REG - Curzon Energy plc - Results for the Year Ended 31 December 2022
28/04/2023 12:15
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RNS Number : 8986X Curzon Energy PLC 28 April 2023
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 2022
28 April 2023
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 2022.
A copy of the Company's annual report and financial statements for the year
ended 31 December 2022, 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 2022, on or before 5 May 2023.
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, Room 2K, on Wednesday 31 May 2023 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 29 May 2023.
For further information please contact:
Curzon Energy Plc +44 (0) 20 7747 9980
Scott Kaintz
www.curzonenergy.com (http://www.curzonenergy.com)
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 2022.
Period in Review
During the course of 2022, the Company focused its efforts on completing 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,
into high value, enhanced recycled PET resin (''erPET''). Formal exclusivity
with PET lapsed in September 2022.
Activities at Coos Bay were relatively minimal during the course of the year,
with the project remaining on care and maintenance. The Company visited the
site during the year and continued discussions regarding formal extensions of
the project leases with the two main leaseholders, as well as a potential
farm-out or sale of the project in light of higher natural gas demand and
prices.
Results
For the period ended 31 December 2022, the Group incurred a loss of US$467,793
(2021: loss of US$821,344). The majority of this loss comprised expenditures
on RTO due diligence, administrative expenses and required listing and
regulatory overheads. Overall administrative expenses fell during the period
at US$509,358 in 2022 (2021: US$569,865) and finance expenses rose slightly to
US$191,735 (2021: US$165,598) reflecting the ongoing costs of funding the
business during this due diligence phase.
Outlook
While the delays associated with the proposed PET RTO were material and
frustrating to all stakeholders, the Company has now formally exited this
transaction. Subsequently, the Company executed a Letter of Intent on 19 April
2023 with Technology Metals Market Limited ("TM2"), an investment holding
company developing a global network of supply, extending from mines (upstream)
through the smelters, processors and convertors (midstream) and into the
global distribution networks of global brands. Its portfolio of more than
dozen verticals covers key battery metals such as lithium, graphite,
manganese, zinc or nickel.
For the Company providing TM2 with an initial 17-day extendable period of
exclusivity, the parties have agreed that they will work towards the execution
and delivery of a definitive purchase agreement, with the goal to conclude an
RTO transaction in the critical technology metals space. TM2 has provided a
working capital facility of up to £750,000 to Curzon in the form of a
one-year loan note (the "Note"), carrying an annual interest rate of 10% per
annum, and convertible at the price of any subsequent share issue alongside
the contemplated RTO transaction. Under the terms of the Note, a total
authorised amount of up to £750,000 is to be made available to the Company
through mutually agreed drawdowns that began on 19 April 2023. Currently, the
Company has begun due diligence on a TM2 nominated African lithium development
company that seeks to achieve initial production in the medium term. Curzon
expects to release more information and details on the ultimate target of the
RTO transaction in due course.
Elsewhere, the ongoing conflict in Ukraine has now continued on for more than
a year, impacting markets and driving up commodity prices. While the global
trend for lower emissions continues to push the world away from traditional
oil and gas activities, this creates short term opportunities in the space.
Notwithstanding the Company's coal bed methane project at Coos Bay remains on
care and maintenance and is earmarked for disposal, it may yet have residual
value and may also benefit from the proposed RTO with TM2. Going forward,
the Company expects to remain active in its original natural resource
extractives space, but with migration into the critical metals technology
sector seeking to facilitate the world's low-carbon and electrification
goals.
We thank all investors and stakeholders for their patience and support during
this period of transition and we look forward to both delivering this
transaction and to working with TM2 to create a high-impact technology metals
business with an initial focus on lithium.
John McGoldrick
Non-Executive Chairman
27 April 2023
Strategic Report
Financial Results
The Group loss for the year to 31 December 2022 was US$467,793 (2021:
US$821,344). There were no revenues and the majority of this loss related to
administrative, listing and transaction costs.
The loss per share was US$0.007 (2021: loss per share US$0.009).
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$20,421 as at 31 December 2022.
The Directors note that the Group will need additional funding to continue
operations for the foreseeable future and, coupled with the fact that there is
no guarantee that the TM2 transaction will be completed, this means there is a
material uncertainty as to the Group's ability to continue as a going concern.
The Directors are confident however 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 18 April 2023, the Company announced that it had executed a letter of
intent with Technology Metals Market Limited ("TM2") to acquire a 100%
interest in a designated mining company via a potential reverse takeover.
TM2 and the Company have entered a period of exclusivity, where each party
will conduct due diligence on the other and the designated target.
The parties have further agreed that during this period they will work towards
the execution and delivery of a sale and purchase agreement, with a goal to
complete a reverse takeover transaction during the course of 2023.
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
potentially 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; and
§ 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.
Analysis by Gender
Category Male Female
Directors 3 0
Senior Managers 0 0
Other Employees 0 0
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 Board does not support discrimination of any form,
positive or negative, and all appointments are based solely on merit.
Health and Safety
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
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.
Outlook
In April 2023, the Company announced that it had executed a LOI with
Technology Metals Market Limited ("TM2"), where TM2 agreed to extend up to a
£750,000 facility in order to fund due diligence concluding in a reverse
takeover of Curzon by a designated mining target, currently focused on
lithium.
TM2 is building a global supply network, extending from the minesite through
to smelters, processors, and converters and into the distribution networks of
global brands. TM2 has initially identified an African-based lithium
development company, that is seeking to reach initial production in the medium
term, and the Company and TM2 will work together over the coming weeks to
further delineate these plans.
Signed by order of the Board
Scott Kaintz
Chief Executive Officer
27 April 2023
Directors' Report
The Directors present their report on the Company, together with the audited
financial statements of the Company for the year ended 31 December 2022.
Cautionary Statement
The review of the business and its future development in the Strategic Report
has been prepared solely to provide additional information to shareholders to
assess the Company's strategies and the potential for these strategies to
succeed. It should not be relied on by any other party for any other purpose.
The review contains forward looking statements, which are made by the
Directors in good faith based on information available to them up to the time
of the approval of the reports and should be treated with caution due to the
inherent uncertainties associated with such statements.
Results and Dividends
Given the nature of the business and its development strategy, it is unlikely
that the Board will recommend a dividend in the next few years. The Directors
believe the Company should seek to re-invest any profits to fund the Company's
growth strategy over the short- and medium-term horizons.
