Sterling (£). The Directors monitor the exchange rate fluctuations
on a continuous basis and act accordingly. The following sensitivity analysis
shows the effects on loss before tax of 10% increase/decrease in the exchange
rates of the US$ versus closing exchange rates of UK Pound Sterling as at 31
December 2021:
+10% -10%
US$ US$
Loss before tax Increase in loss by US$71,466 Decrease in loss by US$71,466
2021 2021 2021 2020 2020 2020
Assets and liabilities by currency of denomination, al numbers are presented US$ Total US$ Total
in US$
£ US$ £ US$
In US$ In US$
Financial assets
Cash and cash equivalents 8,931 129,211 138,142 299 46,889 47,188
Other receivables - - - - - -
Restricted cash* 125,000 - 125,000 125,000 - 125,000
Financial liabilities
Trade payables 48,918 243,674 292,592 54,805 294,312 349,117
Accruals - 481,999 481,999 - 388,718 388,718
Short-term borrowings 454,726 1,481,193 1,935,919 409,728 773,290 1,183,018
*Note that the restricted cash balance has been impaired to nil in the current
year, see note 12 for further details.
Liquidity Risk
The Group currently holds cash balances to provide funding for normal trading
activity. Trade and other payables and short-term borrowings are monitored as
part of normal management routine and all amounts outstanding fall due in one
year or less. Borrowings are conducted in both US$ and UK Pound Sterling and
as such the Company monitors fluctuations that may impact both present and
future liquidity levels.
Capital Management
The Group defines capital as the total equity of the Group. The Directors'
objectives, when managing capital, are to safeguard its 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 to reduce the
cost of capital.
To meet these objectives, the Directors review the budgets and projections on
a regular basis to ensure there is sufficient capital to meet the needs of the
Group through to profitability and positive cash flow.
The capital structure of the Group consists of shareholders' equity as set out
in the consolidated statement of changes in equity. All working capital
requirements are financed from existing cash resources and borrowings.
Whilst the Group does not currently have distributable profits, it is part of
the capital strategy to provide returns for shareholders and benefits for
members in the future.
Capital for further development of the Group's activities will, where
possible, be achieved by share issues or other finance as appropriate.
In order to maintain or adjust the capital structure, the Directors may return
capital to shareholders, issue new shares or sell assets to reduce debt. It
also ensures that distributions to shareholders do not exceed working capital
requirements.
Fair Value Hierarchy
All the financial assets and financial liabilities, recognised in the Group
Financial Statements, are shown at the carrying value, which also approximates
the fair values of those financial instruments. Therefore, no separate
disclosure for fair value hierarchy is required.
21. Related Party Transactions
Balances and transactions between the Company and its subsidiaries, Coos Bay
Energy LLC, Westport Energy Acquisition Inc. and Westport Energy LLC are
eliminated on consolidation and are not disclosed in this note. Balances and
transactions between the Group and other related parties are disclosed below.
Promissory Notes
On 13 February 2020, the Company announced that it had been informed by YA
Global Investments LP of the sale of its outstanding debt due to YA Global to
C4 Energy Ltd, a UK incorporated private Company. The balance of the loan
agreement at that time was US$200,000, with approximately US$32,000 of accrued
interest.
Remuneration of Directors
The remuneration of the senior Executive Management Committee members, who are
the key management personnel of the Group, is set out in aggregate for each of
the categories specified in IAS 24 "Related Party Disclosures" in note 5.
22. Events After the Reporting Period
Drawdown of Loan Facility
Following the reporting date, the Company drew down on a further $189,000
(£140,000) on its loan facility with Poseidon Enhanced Technologies Limited,
bringing the total value of the principal of this loan facility drawn down to
$796,000 (£590,000).
Exclusivity Extensions
On 4 January 2022, 31 January 2022, 23 February 2022, 2 Match 2022, 31 March
2022 and 28 April 2022 the Company announced a series of extensions to the
exclusivity period entered into with Poseidon Enhanced Technologies Limited
under the terms of the LOI entered into between the parties, initially
announced on 3 February 2021, with such period now expiring on 1 June 2022 and
extendable up to 30 September 2022.