Directors' Insurance and Indemnities
The Directors have the benefit of the indemnity provisions, contained in the
Company's Articles of Association ('Articles'), and the Company has maintained
throughout the year Directors' and officers' liability insurance for the
benefit of the Company, the Directors and its officers. The Company has
entered into qualifying third-party indemnity arrangements for the benefit of
all its Directors in a form and scope, which comply with the requirements of
the Companies Act 2006, and which were in force throughout the year and remain
in force.
Business Review and Future Developments
Details of the business activities and developments made during the period can
be found in the Strategic Report and in note 1 to the Financial Statements
respectively.
Financial Instruments and Risk Management
Disclosures regarding financial instruments are provided within note 20 to the
Financial Statements.
Capital Structure and Issue of Shares
Details of the Company's share capital, together with details of the movements
during the period, are set out in note 17 to the Financial Statements. The
Company has one class of Ordinary Shares, which carry no right to fixed
income.
Post Balance Sheet Events
Transaction Termination and LOI with TM2
On 18 April 2023, the Company announced that it had notified Poseidon Enhanced
Technologies of its intention to terminate discussions regarding a RTO of
Curzon by PET, as originally announced on 3 February 2021. The Company
further announced that it has signed an LOI with Technology Metals Market
Limited ("TM2"), to provide a working capital facility of £750,000 to fund
Curzon to conduct due diligence and ultimately progress a RTO of Curzon by a
designated target by TM2, currently expected to be in the lithium space. TM2
would be able to fund ongoing exclusivity of Curzon by drawdowns on the
offered facility.
Directors
The Directors of the Company, who have served during the period and at the
date of this report are:
Director Role Date of Appointment Date of Resignation Board Committee*
John McGoldrick Chairman and Non-Executive Director 4/10/2017 N, R, A
Scott Kaintz Executive Director 27/06/2018
Owen May Non-Executive Director 27/09/2016 N, R, A
*Board Committee abbreviations are as follows: N = Nomination Committee; A =
Audit and Risk Committee; R = Remuneration Committee.
Board of Directors
Details of the current Directors and their backgrounds are as follows:
John McGoldrick (Chairman and Non-Executive Director)
John McGoldrick has over forty years of experience in the energy sector
including a variety of senior management roles, notably at Enterprise Oil
where he was responsible for its US operations up until Shell's takeover in
2002. Since then, Mr. McGoldrick has served as executive chairman of Caza Oil
& Gas Inc. (formerly Falcon Bay Energy LLC), a US onshore exploration and
production company, which went public in Toronto and London in 2007, becoming
Non-Executive Chairman in 2010. From 2008 to 2013, Mr. McGoldrick was a
Non-Executive Director of Vanguard Natural Resources LLC, a NYSE-listed Oil
& Gas company focused on the US. In January 2012, Mr. McGoldrick joined
Dart Energy International as CEO, subsequently becoming CEO of Dart Energy in
March 2013. He held this post until Dart Energy's takeover by IGas at the end
of 2014. Mr. McGoldrick is also a Director of Poseidon Plastics Limited. Mr.
McGoldrick holds a Bachelor of Engineering in Chemical Engineering with
Management Economics from University of Bradford.
Scott Kaintz (Executive Director and Chief Executive Officer)
Scott has extensive experience leading, funding and operating publicly traded
natural resource exploration and development businesses on the London
markets. He started his career as a US Air Force Officer working across
Europe, the Middle East and Central Asia. He subsequently held managerial
and technology roles in the defence sector in Europe, before transitioning to
corporate finance and investment positions, focused primarily on capital
raising and making debt and equity investments in small-cap listed
companies. Scott has significant experience in emerging markets, with a
particular emphasis on the countries of the former Soviet Union. Scott holds
a BSLA in Russian language and Russian Area Studies from Georgetown University
as well as MBA degrees from Columbia Business School and London Business
School. He is also a Director of Corcel Plc and Red Rock Resources Plc.
Owen May (Non-Executive Director)
Mr. Owen May is an American banker with over 30 years of experience on Wall
Street. He currently serves as a Managing Director of MD Global Partners, a
full-service investment-banking firm, and is actively involved in a broad
range of investment activities in Israel, China and Europe. Mr. May started
his career at Lehman Brothers as a Financial Advisor in the high-net-worth
division in 1985. After leaving Lehman Brothers in 1989, Mr. May joined D.H.
Blair & Co., a small boutique firm on Wall Street. In 1993, Mr May went
on to establish May Davis Group, a full-service investment banking firm on
Wall Street that offered a full range of investment banking, research, sales,
trading and retail brokerage services. In 2007, Mr. May established MD
Global Partners LLC, a firm that specialises in corporate finance, mergers
& acquisitions, restructuring and business development. Following his
undergraduate degree in Biology at University of Miami, Mr. May earned an MBA
in Finance from Duke University's Fuqua School of Business, where he currently
sits on the Board of Visitors and offers career coaching and opportunities to
programme participants. He also continues to hold a position on the
President's Council for the University of Miami.
Directors' Interests in Shares
Directors' interests in the shares of the Company, at the date of this report,
are disclosed below.
Director Ordinary Shares Held % Held
John McGoldrick 316,455 0.32
Scott Kaintz 949,367 0.95
Owen May - -
Substantial Interests
As at 1 April 2022, the Company has been advised of the following significant
interests (greater than 3%) in its ordinary share capital:
Shareholder Ordinary Shares Held % Held
Jim Nominees Limited, Designation JARVIS 39,442,082 39.58%
Interactive Investor Services Nominees Limited, Designation SMKTNOMS 5,430,173 5.45%
Hargreaves Lansdown (Nominees) Limited, Designation 15942 5,239,899 5.26%
Hargreaves Lansdown (Nominees) Limited, Designation HLNOM 4,219,667 4.23%
Queensbury Inc 4,000,000 4.01%
Interactive Investor Services Nominees Limited, Designation SMKTISAS 3,627,140 3.64%
Corporate Governance
The Board is committed to maintaining high standards of corporate governance
and, so far as appropriate given the Company's size and the constitution of
the Board, complies with the Corporate Governance Guidelines for Small and
Mid-Sized Companies (the "QCA Code").
The Board
The Board currently comprises one Executive Director and two Non-Executive
Directors. The Board is ultimately responsible for the day-to-day management
of the Company's business, its strategy and key policies. Members of the Board
are appointed by the Shareholders. The Board also has power to appoint
additional directors, subject to such appointments being approved by
Shareholders. At least six board meetings are held per year.