Loan Extension and Facility Increase
On 23 February 2022, the Company announced that it had extended its
outstanding loan with Poseidon Enhanced Technologies Limited to 14 February
2023 along with an expansion of the total principal available for drawdown
from $674,000 (£500,000) to $1,005,000 (£745,000).
Company Statement of Financial Position
as at 31 December 2021
Note 2021 2020
£ £
Assets
Current assets
Trade and other receivables 28 32,662 30,500
Cash and cash equivalents 29 102,408 34,514
Total current assets 135,070 65,014
Total assets 135,070 65,014
Liabilities
Current liabilities
Trade and other payables 30 537,959 499,583
Borrowings 31 1,435,141 865,285
Total liabilities 1,973,100 1,364,868
Capital and reserves attributable to shareholders
Share capital 32 831,990 831,990
Share premium 32 2,718,932 2,718,932
Share-based payments reserve 355,269 355,269
Warrants reserve 289,481 289,481
Merger relief reserve 2,800,000 2,800,000
Accumulated losses (8,833,702) (8,295,526)
Total capital and reserves (1,838,030) (1,299,854)
Total equity and liabilities 135,070 65,014
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has not presented
its own income statement or statement of comprehensive income. The Company's
loss for the financial year was £538,176 (2020: £515,324). The Company's
total comprehensive loss for the financial year was £538,176 (2020:
£515,324).
The Financial Statements were approved by the Board of Directors and
authorised for issue on 28 April 2022 and are signed on its behalf by:
John McGoldrick
Director
The notes to the Company Statement of Financial Position form part of these
Financial Statements.
Company Statement of Changes in Equity
Share Share Share-based payments reserve Warrants reserve Merger relief Accumulated loss Total
capital Premium £ £ reserve £ £
£ £ £
Equity at 1 January 2020 830,330 2,693,194 355,269 160,777 2,800,000 (7,780,202) (940,632)
Loss for the year 2020 - - - - - (515,324) (515,324)
Total comprehensive loss for the year 2020 - - - - - (515,324) (515,324)
Issue of shares 1,661 164,405 - - - - 166,066
Issue of warrants - (9,964) - - - - (9,964)
Issue of share options - (128,704) - 128,704 - - -
Total transactions with shareholders 1,661 25,737 - 128,704 - - 156,102
Equity at 31 December 2020 831,991 2,718,931 355,269 289,481 2,800,000 (8,295,526) (1,299,854)
Loss for the year 2021 - - - - - (538,176) (538,176)
Other comprehensive loss for the year - - - - - - -
Total comprehensive loss for the year 2020 - - - - - (538,176) (538,176)
Total transactions with shareholders - - - - - - -
Equity at 31 December 2021 831,991 2,718,931 355,269 289,481 2,800,000 (8,833,702) (1,838,030)
Company Statement of Cash Flows
for the Year Ended 31 December 2021
Notes 2021 2020
£ £
Cash flow from operating activities
Loss before taxation (538,176) (515,324)
Adjustments for:
Finance expense 115,488 87,681
Finance income - (39,368)
Impairment of loans and receivables 9,596 94,627
Income from forgiven creditors - (15,816)
Unrealised foreign exchange movements 4,727 (18,110)
Operating cashflows before working capital changes (408,365) (406,310)
Changes in working capital:
Increase in payables 38,375 64,802
(Increase)/decrease in receivables (2,162) (6,709)
Net cash used in operating activities (372,152) (348,217)
Financing activities
Issue of ordinary shares, net of share issue costs - 156,102
Proceeds from new borrowings 450,000 260,000
Interest paid (358) -
Advances granted to subsidiaries (9,596) (55,259)
Net cash flow from financing activities 440,046 360,843
Net increase/(decrease) in cash and cash equivalents in the period 67,894 12,626
Cash and cash equivalents at the beginning of the period 34,514 21,888
Cash and cash equivalents at the end of the period 102,408 34,514
Notes to the Company Financial Statements
23. Significant Accounting Policies
The separate Financial Statements of the Company are presented as required by
the Companies Act 2016 ("the Act"). As permitted by the Act, the separate
Financial Statements have been prepared in accordance with UK adopted
International Accounting Standards.