Director Number of Meetings Held During Tenure Number of Meetings Attended
John McGoldrick 9 9
Scott Kaintz 9 9
Owen May 9 9
As prescribed by the QCA Code, the Board has established three committees: An
Audit and Risk Committee, a Remuneration Committee and a Nomination Committee.
Each of the committees were formed on admission of the Company to the Standard
Listing Segment on 4 October 2017. The Audit and Risk Committee and the
Remuneration Committees have met once each during 2022.
Audit and Risk Committee
The Audit and Risk Committee, which comprises John McGoldrick and Owen May, is
responsible, amongst other things, for monitoring the Group's financial
reporting, external and internal audits and controls, including reviewing and
monitoring the integrity of the Group's annual and half-yearly financial
statements, reviewing and monitoring the extent of non-audit work undertaken
by external auditors, advising on the appointment of external auditors,
overseeing the Group's relationship with its external auditors, reviewing the
effectiveness of the external audit process and reviewing the effectiveness of
the Group's internal control review function. The ultimate responsibility for
reviewing and approving the annual report and accounts and the half-yearly
reports remains with the Board. The Audit and Risk Committee gives due
consideration to laws and regulations, the provisions of the UK Corporate
Governance Code (the Quoted Companies' Alliance code) and the requirements of
the Listing Rules. The Audit and Risk Committee shall meet at least once a
year at appropriate intervals in the financial reporting and audit cycle and
otherwise as required.
Remuneration Committee
The Remuneration Committee, which comprises John McGoldrick and Owen May, is
responsible, amongst other things, for assisting the Board in determining its
responsibilities in relation to remuneration, including making recommendations
to the Board on the Company's policy on executive remuneration, including
setting the parameters and governance framework of the Group's remuneration
policy and determining the individual remuneration and benefits package of
each of the Company's Executive Directors and the Group. It is also
responsible for approving the rules and basis for participation in any
performance related pay-schemes, share incentive schemes and obtaining
reliable and up-to-date information about remuneration in other companies. The
Remuneration Committee shall meet at least once a year.
Nomination Committee
The Nomination Committee, which comprises John McGoldrick as Chairman and Owen
May, will identify and nominate, for the approval of the Board, candidates to
fill Board vacancies as and when they arise. The Nominations Committee will
meet as required.
Share Dealing Policy
The Company has adopted a Share Dealing Policy, which sets out the
requirements and procedures for dealings in any of its listed securities. The
Share Dealing Policy applies widely to the Directors of the Company and its
subsidiaries, the Company's employees and persons closely associated with
them. The policy complies with the Market Abuse Regulations, which came into
effect on 3 July 2016.
Anti-Bribery and Anti-Corruption Policy
The Company has adopted an Anti-Bribery and Anti-Corruption Policy, which
applies to the Directors and any future employees of the Company. The
Directors believe that the Group, through its internal controls, has
appropriate procedures in place to reduce the risk of bribery and that all
employees, agents, consultants and associated persons are made fully aware of
the Group's policies and procedures with respect to ethical behaviour,
business conduct and transparency.
Health and Safety
The safety of the Group's employees and contractors is critical to its
operations. Coos Bay requires its contractors working on site to comply with
all applicable laws in connection with the performance of its work, including
applicable requirements of the Occupational Health and Safety Act and the
rules promulgated thereunder (OSHA). As Coos Bay currently maintains no
employees and almost all work on site is performed by independent contractors,
Coos Bay has not developed any formal safety procedures or training programs
beyond those that may be required by OSHA or other applicable laws. The Board
intends to review Coos Bay's health and safety practices from time-to-time to
ensure that they remain consistent with current industry standards.
Relations with Shareholders
As detailed further below, the Directors seek to build on a mutual
understanding of objectives between the Company and its shareholders by
meeting to discuss long term issues and receive feedback, communicating
regularly throughout the year and issuing trading updates as appropriate. The
Board also seeks to use the Annual General Meeting to communicate with its
shareholders.
Fair, Balanced and Understandable Assessment of Position and Prospects
The Board has shown its commitment to presenting fair, balanced and
comprehensible assessments of the Company's position and prospects by
providing comprehensive disclosures within the financial report in relation to
its activities. The Board has applied the principles of good governance
relating to Directors' remuneration as described below. The Board has
determined that there are no specific issues, which need to be brought to the
attention of shareholders.
Remuneration Strategy
The Company operates in a competitive market. If it is to compete
successfully, it is essential that it attracts, develops and retains high
quality staff. Remuneration policy has an important part to play in achieving
this objective. The Company aims to offer its staff a remuneration package,
which is both competitive in the relevant employment market and which reflects
individual performance and contribution.
Share Options and Warrants
Nil.
Communication with Shareholders
The Board attaches great importance to communication with both institutional
and private shareholders.
Regular communication is maintained with all shareholders through Company
announcements, the half-year Statement and the Annual Report and Financial
Statements.
The Directors seek to build on a mutual understanding of objectives between
the Company and its shareholders. Institutional shareholders are in contact
with the Directors through presentations and meetings to discuss issues and to
give feedback regularly throughout the year. With private shareholders, this
is not always practical.
The Board therefore intends to use the Company's Annual General Meeting as the
opportunity to meet private shareholders, who are encouraged to attend, and at
which the Board will give a presentation on the activities of the Company.
Following the presentation, there will be an opportunity to meet and ask
questions of Directors and to discuss development of the business.
The Company operates a website at
http://www.curzonenergy.com/investor-relations
(http://www.curzonenergy.com/investor-relations)
The website contains details of the Company and its activities, regulatory
announcements, Company announcements, interim statements, preliminary
statements and annual reports.
Greenhouse Gas Emissions
The Group has as yet minimal greenhouse gas emissions to report from the
operations of the Company and its subsidiaries and does not have
responsibility for any other emission producing sources under the Companies
Act 2006 (Strategic Report and Directors Report) Regulations 2014.
Task Force on Climate Financial Disclosures
Given the current position of the group, the directors have not made any
disclosures against the Task Force on Climate-related Financial Disclosures
(TCFD) framework. The directors will revisit the position in the event that
a future transaction is completed.
Annual General Meeting
The Company currently intends to hold its Annual General Meeting on 31 May
2023 at 2.00 pm, and it encourages all shareholders to vote via proxy
regardless of their intention of attending the meeting in person.