The Financial Statements have been prepared on the historical cost basis. The
principal accounting policies adopted are the same as those set out in note 2
(#Ref5121631291) to the Consolidated Financial Statements except as noted
below.
The presentational currency of the Company financial statements is UK Pounds
Sterling, being the functional currency of the Company given its operations
are entirely within the United Kingdom.
Investments in Subsidiaries
Investments in subsidiaries are carried at cost and are regularly reviewed for
impairment if there are any indications that the carrying value may not be
recoverable.
Receivables from Subsidiaries
Impairment provisions for receivables from related parties and loans to
related parties are recognized, based on a forward-looking expected credit
loss model. The methodology, used to determine the amount of the provision, is
based on whether there has been a significant increase in credit risk since
initial recognition of the financial asset. For those where the credit risk
has not increased significantly since initial recognition of the financial
asset, twelve month expected credit losses along with gross interest income
are recognised. For those for which credit risk has increased significantly
but not determined to be credit impaired, lifetime expected credit losses
along with the gross interest income are recognised. For those that are
determined to be credit impaired, lifetime expected credit losses along with
interest income on a net basis are recognised.
Critical Accounting Judgments and Key Sources of Estimation Uncertainty
The Company's Financial Statements, and in particular its investments in and
receivables from subsidiaries, are affected by the critical accounting
judgments and key sources of estimation uncertainty in respect of going
concern judgements which are more fully described in note 2 to the
Consolidated Financial Statements.
24. Auditor's Remuneration
The auditor's remuneration for audit and other services is disclosed in note 4
to the Consolidated Financial Statements.
25. Directors and Staff
Scott Kaintz, Executive Director of the Company, has been the only employee of
the Company in the reporting year after he was employed on 27 June 2018 and to
date.
Key management remuneration is disclosed in note 5 to the Consolidated
Financial Statements.
26. Administrative Expenses
2021 2020
£ £
Staff costs 217,596 218,954
Standard Listing Regulatory Costs 45,951 73,263
Professional and consultancy fees 91,178 75,672
Other general administrative expenses 43,860 38,421
Total 398,585 406,310
27. Receivables from Subsidiaries and Related Party Transactions
2021 2020
£ £
Loans to subsidiaries - -
Total loans to subsidiaries - -
During the year ended 31 December 2021, the Company recognised expected credit
losses in relation to the intercompany loans in the amount of £19,378 (2020:
£94,627). This relates to the write-off of the Company's Coos Bay coal bed
methane project in full, due primarily to the lack of capital available to
advance the project in declining US oil and gas markets.
During the year ended 31 December 2021, the maximum amount owed by the
subsidiary to the Company was £19,378 (2020: £94,627). The related party
loans are unsecured and are repayable at the time of completion of a reverse
takeover. In prior years interest was receivable at a rate of 9%. No
interest has been charged for the year ended 31 December 2021 At 31 December
2021, £39,368 (2020: £39,368) was accrued and included in the above balance.
The remuneration of the senior Executive Management Committee members, who are
the key management personnel of the Group, is set out in aggregate for each of
the categories specified in IAS 24 "Related Party Disclosures" in note 5.
28. Prepayments and Other Receivables
2021 2020
£ £
VAT recoverable 6,230 2,272
Prepayments 26,432 28,227
Total prepayments and other receivables 32,662 30,499
The fair value of receivables and deposits approximates their carrying amount,
as the impact of discounting is not significant. The receivables are not
impaired and are not past due.