Financial Risk Management
The Group is exposed to a variety of financial risks, including currency risk,
credit risk and liquidity risk. Some of the objectives and policies applied by
management to mitigate these risks are outlined in note 20 to the Consolidated
Financial Statements.
Share Capital
The Company's Ordinary Shares of £0.0001 per share and Deferred share of
£0.0099 represent 100% of its total share capital. At a meeting of the
Company every member present in person or by proxy shall have one vote for
every Ordinary Share of which he is the holder. Holders of Ordinary Shares are
entitled to receive dividends. Deferred shares do not carry any voting right
or right to receive dividends.
On a winding-up or other return of capital, holders are entitled to share in
any surplus assets pro rata to the amount paid up on their Ordinary Shares.
The shares are not redeemable at the option of either the Company or the
holder. There are no restrictions on the transfer of shares.
Independent Auditors
During the year, Crowe U.K. LLP was re-appointed as auditor to the Company.
Provision of Information to Auditors
Each of the persons, who are Directors at the time when this Directors' Report
is approved, has confirmed that:
§ so far as that Director is aware, there is no information relevant to the
audit of which the Company's auditors are unaware; and
§ each Director has taken all the steps that ought to have been taken as a
director in order to be aware of any information needed by the Company's
auditors in connection with preparing their report and to establish that the
Company's auditors are aware of that information.
Signed by order of the Board
Scott Kaintz
Chief Executive Officer
27 April 2023
Directors' Remuneration Report
The Board of Directors has established a Remuneration Committee. The
Remuneration Committee (the 'Committee') comprises our two Non-Executive
Directors, John McGoldrick and Owen May.
The members of the Remuneration Committee have the necessary experience of
executive compensation matters relevant to their responsibilities as members
of such a committee by virtue of their respective professions, contacts within
the minerals industry as well as experience in the broader business community.
In addition, each member of the Remuneration Committee keeps abreast on a
regular basis of trends and developments affecting executive compensation.
Accordingly, it is considered that the Remuneration Committee has sufficient
experience and knowledge to set appropriate levels of compensation. Neither
the Company nor the Remuneration Committee engaged independent consultants to
evaluate the levels of compensation during the year ended 31 December 2022.
Committee's Main Responsibility
The Remuneration Committee is responsible, amongst other things, for assisting
the Board in determining its responsibilities in relation to remuneration,
including making recommendations to the Board on the Company's policy on
executive remuneration, including setting the parameters and governance
framework of the Group's remuneration policy and determining the individual
remuneration and benefits package for the Company's Executive Directors and
the Group. It is also responsible for approving the rules and basis for
participation in any performance related pay-schemes, share incentive schemes
and obtaining reliable and up-to-date information about remuneration in other
companies. The Remuneration Committee shall meet at least once a year.
Statement of Policy on Directors' Remuneration
The Company's policy is to set remuneration to attract and retain the highest
quality of directors and senior executives, and to:
▪ align their interests with shareholders';
▪ avoid incentivising excessive risk taking by executives;
▪ be proportionate to the contribution of the individuals concerned;
and
▪ be sensitive to pay and employment conditions elsewhere in the
group.
The Company is at an early stage of development. As a result, the use of
traditional performance standards, such as corporate profitability, is not
considered by the Remuneration Committee to be appropriate in the evaluation
of corporate or Directors' performance. Discretionary bonuses may be paid to
aid staff retention and reward performance.
The Company provides Executive Directors with base fees, which represent their
minimum compensation for services rendered during the financial year. The base
fees of Directors and senior executives depend on the scope of their
experience, responsibilities and performance.
The Remuneration Committee has considered the risk implications of the
Company's compensation policies and practices and has concluded that there is
no appreciable risk associated with such policies and practices since such
policies and practices do not have the potential of encouraging an executive
officer or other applicable individual to take on any undue risk or to
otherwise expose the Company to inappropriate or excessive risks. Furthermore,
although the Company does not have in place any specific prohibitions,
preventing executives from purchasing financial instruments, including prepaid
variable forward contracts, equity swaps, collars or units of exchange funds
that are designed to hedge or offset a decrease in market value of options or
other equity securities of the Company granted in compensation or held
directly or indirectly by the director, the Company is unaware of the purchase
of any such financial instruments by any Director.
The Company does not anticipate making any significant changes to its
compensation policies and practices during 2023.
Directors' Remuneration
The Directors, who held office on 31 December 2022 and who had beneficial
interests in the ordinary shares of the Company, are summarised as follows:
Name of Director Position
John McGoldrick Chairman, Non-Executive Director
Scott Kaintz Chief Executive Officer, Executive Director
Directors' Service Contracts
John McGoldrick was appointed by the Company with effect from Admission to act
as Chairman and a Non-Executive Director of the Company under a letter of
appointment, dated 4 October 2017. His appointment is terminable on three
months' written notice on either side. He is entitled to a fee of £50,000 per
annum.
Owen May was appointed as a Director on 27 September 2016. He has been
appointed to act as a Non-Executive Director of the Company pursuant to a
letter of appointment with the Company, dated 23 May 2017. His appointment is
terminable on three months' written notice on either side. Owen is entitled to
a fee of £25,000 per annum payable in cash or shares at the discretion of the
Board.
Scott Kaintz was appointed as a Director on 27 June 2018. He was appointed to
act as an Executive Director and Chief Executive Officer as of 5 November
2018. His appointment continues until terminated by either party giving four
months written notice. Scott is entitled to a fee of £120,000 per annum.
Summary Compensation Table (audited)
The following table sets forth the compensation awarded, paid to or earned by
each Director during 2022:
2022 Directors' Social Total cash-compensation Share-based Payments (options) Total
fees security US$ US$ compensation
US$ costs US$
US$
John McGoldrick 62,473 - 62,473 - 62,473
Scott Kaintz 149,935 17,243 167,178 - 167,178
Owen May 31,236 - 31,236 - 31,236
Total Directors' compensation 243,644 17,243 260,887 - 260,887
John McGoldrick has, through agreement with the Company, agreed to defer
payment of the majority of his Director's compensation from 2017 to 2022 until
the completion of the RTO, which at 31 December 2022 totaled US$280,511 and
has been recognized in other payables at the reporting date.
Owen May has, through agreement with the Company, agreed to defer payment of
the majority of his Director's compensation from 2018 to 2022 until the
completion of the RTO, which at 31 December 2022 totaled US$106,071 and has
been recognized in other payables at the reporting date.