29. Cash and Cash Equivalents
For the purpose of the statements of cash flows, cash and cash equivalents
comprise the following:
2021 2020
£ £
Cash in hand and at bank 102,408 34,514
30. Current Liabilities
Trade and Other Payables
2021 2020
£ £
Trade and other payables 180,642 215,266
Accruals 357,317 284,317
Total trade and other payables 537,959 499,583
31. Short-Term Borrowings
At 31 December 2021, the Company had an outstanding promissory notes and loans
of £1,435,141 (2020: £865,285), please refer to note 16.
1 Jan 2021, £ Cash flows Proceeds from new borrowings, £ Non-cash flow Forex movement, £ Non-cash flow Interest accrued, £ 31 Dec 2021, £
HNW Investor Group 288,956 - - 34,224 323,180
C4 Energy Ltd 191,909 - 3,059 21,778 216,746
Bruce Edwards 107,775 - 1,689 10,889 120,353
Sun Seven Stars Investment Group ("SSSIG") 276,645 - - 26,000 302,645
Poseidon Plastics Ltd ("PPL") - 450,000 - 22,217 472,217
Total liabilities from financing activities 865,285 450,000 4,748 115,108 1,435,141
1 Jan 2020, £ Cash flows Proceeds from new borrowings, £ Non-cash flow Forex movement, £ Non-cash flow Interest accrued, £ 31 Dec 2020, £
HNW Investor Group 254,705 - - 34,251 288,956
C4 Energy Ltd 177,171 - (8,773) 23,511 191,909
Bruce Edwards 100,907 - (4,888) 11,756 107,775
Sun Seven Stars Investment Group ("SSSIG") - 260,000 - 16,645 276,645
Total liabilities from financing activities 532,783 260,000 (13,661) 86,163 865,285
32. Share Capital
The movements in the share capital account are disclosed in note 17 to the
Consolidated Financial Statements.
33. Financial Instruments - Risk Management
The Company's strategy and financial risk management objectives are described
in note 20.
Principal Financial Instruments
The principal financial instruments used by the Company from which risk arises
are as follows:
2021 2020
£ £
Financial assets
Cash and cash equivalents 102.408 34,514
Other receivables - -
Loans due from subsidiaries - -
Financial liabilities
Trade payables 180,624 215,266
Accruals 357,317 284,317
Short-term borrowings 1,435,141 865,285
Credit Risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations, resulting in financial loss to the Company.
In addition to the risks described in note 20, which affect the Group, the
Company is also subject to credit risk on the balances receivable from
subsidiaries, see note 27. In the year ended 31 December 2021, credit losses
were recognised in full in relation to all the balances receivable from
subsidiaries.
Market Risk - Currency Risk
The Company is exposed to foreign exchange risk, arising from currency
exposures primarily with respect to the US Dollar (US$). The Directors monitor
the exchange rate fluctuations on a continuous basis and act accordingly.
Assets and liabilities by currency of denomination, al numbers are presented 2021 2021 2020
in £
US$ 2021 Total US$ 2020 2020
£ £ £ Total
£
Financial assets
Cash and cash equivalents 6,621 95,787 102,408 219 34,295 34,514
Other receivables - - - - - -
Financial liabilities
Trade payables - 180,642 180,642 - 215,266 215,266
Accruals - 357,317 357,317 - 284,317 284,317
Short-term borrowings 337,099 1,098,042 1,435,141 299,684 565,601 865,285
34. Events After the Reporting Period
Events after the reporting period are more fully described in note 22.
35. Controlling Party
At 31 December 2021, the Company did not have an ultimate controlling party.
36. These results are audited, however the information does not constitute
statutory accounts as defined under section 434 of the Companies Act 2006.
The consolidated statement of financial position at 31 December 2021 and the
consolidated income statement, consolidated statement of comprehensive income,
consolidated statement of changes in equity and the consolidated cash flow
statement for the year then ended have been extracted from the Group's 2021
statutory financial statements. Their report was unqualified and contained
no statement under sections 498(2) or (3) of the Companies Act 2006. The
financial statements for 2021 will be delivered to the Registrar of Companies
by 30 June 2022.
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