As at 31 December 2022 Scott Kaintz was owed US$144,780 in unpaid salary (31
December 2021: US$67,400).
Summary Compensation Table (audited)
2021 Directors' Social Total cash-compensation Share-based Payments (options) Total
fees security US$ 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
Share-Based Awards (audited)
The Company has nil share options awarded to the Directors of the Company in
accordance with its share option plan. There were no awards of annual
bonuses or incentive arrangements in the period. All remuneration was
therefore fixed in nature and no illustrative table of the application of
remuneration policy has been included in this report.
Directors' Interests in Shares (audited)
Directors' interests in the shares of the Company at the date of this report
are disclosed below.
Director Ordinary Shares Held % Held
John McGoldrick 316,455 0.32
Scott Kaintz 949,367 1.14
Owen May - -
Other Matters Subject to Audit
The Company does not currently have any pension plans for any of the Directors
and does not pay pension amounts in relation to their remuneration.
Other Matters
The Company does not currently have any annual or long-term incentive schemes
in place for any of the Directors and as such there are no disclosures in this
respect.
The performance of the Remuneration Committee is yet to be assessed given the
short time frame that it has been operational.
No performance graph has been included here as the Company is in the early
stages of its business development.
Signed
John McGoldrick
Chairman of the Remuneration Committee
27 April 2023
Statement of Directors' Responsibilities in Respect of the Strategic Report,
the Directors' Report and the Financial Statements
The Directors are responsible for preparing the Strategic Report, the
Directors' Report and the Financial Statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare Financial Statements for each
financial year. Under that law they have elected to prepare the Financial
Statements in accordance with UK adopted International Accounting Standards
and applicable law.
Under company law, the Directors must not approve the Financial Statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and of the profit or loss of the Group for that period.
In preparing these Financial Statements, the Directors are required to:
§ select suitable accounting policies and then apply them consistently;
§ make judgments and estimates that are reasonable and prudent;
§ state whether they have been prepared in accordance with UK adopted
International Accounting Standards; and
§ prepare the Financial Statements on the going concern basis, unless it is
inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the Financial Statements comply with the Companies
Act 2006. They have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the Company and to prevent
and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the UK governing the preparation and dissemination of Financial
Statements may differ from legislation in other jurisdictions.
We confirm that to the best of our knowledge:
§ the Financial Statements, prepared in accordance with UK adopted
International Accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Group;
§ the Directors report includes a fair review of the development and
performance of the business and the position of the Company, together with a
description of the principal risks and uncertainties that they face.
By Order of the Board
John McGoldrick
Director
27 April 2023
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2022
Notes 2022 2021
US$ US$
Administrative expenses 6 (509,358) (569,865)
Loss from operations (509,358) (569,865)
Finance expense, net 7 (191,735) (165,598)
Provision for reclamation obligation 12 - (125,000)
Loss before taxation 4 (701,093) (860,463)
Income tax expense 8 - -
Loss for the year attributable to
equity holders of the parent company (701,093) (860,463)
Other comprehensive income
Gain/(loss) on translation of parent net assets and results from functional 233,300 39,119
currency into presentation currency
Total comprehensive loss for the year (467,793) (821,344)
Loss per share - Basic and diluted, US$ 9 (0.007) (0.009)
The notes form part of these Financial Statements
Consolidated Statement of Financial Position
as at 31 December 2022
Notes 2022 2021
US$ US$
Assets
Current assets
Prepayments and other receivables 13 29,828 44,058
Cash and cash equivalents 14 20,421 138,142
Total current assets 50,249 182,200
Total assets 50,249 182,200
Current liabilities
Trade and other payables 15 912,521 774,591
Borrowings 16 2,133,832 1,935,919
Total current liabilities 3,046,353 2,710,510
Total liabilities 3,046,353 2,710,510
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 86,746 (146,554)
Accumulated losses (39,869,759) (39,168,666)
Total capital and reserves (2,996,104) (2,528,310)
Total equity and liabilities 50,249 182,200
The Financial Statements were approved and authorised for issue by the Board
of Directors on 27 April 2023 and were signed on its behalf by:
John McGoldrick
Director
The notes form part of these Financial Statements.
Consolidated Statement of Changes in Equity
Share Share Other Accumulated losses Total
capital premium reserves
US$ US$ US$ US$ US$
Equity at 1 January 2021 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 income for the year - - 39,119 - 39,119
Total comprehensive loss for the year - - 39,119 (860,463) (821,344)
Equity at 31 December 2021 1,105,547 3,619,332 31,915,477 (39,168,666) (2,528,310)
Loss for the year - - - (701,093) (701,093)
Other comprehensive income for the year - - 233,300 - 233,300
Total comprehensive loss for the year - - 233,300 (701,093) (467,793)
Equity at 31 December 2022 1,105,547 3,619,332 32,148,777 (39,869,759) (2,996,104)
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 2021 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
Other comprehensive loss for the year - - - 233,300 233,300
Total comprehensive loss for the year - - - 233,300 233,300
Other reserves at 31 December 2022 31,212,041 474,792 375,198 86,746 32,148,777
Consolidated Statement of Cash Flows
Notes 2022 2021
US$ US$
Cash flow from operating activities
Loss before taxation (701,093) (860,463)
Adjustments for:
Finance expenses 7 191,970 159,087
Provision for reclamation obligations 12 - 125,000
Unrealised foreign exchange movements 7 (36,606) 6,511
Operating cashflows before working capital changes (545,729) (569,865)
Changes in working capital:
Increase in payables 235,141 46,220
(Increase)/decrease in receivables 10,587 (2,359)
Net cash used in operating activities (300,002) (526,004)
Financing activities
Issue of ordinary shares, net of share issue costs 17 - -
Proceeds from new borrowings 16 184,693 619,886
Net cash flow from financing activities 184,693 619,886
Net increase /(decrease) in cash and cash equivalents in the period (115,309) 93,882
Cash and cash equivalents at the beginning of the period 138,142 47,188
Restricted cash held on deposits 12 125,000 125,000
Total cash and cash equivalents at the beginning of the period, including 263,142 172,188
restricted cash
Effect of the translation of cash balances into presentation currency (2,412) (2,927)
Cash and cash equivalents at the end of the period 20,421 138,142
Restricted cash held on deposits 12 125,000 125,000
Total cash and cash equivalents at the end of the period, including restricted 145,421 263,142
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 Salisbury House, London Wall, London EC2M 5PS. 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 with adequate scale and growth
potential to be listed on the Standard Listing of the London Stock Exchange.
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
2022
There were no new standards or interpretations effective for the first time
for periods beginning on or after 1 January 2022 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 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 Technology Metals
Market Ltd. ("TM2"). On 19 April 2023, the Company announced that it had
signed a letter of intent with TM2 to potentially acquire a 100% interest in a
mining business of their choosing, with current plans focused on an African
based lithium company. In exchange for a period of exclusivity in relation
to this potential reverse takeover transaction, TM2 has agreed to loan the
Company a working capital facility of £750,000 in the form of a one-year loan
note, carrying an annual interest rate of 10%. 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 TM2 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$20,421 as at 31 December 2022 and has subsequently increased its borrowing
capacity and current liquidity through the extension and expansion of the
funding agreement with TM2.
The directors remain in discussions with the various creditors of the Company
regarding the forbearance of amounts payable until the conclusion of the
proposed RTO, with all creditors informally agreeing to defer payment of
amounts due until the transaction has completed.
The Directors note that the Group will need additional funding to continue
operations for the foreseeable future and, together with the above matters,
this means there is a material uncertainty as to the Group's ability to
continue as a going concern. The Directors are confident however that the
Group will be able to raise, as required, sufficient cash or reduce its
commitments to enable it to continue its operations, and to continue to meet,
as and when they fall due, its liabilities for at least the next 12 months
from the date of approval of the Group Financial Statements. The Group
Financial Statements have, therefore, been prepared on the going concern
basis.
Functional Currency
Functional and Presentation Currency
The individual financial information of each Group entity is measured in the
currency of the primary economic environment in which the entity operates (its
functional currency). The Company's functional currency is UK Pound Sterling
(£). All other companies, belonging to the Curzon Group, have US Dollar as
their functional currency. The Group Financial Statements are presented in US
Dollars ($).
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:
2022 2021
Closing USD/GBP rate at 31 December 1.2065 1.3489
Average USD/GBP rate for the year 1.2495 1.3775
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 2022 and 2021, a provision has been
recognised and set off against restricted cash as permitted by IAS 32.
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 is allocated to the
conversion option and is recognised as a separate equity component within
shareholders' equity, net of income tax effects.
(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.
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 with adequate scale and growth
potential to operate successfully on the Standard List of the London Stock
Exchange. At 31 December 2022 and 31 December 2021, 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): 2022 2021
US$ US$
Auditor's remuneration:
- fees payable to the Company's auditor for the 46,230 34,438
audit of the consolidated and Company financial statements
Foreign currency translation (gain) (235) 6,511
5. Directors and Staff
There were no staff employed by the Group during the years ended 31 December
2022 and 31 December 2021, 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:
2022 Directors' Social Total cash-compensation Share-based Payments (options) Total
fees security US$ US$ compensation
US$ costs US$
US$
John McGoldrick 62,473 - 62,473 - 62,473
Scott Kaintz 149,935 17,243 167,178 - 167,178
Owen May 31,236 - 31,236 - 31,236
Total Directors' compensation 243,644 17,243 260,887 - 260,887
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
John McGoldrick has, through agreement with the Company, agreed to defer
payment of the majority of his Director's compensation from 2017 to 2022 until
the completion of the RTO, which at 31 December 2022 totaled US$280,511 and
has been recognized in other payables at the reporting date.
Owen May has, through agreement with the Company, agreed to defer payment of
the majority of his Director's compensation from 2018 to 2022 until the
completion of the RTO, which at 31 December 2022 totaled US$106,071 and has
been recognized in other payables at the reporting date.
As at 31 December 2022, Scott Kaintz was owed US$144,780 in unpaid salary (31
December 2021: US$67,400).
6. Administrative Expenses
2022 2021
US$ US$
Staff costs
Directors' salaries 243,644 254,842
Employers NI 17,243 13,219
Consultants 26,239 22,729
Professional services
Accounting, audit & taxation 89,220 90,527
Legal 4,702 -
Marketing 14,816 14,447
Other - 440
Regulatory compliance 2,349 63,298
Standard Listing Regulatory Costs - 48,351
Travel 12,310 -
Business development - -
Office and Admin
General 32,865 11,716
IT costs 2,293 -
Temporary storage and office rent 27,406 7,199
Insurance 36,271 43,097
Total administrative costs 509,358 569,865
7. Finance Expense (net)
2022 2021
US$ US$
Foreign exchange loss/(gain) (235) 6,511
Interest expense on promissory notes and other short-term loans 191,970 159,087
Total finance expense 191,735 165,598
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:
2022 2021
US$ US$
Loss before tax (701,093) (860,463)
UK corporation tax credit at 19.00% (2021: 19.00%) (133,208) (163,488)
Effect of non-deductible expense - -
Differences in overseas tax rates (961) (2,916)
Effect of tax benefit of losses carried forward 134,169 166,404
Current tax (credit) - -
As at 31 December 2022, the tax effects of temporary timing differences,
giving rise to deferred tax assets, was US$1,717,984 (2021: US$1,583,815 ).
A deferred tax asset in respect of these losses and temporary differences has
not been established as the Group has not yet generated any revenues and the
Directors have, therefore, assessed the likelihood of future profits being
available to offset such deferred tax assets to be uncertain.
9. Loss Per Share
The basic loss per share is derived by dividing the loss for the year
attributable to ordinary shareholders of the Company by the weighted average
number of shares in issue.
Diluted loss per share is derived by dividing the loss for the year
attributable to ordinary shareholders of the Company by the weighted average
number of shares in issue plus the weighted average number of ordinary shares
that would be issued on conversion of all dilutive potential ordinary shares
into ordinary shares.
The following reflects the loss and share data used in the basic and diluted
loss per share computations:
2022 2021
(Loss) after tax attributable to the shareholders of the parent (US$) (701,093) (860,463)
Weighted average number of ordinary shares of £0.01 in issue used calculation 99,639,565 99,639,565
of in basic and diluted EPS
(Loss) per share - basic and fully diluted (US$) (0.007) (0.009)
At 31 December 2022 and 31 December 2021, the effect of all potential ordinary
shares and contingently issuable shares, that are presented in the table
below, was anti-dilutive as it would lead to a further reduction of loss per
share, therefore, these instruments were not included in the diluted loss per
share calculation.
2022 2021
Number Number
Share options granted to employees - fully vested at the end of the respective - 280,854
period
Warrants given to shareholders as a part of placing equity instruments - fully 18,606,594 18,606,594
vested at the end of the respective period
Total instruments fully vested 18,606,594 18,887,448
Total number of instruments and potentially issuable instruments (vested and 18,606,594 18,887,448
not vested) not included into the fully diluted EPS calculation
10. Intangible Assets
2022 2021
Exploration and evaluation expenditure US$ 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 2022 and 31 December 2021. 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
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 US$125,000 comprises funds held as collateral to support
stand-by letters of credit related to the Group's oil and gas properties. The
letters of credit secure the reclamation obligations under the leases and
state law. The cash can be taken by Umpqua Bank in the event the letters of
credit are drawn on by the State of Oregon, Department of Geology &
Mineral Industries (DOGAMI). The cash is held in the form of a Certificate of
Deposit. In 2022 the Group recognised a provision for reclamation
obligations equivalent to the entire restricted cash balance in recognition of
the fact that recovery of these funds may only be possible following
completion of reclamation work on these oil and gas properties. This
provision has been offset against the restricted cash balance as permitted by
IAS 32.
13. Prepayments and Other Receivables
2022 2021
US$ US$
VAT recoverable 1,744 8,404
Other debtors 28,084 35,654
Total prepayments and other receivables 29,828 44,058
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:
2022 2021
US$ US$
Cash in hand and at bank 20,421 138,142
15. Trade and Other Payables
2022
2021
US$ US$
Trade and other payables 283,587 734,146
Accruals 628,934 33,724
Total financial liabilities, excluding loans and borrowings, classified as 912,521 767,870
financial liabilities measured at amortised cost
Other payables - tax and social security payments - 6,721
Total trade and other payables 912,521 774,591
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 2022
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 $100,000 15% unsecured Outstanding
HNW Investor Group 1 July 2019 Conversion/Repayment at RTO date £263,265 13% 100% interest in Coos Bay LLC Outstanding
Sun Seven Stars Investment Group ("SSSIG") 13 Mar 2020 Conversion/Repayment at RTO date £260,000 10% unsecured Outstanding
Poseidon Plastics Limited ("PPL") 2 February 2021 Conversion/Repayment at RTO date £590,000 10% unsecured Outstanding
No interim payments are required under the promissory notes, as the payment
terms require the original principal amount of each note and all accrued
interest thereon, to be paid in single lump payments at the time of the
completion of a reverse takeover.
2022 2021
US$ US$
At 1 January 1,935,919 1,183,018
Received during the year 184,693 619,886
Interest accrued during the year 190,175 158,564
Exchange rate differences (176,995) (25,549)
Short-term loans and borrowings 31 December 2,133,832 1,935,919
Reconciliation of Liabilities Arising from Financing Activities
31 Dec 2021 Cash flows Proceeds from new borrowings Non-cash flow Forex movement Non-cash flow Interest accrued 31 Dec 2022
HNW Investor Group 435,950 - (47,504) 42,762 431,208
C4 Energy Ltd. 292,378 - - 30,000 322,378
Bruce Edwards 162,350 - - 15,000 177,349
Sun Seven Stars Investment Group ("SSSIG") 408,251 - (44,226) 32,486 396,510
Poseidon Plastics Ltd ("PPL") 636,991 184,693 (85,225) 69,927 806,387
Total liabilities from financing activities 1,935,920 184,693 (176,955) 190,175 2,133,832
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
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 2021 99,639,565 83,032,971 1,105,547
At 31 December 2021 99,639,565 83,032,971 1,105,547
At 31 December 2022 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 - 83,032,971 1,092,422 - -
Post reorganization issue of shares 16,606,594 - 2,090 - -
Total Share Capital 1,105,547 -
99,639,565 83,032,971 -
*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 2022, the Company had no outstanding options to subscribe for
ordinary shares.
2022 2021
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
Expired in the period (280,854) 0.10 - -
Outstanding at the end of the period - - 280,854 0.10
Vested and exercisable at the end of the period - - 280,854 0.10
During the financial year, no options (2021: none) were granted. The weighted
average fair value of each option granted during the year was £nil (2021:
nil).
The exercise price of options outstanding on 31 December 2022 was £nil (31
December 2021: £0.1). Their weighted average remaining contractual life was
nil years (2021: 0.75 years).
No options were exercised during the reporting year (2021: nil).
Warrants
On 31 December 2022, there were no warrants in issue.
2022 2021
Number of Number of
warrants warrants
Outstanding at the beginning of the period 18,606,594 20,612,925
Granted during the period - -
Lapsed during the period (18,606,594) (2,006,331)
Exercised during the period - -
Outstanding at the end of the period - 18,606,594
Vested and exercisable at the end of the period - 18,606,594
The exercise price of warrants, outstanding on 31 December 2022 was £nil
(2021: ranged between £0.011 and £0.015). Their weighted average remaining
contractual life was nil years (2021: 0.45 years).
The weighted average share price (at the date of exercise) of warrants
exercised during the year was nil (2021: nil) as no warrants were exercised.
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.
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:
2022 2021
US$ US$
Financial assets
Cash and cash equivalents 20,421 138,142
Other receivables - -
Restricted cash* 125,000 125,000
Financial liabilities
Trade payables 283,587 292,592
Accruals 628,934 481,999
Short-term borrowings 2,133,832 1,935,919
*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/Positive A1/Negative A+/Stable 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 2022:
+10% -10%
US$ US$
Loss before tax Increase in loss by US$70,673 Decrease in loss by US$70,673
2022 2022 2022 2021 2021 2021
Assets and liabilities by currency of denomination, al numbers are presented US$ Total US$ Total
in US$
£ US$ £ US$
In US$ In US$
Financial assets
Cash and cash equivalents 53 20,356 20,410 8,931 129,211 138,142
Other receivables - - - - - -
Restricted cash* - - - 125,000 - 125,000
Financial liabilities
Trade payables 73,917 209,671 283,587 48,918 243,674 292,592
Accruals - 628,934 628,934 - 481,999 481,999
Short-term borrowings 499,727 1,634,105 2,133,832 454,726 1,481,193 1,935,919
*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.
The Group has a loan arrangement with Poseidon Plastics Limited, a company in
which John McGoldrick is also a director. See note 16 for further details.
During the year, the Group and Company was charged £15,000 (2021: £8,208) in
rental recharges for utilized office space from Corcel plc, a company in which
Scott Kaintz is also a director. As at 31 December 2022 the Group and
Company owed £28,114 to Corcel plc for such charges (2021: £13,354).
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
Transaction Termination and LOI with TM2
On 18 April 2023, the Company announced that it had notified Poseidon Enhanced
Technologies of its intention to terminate discussions regarding a RTO of
Curzon by PET, as originally announced on 3 February 2021. The Company
further announced that it has signed an LOI with Technology Metals Market
Limited ("TM2"), to provide a working capital facility of £750,000 to fund
Curzon to conduct due diligence and ultimately progress a RTO of Curzon by a
designated target by TM2, currently expected to be in the lithium space. TM2
would be able to fund ongoing exclusivity of Curzon by drawdowns on the
offered facility.
Company Statement of Financial Position
as at 31 December 2022
Notes 2022 2021
£ £
Assets
Current assets
Trade and other receivables 28 24,722 32,662
Cash and cash equivalents 29 16,926 102,408
Total current assets 41,648 135,070
Total assets 41,648 135,070
Liabilities
Current liabilities
Trade and other payables 30 695,072 537,959
Borrowings 31 1,768,614 1,435,141
Total liabilities 2,463,686 1,973,100
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 (9,417,709) (8,833,702)
Total capital and reserves (2,422,037) (1,838,030)
Total equity and liabilities 41,649 135,070
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 £584,007 (2021: £538,176). The Company's
total comprehensive loss for the financial year was £584,007 (2021:
£538,176).
The Financial Statements were approved by the Board of Directors and
authorised for issue on 27 April 2023 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 2021 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)
Total comprehensive loss for the year 2021 - - - - - (538,176) (538,176)
Equity at 31 December 2021 831,991 2,718,931 355,269 289,481 2,800,000 (8,833,702) (1,838,030)
Loss for the year 2022 - - - - - (584,007) (584,007)
Total comprehensive loss for the year 2022 - - - - - (584,007) (584,007)
Equity at 31 December 2022 831,991 2,718,931 355,269 289,481 2,800,000 (9,417,709) (2,422,037)
Company Statement of Cash Flows
for the Year Ended 31 December 2021
Notes 2022 2021
£ £
Cash flow from operating activities
Loss before taxation (584,007) (538,176)
Adjustments for:
Finance expense 153,643 115,488
Finance income - -
Impairment of loans and receivables 18,378 9,596
Unrealised foreign exchange movements 40,968 4,727
Operating cashflows before working capital changes (371,018) (408,365)
Changes in working capital:
Increase in payables 157,113 38,375
(Increase)/decrease in receivables 7,939 (2,162)
Net cash used in operating activities (205,966) (372,152)
Financing activities
Issue of ordinary shares, net of share issue costs - -
Proceeds from new borrowings 140,000 450,000
Interest paid (1,138) (358)
Advances granted to subsidiaries (18,378) (9,596)
Net cash flow from financing activities 120,484 440,046
Net increase/(decrease) in cash and cash equivalents in the period (85,482) 67,894
Cash and cash equivalents at the beginning of the period 102,408 34,514
Cash and cash equivalents at the end of the period 16,926 102,408
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
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
2022 2021
£ £
Staff costs 229,800 217,596
Standard Listing Regulatory Costs 1,880 45,951
Professional and consultancy fees 82,858 91,178
Other general administrative expenses 54,675 43,860
Total 369,212 398,585
27. Receivables from Subsidiaries and Related Party Transactions
2022 2021
£ £
Loans to subsidiaries - -
Total loans to subsidiaries - -
During the year ended 31 December 2022, the Company recognised expected credit
losses in relation to the intercompany loans in the amount of £18,378 (2021:
£19,378). 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 currently
available to advance the project.
During the year ended 31 December 2022, the maximum amount owed by the
subsidiary to the Company was £18,378 (2021: £19,378). 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 2022. At 31 December
2022, £39,368 (2021: £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
2022 2021
£ £
VAT recoverable 1,446 6,230
Prepayments 23,276 26,432
Total prepayments and other receivables 24,722 32,662
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:
2022 2021
£ £
Cash in hand and at bank 16,926 102,408
30. Current Liabilities
Trade and Other Payables
2022 2021
£ £
Trade and other payables 173,784 180,642
Accruals 521,288 357,317
Total trade and other payables 695,072 537,959
31. Short-Term Borrowings
At 31 December 2022, the Company had an outstanding promissory notes and loans
of £1,768,614 (2021: £1,435,141), please refer to note 16.
1 Jan 2022, £ Cash flows Proceeds from new borrowings, £ Non-cash flow Forex movement, £ Non-cash flow Interest accrued, £ 31 Dec 2022,
£
HNW Investor Group 323,180 - - 34,224 357,404
C4 Energy Ltd 216,746 - 26,369 24,086 267,201
Bruce Edwards 120,353 - 14,599 12,043 146,995
Sun Seven Stars Investment Group ("SSSIG") 302,645 - - 26,000 328,645
Poseidon Plastics Ltd ("PPL") 472,217 140,000 - 56,152 668,369
Total liabilities from financing activities 1,435,141 140,000 40,968 152,505 1,768,614
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
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:
2022 2021
£ £
Financial assets
Cash and cash equivalents 16,926 102.408
Other receivables - -
Loans due from subsidiaries - -
Financial liabilities
Trade payables 173,784 180,624
Accruals 521,288 357,317
Short-term borrowings 1,768,614 1,435,141
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 2022, 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$). The Directors monitor
the exchange rate fluctuations on a continuous basis and act accordingly.
Assets and liabilities by currency of denomination, al numbers are presented 2022 2022 2021
in £
US$ 2022 Total US$ 2021 2021
£ £ £ Total
£
Financial assets
Cash and cash equivalents 54 16,872 16,926 6,621 95,787 102,408
Other receivables - - - - - -
Financial liabilities
Trade payables - 173,784 173,784 - 180,642 180,642
Accruals - 521,288 521,288 - 357,317 357,317
Short-term borrowings 414,196 1,354,418 1,768,614 337,099 1,098,042 1,435,141
34. Events After the Reporting Period
Events after the reporting period are more fully described in note 22.
35. Controlling Party
At 31 December 2022, 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 30 December 2022 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 2022
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 2022 will be delivered to the Registrar of Companies
by 30 June 2023.
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